B-145396, JUL. 29, 1963

B-145396, JUL. 29, 1963

TO ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 11, 1962, FILE G-632445, ACKNOWLEDGED OCTOBER 17, 1962, REQUESTING RECONSIDERATION OF OUR SETTLEMENT DATED MAY 31, 1962, WHICH DISALLOWED $52.43 OF YOUR CLAIM IN THE AMOUNT OF $55.64 FOR ADDITIONAL CHARGES ON THE SHIPMENT OF INTERNAL COMBUSTION ENGINES MOVING FROM INDIANAPOLIS, INDIANA, TO WEBB, ARIZONA, WITH A STOP FOR TRANSIT AT MIDWEST CITY, OKLAHOMA, UNDER EXECUTIVE COMMITTEE--- WESTERN TRAFFIC ASSOCIATION SECTION 22 QUOTATION 60. THERE HAS ALSO BEEN RECEIVED YOUR SUPPLEMENTAL BILL 632445-B IN WHICH WE NOTE YOU NOW CLAIM $51.38 AND YOU AGREE THAT THE THROUGH CHARGES PAYABLE ARE $1,262.82 AS SHOWN ON OUR SETTLEMENT OF MAY 31, 1962. YOUR LETTER THEREFORE RELATES ONLY TO THE AMOUNT OF THE INBOUND CHARGES TO BE CREDITED AGAINST THE THROUGH CHARGES ON THE SHIPMENT.

YOU CONTEND THAT THE METHOD USED IN OUR SETTLEMENT TO ASCERTAIN THE CREDIT FOR THE INBOUND CHARGES IS UNAUTHORIZED SINCE ITEM 13 OF THE QUOTATION HEADED "METHOD OF SETTLEMENT" "PROVIDES THE GOVERNMENT WILL PAY THE THROUGH RATE IN ITEM 5 LESS THE LINE HAUL RATE PAID INTO SUCH TRANSIT POINT.' THUS IT SEEMS TO BE YOUR POSITION THAT A BALANCE RATE SHOULD BE APPLIED TO THE WEIGHT OF THE OUTBOUND MOVEMENT AND THAT NO CONSIDERATION SHOULD BE GIVEN TO THE ACTUAL CHARGES PAID TO THE TRANSIT STATION ON THAT PORTION OF THE INBOUND TONNAGE WHICH WAS TRANSITED TO ITS ULTIMATE DESTINATION.

STORAGE IN TRANSIT AND OTHER TRANSIT ARRANGEMENTS, HOWEVER, REST UPON THE FICTION THAT THE INCOMING AND OUTGOING TRANSPORTATION SERVICES, WHILE DISTINCT, CONSTITUTE A CONTINUOUS SHIPMENT FROM THE POINT OF ORIGIN TO FINAL DESTINATION. CENTRAL R.CO. OF N.J. V. UNITED STATES, 237 U.S. 247, 257. GREAT NORTHERN R.CO. V. COMMODITY CREDIT CORPORATION, 77 F.SUPP. 780, 787. THE THEORY BEING THAT THE TRANSPORTATION CONTRACT HAS NOT BEEN COMPLETED AT THE TRANSIT STATION, THE ENTIRE MOVEMENT IS CONSIDERED THE SAME AS IF THE SHIPMENT MOVED FROM ORIGIN TO DESTINATION WITHOUT TRANSIT, BALTIMORE AND O.R. V. UNITED STATES, 24 F.SUPP. 734, 735. WHEELOCK AND BIERD V. AKRON, C. AND Y. RY.CO., 179 I.C.C. 517,520-521. CHICAGO BOARD OF TRADE V. ANN ARBOR R.CO., 39 I.C.C. 643, 651; LARABEE FLOUR MILLS CO. V. CHICAGO, B. AND Q.R.CO., 223 I.C.C. 55, 64; KANSAS CITY BOARD OF TRADE V. ATCHISON T. AND S.F.RY.CO. 69 I.C.C. 185, 189.

