common carrier must furnish cars in good order, reasonably safe for the purposes intended. To the extent that movements to and from repair shops enable it to fulfill this duty, it will derive economic benefit when it uses any cars in this national tank car fleet for revenue-producing movements of any sort. Thus, Union Tank Car continued the Use of Passenger Cars benefit test although it did not label it as such.

The Mileage Allowance cases set forth a broader outline of what constitutes an "instrumentality of transportation." Movements before or after a loaded haul, movements to and from repair shops, empty movements of cars moved to or from facilities for lining, relining, or modification, and movements between shippers for joint use of cars were all classified as movements of an instrumentality of commerce for which a separate charge would be improper. Movements of "new acquired" or "newly constructed" or "rebuilt" cars prior to their first loaded movement, and empty movements of cars to or from facilities for transfer between shippers for sale or scrap were considered to be commercial movements for which a charge would be permissable. This is not an exhaustive listing, but was based on a specific carrier proposal.

The Mileage Allowances, Tank Cars case, at page 61, indicated that the above-described commercial movements did not provide any demonstrable benefit to the railroads. New or newly acquired or constructed or rebuilt cars do not benefit the railroads until they become part of the national car fleet with their first loaded revenue movement. Similarly, once a car has been removed from the national car fleet for sale or scrap, it no longer benefits the railroads. Repair movements were considered as mere temporary disruptions which do not occasion removal of a car from the national car fleet. It was noted that the need for repair is brought about by loaded revenue movements which directly benefit the railroads. Although the case did not discuss the point, it is obvious that the movements of instrumentalities of transportation benefitted the railroads in each instance.

The Mileage Allowance cases rejected a proposed 100-percent equalization rule whereby excess empty car-miles transported during the prior calendar year would be charged tariff rates, with a provision for refund to the extent that the car owner had excess loaded miles in the first 6 months of the following year. The Commission noted that one-way loading, caused by product incompatibility, special equipment, vehicle design and capacity, and routing difficulties, made an empty-return ratio of at least 100

percent almost inevitable. To the extent that the rule would have resulted in imposition of charges on empty movements of instrumentalities of transportation, it it was found unjust and unreasonable. Such movements were described as an integral part of the transportation function itself, which should not be made to bear transportation costs as ordinary freight. The Commission stressed that a fair and reasonable solution to the problem of apportioning responsibility for costs accruing from such movements would require an industrywide approach, rather than equalization by individual rail carriers. The Commission noted that the trend toward eliminating railroad-owned repair facilities has increasingly necessitated that privately owned cars be repaired by their owners at their own shop facilities.

The Mileage Allowance cases make it clear that the status of a car as an instrumentality of transportation depends upon whether the purpose for which the particular movement in question is made is necessary to produce loaded freight movements and whether the need for the movement arises directly from the transportation function itself. There is no language in these cases which would necessitate the interpretation that the concept of an instrumentality of transportation should apply to carriers which derive no benefit from revenue movements of privately owned cars. The Mileage Allowances cases dealt with representations by the major line-haul carriers and did not consider particular exceptional situations, such as that of the EC&H, which may require different treatment.

The effect of several other cases must also be considered. In Cancellation of Private Car Allowances, the Commission characterized the IHB's arguments that a switching carrier should not have to pay mileage allowances to private-car owners as a dispute between carrriers. Shippers should not be penalized by having the level of mileage allowances reduced. Underlying this case was the belief that a solution to such a carrier dispute should be settled or litigated by the affected parties themselves without injury to innocent third parties. Implied in the finding that mileage allowances must be paid by switching carriers was the fact that these carriers generally received economic benefit from revenue movements of private cars, and whether this revenue is called "linehaul" or "switching" revenue is of no significance. There is, by its very nature, nothing in this case that implies that a particular switching carrier which derives no benefit at all from the movement of private cars must join in otherwise proper national solutions to the problem of compensation for their use. The Compensation For

Transportation Services case did not change this refusal to give special status to switching carriers generally. That case dealt with a dispute between several line-haul carriers as to whether the Commission might order imposition of mileage charges for empty movements of cars pursuant to emergency car service orders issued by the Commission. The Commission held that its power to order compensation was not coextensive with its car service jurisdiction, and that in emergency situations the Commission would only order compensation for the use of cars in instances where the car owner would not otherwise be compensated. Focusing its attention on the carriers before it in that case, the Commission noted that it assumed that any inequality in such nonrevenue empty mileage would be corrected by divisions of revenue derived from transporting loaded cars. In such instances, these line-haul carriers would clearly derive indirect economic benefit from these divisions. There is no language in this case that indicated that switching carriers in general cannot be benefitted indirectly by such movements in some other way.

