District of Columbia, Baltimore, terri- | England Motor Carrier Rates, 11 M. C. tory.-Mid-Western Motor Freight Tar- C. 325 (326)*. iff Bureau, Inc., v. Eichholz, 4 M. C. C. 755 (761). 25. Competition considered. If the commission is to foster sound economic The deplorable financial condition in conditions, it must have regard for the the mid-western territory of motor car- welfare of the carriers generally, and riers generally, whose ratios of operat- it is its duty to keep competition withing expenses, including taxes, to reve-in reasonable bounds and prevent the nues, are close to 100 percent, demon-industry from degenerating into a mere strates the need for a reasonably com- struggle for existence.-Mid-Western pensatory level of rates for uniform Motor Freight Tariff Bureau, Inc., v. application.-Id., p. 772. Eichholz, 4 M. C. C. 755 (772); Southwestern Motor Freight Bureau, Inc., v. Gill, 11 M. C. C. 91. The motor carrier industry in central territory is in a demoralized condition due principally to conflicting rates and practices, lack of unity of action, continuing rate wars. The rate structure is filled with inequalities and incongruities. An order prescribing rates below which respondent carriers may not lawfully go is essential.-Central Territory Motor Carrier Rates, 8 M. C. C. 233*. Present downward trend in the rate level in central territory must be arrested if sound economic conditions are to be fostered. Cancelation of proposed rates ordered.-Id., 8 M. C. C. 131 (135). Class I motor common carriers in central territory as a group suffered heavy operating losses during 1937 and the first two months of 1938 under rates now in effect. The situation was less favorable during the first two months of 1938.-Id., p. 135. It is inevitable that in one way or another the competitive equilibrium in rates must be restored.-Id. A rate which is compensatory for a rail carrier might be below a minimum reasonable motor-carrier rate. The reverse may also be true in many instances. The commission must also take notice that the rail carriers to meet competition and for other purposes have resorted to rates below a minimum reasonable rate basis.-Mid-Western Motor Freight Tariff Bureau, Inc., v. Eichholz, 4 M. C. C. 755 (775). In many instances advantages inherent in motor transport permit motor carriers to charge higher rates than the rails, but where the services of both agencies are equally attractive to shippers the traffic flows to the agency having lower rates.-Id., p. 774. Defendants permitted to establish commodity rates as low as those maintained by rail carriers, but no lower.— Id., p. 778. The industry in New England is now and for some time has been in a critical condition. One of the major factors was the practice of establishing rates lower than the prevailing level to at- To foster sound economic conditions tract traffic, forcing the majority to re- the commission must keep in mind the duce rates or see desirable traffic di- needs of the territory as a whole for verted to such competitors.-Commod-good service at reasonable rates, includity Rates in New England, 8 M. C. C. ing small towns as well as larger cities. 387 (388)*. Carriers which undertake to provide a Injunction to respondents to increase comprehensive service must be given their rates to a maximum reasonable reasonable protection against those level wherever possible renewed; need which have elected to confine their atfor increased revenues are not local to tention largely to the points where busicarriers operating to and from the Newness in volume can be obtained.—Id., York metropolitan area, but is general p. 773; Southwestern Motor Freight Buthroughout the entire territory.-New reau, Inc., v. Gill, 11 M. C. C. 91. One of the principal purposes of the act is to bring greater stability to the motor-carrier industry and to prevent the demoralization which flows from unrestrained and unreasonable competition.-Rates over Freight Forwarders, Inc., 4 M. C. C. 68 (75)*. Railroads and motor carriers should put their houses in order and avoid destructive competition.-Stoves, Ala. and Tenn. to Interstate Points, 4 M. C. C. 641 (649). Rails have similar, perhaps better, opportunities to cut under the higher rates in the reverse direction upon which respondent is dependent for any profit. Competitive truck rates ought not to be permitted in the situation.-Refrigerator Material, Memphis, Tenn., to Dayton, Ohio, 4 M. C. C. 187 (189). To meet truck competition, through the medium of the forwarder, respondents established c. 1. all-commodity rates between many important points in the territory. These rates recovered a disappointingly small amount of traffic. Underlying reason-lack of information as to going-truck-rates.