EX PARTE NO. 241

INVESTIGATION OF ADEQUACY OF RAILROAD FREIGHT CAR OWNERSHIP, CAR UTILIZATION, DISTRIBUTION, RULES AND PRACTICES

Decided August 25, 1976

Upon further consideration, Car Service Rule 7, previously prescribed and modified, further modified.

James I. Collier, Jr., for petitioner.

REPORT OF THE COMMISSION ON

FURTHER CONSIDERATION

MURPHY, Commissioner:

In the prior report, 335 I.C.C. 264 (1969), as modified in 335 I.C.C. 874 (1970), it was found that the Nation's railroads as a group lacked an adequate freight car supply. In an attempt to resolve these problems, certain car service rules, including rule 7, which was intended to alleviate delays to loaded cars at terminals and interchange points, were prescribed for mandatory observance, and the proceeding was held open for further action, if necessary. Upon petition, rule 7 was modified in a prior proceeding, 343 I.C.C. 360, at 365 (1973). That modification is reproduced in the appendix hereto and designated as the "present" rule. See also, 49 CFR 1033.7. The modification of rule 7 essentially provides that penalty charges be assessed against the delivering carrier at an interchange point to be paid to the receiving carrier for any car that was interchanged without a waybill. Such cars are unknown as "no bill" cars. The intent of the modification was that in assessing such penalty charges, delays in car movement through interchange points would be reduced, and receiving lines would be compensated to some extent for their expense in holding and/or returning “no bill" cars.

The penalty provision as applied to "no billed" cars apparently has been very effective in increasing the efficiency of car movements at interchanges. As such, individual railroads have sought to expand the scope of the penalty provision to error deliveries by attempting to publish individual tariff provisions pertaining to this matter. In response thereto, in Investigation and Suspension Docket No. 8975, Holding & Switching Charges for Returning Misdirected Cars, decided May 1, 1975 (not printed), Review Board Number 4 ordered that the proposed rule and charges for the handling, disposition and/or return of loaded and empty cars delivered in error published by individual carriers be canceled, in that the "proper remedy for any legitimate problems encountered by the respondents in the efficient interchange of equipment with other carriers is to seek redress within the framework of Ex Parte No. 241***."

Pursuant thereto, on November 3, 1975 the Association of American Railroads (hereinafter referred to as the Association or petitioner) filed the instant petition seeking further modification of rule 7. No replies to the petition were received.

Under the proposed modification, the Association seeks to clarify certain existing provisions of rule 7 where disputes among railroads have arisen, and to expand upon the penalty provision of paragraph (D) thereof, so as to make the penalty applicable on defined "error delivery cars" in addition to the existing penalty on "no bill" cars.

The following is an explanation submitted by the Association of the specific proposed amendments to rule 7 found in the appendix hereto, and justification for such amendments.

(1) Note 2 provides for notification other than in writing when agreed to by carriers involved. This will help expedite the movement of the "no bill" or "error delivered" car to the proper carriers.

(2) Note 4 has been added to define the areas in which intermediate switching carriers will be responsible for the penalty charge and where they will not be responsible. This will help to eliminate some of the disputes which have arisen as to application of the penalty provisions to switching carriers.

(3) A portion of the first sentence of paragraph (D), which now reads “or delivered in run-through trains," was eliminated since there is no need for handling or treating these cars any differently than other cars placed on interchange tracks. If any unsual problems arise from the operation of run-through trains, they should and can be resolved by the carriers involved who have entered into run-through train arrangements or agreements.

(4) Item 1 of paragraph (D) presently provides that the $25 penalty applies only when "no bill" cars are returned to the delivering carrier. In many cases excess switching could be reduced and car interchange could be improved if the carrier receiving the "no bill" car would determine where the car actually belonged and delivered the car to the proper carrier. The proposed amendment will accomplish this. Also, in the same item, the obligation for the payment of the $25 penalty charge will be placed upon the "delivering carrier" rather than the "responsible carrier." In some cases, it has been very difficult to determine the "responsible carrier" where several have participated in the movement of a car. In order to eliminate some of the disputes concerning this, it is deemed advisable to place the responsibility directly on the carrier delivering the "no bill" car. Further, in item 1, the carrier delivering a "no bill" car has been made responsible for car hire charges and intermediate switching charges applicable when an intermediate switching carrier is used to deliver the "no bill" car to the delivering or proper

carrier.

