B-151913, OCT. 3, 1963

B-151913: Oct 3, 1963

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TO ILLINOIS CENTRAL RAILROAD: REFERENCE IS MADE TO YOUR LETTER OF JUNE 19. WHICH WAS ACCORDED TRANSIT PRIVILEGES AT PROVING GROUND. SINCE BOTH YOUR COMPUTATIONS AND OURS ARE IN AGREEMENT THAT THE CHARGES ON THE THROUGH MOVEMENT ARE $765.98 BASED UPON A RATE OF $1.27 PER 100 POUNDS ON 48. CONSISTED OF TWO SHIPMENTS AND WAS LOADED IN TWO 40-FOOT CARS. THESE SHIPMENTS WERE SUBJECT TO A RATE OF 66 CENTS PER 100 POUNDS. WAS SUBJECT TO A THROUGH RATE FROM DETROIT. CREDIT WAS TAKEN FOR ALL OF THE TRANSPORTATION CHARGES OF $607.20 PAID INTO THE TRANSIT POINT. THIS ITEM ENTITLED "METHOD OF SETTLEMENT" IS. THE ENTIRE MOVEMENT IS TREATED AS IF THE SHIPMENT HAD MOVED FROM ORIGIN TO DESTINATION WITHOUT A STOP FOR TRANSIT.

B-151913, OCT. 3, 1963

TO ILLINOIS CENTRAL RAILROAD:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 19, 1963, FILE G-AFR-30666 C-BG, REQUESTING REVIEW OF THE DISALLOWANCE OF YOUR CLAIM FOR $394.08 AS ADDITIONAL FREIGHT CHARGES ON A SHIPMENT OF ARMY TRACTOR TANK PARTS, NOIBN, IRON OR STEEL, FROM DETROIT, MICHIGAN, TO NEW ORLEANS, LOUISIANA, WHICH WAS ACCORDED TRANSIT PRIVILEGES AT PROVING GROUND, ILLINOIS, UNDER SOUTHERN FREIGHT ASSOCIATION SECTION 22 QUOTATION ADVICE NO. A-610 (EXECUTIVE COMMITTEE--- WESTERN TRAFFIC ASSOCIATION SECTION 22 QUOTATION NO. 38).

IN YOUR REQUEST FOR REVIEW YOU CONTEND THAT UNDER THE PROVISIONS OF SECTION 22, SOUTHERN FREIGHT ASSOCIATION NO. A-610, ITEM 17, CREDIT ON INBOUND PAYMENT CAN ONLY BE ALLOWED FOR THE ACTUAL TANGIBLE TONNAGE RESHIPPED FROM THE TRANSIT STATION. SINCE BOTH YOUR COMPUTATIONS AND OURS ARE IN AGREEMENT THAT THE CHARGES ON THE THROUGH MOVEMENT ARE $765.98 BASED UPON A RATE OF $1.27 PER 100 POUNDS ON 48,000-POUND MINIMUM (PLUS 15 PERCENT INCREASE), AND PLUS THE APPLICABLE TRANSIT AND OUT-OF-ROUTE CHARGES, YOUR REQUEST FOR REVIEW PERTAINS SOLELY TO THE AMOUNT OF INBOUND CHARGES TO BE CREDITED AGAINST THE THROUGH CHARGES ON THE SHIPMENT.

THE INBOUND MOVEMENT FROM DETROIT, MICHIGAN, TO PROVING GROUND, ILLINOIS, CONSISTED OF TWO SHIPMENTS AND WAS LOADED IN TWO 40-FOOT CARS, EACH CAR CONTAINED 18,500 POUNDS OF ARMY TRACTOR TANK PARTS, NOIBN, IRON OR STEEL, A TOTAL OF 37,000 POUNDS. THESE SHIPMENTS WERE SUBJECT TO A RATE OF 66 CENTS PER 100 POUNDS, PLUS A 15 PERCENT INCREASE, AND A CARLOAD MINIMUM WEIGHT OF 40,000 POUNDS. THE OUTBOUND MOVEMENT FROM PROVING GROUND, ILLINOIS, TO NEW ORLEANS, LOUISIANA, FOR EXPORT, WEIGHED 28,079 (18,500 PLUS 9,579) POUNDS, AND WAS SUBJECT TO A THROUGH RATE FROM DETROIT, MICHIGAN, TO NEW ORLEANS, LOUISIANA, FOR EXPORT, OF $1.27 PER 100 POUNDS, PLUS THE 15 PERCENT INCREASE, ON A MINIMUM WEIGHT OF 24,000 POUNDS PER CAR OR 48,000 POUNDS. IN OUR SETTLEMENT, CREDIT WAS TAKEN FOR ALL OF THE TRANSPORTATION CHARGES OF $607.20 PAID INTO THE TRANSIT POINT.

YOU REFER TO THE PROVISIONS OF ITEM 17 OF SOUTHERN FREIGHT ASSOCIATION SECTION 22 QUOTATION ADVICE NO. 38 AS SUPPORTING YOUR REQUEST FOR REVIEW. THIS ITEM ENTITLED "METHOD OF SETTLEMENT" IS, IN PERTINENT PART, AS FOLLOWS:

"ON EACH SHIPMENT FROM A TRANSIT POINT TO A PORT OF TRANSSHIPMENT * * * REFERRED TO IN ITEM NO. 1, THE GOVERNMENT SHALL PAY THE THROUGH RATE APPLICABLE ON SUCH SHIPMENT, AS SPECIFIED IN ITEM NO. 6, PLUS ANY OTHER CHARGES ACCRUING HEREUNDER IN ADDITION TO SUCH THROUGH RATE, MINUS THE LINE-HAUL RATE * * * PAID ON SUCH SHIPMENT INTO SUCH TRANSIT POINT * *

YOU STATE THAT "CREDIT CAN ONLY BE ALLOWED FOR 28,079 POUNDS INTO PROVING GROUND FROM DETROIT, MICH.' THUS, YOU CONTEND THAT THE CREDIT FOR THE INBOUND CHARGES SHOULD BE COMPUTED ON THE BASIS OF THE ACTUAL WEIGHT OF THE OUTBOUND SHIPMENT AT THE INBOUND RATE.