-Rates between Ariz., Calif., New Mexico, Texas, 3 M. C. C. 505 (511-12). In view of the volume and importance of petroleum traffic to defendant, the commission would hardly be justified in prescribing rates so high as to preclude it from competing on an even basis with the rail carriers.-Bamberger Electric R. Co. v. Lang Transp. Corp., 8 M. C. C. 200 (209). Financial ability of respondents serving small intermediate points as well as large key points is impaired by their efforts to meet competition of keypoint operators which handle truckloads between important commercial centers only, thereby able to cut rates to a degree that makes it no longer profitable for carriers that serve the general public.-Central Territory Motor Carrier Rates, 8 M. C. C. 233*. The principal reason for inequalities in existing commodity rates is the extreme competitive conditions that have prevailed not only between motor carriers and other transport agencies but to a considerable degree between the common motor carriers themselves.Id. It may ultimately be found that both rail and motor carrier rates should conform to cost of service principles, but as matters now stand motor carrier rates cannot reasonably be constructed without regard to the competitive rates of other carriers.-Id. It is necessary to establish a uniform basis for common carrier rates before it is possible to attack the similar problem of contract carrier rates. Issuance of a minimum rate order with respect to common carriers alone will not prejudice them unduly in favor of contract carriers, railroads or forwarders.-Id. Mere allegations that reductions are necessary to meet intrastate competition, competition of other transport agencies, are insufficient to warrant reductions. The fact of competition, volume, rates of competing agencies, conditions surrounding establishment of those rates, should be put in evidence.Id., 12 M. C. C. 153 (155)*. Intrastate rates are said to have been influenced by contract-carrier competition, but they may not in any way be affected by an order under the motor carrier act.-Id., p. 160. Reduction below prescribed rates is not warranted merely because of the belief that, upon the level sought, respondents would be able to handle some traffic now moving c. 1. for distribution in smaller quantities at destination.— Id., 19 M. C. C. 545 (586)*. Although the level of intrastate rates is lower than the level of the prescribed rates, this fact in itself is insufficient to require reduction of the latter.-Id., 20 M. C. C. 725 (728)*. In certain circumstances competition may justify inequalities in rates, but it is not sufficient justification where the inequalities cause undue preference and prejudice.—Id., 21 M. C. C. 473 (485)* If railroads are permitted to meet | reasonable minimum level and thus will competitively the rates of motor car- forgo the opportunity to obtain needed riers where the latter have the advan- increased revenues.-Id., 16 M. C. C. tage in costs of service, and at the same 499*. time the motor carriers refrain from meeting rail rates where the railroads have the cost advantage, the net result will be disadvantage to the motor carriers. New England Motor Carrier Rates, 8 M. C. C. 287*. If present trends in the motor-carrier industry continue, it will not be capable of transporting so large a portion of the traffic as it has attracted from the rails. It must be on a sound financial basis or shrivel until merely that remnant remains which is able to carry on at a living profit. And it must be able to act with some degree of solidarity.Fifteen Percent Case, 1937-1938, 226 I. C. C. 41 (74)*. The rail situation in New England and border territory is far less complex than the motor carrier situation. There are 100 motor common carriers of property in New England for every carrier by rail. Motor carriers compete with each other, with contract and private carriers, railroads, steamship companies, forwarding companies. They they would be reasonable for motor have no noncompetitive traffic.-Id. An irregular-route operator can despatch a truck of the size required, while regular-route operators generally operate 10 ton trucks between terminals regardless of extent to which loaded. Advantage of irregular-route carrier is offset by higher load factor on round trips enjoyed by regular-route carriers, and generally irregular-route operators transport in one direction only.-Id. Competitive rail rates are very low as a result of pipe-line competition and there is serious question as to whether carriers.