B-122963, APR. 16, 1956

B-122963: Apr 16, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

YOU CLAIMED AND WERE PAID CHARGES COMPUTED ON THE BASIS OF A THROUGH COMMODITY RATE OF $1.35. THE RATE OF $1.35 IS PUBLISHED IN CENTRAL FREIGHT ASSOCIATION TARIFF NO. 497-F AND IS RESTRICTED TO APPLY ONLY VIA THE ROUTES SPECIFIED THEREIN. OUT TRANSPORTATION DIVISION DETERMINED THAT THE PROPER LAND GRANT ROUTE OVER WHICH TO COMPUTE THE CHARGES ON THESE SHIPMENTS WAS VIA THE PERE MARQUETTE RAILWAY TO MANITOWOC. WAS NOT APPLICABLE VIA THE SELECTED LAND-GRANT ROUTE SO THE CHARGES WERE COMPUTED ON THE BASIS OF THE CLASS RATES LAWFULLY APPLICABLE VIA THAT ROUTE. - OF $42.69 WAS DEDUCTED IN MAKING PAYMENT OF AMOUNTS OTHERWISE DUE YOU. THAT IN VIEW OF AN ALLEGED CONFERENCE RULING THE METHOD EMPLOYED BY OUR OFFICE IN COMPUTING THE CHARGE IS INAPPLICABLE.

B-122963, APR. 16, 1956

TO MISSOURI PACIFIC RAILROAD COMPANY:

CONSIDERATION HAS BEEN GIVEN YOUR REQUEST FOR REVIEW OF THE SETTLEMENT DATED JANUARY 7, 1955, WHICH DISALLOWED YOUR CLAIM, PER BILL 23038-A, FOR $42.69 AS A PART OF THE CHARGES ALLEGED TO BE DUE FOR TRANSPORTING THREE SHIPMENTS OF FREIGHT AUTOMOBILES FROM DETROIT,MICHIGAN, TO FORT CROOK NEBRASKA, UNDER BILLS OF LADING WQ 14109989, WQ-14109991 AND WQ-14110011 DURING AUGUST 1943.

IN THE FIRST INSTANCE, YOU CLAIMED AND WERE PAID CHARGES COMPUTED ON THE BASIS OF A THROUGH COMMODITY RATE OF $1.35, REDUCED BY LAND-GRANT DEDUCTION TO $1.0952 PER 100 POUNDS. THE RATE OF $1.35 IS PUBLISHED IN CENTRAL FREIGHT ASSOCIATION TARIFF NO. 497-F AND IS RESTRICTED TO APPLY ONLY VIA THE ROUTES SPECIFIED THEREIN. IN THE AUDIT OF THIS PAYMENT, OUT TRANSPORTATION DIVISION DETERMINED THAT THE PROPER LAND GRANT ROUTE OVER WHICH TO COMPUTE THE CHARGES ON THESE SHIPMENTS WAS VIA THE PERE MARQUETTE RAILWAY TO MANITOWOC, WISCONSIN, THE CHICAGO AND NORTHWESTERN RAILWAY TO FREEPORT, ILLINOIS, THE CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD TO BURLINGTON, ILLINOIS, AND CHICAGO, BURLINGTON AND QUINCY RAILROAD TO FORT CROOK, NEBRASKA. THE COMMODITY RATE IN CENTRAL FREIGHT ASSOCIATION TARIFF NO. 497-F, I.C.C. NO. 3592, WAS NOT APPLICABLE VIA THE SELECTED LAND-GRANT ROUTE SO THE CHARGES WERE COMPUTED ON THE BASIS OF THE CLASS RATES LAWFULLY APPLICABLE VIA THAT ROUTE, REDUCED BY LAND-GRANT DEDUCTION, ON THE BASIS OF WHICH OUR TRANSPORTATION DIVISION FOUND THE PROPER CHARGE TO BE $410.73. THE RESULTING OVERPAYMENT--- TAKING INTO CONSIDERATION YOUR EQUALIZATION AGREEMENT--- OF $42.69 WAS DEDUCTED IN MAKING PAYMENT OF AMOUNTS OTHERWISE DUE YOU.

IN YOUR REQUEST FOR REVIEW, YOU URGE, THAT IN VIEW OF AN ALLEGED CONFERENCE RULING THE METHOD EMPLOYED BY OUR OFFICE IN COMPUTING THE CHARGE IS INAPPLICABLE. FURTHER, YOU STATE THAT THE EQUALIZATION AGREEMENT IS NOTHING MORE THAN A DOCUMENT WHICH EXTENDS TO NON-LAND GRANT LINES AN OPPORTUNITY TO PARTICIPATE IN MOVEMENTS OF GOVERNMENT FREIGHT ON AN EQUAL BASIS WITH LAND-GRANT LINES, AND DOES NOT SET ASIDE RATES ESTABLISHED BY THE INTERSTATE COMMERCE COMMISSION.

