B-166806, OCTOBER 22, 1969, 49 COMP. GEN. 266

B-166806: Oct 22, 1969

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DISPLACEMENT THE CONCEPT OF STOPPING A SHIPMENT IN TRANSIT AND THE GRANTING OF TRANSIT PRIVILEGES RESTS ON THE FICTION THAT TWO OR MORE SEPARATE SHIPMENTS MAY BE TREATED AS A SINGLE THROUGH SHIPMENT AND THAT THROUGH CHARGES ASSESSED WILL BE LOWER THAN THE AGGREGATE OF THE CHARGES APPLICABLE TO THE SEPARATE SHIPMENTS AND. THE UNITED STATES GENERAL ACCOUNTING OFFICE PROPERLY USED THE LOWER AGGREGATE CHARGES AND THE CARRIER IS NOT ENTITLED TO A REFUND. THESE WERE GOVERNMENT TRANSIT BILLS OF LADING COVERING SHIPMENTS OF EXPLOSIVES MOVING OUTBOUND FROM FORT ESTILL. WHICH MOVED INBOUND TO FORT ESTILL AND WERE RECORDED FOR TRANSIT. " THUS INDICATING THAT THE SHIPMENT COVERED THEREBY WAS TENDERED PURSUANT TO THE TERMS AND CONDITIONS OF SOUTHERN FREIGHT ASSOCIATION (SFA) SECTION 22 QUOTATION ADVICE NO.

B-166806, OCTOBER 22, 1969, 49 COMP. GEN. 266

TRANSPORTATION -- TRANSIT PRIVILEGES -- THROUGH RATES -- DISPLACEMENT THE CONCEPT OF STOPPING A SHIPMENT IN TRANSIT AND THE GRANTING OF TRANSIT PRIVILEGES RESTS ON THE FICTION THAT TWO OR MORE SEPARATE SHIPMENTS MAY BE TREATED AS A SINGLE THROUGH SHIPMENT AND THAT THROUGH CHARGES ASSESSED WILL BE LOWER THAN THE AGGREGATE OF THE CHARGES APPLICABLE TO THE SEPARATE SHIPMENTS AND, THEREFORE, WHEN UPON THE EXPIRATION OF RECORDED INBOUND TRANSIT CREDITS ON AN OUTBOUND SHIPMENT OF EXPLOSIVES TENDERED UNDER A SECTION 22 QUOTATION, THE ASSESSMENT OF THROUGH RATES RESULTS IN A HIGHER CHARGE THAN THE AGGREGATE OF THE RATES APPLICABLE TO THE SEPARATE SHIPMENTS, THE GOVERNMENT HAS A RIGHT TO DISREGARD THE TRANSIT FICTION, A RIGHT RECOGNIZED BY THE QUOTATION, AND UPON SETTLEMENT PURSUANT TO 49 U.S.C. 66, OF THE PAYMENT TO THE CARRIER ON THE BASIS OF FICTIONAL THROUGH SHIPMENTS, THE UNITED STATES GENERAL ACCOUNTING OFFICE PROPERLY USED THE LOWER AGGREGATE CHARGES AND THE CARRIER IS NOT ENTITLED TO A REFUND.

TO THE CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, OCTOBER 22, 1969:

WE REFER TO YOUR LETTERS OF SEPTEMBER 23, 1968, FILE USG-G-260403, DECEMBER 13, 1968, FILE USG-G-260437, AND DECEMBER 24, 1968, FILE USG-G 260401, PROTESTING SETTLEMENTS ISSUED HERE DENYING YOUR RECLAIMS FOR $38.10 OR $37.07 PER SHIPMENT FOR DEDUCTIONS AUTHORIZED TO RECOVER OVERCHARGES PAID TO YOUR COMPANY FOR TRANSPORTATION SERVICES COVERED BY BILLS OF LADING AT-079814, AT-079813, AT-079922 AND AT-079923. THESE WERE GOVERNMENT TRANSIT BILLS OF LADING COVERING SHIPMENTS OF EXPLOSIVES MOVING OUTBOUND FROM FORT ESTILL, KENTUCKY, TO CRANE, INDIANA, AND EACH OF THE BILLS OF LADING BEARS REFERENCE TO INBOUND TRANSIT CREDITS SURRENDERED AT FORT ESTILL, REPRESENTING SHIPMENTS ORIGINATING AT COWAN, VIRGINIA, WHICH MOVED INBOUND TO FORT ESTILL AND WERE RECORDED FOR TRANSIT.

EACH OF THE GOVERNMENT TRANSIT BILLS OF LADING, IN THE SPACE PROVIDED FOR SHOWING TARIFF OR SPECIAL RATE AUTHORITIES, BEARS REFERENCE TO THE TERM "A1606B," THUS INDICATING THAT THE SHIPMENT COVERED THEREBY WAS TENDERED PURSUANT TO THE TERMS AND CONDITIONS OF SOUTHERN FREIGHT ASSOCIATION (SFA) SECTION 22 QUOTATION ADVICE NO. A 1606-B, A QUOTATION WHICH APPLIES TO TRANSIT ARRANGEMENTS ON DOMESTIC AND EXPORT SHIPMENTS OF AMMUNITION, EXPLOSIVES AND OTHER ORDNANCE. ALSO, EACH OF THE GOVERNMENT TRANSIT BILLS OF LADING SHOWS THAT THE TONNAGE COVERED THEREBY WAS RECORDED FOR TRANSIT AT CRANE.

