B-120651, JAN. 27, 1956

B-120651, JAN. 27, 1956

TO UNION PACIFIC RAILROAD COMPANY:

REFERENCE IS MADE TO YOUR REQUEST FOR REVIEW OF THE SETTLEMENT WHICH DISALLOWED YOUR CLAIM, PER BILL NO. F-177381-A, FOR $106.46 REPRESENTING A PART OF THE CHARGES ALLEGED TO BE DUE FOR TRANSPORTING A SHIPMENT OF 102 CARTONS OF CHAIR TOPS, WEIGHING 10,234 POUNDS, FROM BEDFORD, OHIO, TO PORTLAND, OREGON, ON BILL OF LADING MC-136086, DURING JULY 1942.

FOR THIS TRANSPORTATION YOU ORIGINALLY CLAIMED AND WERE PAID $555.71, COMPUTED ON THE BASIS OF A COMMERCIAL RATE OF $5.43 PER 100 POUNDS. THE AUDIT OF THIS PAYMENT OUR TRANSPORTATION DIVISION DETERMINED THAT THE ALLOWABLE CHARGES FOR THE TRANSPORTATION WERE $197.63, COMPUTED ON THE BASIS OF A COMMODITY RATE OF $2.77 PER 100 POUNDS, CARLOAD MINIMUM WEIGHT 12,500 POUNDS, PROVIDED IN ITEM 2833 OF TRANS-CONTINENTAL FREIGHT BUREAU TARIFF NO/4-S, I.C.C. NO. 1473, REDUCED BY LAND-GRANT DEDUCTIONS TO $1.58101 PER 100 POUNDS. YOU REFUNDED $241.39 OF THE OVERPAYMENT OF $358.08, AND THE REMAINDER OF $116.69 WAS COLLECTED IN MAKING PAYMENT OF AMOUNTS OTHERWISE DUE YOUR COMPANY. THEREAFTER, YOU CLAIMED THE AMOUNT OF $116.69 ALLEGING THAT THE SHIPMENT WAS DELIVERED AT DESTINATION BY THE MANNING WAREHOUSE AND TRANSFER COMPANY, AND YOU WERE ALLOWED $10.23 FOR THE DELIVERY SERVICE, COMPUTED ON THE BASIS OF 10 CENTS PER 100 POUNDS AT THE ACTUAL WEIGHT OF THE SHIPMENT.

IN YOUR REQUEST FOR REVIEW YOU STATE THAT THE ACTUAL WEIGHT OF THIS SHIPMENT WAS 10,234 POUNDS, WHEREAS CARLOAD MINIMUM WEIGHT FOR THE $2.77 RATE WAS 12,500 POUNDS, AND THAT SINCE DELIVERY SERVICE WAS PERFORMED BY THE MANNING WAREHOUSE AND TRANSFER COMPANY AT PORTLAND, AS REPORTEDLY REQUESTED BY THE GOVERNMENT, THE CARRIER WAS NOT AUTHORIZED TO DISREGARD THE PROVISIONS OF SECTION 1 (B), RULE 15 OF CONSOLIDATED FREIGHT CLASSIFICATION NO. 15.

IT APPEARS THAT YOU ARE CLAIMING A TOTAL OF $304.32 FOR THE TRANSPORTATION OF 10,234 POUNDS, BEING 2,266 POUNDS LESS THAN THE CARLOAD MINIMUM WEIGHT OF 12,500 POUNDS, WHICH WOULD ENTAIL CHARGES OF $197.63. THUS, YOU ARE CLAIMING ABOUT 54 PERCENT GREATER REVENUE FOR TRANSPORTING A SHIPMENT WEIGHING 10,234 POUNDS THAN FOR A SHIPMENT OF 12,500 POUNDS, OR ABOUT 22 PERCENT GREATER WEIGHT.