-Lubricating Oil and Greases from Okla. to Mo., 9 M. C. C. 465 (467). The principal question in cases seeking adjustments to enable motor carriers to regain lost business, and to enable them to share in traffic that now moves solely by rail, is whether rates proposed would be reasonably compensatory.-Middle Atlantic States Motor Carrier Rates, 10 M. C. C. 193 (194)*. The commission has no jurisdiction By limiting operations to shipments over competitive intrastate rates.weighing 6,000 pounds or over, and col- Candy and Confectionery-Hersheylecting and delivering shipments with Baltimore, 11 M. C. C. 657 (661). line-haul trucks, the irregular-route Disastrous results will follow if the carrier may avoid pick-up and delivery, commission permits rail and motor carand other expenses incurred by regular-riers to engage in a rate war to gain or route carriers which afford a complete service.-Id. While small common carriers are alleged to be at a disadvantage in competing with larger carriers, there was no agreement as to what constitutes a small carrier.-Id. When the only justification offered for reduction in prescribed rates is to meet rail competition, respondents should not be permitted to go any farther than to publish a competitive rate.-Id., 12 M. C. C. 417 (423)*. retain available traffic. There are reasonable limits, however, to which motor carriers should be permitted to go in their effort to meet competition.-Rope and Sash Cord from Rockford, Tenn., 14 M. C. C. 437 (439). Owing to the flexibility of motor service and the lower minimum possible by truck, it should be able to compete for the traffic on the basis of a rate which, although higher than the competitive c. 1. rail rate, would be compensatory.— Leather from Middlesboro, Ky., to Chicago, Ill., 18 M. C. C. 265 (268). Unless the commission prescribes the increased rates, respondents, because of Rates on a depressed basis because of their apprehensions, will not bring competition are not a standard for reamany of their unduly low rates to a sonableness.- Rockne Bros.-Commodi As distance increases beyond 50 miles rail competition becomes more important. For extreme long hauls, costs of truck transport prevent any possibility of motor carriers competing with the ties, Sioux City, 19 M. C. C. 739 (741). The commission cannot adjust rates so as to deprive a point of the benefit of its natural advantages, such as location on а water route.-Coffee, Roasted, from Omaha to Twin Cities, 22 M. C. C. | rails. On low-grade, heavy-loading 529 (532). A contributing factor to operating losses of vendors is destructive competitive practices in central territory.Kirk Transp. Co.-Purchase-Guardian, 15 M. C. C. 729. commodities, the competitive range is shorter for motor carriers than on more valuable light-loading commodities.-New England Motor Carrier Rates, 8 M. C. C. 287*. That present rates are the same in amount as corresponding class rates of rail carriers, which are based upon distances by rail, does not establish that such rates are discriminatory even if the highway distances are shorter than 30. Volume of traffic bearing on reasonableness.-Frequency and volume of traffic handled have a bearing on the fact that defendant has been able to continue in operation in spite of his extremely low rates, but such circum-the distances by rail.-Hosiery-Loudon stances do not convince that the low rates are just and reasonable.-Southwestern Motor Freight Bureau, Inc., v. Gill, 11 M. C. C. 91 (99). While tonnage of carriers transporting special commodities has not fallen off during the recession, that of common carriers of general commodities has been reduced from 25 to 40 percent. New England Motor Carrier Rates, 8 M. C. C. 287*. and Roane Counties, Tenn.-St. Louis, 17 M. C. C. 464 (465). Waring tariff class rates compared with similar rates for like distances between New York City and New England points show the former materially lower, much lower than for comparable distances between Charlotte, N. C. and other points in southern territory.— Rates over Freight Forwarders, Inc., 4 M. C. C. 68 (74)*. I. C. C. 588 (599). Uniform spreads of 10 and 20 cents Paper stock can be moved with profit under any-quantity basis are made on by trucks for distances up to 100 miles. the theory that there is actual saving-Paper Stock in Official Territory, 214 (largely terminal) to the carrier, approximating those amounts, in handling California R. Comm. has found movthe larger quantities.-Rates between ing petroleum products in trucks has Ariz., Calif., New Mex., Tex., 3 M. C. C. advantage in costs for 290 miles and 505 (514). less, rails in costs for longer distances. The new Waring tariff rates include a-Petroleum between Wash. and Oreg. volume "break-down". [Described, p. Points, 225 I. C. C. 382 (388)*. 