CHARGES FOR THE TRANSPORTATION SERVICES COVERED BY THE GOVERNMENT TRANSIT BILLS OF LADING IN QUESTION WERE BILLED BY YOUR COMPANY ON THE BASIS OF THE THROUGH TARIFF RATE APPLICABLE ON EXPLOSIVES FROM COWAN, VIRGINIA, TO CRANE, INDIANA, LESS THE INBOUND CHARGES TO FORT ESTILL, WHICH HAD BEEN PAID ON THE BASIS OF A RATE PROVIDED IN SOUTHERN FREIGHT ASSOCIATION SECTION 22 QUOTATION A-2497, APPLICABLE FROM COWAN TO FORT ESTILL, PLUS A TRANSIT CHARGE OF 22-1/2 CENTS PER 100 POUNDS, AS PROVIDED IN THE TRANSIT QUOTATION, NO. A1606-B. IN THE AUDIT HERE, NOTICES OF OVERCHARGE FOR $38.10 OR $37.07 PER SHIPMENT WERE ISSUED, BASED ON THE RATE PROVIDED IN SFA SECTION 22 QUOTATION NO. A-2497, APPLICABLE FROM COWAN TO FORT ESTILL, PLUS THE RATE PROVIDED IN APPLICABLE FROM COWAN TO FORT ESTILL, PLUS THE RATE PROVIDED IN SFA SECTION 22 QUOTATION A-1998-A, APPLICABLE FROM FORT ESTILL TO CRANE.

IN YOUR PROTESTS YOU STATE THAT ONCE THE GOVERNMENT HAS TENDERED TRANSIT BILLING AT FORT ESTILL AND THE SHIPMENTS HAVE BEEN BILLED ON THE BASIS OF THE BALANCE OF THE THROUGH RATE APPLICABLE FROM COWAN TO CRANE, THE GOVERNMENT MAY NOT THEREAFTER RESCIND SUCH BILLING AND VOID THE INITIAL TRANSPORTATION CONTRACT BY ATTEMPTING TO SUBSTITUTE SEPARATE OR LOCAL SECTION 22 QUOTATIONS IN COMBINATION OVER THE INITIALLY DECLARED TRANSIT STATION. ALSO, YOU STATE THAT ONCE THE TRANSIT BILLING WAS TENDERED AT FORT ESTILL, THE TRANSPORTATION CONTRACT REQUIRED THAT A THROUGH RATE FROM COWAN TO CRANE BE PROTECTED AND, BECAUSE OF THAT CHOICE, THE PROHIBITION CONTAINED IN SECTION 22 QUOTATIONS NOT PERMITTING THEIR USE IN COMBINATION TO DEFEAT THROUGH RATES WAS APPLICABLE.

IN ADDITION, YOU REFER TO THE CASE OF UNITED STATES V CENTRAL OF GEORGIA R. CO., 332 I.C.C. 33, WHEREIN THE INTERSTATE COMMERCE COMMISSION HELD A COMPLAINT RAISING THE QUESTION OF THE REASONABLENESS OF A TARIFF RATE APPLICABLE FROM LATHROP, CALIFORNIA, TO FORT BENNING, GEORGIA, TO BE FATALLY DEFECTIVE BECAUSE THE SHIPMENT HAD MOVED INBOUND TO LATHROP UNDER A SECTION 22 TRANSIT ARRANGEMENT AND THE COMPLAINT FAILED TO BRING INTO ISSUE THE CHARGES FOR THE THROUGH MOVEMENT. WE DO NOT BELIEVE THAT CASE IS RELEVANT TO THE PROBLEM RAISED BY THE SUBJECT SHIPMENTS. NO QUESTION OF THE APPLICABILITY OF THE CHARGES DUE UNDER THE TRANSIT QUOTATION WAS BEFORE THE COMMISSION, OR WITHIN ITS JURISDICTION. THE HOLDING MERELY STANDS FOR THE PROPOSITION THAT THE COMMISSION WILL REFUSE TO CONSIDER, IN A SECTION 1 (OF THE INTERSTATE COMMERCE ACT) PROCEEDING, THE REASONABLENESS OF AN OUTBOUND TARIFF RATE APPLIED TO A SHIPMENT ACCORDED TRANSIT UNDER A SECTION 22 QUOTATION UNLESS THE CHARGES FOR THE ENTIRE MOVEMENT ARE BROUGHT INTO ISSUE.

