B-143463, AUG. 25, 1960

B-143463, AUG. 25, 1960

TO ILLINOIS CENTRAL RAILROAD:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 29, 1960, FILE G-AFR-19405 WAG- R, REQUESTING A REVIEW OF OUR ACTION ON YOUR BILL NO. AFR-19405 WHICH STATED CHARGES ON SHIPMENTS OF FROZEN MEATS AND PACKING HOUSE PRODUCTS HANDLED UNDER A TRANSIT ARRANGEMENT AT NEW ORLEANS, LOUISIANA, DURING JULY 1951. THE SHIPMENTS IN QUESTION MOVED INTO NEW ORLEANS ON COMMERCIAL PREPAID BILLS OF LADING AND CHARGES WERE PAID ON THE BASIS OF DOMESTIC RATES. WE HAVE ASKED FOR AN ADJUSTMENT OF THE THROUGH CHARGES APPLYING FROM THE ORIGINAL POINTS OF ORIGIN TO NEW ORLEANS TO THE BASIS OF LOWER EXPORT RATES, AS AUTHORIZED BY THE TRANSIT TARIFF APPLICABLE AT THAT PORT. IN YOUR PRIOR LETTERS YOU CONTENDED THAT TRANSIT WAS NOT AVAILABLE TO THE GOVERNMENT, SINCE THE MEAT WAS SOLD TO THE GOVERNMENT F.O.B. NEW ORLEANS, AND THAT FREIGHT CHARGES INTO NEW ORLEANS WERE PREPAID BY THE SHIPPER.

THE SHIPMENT MOVING UNDER GOVERNMENT BILL OF LADING WZ-T-49297, DATED JULY 27, 1951, IS REPRESENTATIVE OF THE SITUATION. THE RECORD SHOWS THAT THIS TRANSIT BILL OF LADING COVERS A SHIPMENT OF 799 BOXES OF "MEATS, FRESH, FROZEN, NOIBN VIZ BONELESS BEEF," WEIGHING 45,272 POUNDS, FROM NEW ORLEANS COLD STORAGE FOR PROPERTY OFFICER, QUARTERMASTER MARKET CENTER, FOR DELIVERY TO ARMY WHARF, SECTIONS 66 88, TRACK NO. 3, NEW ORLEANS, LOUISIANA. BILL OF LADINGWZ-T-49297 IS MARKED "FOR: EXPORT" AND "FOR: BADE.' THE WORD BADE IS A CODE DESIGNATION FOR THE PANAMA CANAL ZONE. THE INBOUND BILLING REFERENCE SHOWS THAT THE SHIPMENT ORIGINATED AT CHICAGO, ILLINOIS, AND REFERENCE IS MADE TO BUREAU NUMBER 556, AND COMMERCIAL PREPAID FREIGHT BILL NO. 198796, DATED JULY 12, 1951, AND WAYBILL NO. 1035 OF JULY 9, 1951. THE BILL OF LADING ALSO SHOWS THAT THE PAID IN RATE TO NEW ORLEANS WAS $1.83, AND THAT TRANSIT IS UNDER AUTHORITY OF SOUTHERN PORTS FOREIGN FREIGHT COMMITTEE TARIFF NO. 1033-N, ICCNO. 99.

TARIFF NO. 1033-N PROVIDES THAT FREIGHT IN CARLOADS, FOR EXPORT, ORIGINATING AT SPECIFIED POINTS, INCLUDING ILLINOIS, MAY BE STORED AT PORTS OF EXIT FOR A PERIOD NOT EXCEEDING 12 MONTHS AND THEN EXPORTED WITHIN THAT TIME TO FOREIGN COUNTRIES OR INSULAR POSSESSIONS OF THE UNITED STATES. UNDER THE TARIFF PAYMENT OF FREIGHT CHARGES INTO THE TRANSIT PORT OF EXIT WILL BE AT THE DOMESTIC ALL-RAIL RATE. WHEN SUCH SHIPMENTS ARE EXPORTED, THE INBOUND RATE WILL BE ADJUSTED TO THE BASIS OF THE THROUGH EXPORT RATE, AND CLAIM FOR READJUSTMENT OF THE INBOUND CHARGES IS TO BE MADE WITH THE INBOUND CARRIER. IN ORDER TO SUPPORT A CLAIM FOR READJUSTMENT, THE TARIFF REQUIRES IT BE SUPPORTED BY (1)A RESHIPPING CERTIFICATE, (2) A FREIGHT BILL COVERING THE SHIPMENT INTO THE TRANSIT PORT OF EXIT, WHICH BILL HAS BEEN MARKED RECORDED FOR TRANSIT WITHIN 15 DAYS OF ITS ISSUE DATE, AND (3) SATISFACTORY PROOF OF EXPORTATION.

