B-161618, AUG 16, 1971

B-161618: Aug 16, 1971

Additional Materials:

Contact:

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

 

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

TERMINAL CHARGES - SOUTHWESTERN MOTOR FREIGHT BUREAU RULES TARIFF NO. 15 SERIES DECISION NOTIFYING STRICKLAND TRANSPORTATION COMPANY THAT TRANSPORTATION DIVISION WILL CONTINUE ATTEMPTS TO RECOVER REFUNDS OF A TERMINAL CHARGE THAT IS BEING ASSESSED ON SHIPMENTS AT THE GULF OUTPORT (U.S. IT IS APPARENT THAT THE CHARGES ARE NOT APPLICABLE TO DELIVERIES MADE AT THE NEW ORLEANS MILITARY INSTALLATIONS. AN ATTEMPT TO INCLUDE THESE TERMINALS IN THE COVERAGE OF ITEM 1110 WAS WITHDRAWN AT THE REQUEST OF THE DEPARTMENT OF DEFENSE. CONCERNING OUR TRANSPORTATION DIVISION'S REQUESTS FOR REFUND OF A TERMINAL CHARGE OF 11 CENTS PER 100 POUNDS THAT IS BEING ASSESSED ON SHIPMENTS. THE BASIS OF THE REFUND REQUESTS OF THE 11-CENT CHARGE IS THAT ITEM 1110 OF SOUTHWESTERN MOTOR FREIGHT BUREAU RULES TARIFF NO. 15-SERIES.

B-161618, AUG 16, 1971

TERMINAL CHARGES - SOUTHWESTERN MOTOR FREIGHT BUREAU RULES TARIFF NO. 15 SERIES DECISION NOTIFYING STRICKLAND TRANSPORTATION COMPANY THAT TRANSPORTATION DIVISION WILL CONTINUE ATTEMPTS TO RECOVER REFUNDS OF A TERMINAL CHARGE THAT IS BEING ASSESSED ON SHIPMENTS AT THE GULF OUTPORT (U.S. ARMY TERMINAL) NEW ORLEANS, LOUISIANA. FROM THE EXAMINATION OF THE HISTORY OF ITEM 1110 OF SOUTHWESTERN MOTOR FREIGHT BUREAU RULES TARIFF NO. 15-SERIES, IT IS APPARENT THAT THE CHARGES ARE NOT APPLICABLE TO DELIVERIES MADE AT THE NEW ORLEANS MILITARY INSTALLATIONS. AN ATTEMPT TO INCLUDE THESE TERMINALS IN THE COVERAGE OF ITEM 1110 WAS WITHDRAWN AT THE REQUEST OF THE DEPARTMENT OF DEFENSE.

TO MR. OSCAR P. PECK:

WE REFER TO YOUR LETTER OF MARCH 17, 1971, AND TO LETTERS FROM MR. R. V. SMITH, MANAGER OVERCHARGE CLAIMS, CONCERNING OUR TRANSPORTATION DIVISION'S REQUESTS FOR REFUND OF A TERMINAL CHARGE OF 11 CENTS PER 100 POUNDS THAT IS BEING ASSESSED ON SHIPMENTS, BOTH TRUCKLOAD AND LESS TRUCKLOAD, DELIVERED AT THE GULF OUTPORT (U.S. ARMY TERMINAL) AT NEW ORLEANS, LOUISIANA.

THE BASIS OF THE REFUND REQUESTS OF THE 11-CENT CHARGE IS THAT ITEM 1110 OF SOUTHWESTERN MOTOR FREIGHT BUREAU RULES TARIFF NO. 15-SERIES, NAMING THIS CHARGE, IS NOT APPLICABLE TO DELIVERIES MADE AT THE U.S. ARMY TERMINAL OR OTHER MILITARY INSTALLATIONS AT NEW ORLEANS. YOUR REASON FOR DECLINING TO MAKE THESE REFUNDS, AS STATED IN YOUR LETTER OF MARCH 17, 1971, IS THAT ITEM 1110 COVERS ALL PIERS, WHARVES OR DOCKS AT NEW ORLEANS, AND THAT IT IS NOT NECESSARY THAT THE MILITARY INSTALLATIONS BE SPECIFICALLY NAMED. MR. SMITH'S LETTERS STATE THAT YOUR COMPANY PERFORMS CERTAIN SERVICES, SUCH AS UNLOADING, WAITING FOR SPOTTING DESIGNATIONS, WAITING TIME, ETC., AND THAT THOSE SERVICES ENTITLE YOU TO THE 11-CENT CHARGE.