THE ENTIRE CONCEPT OF STOPPING IN TRANSIT AND THE GRANTING OF TRANSIT PRIVILEGES RESTS ON THE FICTION THAT TWO OR MORE SEPARATE SHIPMENTS MAY BE TREATED AS A SINGLE THROUGH SHIPMENT AND THROUGH CHARGES ASSESSED WHICH ARE LOWER THAN THE AGGREGATE OF THE CHARGES OTHERWISE APPLICABLE TO THE SEPARATE SHIPMENTS. WHEN THE EXPLOSIVES IN QUESTION WERE TENDERED FOR SHIPMENT FROM FORT ESTILL TO CRANE, THERE WAS NO ELECTION ON THE PART OF THE TRANSPORTATION OFFICER TO SUBJECT THE SHIPMENTS TO THE PROVISIONS OF THE TRANSIT QUOTATION FOR SETTLEMENT OF THE TRANSPORTATION CHARGES ON THE BASIS OF A FICTITIOUS THROUGH MOVEMENT FROM COWAN TO CRANE. IF THIS WERE TRUE, THE TRANSPORTATION OFFICER COULD BE SAID TO HAVE OPTED FOR A TRANSIT LIABILITY, RATHER THAN A TRANSIT PRIVILEGE, BECAUSE THE CHARGES APPLICABLE TO THE FICTIONAL THROUGH SHIPMENTS WOULD HAVE EXCEEDED THE AGGREGATE OF THE CHARGES APPLICABLE TO THE SEPARATE SHIPMENTS.

WHEN THE SHIPMENTS IN QUESTION WERE TENDERED FOR TRANSPORTATION FROM FORT ESTILL TO CRANE, IF THE INTENTION HAD BEEN TO TERMINATE THE SHIPMENTS AT CRANE, THE TRANSPORTATION OFFICER COULD HAVE CANCELED THE INBOUND TRANSIT CREDITS AT FORT ESTILL AND COULD HAVE SHIPPED TO CRANE UNDER STANDARD GOVERNMENT BILLS OF LADING. IN THAT CASE, THE APPLICABLE CHARGES ON THE SEPARATE SHIPMENTS UNQUESTIONABLY WOULD HAVE BEEN THOSE BASED ON THE SECTION 22 RATES APPLICABLE TO AND FROM FORT ESTILL.

THIS WAS NOT DONE BECAUSE THE INTENTION AT THE TIME WAS TO SHIP TO CRANE UNDER THE TRANSIT QUOTATION, TO RECORD THE SHIPMENTS FOR TRANSIT AT CRANE, AND TO RESHIP FROM CRANE TO SOME OTHER DESTINATION. THIS INTENTION WAS FRUSTRATED BECAUSE THE TRANSIT CREDITS RECORDED AT CRANE EXPIRED. THESE CIRCUMSTANCES, THE QUESTION ARISES WHETHER THE GOVERNMENT WAS BOUND TO SETTLE THE CHARGES ON A TRANSIT BASIS APPLICABLE TO FICTIONAL THROUGH SHIPMENTS FROM COWAN TO CRANE OR WHETHER IT HAD THE ELECTION TO DISREGARD THE TRANSIT FICTION AND TO SETTLE THE CHARGES ON THE BASIS OF THE RATES APPLICABLE TO THE SEPARATE SHIPMENTS.

THE TRANSIT QUOTATION (NO. A-1606-B) ITSELF SEEMS TO RECOGNIZE THIS PROBLEM, FOR IT PROVIDES, IN PART, IN ITEM NO. 27:

THIS QUOTATION, WHEN ACCEPTED BY THE GOVERNMENT BY MAKING ANY SHIPMENT OR SETTLEMENT UNDER THE TERMS HEREOF OR OTHERWISE, WILL CONSTITUTE AN AGREEMENT BETWEEN THE PARTIES HERETO AS TO THE TRANSPORTATION SERVICES HEREIN DESCRIBED. *** THUS THE QUOTATION EXPRESSLY RECOGNIZES THAT SETTLEMENT MAY BE MADE FOR THE TRANSPORTATION SERVICES COVERED THEREBY OTHERWISE THAN UNDER THE TERMS OF THE QUOTATION.

ALTHOUGH THE CHARGES FOR THE SHIPMENTS IN QUESTION WERE BILLED AND PAID ON THE BASIS OF TRANSIT BALANCES APPLICABLE TO FICTIONAL THROUGH SHIPMENTS, SUCH PAYMENTS WERE NOT SETTLEMENTS BECAUSE THEY WERE REQUIRED BY LAW TO BE MADE UPON PRESENTATION OF THE BILLS FOR PAYMENT PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE. 49 U.S.C. 66. THE SETTLEMENTS WERE MADE HERE, ON THE BASIS OF THE CHARGES APPLICABLE TO THE SEPARATE SHIPMENTS, AND THE RIGHT TO SETTLE THE CHARGES OTHERWISE THAN UNDER THE TRANSIT BASIS WAS PROVIDED IN THE QUOTATION ITSELF.

FOR THE REASONS STATED, THE SETTLEMENTS ISSUED HERE ARE SUSTAINED, AND YOUR REFUND CLAIMS ACCORDINGLY ARE DENIED.