the International bridge. If cars are not properly cleared through Mexican Customs, merchandise is confiscated by the Mexican Government and the U.S. carrier and broker are charged with contraband. In as much as Laredo handles more traffic between the United States and Mexico than all other Rio Grande crossings put together, Tex-Mex's switching is not easy.

Tex-Mex's operating records show that the gross tonnage moved from complainant's facility at Realitos to Laredo for export from December 13, 1973 to June 25, 1975 was 12.41 percent of the gross tonnage moved by the westbound trains between Corpus Christi and Laredo. During this period of 559 days, complainant shipped 2,433 cars (an average of 4.35 cars per day), while defendant handled 58,070 cars for an average of 104.39 per day. In Tex-Mex's view, complainant's traffic is a small percentage of its overall traffic.

Fifthly, complainant did not include any cost element for loss and damage claims on this traffic. The reason stated for this decision is that there have been no loss and damage claims paid on this traffic within the last 18 months, but it is unrealistic to simply omit any element of expense attendant to loss and damage claims on this traffic. Liquefied petroleum gas (flammable compressed gas) is a dangerous commodity which requires special handling. All persons involved in the handling of these cars, whether train crews or office personnel, must know the precautions and requirements of Graziano's Tariff No. 27. Other rail and truck carriers have suffered serious losses in accidents involving LPG. Even one substantial accident could completely wipe out Tex-Mex as a railroad.

From information furnished by other carriers of LPG to Rio Grande crossings, TexMex concluded that the accepted basis for establishing reduced rates on a minimum weight of 140,000 pounds was a 2-cent-per-hundredweight reduction from the rate on 127,000 pounds.

Since complainant's movement of LPG from Realitos to Laredo is a single-line movement, a 4-cent-per-hundredweight reduction was offered to complainant on September 20, 1974, and again on September 30, 1974. At that time, complainant insisted on a rate of 24 cents, whereas Tex-Mex proposed a rate of 28 cents because the existing rate on 127,000 pounds minimum weight was 32 cents. Complainant avers that Tex-Mex has refused to negotiate regarding this matter, but this is only partially true, because a reasonable rate reduction for complainant's jumbo tank car traffic has been offered. Complainant never states what rate level it desires to have published on this traffic. Presumably complainant is seeking a rate lower than the reduced rate TexMex offered of 28 cents per hundredweight at the Ex Parte No. 305-A level, on a minimum weight of 140,000 pounds.

A major reason for complainant's requested rate reduction in this case seems to be that complainant is dissatisfied with the recent ex parte increases granted by the Commission to apply on complainant's traffic. Such increases were justified to the Commission with evidence of specific revenue need. Complainant has not refuted any of such evidence and it has made no showing of any reason why its movement of LPG from Realitos to Laredo should have been exempted from the general rate increases. For the Commission to grant a reduced rate for complainant for the reason that, as alleged by complainant, the ex parte increases have caused the rate to become unreasonable, would result in an unsound preference to complainant and a clear discrimination against all other export shippers of LPG.

In December 1973, when complainant started its operations in Realitos, Tex-Mex had rates of 26 cents per hundredweight, minimum 127,000 pounds, subject to Ex Parte No. 281 and all other general increases approved by the Commission published

in item 23752 of SWL Tariff 48-S (TLFB Series) ICC 1156 (TLFB Series). In items 23720 through 23752 of SWL Tariff 48-S rates are published from Tex-Mex stations and other origins not on its line to Laredo, and other Rio Grande crossings. These rates are all on the same basis, have been in effect for many years, and have moved traffic to Mexico ever since their effective date. Table IV infra shows some comparative rates for other carriers based on the interstate scale published in item 31071 Tariff SWL 48-S (TLFB) ICC 1556, with which Tex-Mex's rates compare favorably because they are on the same scale.

In like fashion, to show that Realitos rates are reasonably aligned, table 5 infra was submitted showing the percentage relationship of LPG rates to class 100 rates.

TABLE V

Comparison of class 100 rates with applicable rates at X-305-A level

Although Tex-Mex would agree to the establishment of a rate of 28 cents at the Ex Parte No. 305-A level for shipments of LPG moving from Realitos to Laredo, subject to a minimum weight of 140,000 pounds, it is not agreeable to any alteration of the existing rates applicable on movements of LPG from Realitos, to Laredo at other minimum weights. Complainant never requested any such rate adjustment on the rates applicable to minimum weights in the range of 44,000 to 127,000 pounds. Yet, complainant's plea for reparation would apparently include every carload of LPG shipped by it since December 13, 1973, regardless of the rates applicable to such shipments.

