B-129302, APR. 15, 1957

B-129302: Apr 15, 1957

Additional Materials:

Contact:

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

 

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

INC.: REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 18 AND NOVEMBER 9. WAS OVERPAID IN THE AMOUNT OF $285.89 FOR THE TRANSPORTATION OF TWO JEEPS. WAS TRANSPORTED FROM TOLEDO. WAS TRANSPORTED FROM TOLEDO. IT IS YOUR CONTENTION THAT AS YOUR SERVICE WAS LIMITED BY YOUR TARIFFS TO TRUCKLOAD OR VOLUME SHIPMENTS ONLY OF VEHICLES. FOR THIS REASON IT IS YOUR CONTENTION THAT YOU ARE ONLY OBLIGATED TO PROTECT THE LOWEST COST AVAILABLE ON A VOLUME BASIS. OR A CARLOAD BASIS WHERE RAIL RATES ARE INVOLVED. IT IS INDICATED THAT. AS BILL OF LADING WQ 5338509 WAS CHANGED BY THE ARMY TRANSPORTATION OFFICE TO COVER A SINGLE VEHICLE. WHEREAS NINE VEHICLES WERE ORIGINALLY COVERED. AS BILL OF LADING WQ-5338708 WAS ALSO CHANGED TO COVER ONE VEHICLE.

B-129302, APR. 15, 1957

TO UNITED TRANSPORTS, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 18 AND NOVEMBER 9, 1956, REQUESTING REVIEW OF THE AUDIT ACTION OF OUR TRANSPORTATION DIVISION WHICH INDICATES THAT UNITED TRANSPORTS, INC., WAS OVERPAID IN THE AMOUNT OF $285.89 FOR THE TRANSPORTATION OF TWO JEEPS. ONE JEEP, WEIGHING 2,267 POUNDS, WAS TRANSPORTED FROM TOLEDO, OHIO, TO FORT BLISS, TEXAS, IN MARCH 1942, UNDER GOVERNMENT BILL OF LADINGWQ-5338509, AND THE OTHER JEEP, WEIGHING 2,267 POUNDS, WAS TRANSPORTED FROM TOLEDO, OHIO, TO FORT MCINTOSH, TEXAS, ON MARCH 23, 1942, UNDER GOVERNMENT BILL OF LADING WQ- 5338708.

IT IS YOUR CONTENTION THAT AS YOUR SERVICE WAS LIMITED BY YOUR TARIFFS TO TRUCKLOAD OR VOLUME SHIPMENTS ONLY OF VEHICLES, THAT THE TENDER OF A SINGLE VEHICLE UNDER ONE BILL OF LADING MADE EACH SHIPMENT SUBJECT TO THE VOLUME LOADING PROVISIONS OF YOUR TARIFFS. FOR THIS REASON IT IS YOUR CONTENTION THAT YOU ARE ONLY OBLIGATED TO PROTECT THE LOWEST COST AVAILABLE ON A VOLUME BASIS, OR A CARLOAD BASIS WHERE RAIL RATES ARE INVOLVED. IT IS INDICATED THAT, AS BILL OF LADING WQ 5338509 WAS CHANGED BY THE ARMY TRANSPORTATION OFFICE TO COVER A SINGLE VEHICLE, WHEREAS NINE VEHICLES WERE ORIGINALLY COVERED, AND AS BILL OF LADING WQ-5338708 WAS ALSO CHANGED TO COVER ONE VEHICLE, WHEREAS THREE VEHICLES WERE ORIGINALLY COVERED,"IT CAN ONLY BE ASSUMED THAT IT WAS THE INTENT OF THE TRANSPORTATION OFFICER THAT THE SHIPMENT BE GIVEN EXPEDITED SERVICE ON A TRUCK LOAD BASIS, WHICH WOULD NOT HAVE BEEN AVAILABLE ON AN LCL BASIS WITH THE RAILROADS.' YOU ASSERT THAT IT IS INCONCEIVABLE THAT A CARRIER WOULD TRANSPORT A SINGLE VEHICLE FROM TOLEDO, OHIO, TO FORT BLISS, TEXAS, A DISTANCE OF 1,665 MILES, FOR $109.48, OR FROM TOLEDO, OHIO, TO FORT MCINTOSH, TEXAS, A DISTANCE OF APPROXIMATELY 1,550 MILES, FOR $100.97.