WHILE THE ARMY FORM OF RECORD OF TRANSIT FREIGHT BILLS AND TONNAGE CREDITS IS NOT IN THE EXACT FORM PRESCRIBED BY THE TARIFF FOR A RESHIPPING CERTIFICATE, SUCH A RECORD FORM HAS FOR SOME TIME BEEN THE ACCEPTED FORM OF TRANSIT RECORD ON GOVERNMENT SHIPMENTS. THIS FORM FURNISHES THE NECESSARY INFORMATION TO ENTITLE THE GOVERNMENT TO THE TRANSIT PRIVILEGE, SHOWING THE INBOUND BILLING REFERENCE, TRANSIT BUREAU NUMBER, AND THAT THE SHIPMENT WAS BEING FORWARDED TO CRISTOBAL, CANAL ZONE. FREIGHT BILL NO. 198792 WAS ISSUED BY THE ILLINOIS CENTRAL RAILROAD AT NEW ORLEANS ON JULY 12, 1951. IT IS MARKED WITH THE STAMPED IMPRESSION "RECORDED FOR TRANSIT- -- BUREAU NO. 556--- DATE RECORDED JULY 27, 1951" AND IT IS SIGNED "J J BURNS, AGENT.' THUS, THE FREIGHT BILL WAS RECORDED WITHIN THE 15 DAY PERIOD ALLOWED UNDER THE TARIFF. THE GOVERNMENT EXPORT BILL OF LADING SHOWS THAT IT IS DESTINED FOR OVERSEAS DELIVERY, CONSISTENT WITH THE ULTIMATE DESTINATION INDICATED ON THE TRANSIT CERTIFICATE. THUS, OUR RECORDS ESTABLISH COMPLIANCE WITH THE TERMS OF THE TRANSIT TARIFF, ENTITLING THE GOVERNMENT TO ADJUSTMENT OF THE CHARGES TO THE EXPORT BASIS.

CONCERNING THE RIGHT OF THE GOVERNMENT TO SEEK ADJUSTMENT OF THE CHARGES ALREADY PAID TO NEW ORLEANS, YOUR OBJECTION TO SUCH ADJUSTMENT ON THE GROUND THAT THE GOVERNMENT WAS NOT ENTITLED TO THE TRANSIT PRIVILEGE, SINCE IT PURCHASED THE BEEF F.O.B. NEW ORLEANS, IS CONTRARY TO THE LONG- STANDING RULE THAT THE INCIDENCE OF OWNERSHIP SHOULD NOT BE DETERMINATIVE OF THE RATE TO BE CHARGED ON A GIVEN SHIPMENT. INTERSTATE COMMERCE COMMISSION V. DELAWARE, LACKAWANNA AND WESTERN RAILROAD, 220 U.S. 235. IS NOT THE PRIVILEGE OF THE SHIPPER ALONE TO ELECT TRANSIT, BUT SUCH AN ELECTION BELONGS TO THE PARTY PAYING THE CHARGES FROM THE TRANSIT POINT, IN THIS CASE THE UNITED STATES. SCHREIBER MILLING AND GRAIN CO. V. CHICAGO GREAT WESTERN RAILROAD COMPANY, 213 I.C.C. 731. IN GREAT LAKES STEEL CORP. V. BALTIMORE AND OHIO R.CO., 264 I.C.C. 779, THE COMMISSION HELD IN A SOMEWHAT SIMILAR SITUATION, WHERE FABRICATED STEEL WAS PURCHASED BY THE UNITED STATES F.O.B. MANSFIELD, THE TRANSIT POINT, THAT ELECTION TO TAKE TRANSIT BELONGED SOLELY TO THE UNITED STATES NOT THE SHIPPER. SEE, ALSO, PENNSYLVANIA R.CO. V. UNITED STATES, 129 CT.CL. 781, 125 F.SUPP. 233, WHERE IN A CASE INVOLVING TRANSIT AT TACOMA, WASHINGTON, AND WHERE THE SHIPPER HAD PAID THE LOCAL RATE INTO THE TRANSIT STATION, WITH CHANGE OF OWNERSHIP AT THAT POINT TO THE GOVERNMENT, IT WAS HELD THAT THE GOVERNMENT WAS ENTITLED TO THE TRANSIT PRIVILEGE.

ACCORDINGLY, FOR THE REASONS STATED, OUR DETERMINATION OF THE ALLOWABLE CHARGE BASIS ON BILLS OF LADING WZ-T-49297 AND WZ-T-49300 IS CORRECT. WITH RESPECT TO BILL OF LADING WZ-T-49301, FINAL ACTION WILL BE HELD IN ABEYANCE PENDING FURTHER DEVELOPMENT OF THE TRANSIT RECORD. THE AMOUNT OF THE OVERPAYMENT ON BILLS OF LADING WZ-T-49297 AND WZ-T-49300 SHOULD BE REFUNDED PROMPTLY IN ORDER TO AVOID COLLECTION ACTION BY OTHER MEANS.