A-24222, B-142795, DEC. 30, 1960

A-24222, B-142795, DEC. 30, 1960

TO SUMNER G. WHITTIER, ADMINISTRATOR, VETERANS ADMINISTRATION:

IN A LETTER OF NOVEMBER 8, 1960, FILE 134D3, FROM THE DIRECTOR, SUPPLY SERVICE OF YOUR DEPARTMENT OF MEDICINE AND SURGERY, TO THE DIRECTOR OF OUR TRANSPORTATION DIVISION, WE WERE ASKED TO CLARIFY THAT PART OF OUR DECISION OF JULY 27, 1959, A-24222, IN WHICH WE REFERRED TO A LETTER DATED MAY 5, 1958, FROM THE MANAGER OF THE SUPPLY DEPOT AT ROYCE, NEW JERSEY, INDICATING THAT THOSE ARTICLES THAT COULD BE MOVED CHEAPER UNDER RATES NAMED IN TARIFFS FOR THE SPECIFIC ARTICLES THAN UNDER SECTION 22 QUOTATIONS FOR "FREIGHT, ALL KINDS" (FAK) OR "FOODSTUFFS," WOULD BE LISTED SEPARATELY WITH A PROVISION ON THE BILL OF LADING TO THE EFFECT THAT SUCH LOWER RATES WOULD APPLY AS TO THE IDENTIFIED ARTICLES. IT IS NOW EXPLAINED THAT MOTOR CARRIERS ARE PROTESTING YOUR ADMINISTRATION'S APPLICATION OF A COMBINATION OF FREIGHT, ALL KINDS RATES TO HIGH-RATED ITEMS AND LOWER TARIFF RATES TO LOW-RATED ITEMS ON ARTICLES MOVING IN THE SAME SHIPMENT BETWEEN THE SAME POINTS ON ONE BILL OF LADING. THESE CARRIERS CONTEND THAT THIS PRACTICE IS CONTRARY TO THE DECISION OF THE INTERSTATE COMMERCE COMMISSION IN DOCKET NO. MC-C-1331, AND SAY THAT EITHER THEIR SPECIAL QUOTATIONS OR THEIR TARIFFS, NOT BOTH, MAY BE USED EXCLUSIVELY TO DETERMINE THE TOTAL TRANSPORTATION CHARGES ON ANY PARTICULAR SHIPMENT. WE HAVE ALSO FOR CONSIDERATION AT THIS TIME A LETTER FROM MCLEAN TRUCKING COMPANY--- CONCERNING THE FREIGHT CHARGES APPLICABLE ON GOVERNMENT BILL OF LADING VA-874504--- IN WHICH THE PROPRIETY OF USING ITS TENDER IC.C.NO. 64 TOGETHER WITH A PUBLISHED AND FILED TARIFF WHICH OTHERWISE WOULD BE APPLICABLE BY ITS TERMS IS QUESTIONED.

THE ADMINISTRATIVE DIRECTIONS ON THE REVERSE OF THE GOVERNMENT BILL OF LADING FORM REQUIRE THAT ARTICLES TO BE SHIPPED BE DESIGNATED BY THE CARRIER'S CLASSIFICATION OR TARIFF DESCRIPTION, IF POSSIBLE, AND THAT THE WEIGHT, DIMENSIONS, AND MANNER OF PACKING BE STATED. IN A LETTER OF DECEMBER 15, 1958 (FILE REFERENCE 134D3), FROM YOUR ADMINISTRATION, AUTHORITY WAS REQUESTED TO DEVIATE FROM THESE DIRECTIONS IN THE DESCRIPTION OF VARIOUS ARTICLES SHIPPED FROM YOUR WAREHOUSES BY USING THE GENERAL COMMODITY DESCRIPTION "FREIGHT, ALL KINDS" WHERE TARIFF OR QUOTATION RATES WERE AVAILABLE FOR SHIPMENTS SO CLASSIFIED. IN THAT LETTER WE WERE ASSURED THAT THE PROPOSED PROCEDURE WOULD BE UNDER THE CONTROL OF QUALIFIED TRAFFIC PERSONNEL AND WOULD BE POLICED PERIODICALLY BY REPRESENTATIVES OF YOUR CENTRAL OFFICE. AT THAT TIME IT APPEARS TO HAVE BEEN ASSUMED THAT THE SECTION 22 QUOTATIONS GENERALLY DESCRIBED CONTAINED AUTHORITY FOR THE PARTIAL APPLICATION OF THE LOWER TARIFF RATES IN COMBINATION WITH THE SECTION 22 QUOTATION RATES TO PRODUCE LOWER OVERALL CHARGES ON ANY GIVEN SHIPMENT. APART FROM SUCH AUTHORITY THE SEPARATE ITEMIZATION OF ARTICLES SUBJECT TO RATES LOWER THAN THOSE AVAILABLE UNDER A SECTION 22 TENDER OR QUOTATION MAY PROVIDE A READY BASIS FOR A COMPARATIVE ANALYSIS BETWEEN QUOTATION AND TARIFF CHARGES ON AN ENTIRE SHIPMENT. HOWEVER, IN THE ONE SPECIFIC EXAMPLE (CONCERNING BILL OF LADING VA 874504) WE NOW HAVE BEFORE US FOR REVIEW, NO AUTHORITY EXISTS, UNDER THE TRANSPORTATION CONTRACT, FOR THE LOWER-CHARGE BASIS APPLIED BY YOUR ADMINISTRATION.