ON MARCH 2, 1942, YOU EXECUTED A "STANDARD MOTOR FREIGHT LAND-GRANT EQUALIZATION AGREEMENT" WITH THE WAR DEPARTMENT, WHICH BECAME EFFECTIVE MARCH 4, 1942. THE PERTINENT PROVISION OF THIS AGREEMENT READS AS FOLLOWS:

"1. THE UNDERSIGNED CARRIER AGREES OR, IF MORE THAN ONE ARE UNDERSIGNED, THEY AGREE JOINTLY AND SEVERALLY, IN CONNECTION WITH ANY SHIPMENT OF GOVERNMENT PROPERTY TRANSPORTED FROM ORIGIN TO DESTINATION EXCLUSIVELY BY HIM OR BY ANY ONE OR MORE OF THEM, TO PROTECT THE GOVERNMENT OF THE UNITED STATES AGAINST ANY COST IN EXCESS OF THE LOWEST NET LAND-GRANT CHARGE LAWFULLY AVAILABLE ON SUCH SHIPMENT FROM ORIGIN TO DESTINATION AT TIME OF MOVEMENT DERIVED FROM LAWFUL RATES OF COMMON CARRIERS FILED WITH THE INTERSTATE COMMERCE COMMISSION OR APPROPRIATE STATE COMMISSION.'

THIS AGREEMENT DOES NOT APPEAR TO LIMIT ITS APPLICATION TO EITHER A CARLOAD OR LESS-THAN-CARLOAD SHIPMENT, BUT MERELY PROVIDES THE BASIS FOR THE DETERMINATION OF THE MAXIMUM CHARGE FOR WHICH THE GOVERNMENT WILL BE LIABLE. THE PURPOSE OF THIS AGREEMENT IS TO PROVIDE A BASIS FOR ASSESSING CHARGES, WHICH IF LOWER, WILL BE USED BY THE GOVERNMENT IN LIEU OF THE RATES PROVIDED IN YOUR TARIFFS LAWFULLY ON FILE WITH THE INTERSTATE COMMERCE COMMISSION OR APPROPRIATE STATE REGULATORY COMMISSION. THE APPLICATION OF THE TERMS OF THIS AGREEMENT HAS THE EFFECT OF MODIFYING YOUR TARIFFS TO THE EXTENT THAT YOUR CHARGES MAY NOT EXCEED THE LOWEST NET LAND-GRANT CHARGE LAWFULLY AVAILABLE ON SUCH SHIPMENT FROM ORIGIN TO DESTINATION. THIS APPEARS TO BY YOUR UNDERSTANDING OF THE EQUALIZATION AGREEMENT SINCE IN YOUR LETTER OF JULY 26, 1956, YOU STATE,"THE AGREEMENT IN NO WAY VOIDED THE TERMS OF ANY APPLICABLE TARIFF, OTHER THAN TO LIMIT THE COST.' IT IS YOUR VIEW, HOWEVER, THAT AS YOUR TARIFFS PROVIDE ONLY FOR TRUCKLOAD OR VOLUME SHIPMENTS, THESE ARE THE ONLY RATES YOU ARE OBLIGATED TO PROTECT, ON THE CONTRARY, YOU AGREED TO PROTECT THE LOWEST NET LAND GRANT CHARGE LAWFULLY AVAILABLE, AND IN THOSE CIRCUMSTANCES WHERE LESS THAN-CARLOAD CHARGES WERE APPLICABLE AND LESS THAN THE VOLUME RATES PROVIDED IN YOUR TARIFFS, THEY ARE PROPERLY APPLICABLE NOTWITHSTANDING THE TYPE OF SERVICE YOU SAY WAS OFFERED IN SUCH INSTANCES.