THE EXERCISE OF THE TRANSIT PRIVILEGE CONVERTS THE INBOUND SHIPMENT INTO ONE BY FICTION CONSTRUED TO BE AND TREATED AS THOUGH THE SHIPMENT MOVED FROM POINT OF ORIGIN DIRECTLY TO FINAL DESTINATION. THE INBOUND SHIPMENT LOSES ITS IDENTITY AS A COMPLETED OR SEPARATE MOVEMENT AND BECOMES A PORTION OF THE THROUGH MOVEMENT. SAWDUST SALES CO. V. BALTIMORE AND O.R.CO., 186 I.C.C. 265, 268; STALEY MANUFACTURING CO. TERMINAL ALLOWANCE, 245 I.C.C. 383, 392 (FOOTNOTE). TRANSIT IMPLIES A THROUGH MOVEMENT, AND IF THERE IS THROUGH TRANSPORTATION THE THROUGH RATE FROM ORIGIN MUST APPLY. A CONTRACT FOR THROUGH TRANSPORTATION IS A CONTRACT FOR TRANSPORTATION AT THE THROUGH RATE. IN RE MILLING-IN TRANSIT RATES, 17 I.C.C. 113, 114. THE MOVEMENTS TO AND FROM THE TRANSIT POINT ARE PARTS OF A THROUGH MOVEMENT UPON WHICH THE THROUGH RATE ULTIMATELY IS COLLECTED. FREDONIA LINSEED OIL WORKS CO. V. ATCHISON, T. AND S.F.RY.CO., 201 I.C.C. 41; PROCTOR AND GAMBLE CO. V. ALABAMA AND V.RY.CO., 153 I.C.C. 655, 659.

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

ITEM 5 OF QUOTATION 60 PROVIDES THAT EACH SHIPMENT SHALL BE SUBJECT AND ENTITLED TO THE LOWEST APPLICABLE CARLOAD RATE FROM THE POINT OF ORIGIN TO FINAL DESTINATION. ATTENTION IS ALSO INVITED TO THE PROVISION IN ITEM 13 THAT IN THE EVENT THE FREIGHT CHARGES ON THE INBOUND HAVE BEEN OR LATER ARE CHANGED FROM THAT SHOWN ON THE BILLING, THE GOVERNMENT SHALL MAKE FINAL SETTLEMENTS AS PROVIDED IN THIS ITEM ON THE BASIS OF THE ACTUAL FREIGHT CHARGES PAID. THE QUOTATION THUS PROVIDES FOR THE APPLICATION OF A THROUGH CHARGE COMPUTED AT THE THROUGH CARLOAD RATE AND RELATED MINIMUM WEIGHT APPLYING FROM INITIAL POINT OF ORIGIN TO ULTIMATE DESTINATION. THE GREATER MINIMA APPLICABLE ON THE SHIPMENTS TO THE TRANSIT POINT IS NOT APPLICABLE TO THE THROUGH SHIPMENTS AND IT IS OUR VIEW THAT WE ARE ENTITLED TO AN ADJUSTMENT BASED ON THE CHARGES ACTUALLY PAID INBOUND ON THE APPLIED WEIGHT FROM THE TRANSIT POINT. UNLESS SUCH AN ADJUSTMENT IS MADE, CHARGES IN EXCESS OF THOSE COMPUTED AT THE LOWEST THROUGH RATE ARE BEING ASSESSED ON THE THROUGH TRANSIT MOVEMENT.

REGARDING YOUR OBJECTIONS TO THE USE OF A CONSTRUCTIVE RATE---BASED ON THE RELATIONSHIP OF THE INBOUND CHARGES TO THE ACTUAL INBOUND WEIGHT--- FOR DETERMINING THE CREDIT FOR CHARGES PAID INTO THE TRANSIT POINT, YOUR ATTENTION IS INVITED TO BEACON MILLING CO. V. NEW YORK CENTRAL R.CO., 157 I.C.C. 635, WHERE ON PAGE 638, IN RESPONSE TO THE CARRIER'S CONTENTION THAT THE APPLICATION OF THE TRANSIT RULE WOULD RESULT IN THE ASSESSMENT AND COLLECTION--- ON A GREAT MANY TRANSIT SHIPMENTS--- OF RATES NOT APPLICABLE UNDER THE REGULAR RATE TRAFFIC AND NOT PUBLISHED AS RATES, THE COMMISSION STATED THAT THIS ARGUMENT OVERLOOKS THE FACT THAT ALL TRANSIT IS BASED ON FICTION AND THAT SUCH APPLICATION DOES NOT VIOLATE EITHER THE INTERSTATE COMMERCE ACT OR THE COMMISSION'S TARIFF RULES.

ACCORDINGLY, SINCE THE BASIS USED IN THE SETTLEMENT OF YOUR CLAIM APPEARS TO ACCORD WITH THE PROVISIONS OF THE QUOTATION AND WITH THE CITED DECISIONS OF THE COURTS AND THE INTERSTATE COMMERCE COMMISSION PERTAINING TO TRANSIT SHIPMENTS, IT IS SUSTAINED.