B-173923, AUG 11, 1972

B-173923: Aug 11, 1972

Additional Materials:

Contact:

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

 

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

AMERICAN RED BALL'S RATES ON FILE WITH PACOM WERE NOT COMPETITIVE AND WERE NOT. RED BALL WAS NOT ELIGIBLE TO SHARE IN TRAFFIC. NOR WAS IT UNDER AN OBLIGATION TO ACCEPT SHIPMENTS. SINCE RED BALL WAS UNDER NO OBLIGATION TO ACCEPT SHIPMENTS. IT IS THE CARRIER'S CONTENTION THAT THE FILED RATES APPLIED TO THE EXCLUSION OF THOSE SHOWN ON THE GBLS. THE RATES ON FILE WITH PACOM ON BEHALF OF AMERICAN RED BALL TRANSIT WERE HIGHER THAN THE COMPETITIVE RATES OF OTHER CARRIERS AND REPORTEDLY WERE NOT DISTRIBUTED TO INDIVIDUAL INSTALLATIONS WITHIN THE COMMAND. AMERICAN RED BALL TRANSIT ORDINARILY WOULD NOT HAVE BEEN ENTITLED TO SHARE IN THE DISTRIBUTION OF TRAFFIC BY THE INSTALLATIONS. CERTAINLY WAS UNDER NO LEGAL OBLIGATION TO ACCEPT SHIPMENTS AT RATES LOWER THAN THOSE IT HAD DULY FILED.

B-173923, AUG 11, 1972

TRANSPORTATION - RATE OF PAYMENT - DISCREPANCY BETWEEN RATES ON FILE AND BILL OF LADING RATE CONCERNING PAYMENT TO AMERICAN RED BALL TRANSIT COMPANY FOR THE SHIPMENT OF HOUSEHOLD GOODS UNDER GOVERNMENT BILLS OF LADING FROM OKINAWA TO JAPAN AND TAIWAN. AMERICAN RED BALL'S RATES ON FILE WITH PACOM WERE NOT COMPETITIVE AND WERE NOT, THEREFORE, DISTRIBUTED TO INSTALLATIONS WITHIN THE COMMAND. UNDER THESE CIRCUMSTANCES, RED BALL WAS NOT ELIGIBLE TO SHARE IN TRAFFIC, NOR WAS IT UNDER AN OBLIGATION TO ACCEPT SHIPMENTS. THE GBLS UNDER WHICH THE GOODS MOVED QUOTED RATES BELOW THE RED BALL RATES ON FILE. SINCE RED BALL WAS UNDER NO OBLIGATION TO ACCEPT SHIPMENTS, IT CAN ONLY BE CONCLUDED THAT THEY VOLUNTARILY MOVED THE GOODS WITH THE UNDERSTANDING THEY WOULD BE PAID AT THE RATES SPECIFIED IN THE GBLS.

TO HOUSEHOLD GOODS CARRIERS' BUREAU:

WE REFER TO YOUR LETTER OF MAY 31, 1972, ASKING FOR REVIEW OF THE AUDIT BASIS RELATING TO FOUR INTRATHEATER SHIPMENTS OF HOUSEHOLD GOODS TRANSPORTED BY AMERICAN RED BALL TRANSIT COMPANY. TWO OF THE SHIPMENTS MOVED FROM OKINAWA TO TAIWAN UNDER GBLS F-2243670 AND F-2243753 AND THE OTHER TWO SHIPMENTS MOVED FROM OKINAWA TO JAPAN UNDER GBLS F-2251184 AND F -2251206.

THE CARRIER BILLED FOR THESE SHIPMENTS ON THE BASIS OF RATES REPORTEDLY FILED WITH THE PACIFIC AREA COMMAND (PACOM) BUT AIR FORCE DISBURSING OFFICERS ADJUSTED THE CHARGES TO THE BASIS OF LOWER RATES ANNOTATED ON THE BILLS OF LADING. IT IS THE CARRIER'S CONTENTION THAT THE FILED RATES APPLIED TO THE EXCLUSION OF THOSE SHOWN ON THE GBLS.

THE RATES ON FILE WITH PACOM ON BEHALF OF AMERICAN RED BALL TRANSIT WERE HIGHER THAN THE COMPETITIVE RATES OF OTHER CARRIERS AND REPORTEDLY WERE NOT DISTRIBUTED TO INDIVIDUAL INSTALLATIONS WITHIN THE COMMAND. IN THESE CIRCUMSTANCES, AMERICAN RED BALL TRANSIT ORDINARILY WOULD NOT HAVE BEEN ENTITLED TO SHARE IN THE DISTRIBUTION OF TRAFFIC BY THE INSTALLATIONS, AND CERTAINLY WAS UNDER NO LEGAL OBLIGATION TO ACCEPT SHIPMENTS AT RATES LOWER THAN THOSE IT HAD DULY FILED.

DESPITE THESE CONSIDERATIONS, AMERICAN RED BALL TRANSIT ACCEPTED THE FOUR SHIPMENTS IN QUESTION UNDER GBLS APPROPRIATELY ANNOTATED TO SHOW THAT THE ACCEPTANCE WAS CONDITIONED UPON THE APPLICATION OF RATES LOWER THAN THE CARRIER'S FILED RATES. FURTHERMORE, THESE GBL RATES WERE COMPETITIVE WITH THE RATES OF OTHER CARRIERS. SINCE AMERICAN RED BALL TRANSIT WAS UNDER NO LEGAL OBLIGATION TO ACCEPT THESE SHIPMENTS AT ALL BECAUSE ITS FILED RATES WERE NOT A MATTER OF RECORD WITH THE ORIGIN INSTALLATION, WE CAN ONLY CONCLUDE THAT IT DID SO VOLUNTARILY WITH THE UNDERSTANDING THAT THE SHIPMENTS WOULD BE CHARGED FOR AT THE RATES SPECIFIED IN THE BILL OF LADING CONTRACTS.

IF WE WERE TO DISREGARD THE BILL OF LADING ANNOTATIONS IN THIS CASE AND ALLOW ASSESSMENT OF THE HIGHER NONCOMPETITIVE RATES, WE WOULD BE SANCTIONING A PRACTICE WHEREBY A CARRIER COULD OBTAIN TRAFFIC UNDER AGREEMENTS FOR RATES LOWER THAN ITS FILED RATES BUT COULD THEREAFTER OBTAIN PAYMENT AT THE HIGHER FILED RATES. SUCH A PRACTICE WOULD BE INEQUITABLE NOT ONLY TO THE GOVERNMENT BUT TO OTHER CARRIERS PARTICIPATING IN THE TRADE.

WE THINK THE BILL OF LADING CONTRACTS HERE IN QUESTION CONSTITUTED VOLUNTARY ACCEPTANCES AND AGREEMENTS BY THE CARRIER TO TRANSPORT THESE SHIPMENTS AT THE ANNOTATED RATES, AND WE SEE NO VALID BASIS FOR REVISION OF THE AUDIT ACTION. THE DISALLOWANCE OF THE CARRIER'S CLAIMS IS THEREFORE SUSTAINED.