CONCERNING YOUR REFERENCE TO THE CONFERENCE RULINGS OF THE INTERSTATE COMMERCE COMMISSION, IT IS NOTED THAT THESE RULINGS WERE RESCINDED BY THAT COMMISSION IN THEIR ENTIRETY EFFECTIVE DECEMBER 28, 1928. SEE 3 INTERSTATE COMMERCE ACT, ANNOTATED PAGE 1894. HOWEVER, EVEN IF THE CONFERENCE RULINGS HAD REMAINED IN EFFECT, NONE WOULD HAVE BEEN VIOLATED IN THIS INSTANCE, SINCE THE CHARGES WERE COMPUTED IN STRICT ACCORDANCE WITH THE PUBLISHED TARIFF PROVISIONS, AND FROM THE CHARGES SO OBTAINED, APPLICABLE LAND GRANT WAS DEDUCTED. FURTHER, UNDER SECTION 15 (8) OF THE INTERSTATE COMMERCE ACT, A SHIPPER HAS THE STATUTORY RIGHT TO ROUTE HIS SHIPMENT AND IT IS MADE THE DUTY OF THE CARRIERS TO OBSERVE SUCH ROUTING. SEE SOUTHARD FEED MILLING CO. V. CHICAGO AND ALTON R.R. ., 174 I.C.C. 35- 37 AND F. W. BROWNYARD V. UNION PACIFIC R.R. CO., 148 I.C.C. 444-445. FOR THESE SHIPMENTS FROM DETROIT, MICHIGAN, TO FORT CROOK, NEBRASKA, THE LAND- GRANT ROUTE SELECTED BY THE UNITED STATES WAS VIA MANITOWOC, FREEPORT AND BURLINGTON. HAD THE SHIPMENTS BEEN FORWARDED VIA THAT ROUTE, CHARGES BASED ON THE COMBINATION OF RATES ON FILE WITH THE INTERSTATE COMMERCE COMMISSION, APPLYING VIA THAT ROUTE, LESS PROPER LAND GRANT, WOULD HAVE BEEN PAYABLE. THE CHARGE FOR THE TRANSPORTATION FURNISHED HERE WOULD HAVE BEEN $410.73.

THE FREIGHT LAND-GRANT EQUALIZATION AGREEMENT IS A RATE MAKING AGREEMENT ENTERED INTO BETWEEN THE CARRIERS AND THE UNITED STATES, PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT, WHEREBY THE CARRIERS AGREED TO ACCEPT FOR THE TRANSPORTATION OF PROPERTY SHIPPED FOR ACCOUNT OF THE GOVERNMENT OF THE UNITED STATES AND FOR WHICH THE GOVERNMENT OF THE UNITED STATES IS LAWFULLY AVAILABLE, AS DERIVED THROUGH DEDUCTIONS ACCOUNT OF LAND-GRANT DISTANCE FROM LAWFUL RATES FILED WITH THE INTERSTATE COMMERCE COMMISSION APPLYING FROM POINT OF ORIGIN TO DESTINATION AT TIME OF MOVEMENT. SINCE THE EQUALIZATION AGREEMENT IS A RATE MAKING AGREEMENT, THE LAND-GRANT ROUTE IS CHOSEN MERELY FOR THE PURPOSE OF COMPUTING THE RATE, AND THE FACT THAT IN A GIVEN CASE THE SHIPMENTS PROBABLY WOULD NOT HAVE MOVED OVER THE LAND GRANT ROUTE IS IMMATERIAL. SEE SOUTHERN RAILWAY CO. V. UNITED STATES, 322 U.S. 72. IN THIS CONNECTION, SEE THE DECISION OF JULY 31, 1947, B 65261, SUSTAINING THE DISALLOWANCE OF ADDITIONAL CHARGES CLAIMED ON YOUR BILL NO. 5004-A.

SINCE THE CHARGES ALLOWED FOR THE TRANSPORTATION OF THESE SHIPMENTS WERE PROPERLY COMPUTED ON THE BASIS OF THE PUBLISHED TARIFF RATES (LESS LAND GRANT) APPLICABLE VIA THE CHOSEN LAND-GRANT ROUTE, THE DISALLOWANCE OF YOUR CLAIM IS SUSTAINED.