B-127288, SEPTEMBER 7, 1956, 36 COMP. GEN. 202

B-127288: Sep 7, 1956

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THE TRANSPORTATION CHARGES FOR A FREIGHT SHIPMENT IS BASED ON THE LOWEST NET RATES LAWFULLY AVAILABLE BETWEEN ORIGIN AND DESTINATION VIA THE GOVERNMENT SELECTED ROUTE. YOUR CLAIM WAS FOR ADDITIONAL CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF 24 SHIPMENTS OF FREIGHT AUTOMOBILES FROM ST. YOU CLAIMED AND WERE PAID CHARGES OF $3. OUR TRANSPORTATION DIVISION DETERMINED THAT THE PROPER LAND-GRANT ROUTE OVER WHICH TO COMPUTE THESE CHARGES WAS VIA THE ILLINOIS CENTRAL RAILROAD COMPANY TO LA SALLE. SINCE TH 81-CENT COMMODITY RATE WAS NOT APPLICABLE VIA THIS ROUTE. THE PROPER CHARGES WERE DETERMINED BY USE OF AN AGGREGATE OF INTERMEDIATE RATES TOTALING 81 CENTS PER 100 POUNDS (MADE 48 CENTS AND 33 CENTS PER 100 POUNDS TO AND BEYOND KANSAS CITY.

B-127288, SEPTEMBER 7, 1956, 36 COMP. GEN. 202

TRANSPORTATION - RATES - LOWEST LAWFULLY AVAILABLE AS A RESULT OF THE LAND-GRANT EQUALIZATION AGREEMENT ENTERED INTO BY A CARRIER WITH THE UNITED STATES UNDER THE PROVISIONS OF SECTION 22 OF THE INTERSTATE COMMERCE ACT, WHICH ENTITLES THE UNITED STATES TO REDUCED RATES, THE TRANSPORTATION CHARGES FOR A FREIGHT SHIPMENT IS BASED ON THE LOWEST NET RATES LAWFULLY AVAILABLE BETWEEN ORIGIN AND DESTINATION VIA THE GOVERNMENT SELECTED ROUTE, NOTWITHSTANDING THE SHIPMENT DID NOT, AND PROBABLY WOULD NOT, MOVE VIA THE ROUTE SELECTED.

TO MISSOURI PACIFIC RAILROAD COMPANY, SEPTEMBER 7, 1956:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF MARCH 8, 1956, REQUESTING REVIEW OF THE SETTLEMENT DATED FEBRUARY 16, 1955, WHICH DISALLOWED YOUR CLAIM, IN YOUR BILL 13473-A, FOR $420.96. YOUR CLAIM WAS FOR ADDITIONAL CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF 24 SHIPMENTS OF FREIGHT AUTOMOBILES FROM ST. LOUIS, MISSOURI, TO FORT CROOK, NEBRASKA, DURING MARCH 1943.

ORIGINALLY, YOU CLAIMED AND WERE PAID CHARGES OF $3,006.96 FOR THIS SERVICE, COMPUTED AT A COMMODITY RATE OF 81 CENTS PER 100 POUNDS, REDUCED BY DEDUCTIONS FOR LAND GRANT. IN THE AUDIT OF THIS PAYMENT, OUR TRANSPORTATION DIVISION DETERMINED THAT THE PROPER LAND-GRANT ROUTE OVER WHICH TO COMPUTE THESE CHARGES WAS VIA THE ILLINOIS CENTRAL RAILROAD COMPANY TO LA SALLE, ILLINOIS, THE CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD TO BURLINGTON, IOWA, AND THE CHICAGO, BURLINGTON AND QUINCY RAILROAD TO FORT CROOK. SINCE TH 81-CENT COMMODITY RATE WAS NOT APPLICABLE VIA THIS ROUTE, THE PROPER CHARGES WERE DETERMINED BY USE OF AN AGGREGATE OF INTERMEDIATE RATES TOTALING 81 CENTS PER 100 POUNDS (MADE 48 CENTS AND 33 CENTS PER 100 POUNDS TO AND BEYOND KANSAS CITY, MISSOURI), LESS APPROPRIATE LAND-GRANT DEDUCTIONS. ON THIS BASIS, THE TRANSPORTATION DIVISION DETERMINED THAT THE PROPER CHARGES WERE $2,086, AND DEDUCTED THE RESULTING OVERPAYMENT OF $420.96 FROM AMOUNTS OTHERWISE DUE YOU.