74].-Rates over Freight Forwarders, Inc., 4 M. C. C. 68*. 40. Distance considered in determining reasonableness.-That traffic to intermediate points is less than to the❘ more distant points is no satisfactory reason for maintenance of higher rates to such points. In absence of a sound reason therefor, maintenance of class rates to intermediate points higher than to more distant points on the same route is prima facie unreasonable.Fifth Class Rates between Boston and Providence, 2 M. C. C. 530 (546). It is doubtful whether earnings of 8.15 cents per truck-mile for roundtrip movement of 1,150 miles would produce any profit.-Bigler, 6 M. C. C. 221 (224). 41. Rates per truck-mile. By "truck-mile" is meant the highway unit, generally a truck and trailer.-Petroleum between Wash., Oreg., Ida., Mont., 234 I. C. C. 609 (626)*. A rate which yields earnings per truck-mile substantially less than the carrier's average fully allocated costs is not compensatory, in absence of showing that admitted average costs are not representative for the particular movement.-Tallow from Tulsa to Mo., Ill., Ind., Ky., 19 M. C. C. 751 (753). Proposed rate and minimum would hardly be compensatory, for 5.83 cents, or even 6.89 cents, per truck-mile is very low revenue.-Refrigerator Material, Memphis to Dayton, 4 M. C. C. 187 (189). Proposed rates would produce earnings ranging from 3.4 to 4.5 cents, from 3.1 to 5.5 cents per loaded truck-mile. Such low earnings form a logical basis for the presumption that the rates are less than compensatory.-Commodity Rates of Okla. & Tex. Transfer Co., 6 M. C. C. 259 (260). Truckload rates that yield 27 cents per truck-mile for 111 miles and 30 cents for 72 miles are not so low as to be noncompensatory.-Brown Commodity Rates-Baltimore and Washington, 17 M. C. C. 335. If proposed commodity rates were permitted to become effective, a general demand would be made for like rates from other manufacturing points in the South. Not approved.—HosieryLoudon and Roane Counties, Tenn.-St. Louis, 17 M. C. C. 464 (466). Proposed rate would tend to disrupt existing rate structures. In event additional traffic could not be secured in large volume, there would be an unnecessary depletion of respondents' revenues as well as those of protestants and other carriers, should they, because of competitive influences, reduce their rates to the same level. Unlawful. - Proportional Rate on Drugs-Memphis-St. Louis, 12 M. C. C. 447 (452). If respondents were permitted to meet the competitive rates, other carriers might seek to do likewise and a bad situ ation would become worse.-Rockne Bros.-Commodities, Sioux City, 19 M. C. C. 739 (741). Motor carriers do not generally regard small package business as profit45. Disruption of rate adjustment.—able except at rather high minimum That proposed rates might tend to dis- rates. It is difficult to see that the rupt the class-rate adjustment through-motor-carrier rate structure would be out a great portion of the territory is disrupted by applicant's effort to revise by itself no sufficient reason for condemning them.-Fifth Class Rates between Boston and Providence, 2 M. C. C. 530 (547). its rates to place it in better relation with its principal competitor, parcel post service.-Express Rates, 1938–1939, 231 I. C. C. 471 (499). 50. Difference in value as between grades of same commodity. — That value and transport characteristics of the two kinds of paper are substantially the same, considered.-Commodity Rates via Bates Motor Transport Lines, Inc., 1 M. C. C. 457 (458). Disruption of the rate structure of motor common carriers in itself is no sufficient reason for prohibiting a change. All that rail carriers have done is to initiate a schedule which must be upheld as lawful unless adequate reasons are presented for setting it aside. Reduced rate on mixed car- 51. New and second-hand articles.loads of all commodities, by rail, justi- Used or second-hand articles will be fied.-All-Freight, Boston to East Hart-given lower ratings than the new articles ford, 223 I. C. C. 421. Rates not approved, for if permitted to remain in effect it is probable that competition would at length force similar reductions throughout southern territory, thus unnecessarily imperil a reasonable rate structure.-Paint, etc., from Chattanooga to Ala. and Ga., 19 M. C. C. 1 (5). of the same kind only when the old articles have no value except as junk. Reconditioned auto parts are used for the same purposes as new parts, despite the differences in value.-Reconditioned and Junk Auto Parts in Southern Territory, 17 M. C. C. 436 (439). 60. Weight basis. - Weight limita. tions, sec. 225, n. 25. |