It is defendant's position, however, that to award reparation in this type of a case, where the assailed rates are published upon precisely the same basis as numerous other rates for the same commodity from other destinations to the same export point, would produce a disastrous result for this defendant and other railroads. If such relief were granted, there would undoubtedly be numerous other requests for reparations by other shippers of LPG. Defendant submits that the evidence submitted thus far in this proceeding would not support such relief. The granting of reparation in this case would result in an unconscionable windfall to complainant.

Finally, defendant raises an environmental issue by urging that a reduction of the export rates on LPG beyond the recognized basis would adversely affect the domestic supply of LPG in this country by encouraging exportation of a product vitally needed due to the energy crisis and in consequence produce a significant adverse environmental impact.

DISCUSSION AND CONCLUSIONS

The transportation which is the subject of this complaint consists of the movement of LPG in jumbo tank cars from Realitos to Laredo, Tex., for subsequent export to the Republic of Mexico. Since earliest times, this type of transportation has been held to be within the jurisdiction of this Commission. In the decision Transportation of Sugar, 22 I.C.C. 558, such transportation was held to be within the jurisdiction of the Commission even though the traffic does not move on through billing nor do the water and rail lines operate under common control or management. Thus the rates here under consideration are within the jurisdiction of this Commission.

Furthermore, the Commission has the right to pass upon the rates and charges for that portion of the service rendered by defendant in the United States. See Carlowitz & Co. v. C. P. Ry. Co., 46 I.C.C. 290.

Section 1(5) of the Interstate Commerce Act states in part "All charges made for any service rendered *** in the transportation of *** property *** shall be just and reasonable, and every unjust and unreasonable charge for such service or any part thereof is prohibited and unlawful." Reasonable compensation for the service actually rendered is all that a common carrier is permitted to exact. Chesapeake & N.W.R. Co. v. Osborne, 52 Fed. 912; Smyth v. Ames, 169 U.S. 466, 42 L. ed, 819, 18 Sup. Ct. Rep. 418; Tift v. Southern Ry. Co., 138 Fed. 753 affd. Southern Ry. Co. v. Tift, 148 Fed. 1021, 206 U.S. 428, 51 L. ed. 1124, 27 Sup. Ct. Rep. 709.

It has also been stated that if any rate or structure of a carrier is in excess of what is reasonable, it is maintained in violation of the law and should be corrected. A. C. Dutton Lbr. Corp. v. New York, N. H. & H. R. Co., 151 I.C.C. 391.

The situation here is that Enterprise deals with various natural gas plants on a take and pay basis. Thus it must absorb all the expenses of transportation or it is out of business. Because these plants are off-rail, it uses trucks to gather the LPG and bring it into their terminal transfer point at Realitos, where it is transferred to railcars and moved by the defendant to Laredo for export to Mexico City, Mex.

The switching at Realitos and Laredo is relatively simply. The customer's papers are prepared in advance. The tonnage moving on the trains from Realitos to Laredo constitutes possibly the heaviest, percentage of the loads moved by the entire train from Corpus Christi to Laredo, Tex.

The LPG is shipped f.o.b. Laredo, which means that Enterprise absorbs the entire freight cost for the movement and any excess charges directly affects its profits. Although LPG is a flammable compressed gas, it requires no special handling other than that which is given any product by an experienced railroad. There has been no loss or damage claims during the entire period of the movement from Realitos. Likewise no demurrage claims have been made against Enterprise and no unusual switching delays or other delays have been incurred. Enterprise owns or leases all the cars, thus obviating the necessity for Tex-Mex to purchase or lease the cars. The rental is low, in that payment is based on loaded miles. Complainant's cost survey shows that the costs on the movement are 14.47 cents per hundredweight as contrasted with a rate of 36 cents per hundredweight effective June 20, 1975. This means that the contribution to revenue is approximately 235 percent of the costs for the movement.

This rate can be characterized as unjust and unreasonable when the contribution to revenues is compared to the costs on the movement or when compared to the revenue per car-mile derived from other producing points to Laredo, giving due regard to the short-haul feature of this movement.

On the basis of its operating ratio Tex-Mex ranks as one of the most profitable railroads in the country. In a short period of time Tex-Mex moved from an operating deficit to a substantial operating profit. This tremendous turnaround took place for the most part during the period that the considered traffic has been moving from Realitos to Laredo.