IN CRANE CO. V. ALTON R. CO., 268 I.C.C. 511, 513, INVOLVING THE CLASSIFICATION RULE ON WHICH YOU RELY TO SUSTAIN CHARGES BASED UPON THE LESS-THAN-CARLOAD RATE IN THE PRESENT MATTER, THE INTERSTATE COMMERCE COMMISSION SAID THAT COMPARED WITH THE CHARGES FOR A MINIMUM CARLOAD, THE COMPLAINANT HAD TO PAY 87 PERCENT GREATER CHARGES FOR 39 PERCENT LESS WEIGHT; THAT THE CIRCUMSTANCES SURROUNDING THE SHIPMENT WERE NOT UNUSUAL; THAT SIMILAR RESULTS WILL OCCUR UNDER THE RULE WHENEVER PICK-UP OR DELIVERY SERVICE IS PERFORMED ON A SHIPMENT WHICH COMPROMISES A SUBSTANTIAL PORTION OF A CARLOAD AND THERE IS A LARGE DIFFERENCE BETWEEN THE CORRESPONDING CARLOAD AND LESS-THAN-CARLOAD RATES; AND THAT SUCH AN EXCEPTION TO THE RULE IS "PATENTLY UNJUST AND UNREASONABLE," WHEN IT RESULTS IN THE EXACTION OF CHARGES WHICH "ARE EXTORTIONATE, UNJUST, AND UNREASONABLE.'

THE COMMISSION THERE FOUND THAT THE CHARGES BASED ON THE LESS-THAN CARLOAD RATE WERE UNJUST AND UNREASONABLE TO THE EXTENT THAT THEY EXCEEDED THE CHARGES FOR A MINIMUM CARLOAD AT THE CARLOAD RATE, PLUS THE USUAL CHARGES FOR UNLOADING THE ACTUAL WEIGHT SHIPPED. AND SEE ALSO CARNATION CO. V. SOUTHERN PACIFIC CO., 269 I.C.C. 470, WHERE THE COMMISSION STATED THAT THE DISCREPANCY BETWEEN THE CHARGES WAS SO SUBSTANTIAL AS TO CREATE DOUBT AS TO THE JUSTIFICATION FOR THE DIFFERENCE; THAT SIMILAR RESULTS WOULD ENSUE WHENEVER PICK-UP AND LOADING SERVICE IS PERFORMED ON A SHIPMENT THAT WEIGHTS SLIGHTLY LESS THAN THE CARLOAD MINIMUM HEIGHT, AND WHEN THERE IS A SUBSTANTIAL DIFFERENCE BETWEEN THE CARLOAD AND LESS-THAN- CARLOAD RATES; AND THAT NO JUSTIFICATION APPEARS FOR THE EXCEPTION TO THE RULE INVOLVED WHEN, AS IN THE INSTANCE UNDER CONSIDERATION, IT RESULTS IN THE APPLICATION OF CHARGES WHICH PATENTLY ARE UNJUST AND UNREASONABLE.

IT APPEARS, THEREFORE, THAT IF, AS YOU URGE, DELIVERY SERVICE AT DESTINATION WAS RENDERED IN CONNECTION WITH THIS SHIPMENT, THE TRANSPORTATION CHARGES CLAIMED BY YOU TO BE APPLICABLE BECAUSE OF SUCH DELIVERY SERVICE WOULD BE CLEARLY IN THE CATEGORY OF CHARGES WHICH "PATENTLY ARE UNJUST AND UNREASONABLE" AS SAID IN THE CARNATION COMPANY CASE, OR WHICH ARE "EXTORTIONATE, UNJUST, AND UNREASONABLE" AS SAID IN THE CRANE CO. CASE, TO THE EXTENT THAT THEY EXCEEDED THE CHARGES FOR A MINIMUM CARLOAD AT THE CARLOAD RATE, PLUS REASONABLE COMPENSATION FOR SUCH ACCESSORIAL SERVICES AS WERE PERFORMED.