AS NOTED ABOVE, EACH VEHICLE IDENTIFIED ON THE BILLS OF LADING INVOLVED WEIGHED 2,267 POUNDS, WHICH IS SUBSTANTIALLY LOWER THAN THE 10,000 POUNDS MINIMUM WEIGHT FOR WHICH YOU SEEK CHARGES. IN OUR AUDIT IT WAS FOUND THAT THE RATES PROVIDED FOR A LESS-THAN-CARLOAD SHIPMENT YIELDED THE LOWEST CHARGE. THE ALLOWABLE CHARGES FOR THE VEHICLE FROM TOLEDO, OHIO, TO FORT BLISS, TEXAS, COVERED BY BILL OF LADING WQ 5338509, WERE BASED ON A LESS- THAN-CARLOAD TARIFF RATE OF $6.04 PER HUNDRED POUNDS PROVIDED IN SOUTHWESTERN LINES TARIFF NO. 252-A, I.C.C. NO. 3360, PLUS EX PARTE NO. 148 INCREASE. NET LAND-GRANT RATE OF $4.82928 PER HUNDRED POUNDS WAS DERIVED FROM THE TARIFF RATE, PRODUCING A TOTAL CHARGE OF $109.48. AS YOU WERE PAID A NET AMOUNT OF $266.61 FOR THIS VEHICLE, YOU RECEIVED $157.13 IN EXCESS OF THE CHARGES ALLOWED. THE ALLOWABLE CHARGES FOR THE VEHICLE FROM TOLEDO, OHIO, TO FORT MCINTOSH, TEXAS, COVERED BY BILL OF LADING WQ- 5338708, WERE BASED ON A LESS-THAN-CARLOAD TARIFF RATE OF $5.76 PER HUNDRED POUNDS PROVIDED IN TARIFF NO. 252-A, PLUS EX PARTE NO. 148 INCREASE. A NET LAND-GRANT RATE OF $4.45409 PER HUNDRED POUNDS WAS DERIVED FROM THE TARIFF RATE, RESULTING IN A TOTAL CHARGE OF $100.97. YOU WERE PAID A NET AMOUNT OF $229.73 FOR THIS VEHICLE, YOU RECEIVED $128.76 IN EXCESS OF THE CHARGES ALLOWED, THUS MAKING THE TOTAL OVERPAYMENT ON THESE TWO SHIPMENTS $285.89 ($157.13 PLUS $128.76).

THE QUESTION OF THE PROPER CHARGES TO APPLY ON THE TRANSPORTATION OF SIMILAR SHIPMENTS OF JEEPS FROM TOLEDO, OHIO, TO FORT BLISS, TEXAS, AND TO FORT MCINTOSH, TEXAS, UNDER THE LAND-GRANT EQUALIZATION AGREEMENT SIGNED BY UNITED TRANSPORTS, INC., ON MARCH 2, 1942, WAS THE SUBJECT OF A DECISION BY THE UNITED STATES COURT OF CLAIMS, COMMERCIAL CARRIERS, INC. V. UNITED STATES AND UNITED TRANSPORTS, INC. V. UNITED STATES, 130 C.CLS. 387. THE CARRIER'S CONTENTION THAT THE INDIVIDUAL BILLS OF LADING SHOULD GOVERN WAS REJECTED, BECAUSE "MANIFESTLY THEY DID NOT SHOW THE NUMBER OF VEHICLES TRANSPORTED BY THE CARRIER FROM THE FACTORY TO THE SAME DESTINATION ON ANY PARTICULAR DAY.' AS IN THE COURT CASE THE INDIVIDUAL BILLS OF LADING USED IN THIS INSTANCE DO NOT NECESSARILY REFLECT THE ACTUAL TRANSPORTATION SERVICE AFFORDED BY THE CARRIER. THIS RECORD DOES NOT ESTABLISH THAT THE ARMY DEMANDED THAT THE CARRIER TRANSPORT ONLY ONE UNIT AT A TIME, OR THAT THE CARRIER USED ONE TRANSPORTER TO HAUL THE SINGLE JEEPS COVERED BY THE BILLS OF LADING HERE INVOLVED.

IT DOES NOT APPEAR THAT THE AUDIT ACTION OF OUR TRANSPORTATION DIVISION RESULTED IN LOWER CHARGES THAN PROPERLY ALLOWABLE TO THE CARRIER, IT BEING NOTED THAT SUCH ALLOWABLE CHARGES STILL EXCEED THOSE COMPUTABLE ON THE BASIS OF THE FORMULA USED IN THE CITED COURT CASE. IN THE CIRCUMSTANCES, COMPUTATION OF THE ALLOWABLE CHARGES ON THE BASIS OF A LESS-THAN-CARLOAD RATE ON THE ACTUAL WEIGHT OF THE JEEPS CONCERNED IS JUSTIFIED, AND THE AUDIT ACTION GIVING EFFECT TO SUCH BASIS IS NOT IN ERROR.