BILL OF LADING VA-874504 COVERED A SHIPMENT OF MISCELLANEOUS GOVERNMENT FREIGHT WEIGHING 95,002 POUNDS WHICH WAS MOVED BY THE MCLEAN TRUCKING COMPANY FROM ROYCE, NEW JERSEY, TO COLUMBIA, SOUTH CAROLINA, DURING FEBRUARY 1959. THIS BILL OF LADING WAS ANNOTATED IN SUCH A WAY AS TO SHOW THE GOVERNMENT'S INTENTION TO CONTRACT FOR CHARGES ON 12,575 POUNDS OF FREIGHT AT TARIFF RATES AND THE REMAINING 82,427 POUNDS AT RATES NAMED IN MCLEAN TRUCKING COMPANY TENDER I.C.C. NO. 64 FOR ,FREIGHT, ALL KINDS" AND "FOODSTUFFS.' THE CARRIER CLAIMED TRANSPORTATION CHARGES OF $975.76 BASED ON THE RATES CONTAINED IN ITS TENDER I.C.C. NO. 64 APPLIED ON THE TOTAL WEIGHT OF THE SHIPMENT. YOUR ADMINISTRATION RECOMPUTED THE ALLOWABLE CHANGES AND, AFTER AN EXCHANGE OF CORRESPONDENCE,

PAID $934.31, OF $41.45 LESS THAN THE AMOUNT CLAIMED. THIS ACTION WAS BASED ON THE USE OF PUBLISHED TARIFF TRUCKLOAD RATING AND RATES ON VARIOUS ARTICLES IN THE SHIPMENT WEIGHING A TOTAL OF 12,575 POUNDS--- THE CHARGES THEREON BEING BELOW THE LEVEL OF THE CHARGES NAMED IN TENDER I.C.C.NO. 64- -- AND COMPUTING THE CHARGES FOR THE REMAINING 82,427 POUNDS AT THE TENDER BASIS.

IN VIEW OF THE WAY BILL OF LADING VA-874504 IS ANNOTATED TO REFLECT A TENDERING TO THE CARRIER ON CONDITION THAT SOME OF THE ARTICLES WOULD BE SUBJECT TO TARIFF RATES, THERE IS SOME SUPPORT FOR THE CONCLUSION, AS TO THE PARTICULAR FACTUAL SITUATION CONCERNED, THAT THE CONTRACT OF CARRIAGE THUS MADE BETWEEN THE GOVERNMENT AND THE CARRIER IS ENFORCIBLE ACCORDING TO THE BILL OF LADING TERMS. CHARLES J. WEBB AND SONS V. CENTRAL R.CO., 36 F.2D 702; BENTON RAPID EXPRESS, INC. V. UNITED STATES, 171 F.SUPP. 868. THE INTERSTATE COMMERCE COMMISSION'S RULING IN MERCHANDISE IN MIXED TRUCKLOADS--- EAST, 63 M.C.C. 453--- FINDINGS IN DOCKET NO. 31006--- THAT A TARIFF PROVISION WHICH AUTHORIZES THE INCLUSION OF FREIGHT IN MIXED TRUCKLOADS AT RATES OR CHARGES LOWER THAN FREIGHT, ALL KINDS, RATES IS UNJUST AND UNREASONABLE -- WOULD NOT BE CONTROLLING IN THE PRESENT CIRCUMSTANCES BECAUSE OF AUTHORITY FOR FREE OR REDUCED RATE TRANSPORTATION UNDER 49 U.S.C. 317 (B), 22. HOWEVER, ASSUMING THAT A VALID CONTRACT WAS MADE BETWEEN THE GOVERNMENT AND THE CARRIER FOR THE ASSESSMENT OF CHARGES ON THE MIXED TRUCKLOAD SHIPMENT UNDER BILL OF LADING VA-874504 AT BOTH TARIFF RATES AND THE FREIGHT, ALL KINDS, AND FOODSTUFFS RATES (TENDER I.C.C.NO. 64), WE FIND THAT SUCH A BASIS PRODUCES CHARGES HIGHER THAN IF THE COMPLETE SHIPMENT WERE FIGURED SOLELY AT THE TENDER BASIS, AS CONTENDED FOR BY THE CARRIER.