(5) A new paragraph (E) has been added to cover certain defined error delivery problem areas where the $25 penalty charge would apply if approved. It is hoped that the penalty provisions will reduce the number of such instances of error delivery and will contribute to improved car utilization. The new requirement for documented notice withtin 5 days was added to facilitate accounting procedures. (6) Note 3 was added to prevent any carrier from being assessed more than one $25 penalty charge for any single instance at an interchange point involving one car. (7) The proposed new paragraph (F) adds a time limit for the presentation of bills for penalty charges which is deemed necessary for accounting and policing purposes.

1 Error delivery cars are defined in paragraph E of the proposed rule 7 appearing in the appendix.

Petitioner represents substantially all of the class I railroads, and also many of the class II railroads, which are subject to the car service rules prescribed in the prior decisions in this proceeding. The membership was polled by petitioner before the considered proposal was submitted to the Commission to determine whether the proposal had membership support. Of a total of 1,519,787 votes, based on revenue freight cars owned, 1,451,592 votes or 95 percent, favored the proposal, 63,062 votes, or 4 percent, were cast against the proposal, and 5,143 votes were not cast. Thus, it appears that there is not a significant opposition to the proposed modification, especially when considering that no responses have been received to the Association's petition.

On the record we believe that the proposed penalty charges on cars delivered in error will operate in the public interest. Moreover, the fact that the penalty charges will not be assessed against the public, but will be reciprocally applicable only between the railroads is further reason to support this conclusion. The objective is to encourage more efficient operating practices in interchanging cars and the proposed penalty should produce that result. The record for the reasons stated in the original report, 335 I.C.C. 264, remains open for possible further modification or prescription.

We find that Car Service Rule 7, set forth in appendix G to the report, 335 I.C.C. 264, at pages 350-351, as modified in 335 I.C.C. 874, and further modified in 343 I.C.C. 360, at page 365 thereof, (the present rule herein) should be further modified, as proposed in the appendix hereto with additional minor changes made for the purposes of clarity. Paragraphs (D) and (F) have been clarified so that, among other things, when an intermediate switching carrier is used, the delivering carrier will not be held liable for intermediate switching and car hiring charges applicable upon disposing of error delivered cars when the switching carrier is directly responsible. This and our other modifications to the proposed rule 7 are relatively minor and consequently we do not expect opposition from any of the parties to this proceeding. However, if any of the parties to this proceeding object to our modifications, we will entertain their petition for reconsideration.

This decision is not a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969.

An appropriate order of modification will be entered, and it will be published in the Federal Register.

VICE CHAIRMAN CLAPP, Concurring in the result.

COMMISSIONER O'NEAL, did not participate.

357 I.C.C.

(A)

Cars shall be considered as having been delivered to a connecting railroad when placed upon the track agreed upon and designated as the interchange track for such deliveries, accompanied or preceded by necessary data for forwarding and to insure delivery, and accepted by the car inspector of the receiving road.

Notwithstanding the foregoing paragraph, the receiving road shall be responsible for the cars, contents and per diem after receipt of the proper data (1) for forwarding and to insure delivery. This responsibility shall continue as respects cars rejected by the car inspector of the receiving road until such cars have been returned to the delivery road. The effect of this paragraph may be altered by special arrangements made between the roads concerned.

(C) When interchange required by section (B) paragraph (1) of the rule cannot be accomplished, the provisions of Car Hire Rule 15 will apply.

(C) No change.

2 Rules promulgated by the Commission when subsequently published in carrier tariffs or submitted in Commission proceedings must be verbatim, i.e., in the "the same words" as prescribed.

357 I.C.C.