WE ARE OF THE OPINION THAT THE 11-CENT TERMINAL CHARGE AT NEW ORLEANS, LOUISIANA, IS NOT APPLICABLE AT THE U.S. ARMY TERMINAL AND THE OTHER MILITARY INSTALLATIONS. WE TAKE THIS VIEW BECAUSE IT IS CLEAR THAT THIS ITEM APPLIES ONLY WHERE TERMINAL SERVICES OTHER THAN THOSE NORMALLY INCLUDED IN THE LINE-HAUL RATE ARE PERFORMED. THAT SUCH SERVICES ARE NOT PERFORMED AT THE MILITARY TERMINALS IS EVIDENCED BY THE FACT THAT YOUR TARIFF PUBLISHING AGENT ADDED TO ITEM 1110 THE NAMES OF THE SEVERAL MILITARY TERMINALS, BUT UPON OBJECTION BY THE DEPARTMENT OF DEFENSE WHICH FILED A PETITION WITH THE INTERSTATE COMMERCE COMMISSION ASKING THAT THE PROPOSED ADDITION BE SUSPENDED, IT WAS CANCELLED VOLUNTARILY.

TO UNDERSTAND OUR POSITION AS TO THE EXCLUSION OF THE MILITARY TERMINALS IT IS NECESSARY TO REFER TO SEVERAL CANCELLED ISSUES OF TARIFF NO. 15. ITEM 1110, NAMING THE TERMINAL CHARGE OF 11 CENTS PER 100 POUNDS, WAS FIRST EFFECTIVE NOVEMBER 2, 1968, IN SUPPLEMENT NO. 3 TO TARIFF NO. 15-Q. THIS ITEM STATED IN THE SECOND PARAGRAPH THAT THE TERM "PIERS" OR "WHARVES" INCLUDED THE GULF OUTPORTS NAVAL SUPPLY ACTIVITY, GULF OUTPORTS PANAMA CANAL COMPANY AND THE NAVAL SUPPLY ACTIVITY. THE TERMS "PIERS" AND "WHARVES" DID NOT INCLUDE AT THAT TIME THE U.S. ARMY TERMINAL. SUPPLEMENT NO. 5 TO THE TARIFF POSTPONED THE EFFECTIVE DATE OF ITEM 1110 TO NOVEMBER 19, 1968.

ON APRIL 15, 1969, ITEM 1110, HAVING BECOME EFFECTIVE ON NOVEMBER 19, 1968, WAS REISSUED IN TARIFF NO. 15-R. IN THIS ITEM, REFERENCE IS NOT MADE TO THE TERMS "PIERS" AND "WHARVES" AS INCLUDING THE THREE MILITARY OR NAVAL INSTALLATIONS. IN OUR VIEW THE DELIBERATE OMISSION OF THE REFERENCE MEANS THAT THE PROVISIONS OF ITEM 1110 NO LONGER APPLIED TO THOSE INSTALLATIONS.

THAT ITEM 1110, AS IT READ WHEN REISSUED ON APRIL 15, 1969, DID NOT APPLY TO MILITARY INSTALLATIONS, INCLUDING THE U.S. ARMY TERMINAL, IS ESTABLISHED BY THE PUBLICATION OF ITEM 1110-C, EFFECTIVE SEPTEMBER 11, 1969, IN SUPPLEMENT NO. 12 TO TARIFF NO. 15-R. IN THAT ITEM A "NOTE 1," PRECEDED BY AN INCREASE REFERENCE MARK, WAS ADDED. NOTE 1 STATES THAT "PIERS, WHARVES OR DOCKS" AT NEW ORLEANS WILL INCLUDE THE THREE MILITARY INSTALLATIONS FORMERLY NAMED IN ITEM 1110 OF TARIFF NO. 15-Q, PLUS THE U.S. ARMY TERMINAL. THE FACT THAT THIS ITEM IS REFERENCED AS AN INCREASE CLEARLY SHOWS AN INTENTION TO ASSESS THE 11-CENT TERMINAL CHARGE AT THE U.S. ARMY TERMINAL FOR THE FIRST TIME WITH THE EFFECTIVE DATE OF THAT ITEM.