When these cases are viewed as a whole, it becomes apparent that the concept of an instrumentality of transportation, at least as applied to movements for ordinary repairs, has two important elements. On the one hand, a railcar does not automatically maintain a permanent status as an instrumentality of transportation throughout its useful life.28 Rather, it may be "property" as to one carrier and an "instrumentality of transportation" as to another. The distinguishing factor is that a car cannot be an "instrumentality of transportation" when moved by a particular carrier unless that carrier derives some economic benefit, direct or indirect, from its movement or use. Direct benefit occurs when the carrier in question has derived revenue of any sort from the movement or use of the particular car at any previous time, or will derive any such revenue immediately following the repair movements in question. The proposed charges of IHB and EC&H would recognize this concept, to the extent that no charge would be imposed where the carrier derived revenue immediately prior or subsequent to the repair movements. Contrary to IHB's position, direct benefit may result from prior or subsequent loaded switching movements in

"We reject any implication to the contrary in the Mileage Allowance cases. Those cases must be viewed as stating the general rule that carriers which benefit from loaded revenue movements of private cars may not claim that such cars, when moved empty for repairs on their own wheels, are property subject to a separate transportation charge. However, none of the prior cases considered whether this was true also for carriers which did not obtain any benefit from the use of private cars.

addition to line-haul movements. Economic benefit is indirect when the carrier in question makes use of private cars to fulfill its common carrier obligations. The existence of a national private car fleet benefits all carriers which make use of it and derive any revenue thereby. Of course, such use must be more than a de minimus amount. When this indirect benefit is the basis for finding that a car is not "property" as to a particular carrier, prior or subsequent use of the particular car by that carrier need not be shown. All that must be shown is that the particular carrier which seeks to impose a separate charge derives more than a de minimus amount of revenue of any sort from use of any privately owned cars of the type in question. The Commission will look to the benefit to the particular carrier, and will not "pierce the corporate veil" of a switching line to take into account the situation of any parent or affiliated railroads, unless there is strong evidence that the corporate form is being ignored and abused. Such is clearly not the case here.

The idea that a private car moving for repairs may be an instrumentality of transportation as to a carrier which derives only such indirect benefit from use of the national private-car fleet rests upon the fact that costs of ordinary repairs cannot be attributed to any single carrier. The need for such repairs of privately owned cars will usually arise as a result of use by many different carriers over a considerable period of time. Each such carrier is partially responsible for the need for repairs, and ideally the costs should be charged to each carrier accordingly. However, such apportionment is impossible as a practical matter. The costs of moving "instrumentalities of transportation" must be compensated for in such a manner that no carrier which accrues a greater than average portion of these costs will be unduly burdened. Rather than costs for which precise compensation for particular services is possible, the costs of repair movements of privately owned cars. must be treated as a common cost which must be shared by all carriers which derive revenue from the national private-car fleet. These "shared costs" must be compensated for as evenly as possible, for the absence of a comprehensive nationwide scheme to distribute the cost burden in proportion to the amount of economic benefit enjoyed by individual carriers from private-car use would lead to a situation in which some carriers would be overcompensated while others would indeed be performing "free" transportation. Until recently, the calls of this Commission for a workable nationwide solution to permit equitable distribution of the costs and burdens of

empty private-car movements went unheeded. Then, as part of a compromise solution jointly filed by the railroads and the tank car interests in the Manufacturing Chemists case, a 105-percent equalization rule was published, effective January 1, 1977, applicable on tank cars only.29 Under this rule tank cars of private ownership will be assessed a rate of 18 cents per mile for all empty miles accumulated during a calendar year that exceed aggregate loaded mileage by more than 5 percent. That percentage is subject to adjustment based on actual experience during its first year of operation. Among several exclusions from the equalization account is "loaded and empty mileage accumulated on cars-moving on their own wheels to and from repair facilities due to railroad damage" (emphasis added). We interpret this to exclude only extraordinary repairs which are specifically attributable to the fault of one or more particular railroads (such as damages from a derailment). Any contrary interpretation would be irreconcilable with the principles discussed herein. All other movements for ordinary repairs are included in the equalization account. A monthly summary report of actual loaded and empty mileage, in a format prescribed by the AAR, will be submitted by each carrier to private-car owners 40 days after the close of each movement month. It will show the actual loaded and empty miles for each car number and the total actual monthly loaded and empty miles moved for all cars bearing the owner's reporting marks. A duplicate copy of this report will be furnished the AAR. Prior to May 20 of the following year, each carrier must submit a summary of actual loaded and empty mileage, separated by reporting marks, aggregated on its line during the preceding calendar year. The AAR will then summarize such mileage for each private-car owner. If the aggregate (for all carriers) empty mileage exceeds the aggregate loaded mileage by more than 5 percent for any group of reporting marks, then the car owner to whom the reporting marks are assigned will be billed at the aforesaid mileage rate. The excess mileage will be paid to the AAR which will then distribute these charges proportionately to the participating carriers that accrued excess empty mileage.

While it is not the function of this proceeding to examine the merits of any particular equalization formula and a more developed record might lead to different conclusions in this regard, this tank car rule does not appear to contain any illegal element on its face. It allocates responsibility for all nonrevenue empty movements in proportion to actual movements and results in a fairer distribution 29The text of this 105-percent equalization rule is set forth in appendix A.