UPON THE EXERCISE OF THE TRANSIT PRIVILEGE, HOWEVER, THE INBOUND LOSES ITS IDENTITY AS A COMPLETED SHIPMENT AND BECOMES A PART OF THE THROUGH MOVEMENT UPON WHICH THE THROUGH RATE APPLIES. FREDONIA LINSEED OIL WORKS CO. V. ATCHISON, T. AND S.F.RY. CO., 201 I.C.C. 41; 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. THE ENTIRE MOVEMENT IS TREATED AS IF THE SHIPMENT HAD MOVED FROM ORIGIN TO DESTINATION WITHOUT A STOP FOR TRANSIT. BALTIMORE AND O.R. CO. 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. ., 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 INBOUND RATE IS NOT APPLICABLE TO THE SHIPMENT, AND THE PRINCIPLES APPLICABLE TO THE THROUGH SHIPMENT GOVERN THE TRANSPORTATION. IN THE ADJUSTMENT OF THE CHARGES THE CARRIERS RECEIVE THE THROUGH RATE APPLICABLE ON THE THROUGH SHIPMENT--- THE CHARGES FROM ORIGINAL POINT OF ORIGIN TO ULTIMATE DESTINATION, LESS THE INBOUND CHARGES ALREADY PAID. DUCK RIVER GRAIN CO. V. NASHVILLE, C. AND ST.L.RY., 160 I.C.C. 28, 29-30; BEACON MILLING CO., INC., V. NEW YORK C.R. CO., 157 I.C.C. 635, 636; JOHN W. ESHELMAN AND SONS V. ARKANSAS, C.R. CO., 87 I.C.C. 285, 290; SOUTHERN CREOSOTING INDUSTRIES V. ALABAMA C.S.R. CO., 153 I.C.C. 625, 627.

ITEM 6, PARAGRAPH (A) OF QUOTATION 38 PROVIDES THAT WHEN RESHIPPED FROM THE TRANSIT POINT EACH SHIPMENT MADE FROM INITIAL POINT OF ORIGIN SHALL BE SUBJECT AND ENTITLED TO THE CARLOAD RATE FROM SUCH POINT OF ORIGIN TO THE PORT OF TRANSSHIPMENT OR RAILHEAD. ITEM 15 PARAGRAPH (G) OF QUOTATION 38 PROVIDES THAT WHEN THE ACTUAL TRANSIT WEIGHT OF BOTH THE INBOUND AND OUTBOUND MOVEMENTS ARE LESS THAN THE MINIMUM WEIGHT GOVERNING THE THROUGH RATE THE DIFFERENCE BETWEEN THE ACTUAL AND MINIMUM WEIGHTS WILL BE CONSIDERED AS IF TRANSITED AND A CREDIT SLIP WILL NOT BE ISSUED FOR ANY INBOUND WEIGHT NOT INCLUDED IN THE OUTBOUND MOVEMENT. HOWEVER, SUCH PROVISION DOES NOT APPEAR DIRECTLY TO AFFECT THE APPLICABLE CHARGES WHICH SHOULD BE BORNE BY THE GOVERNMENT.

IN THE LIGHT OF THE PRINCIPLES GOVERNING TRANSIT GENERALLY AS SET OUT IN THE DECISIONS OF THE INTERSTATE COMMERCE COMMISSION AND OF THE COURTS REFERRED TO ABOVE, IT IS OUR VIEW THAT THE APPLICABLE CHARGES ARE THOSE BASED ON A THROUGH MOVEMENT, AND THAT TOTAL CHARGES PAID ON THE INBOUND MOVEMENT ARE PROPERLY TO BE CREDITED AGAINST THE THROUGH CHARGES. SUCH THROUGH CHARGES HAVE BEEN PAID AND, UNDER PARAGRAPH 15 (G)OF THE QUOTATION, NO FURTHER ADJUSTMENT OR CREDIT WILL BE GIVEN FOR THE WEIGHT OF THE INBOUND SHIPMENT NOT CARRIED OUTBOUND. THUS THE GOVERNMENT HAS ALREADY PAID TO THE CARRIERS THE THROUGH CHARGES BASED ON THE THROUGH MINIMUM WEIGHT OF 48,000 POUNDS FOR CARRYING 37,000 POUNDS INBOUND AND 28,079 POUNDS OUTBOUND. FOR SUCH CHARGE IT COULD HAVE SHIPPED 48,000 POUNDS INBOUND AND OUTBOUND, A GREATER SERVICE. SEE FRUITS STORED IN TRANSIT IN THE SOUTHWEST, 190 I.C.C. 153, WHERE ON PAGE 157 THE COMMISSION CONDEMNED A TRANSIT RULE WHICH RESULTED IN THE ASSESSMENT OF GREATER CHARGES FOR A LESSER SERVICE. ACCORDINGLY, WE PRECEIVE NO PROPER BASIS FOR ALLOWANCE OF ANY ADDITIONAL CHARGE AND THE SETTLEMENT DISALLOWING YOUR CLAIM FOR $394.08 IN ADDITIONAL CHARGES APPEARS PROPER AND IS SUSTAINED.