AS INDICATED, UPON PETITION BY THE DEPARTMENT OF DEFENSE, THE INTERSTATE COMMERCE COMMISSION, IN I. & S. DOCKET NO. M-23351, SUSPENDED THE EFFECTIVE DATE OF ITEM NO. 1110-C, AND SUPPLEMENT NO. 14 TO TARIFF NO. 15- R, POSTPONED THE EFFECTIVE DATE OF THE ITEM UNTIL APRIL 2, 1970.

THE DEPARTMENT OF DEFENSE PETITION STATED ON PAGE 3 AS FOLLOWS:

"AT THE PRESENT TIME ALL PERTINENT TERMINAL SERVICES AT U.S. ARMY TERMINAL, NAVAL SUPPLY ACTIVITY, GULF OUTPORTS NAVAL SUPPLY ACTIVITY AND GULF OUTPORTS PANAMA CANAL COMPANY ARE NOT PERFORMED BY THE MOTOR CARRIER. IN FACT EACH OF THE GOVERNMENT ACTIVITIES DESCRIBED, PERFORM THEIR OWN TERMINAL SERVICES WITHOUT ALLOWANCE BY THE CARRIER. SUCH TERMINAL SERVICES CONSIST OF ABSORPTIONS, ASSEMBLING, CARTAGE, DISTRIBUTING, LOADING, MARKING, SORTING, TAGGING, TRANSIT PRIVILEGES, AND UNLOADING. SEE ITEM 770 SOUTHWESTERN MOTOR TARIFF 15-R, ICC NO. 10.

"BY ENACTMENT OF ITEM 1110-C, PARTICULARLY NOTE 1, THE GOVERNMENT, THROUGH THE NAMED ACTIVITIES, WOULD BE FORCED TO PAY THE TERMINAL CHARGES ALTHOUGH SUCH SERVICES ARE NOT PERFORMED BY THE CARRIER. SECTION 216 OF THE INTERSTATE COMMERCE ACT PRECLUDES A CARRIER FROM CHARGING FOR A SERVICE NOT RENDERED OR TO BE RENDERED. CLEARLY, THE IMPOSITION OF CHARGES IN THESE CIRCUMSTANCES WOULD BE UNJUST AND UNREASONABLE AND DISCRIMINATORY, CONTRARY TO SECTION 216(B) AND (D) OF THE ACT. THE ITEM SHOULD BE SUSPENDED AND FOUND UNLAWFUL."

IF, AS YOU CONTEND, THE CARRIERS PARTIES TO THIS PUBLICATION PERFORMED A SERVICE AT THE MILITARY INSTALLATIONS THAT JUSTIFIED THE IMPOSITION OF THIS CHARGE, IT IS NOT APPARENT AS TO WHY YOUR PUBLISHING AGENT ISSUED SUPPLEMENT NO. 15 TO TARIFF NO. 15-R, EFFECTIVE OCTOBER 10, 1969, CANCELLING NOTE 1, AND LEAVING ITEM 1110-C AS IT WAS IN EFFECT PRIOR TO SEPTEMBER 11, 1969. OBVIOUSLY, SINCE THE PURPOSE OF THE ADDITION OF NOTE 1 TO ITEM 1110-C WAS TO MAKE ITS PROVISIONS SPECIFICALLY APPLICABLE TO U.S. ARMY TERMINAL AND THE OTHER NAMED MILITARY OR NAVAL ACTIVITIES, THE REMOVAL OF NOTE 1 RESULTS IN THE ELIMINATION OF THE 11-CENT CHARGE IN CONNECTION WITH PROPERTY DELIVERED TO THOSE INSTALLATIONS.

IN THE CIRCUMSTANCES, WE BELIEVE THAT THE 11-CENT CHARGE NAMED IN ITEM 1110-SERIES IS NOT APPLICABLE TO DELIVERIES MADE BY YOUR COMPANY AT THE GOVERNMENT INSTALLATIONS, INCLUDING THE U.S. ARMY TERMINAL, NAMED IN AND WITHDRAWN FROM THE ITEM NO. 1110-C. WE ARE THEREFORE INSTRUCTING OUR TRANSPORTATION DIVISION TO PROCEED WITH THE COLLECTION OF THE OVERCHARGES WHICH YOU WERE REQUESTED TO REFUND.