IN COMPUTING THE FREIGHT CHARGES YOUR ADMINISTRATION USED THE TRUCKLOAD RATINGS AND TARIFF RATES AT THE ACTUAL WEIGHT OF EACH VEHICLE MAKING UP THE 12,575 POUNDS WHICH, BY THE BILL OF LADING CONTRACT, WAS TO BE CHARGED AT THE TARIFF RATHER THAN THE QUOTATION BASIS. WHAT, IN EFFECT, WAS DONE WAS TO APPLY THE "STREAMLINED RULE 10" THEORY OF COMPUTING CHARGES ON MIXED TRUCKLOAD SHIPMENTS IN A SITUATION WHERE THERE WAS, IN FACT, NO AUTHORITY FOR THE APPLICATION OF SUCH RULE. TENDER I.C.C.NO. 64 DID NOT CONTAIN SUCH A RULE NOR DID IT PERMIT REFERENCE TO ANY SUCH RULE OF A TARIFF. THE GOVERNING MIXED SHIPMENT RULE IN THE APPLICABLE TARIFF--- ITEM 210, SOUTHERN MOTOR CARRIERS RATE CONFERENCE TARIFF NO. 504-A--- REFLECTING THE "STREAMLINED RULE 10" THEORY, DID NOT AUTHORIZE THE USE OF FREIGHT, ALL KINDS RATES OBTAINABLE UNDER SECTION 22 TENDERS. ABSENT AUTHORITY FOR THE APPLICATION OF THE "STREAMLINED RULE 10" THEORY TO THIS SHIPMENT (COVERED BY BILL OF LADING VA-874505), THE AMOUNT THAT WOULD BE PROPERLY DUE THE CARRIER UNDER THE ALTERNATIVE CHARGE BASES REMAINING, THAT IS, SOLELY UNDER TARIFF RATES OR UNDER STRICT APPLICATION OF TARIFF RATES (WHEREBY A WEIGHT DEFICIT NECESSARY TO MAKE THE TARIFF TRUCKLOAD MINIMUM WEIGHT WOULD BE SUBJECT TO THE TARIFF RATES) IN COMBINATION WITH THE TENDER RATES, EXCEEDS THE AMOUNT THAT WOULD BE DUE UNDER THE TENDER BASIS ALONE. ACCORDINGLY, WE ARE INFORMING THE CARRIER BY LETTER OF TODAY (B-142795), COPY ENCLOSED, THAT THE ACTION TAKEN BY YOUR ADMINISTRATION IN REDUCING THE CARRIER'S BILL FOR FREIGHT CHARGES AS ORIGINALLY PRESENTED ON THIS SHIPMENT WAS INCORRECT.

OUR RECOGNITION IN OUR DECISION OF JULY 27, 1959, OF THE PRACTICE OF LISTING LOW-RATED ITEMS SEPARATELY ON GOVERNMENT BILLS OF LADING SHOULD NOT BE VIEWED AS IMPOSING A REQUIREMENT THAT TARIFF RATES IN COMBINATION WITH SPECIAL TENDER OR QUOTATION RATES ON FREIGHT, ALL KINDS AND FOODSTUFFS BE APPLIED WHERE THERE IS NO AUTHORITY UNDER THE TRANSPORTATION CONTRACT FOR SUCH APPLICATION. SEPARATE ITEMIZATION OF THE ARTICLES SHIPPED NEED NOT BE MADE IN BILLS OF LADING COVERING FREIGHT, ALL KINDS OR FOODSTUFFS SHIPMENTS OF THE TYPE DISCUSSED ABOVE UNLESS A LEGAL CONTRACTUAL BASIS EXISTS FOR SUCH ITEMIZATION AND IT PROVES TO BE ADVANTAGEOUS TO THE GOVERNMENT. WE WOULD UNDERSTAND, HOWEVER, THAT THE CARRIERS, IN MAKING THE SPECIAL TENDERS OR QUOTATIONS CONCERNED, DO NOT ORDINARILY CONTEMPLATE ENTERING INTO BILL OF LADING CONTRACTS FOR THE TRANSPORTATION OF ARTICLES WITHIN THE MEANING OF THOSE TENDERS OR QUOTATION SUBJECT TO RATES OTHER THAN THOSE THUS SPECIFICALLY AUTHORIZED. IN THAT SITUATION ISSUANCE OF BILLS OF LADING IN THE MANNER OF VA-874504 COULD RESULT IN THE CANCELLATION OF TENDERS SUCH AS NO. 64 AND IT WOULD SEEM CONSISTENT WITH SOUND TRAFFIC MANAGEMENT PRACTICES TO DISCONTINUE THE SEPARATE LISTING OF VARIOUS ARTICLES IN BILLS OF LADING COMPREHENDED BY THE MENTIONED BROAD DESCRIPTIONS WHERE NOT NECESSARY. WE STILL EXPECT, NEVERTHELESS, AS STATED IN THE LAST PARAGRAPH OF OUR DECISION OF JULY 27, 1959, THAT ADEQUATE INFORMATION AS TO THE ACTUAL CONSIST OF A SHIPMENT WILL BE MAINTAINED AND MADE AVAILABLE TO OUR OFFICE, IF NEEDED.