Enterprise attempted to negotiate the unjust level of rates over several years with relatively little success. Tex-Mex made a tentative offer to reduce the rates by 4 cents per hundredweight. Despite this offer, Tex-Mex continued to subject this rate to the general rate increases, thus raising the rate to 36 cents per hundredweight as of June 20, 1975. In so doing Tex-Mex completely ignored the extraordinary volume being moved and the need for tailoring a rate to fit the size of the movement. A going rate should have replaced the unrelated paper rate. It would not have been difficult to exempt this specific rate from the general increases, had Tex-Mex so desired. Not doing so indicates that defendant was not negotiating with the shipper in good faith. The Commission has held that the earnings of a railroad will be taken into consideration in determining what is a reasonable rate on a particular commodity. M. Evans v. Or. Ry. & Nav. Co., and Wm. H. Reed v. Same., 1 I.C.C. 325; Kindely v. Adams Express Co. et al., 13 I.C.C. 475.

Though not necessarily determinative, the Commission has held that one of the best tests of a rate's reasonableness is whether it is in line with other rates on same or similar commodities moving between other points in the same general territory. Economy Block Co. v. Baltimore & O.R. Co., 299 I.C.C. 141-145; Marinette Marine Corp. v. Atchison T. & S. D. Ry. Co., 303 I.C.C. 603-607. Table III shows that the rates herein produce car mile earnings which are more than 200 percent higher than the other rates to Laredo, Tex., on the same commodity and 87 percent higher than the railroad average for handling LPG. By contrast Tex-Mex makes a poor answer through the comparative LPG rates submitted as table IV because they are paper rates covering points from which no LPG moves. Likewise table V carries little weight because involved is a specific point to point rate and not one closely related to the class rate structure or any other grouping of rates.

The issues involved herein are very simple, addressed as they are to one specific rate, the rate on LPG from Realitos to Laredo, Tex, for subsequent export, applying on shipments of LPG moving in 33,000 gallon jumbo tank cars. Complainants have shown that the assailed rates are substantially in excess of the cost of performing the service involved. Defendant appears to have conceded this point. Defendant argues, however, that complainants have not proved that the assailed rates are above the reasonable maximum, which is the value of the service to the shipper. In this regard complainant submitted that because of the unreasonably high rates in issue the ability of Enterprise to honor its contract with the Republic of Mexico has been seriously jeopardized. A further interesting point is that the Republic of Mexico owns Tex-Mex and is likewise the ultimate consignee on the movements involved. Tex-Mex now has an operating ratio of 53.53 percent. In the light of these facts it is significant that Enterprise has scarcely been able to make a profit on the sale of the LPG, and its entire contract is in jeopardy. Specifically, the average cost for LPG to Enterprise at Realitos for the period from January 1, 1974 through July 31, 1975, was 22.115 cents per gallon. Deducting a sale price of 26 1/4 cent leaves a gross profit of 4.135 cents per gallon, from which Enterprise deducts transfer costs at Realitos, Tex., (estimated 1/2 cent per gallon); railway transportation (estimated 1 1/2 cent per gallon); cost of leasing tank cars (estimated 1/2 cent per gallon); and general sales, overhead, and administrative costs (estimated 1 cent per gallon). This allows Enterprise only 0.635 cents per gallon profit. Enterprise's profit is practically nonexistent. The profit made by Enterprise per gallon of LPG is only approximately one-half of the transportation charges assessed by Tex-Mex and yet Enterprise must enter into contracts to buy the LPG, arrange for the gathering of the LPG for movement into Realitos, lease the tank cars, and arrange for the sale, storage, and all other overhead costs, while Tex-Mex merely has to perform the transportation service. In Liquefield Petroleum Gas in the South and Southwest, 259 I.C.C. 55, 61 (1944), the Commission stated:

The value of the transportation service on the gas is affected not only by the origin value of the commodity and the competition which it encounters with other sources of energy, but by the distributors' narrow margin of profit and truck competition for the short hauls and potential barge competition for the long hauls.

Therefore, the value of service to the shipper shown here is not such as would justify a finding that the assailed rates are within the zone of reasonableness. It is readily obvious that the assailed rates are far beyond the zone of reasonableness and consequently constitute an unjust and unreasonable rate. With respect to costs, complainant showed that the cost to Tex-Mex of performing the service is 14.47 cents per hundredweight. Although obviously possessed of more than sufficient information to prepare its own cost survey, defendant chose not to prepare such a cost survey, but attacked complainant's study in an effort to show a more complex operation and consequently a more costly one than shown by complainant. The Administrative Law Judge concludes that the switching operation, track congestion, and paper work described do not convert a relatively simply operation into a complex one particularly when much of the paper work is prepared in advance by the complainants and no demurrage has been assessed on any of shipper's cars. Since a spur track is available near the Enterprise facilities, the movement of cars as much as 83 miles to Alice, Tex. is for the operating convenience of Tex-Mex and not because of necessity. Likewise, the transportation of LPG is no more hazardous than the transportation of other flammable products, and experience to date shows a low claim ratio.