YOUR REQUEST FOR REVIEW IS PREDICATED ON THE CONTENTION THAT OUR TRANSPORTATION DIVISION, IN SETTLING THE CHARGES ON THE BASIS OF THE AGGREGATE OF INTERMEDIATE RATES LESS LAND-GRANT DEDUCTIONS, ASSUMED AUTHORITY TO OVERRIDE CONFERENCE RULINGS ISSUED BY THE INTERSTATE COMMERCE COMMISSION IN 1907 AND 1908 RELATING TO THE PRECEDENCE OF COMMODITY RATES OVER CLASS RATES. THESE RULINGS, HOWEVER, WERE RESCINDED IN THEIR ENTIRETY BY THE INTERSTATE COMMERCE COMMISSION, EFFECTIVE DECEMBER 28, 1928. SEE 3 INTERSTATE COMMERCE ACT, ANNOTATED, PAGE 1894.

EVEN HAD THESE CONFERENCE RULINGS REMAINED IN EFFECT, HOWEVER, THEY WOULD NOT HAVE BEEN VIOLATED BY THE TRANSPORTATION DIVISION'S ACTION, SINCE THE CHARGES WERE COMPUTED IN EXACT COMPLIANCE WITH THE PUBLISHED TARIFF PROVISIONS. FROM THE CHARGES SO DETERMINED, APPLICABLE LAND GRANT WAS DEDUCTED. ALSO, SECTION 15 (8) OF THE INTERSTATE COMMERCE ACT VESTS IN THE SHIPPER THE STATUTORY RIGHT TO ROUTE HIS SHIPMENT AND PLACES ON THE CARRIERS THE OBLIGATION TO OBSERVE THE SHIPPER'S ROUTING. SEE SOUTHARD FEED MILLING CO. V. CHICAGO AND ALTON R.R. CO., 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 ST. LOUIS, MISSOURI, TO FORT CROOK, NEBRASKA, THE UNITED STATES SELECTED A LAND-GRANT ROUTE VIA LA SALLE AND BURLINGTON. HAD THE SHIPMENTS BEEN FORWARDED VIA THAT ROUTE, THE CHARGES PAYABLE WOULD HAVE BEEN BASED ON THE COMBINATION OF RATES ON FILE WITH THE INTERSTATE COMMERCE COMMISSION WHICH APPLIED VIA THAT ROUTE, LESS PROPER LAND GRANT. THE TOTAL CHARGE FOR THIS TRANSPORTATION WOULD HAVE BEEN $2,086.

THE FACT THAT THE SHIPMENTS DID NOT, AND PROBABLY WOULD NOT, MOVE VIA THE LAND-GRANT ROUTE SELECTED IS IMMATERIAL. THIS IS SO BECAUSE THE MISSOURI PACIFIC RAILROAD COMPANY, AS WELL AS OTHER CARRIERS, ENTERED INTO A RATE- MAKING AGREEMENT, THE FREIGHT LAND-GRANT EQUALIZATION AGREEMENT, WITH THE UNITED STATES, UNDER THE PROVISIONS OF SECTION 22 OF THE INTERSTATE COMMERCE ACT. THE CARRIERS AGREED TO ACCEPT FOR THE TRANSPORTATION OF PROPERTY SHIPPED FOR THE ACCOUNT OF THE UNITED STATES, AND FOR WHICH THE UNITED STATES IS LAWFULLY ENTITLED TO REDUCED RATES VIA LAND-GRANT ROADS, THE LOWEST NET RATES LAWFULLY AVAILABLE, AS DERIVED THROUGH DEDUCTIONS BECAUSE OF LAND-GRANT DISTANCE FROM LAWFUL RATES FILED WITH THE INTERSTATE COMMERCE COMMISSION, APPLICABLE FROM ORIGIN TO DESTINATION AT THE TIME OF MOVEMENT. UNDER THE TERMS OF THIS AGREEMENT, THE LAND-GRANT ROUTE IS CHOSEN MERELY FOR THE PURPOSE OF DETERMINING THE LOWEST NET RATE LAWFULLY AVAILABLE. SEE SOUTHERN RAILWAY CO. V. UNITED STATES, 322 U.S. 72.

SINCE YOUR BILL 13473-A WAS SETTLED IN ACCORDANCE WITH THESE PRINCIPLES, THE SETTLEMENT IS SUSTAINED.