B-139771, AUG. 5, 1959

B-139771, AUG. 5, 1959

TO UNION PACIFIC RAILROAD COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 26, 1959, GG-60828, REQUESTING REVIEW OF OUR SETTLEMENT DATED DECEMBER 29, 1958, WHICH DISALLOWED YOUR CLAIM FOR $760.34 ASSERTED IN CONNECTION WITH A SHIPMENT, IN 1943, OF 117,882 POUNDS OF CANNED MEATS FROM HOUSTON, TEXAS, TO OLYMPIA, WASHINGTON, UNDER GOVERNMENT BILLS OF LADING NOS. A 3213768 AND A -513526.

OUR RECORDS SHOW THAT THE INBOUND SHIPMENT ORIGINATED AT HOUSTON UNDER BILL OF LADING NO. A-3213768 AND WAS DELIVERED FOR STORAGE IN TRANSIT AT DENVER, COLORADO, BY THE DENVER AND RIO GRANDE WESTERN RAILROAD COMPANY. THE OUTBOUND MOVEMENT FROM THE TRANSIT STATION (DENVER) WAS ACCOMPLISHED UNDER BILL OF LADING NO. A-513526, RECEIPTED FOR BY THE UNION PACIFIC RAILROAD COMPANY, WHICH CARRIER MADE DELIVERY OF THE GOODS TO OLYMPIA, WASHINGTON, FOR EXPORT.

BOTH THE INBOUND AND THE OUTBOUND SHIPMENTS WERE BILLED BY THE CARRIERS AND PAID ON THE BASIS OF LOCAL MOVEMENTS, BUT IN OUR SUBSEQUENT AUDIT OF THE PAYMENT VOUCHERS WE ISSUED A NOTICE OF OVERPAYMENT (FORM 1003) STATING AN AMOUNT OF $760.34 AS OVERPAID, BASED UPON OUR APPLICATION OF THE TRANSIT PRIVILEGE UNDER AUTHORITY OF ASSOCIATION OF AMERICAN RAILROADS SECTION 22 QUOTATION 41-B. THE REPORTED OVERCHARGE OF $760.34 WAS COLLECTED FROM AMOUNTS OTHERWISE FOUND DUE YOU, PURSUANT TO 49 U.S.C. 66.

YOU HAVE PROTESTED OUR ACTION, AS AFORESAID, ON THE GROUND THAT THE THROUGH RATE PROVISIONS OF ASSOCIATION OF AMERICAN RAILROADS SECTION 22 QUOTATION NO. 41-B, AMENDMENT NO. 8, ITEM 14, PARAGRAPH (B), ARE APPLICABLE ONLY WHEN THE INBOUND CARRIER TO, AND THE OUTBOUND CARRIER FROM, THE TRANSIT STATION ARE THE SAME; AND SINCE THE INBOUND SHIPMENT OF THIS CARGO TO DENVER WAS ACCOMPLISHED BY THE DENVER AND RIO GRANDE WESTERN RAILROAD COMPANY, AND THE OUTBOUND SHIPMENT FROM THAT POINT WAS PERFORMED BY THE UNION PACIFIC RAILROAD COMPANY, YOU CONTEND THAT THE GOVERNMENT IS NOT ENTITLED TO TRANSIT PRIVILEGES.

ASSOCIATION OF AMERICAN RAILROADS SECTION 22 QUOTATION NO. 41-B, ITEM 14, PARAGRAPH (B) READS:

"/B) THE INBOUND LINE-HAUL CARRIER SERVING THE TRANSIT POINT SHALL SUPERVISE AND MANAGE THE TRANSIT PRIVILEGE IN ACCORDANCE WITH THE PROVISIONS OF THIS QUOTATION AND KEEP ALL RECORDS REQUIRED OF THE CARRIERS IN CONNECTION THEREWITH. ALL ARRANGEMENTS FOR THE OUTBOUND MOVEMENT OF EACH SHIPMENT FROM SUCH TRANSIT POINT MUST BE MADE WITH SUCH INBOUND CARRIER.'

IT WILL BE OBSERVED THAT THERE IS NO SPECIFIC PROVISION IN THE QUOTATION NO. 41-B THAT THE OUTBOUND CARRIER FROM THE TRANSIT POINT SHALL BE THE SAME AS THE INBOUND CARRIER, AS YOU CONTEND. RATHER, IT IS OUR BELIEF THAT THE PRIMARY PURPOSE OF THE QUOTED PROVISION IS TO IDENTIFY THE CARRIER FROM WHICH THE TRANSIT PRIVILEGE MUST BE REQUESTED AND TO PROVIDE THAT NOTICE BE GIVEN TO THAT CARRIER OF SUBSEQUENT OUTBOUND SHIPMENT. MOREOVER, SINCE THE CARRIER GRANTING THE TRANSIT PRIVILEGE IS REQUIRED BY THE TERMS OF THE QUOTATION TO SUPERVISE THE TRANSIT RECORDS, THE QUOTED PROVISION THAT "ARRANGEMENTS" FOR OUTBOUND SHIPMENTS MUST BE MADE WITH THE INBOUND CARRIER WAS DESIGNED FOR THE PURPOSE OF GIVING THAT CARRIER NOTICE SO THAT IT CAN ADJUST THE TRANSIT RECORDS, AND WAS NOT INTENDED TO REQUIRE THAT THE INBOUND CARRIER PERFORM THE OUTBOUND HAUL. TO GIVE EFFECT TO THE CONSTRUCTION PLACED ON THE ITEM 4 (B) BY YOU WOULD BE TO PRECLUDE THE APPLICATION OF THE TRANSIT PRIVILEGE AT JUNCTION POINTS WHERE THE INBOUND CARRIER REACHES ITS TERMINAL. THERE IS NOTHING IN THE QUOTATION THAT WARRANTS SUCH A CONSTRUCTION, PARTICULARLY SINCE THE THROUGH RATE IS APPLICABLE ON TRAFFIC INTERCHANGED AT DENVER, COLORADO.

ACCORDINGLY, IT MUST BE CONCLUDED THAT THE PROPER CHARGES ON THESE SHIPMENTS ARE THOSE COMPUTED ON THE BASIS OF THE THROUGH RATE, PLUS A TRANSIT CHARGE, SUCH AS WERE PAID HERE, AND THEREFORE OUR SETTLEMENT OF DECEMBER 29, 1958, DISALLOWING YOUR CLAIM, IS SUSTAINED.