B-120914, FEB. 16, 1956

B-120914, FEB. 16, 1956

TO ILLINOIS CENTRAL RAILROAD COMPANY:

REFERENCE IS MADE TO YOUR REQUEST UNDER FILE G-TPS-314-A-WAG FOR REVIEW OF THE SETTLEMENT WHICH DISALLOWED YOUR CLAIM FOR $68.28 AS A PART OF THE CHARGES ALLEGED TO BE DUE FOR TRANSPORTING 11,500 POUNDS OF WOODEN CABINETS, SET UP, FROM KANKAKEE, ILLINOIS, TO MERIDIAN, MISSISSIPPI, ON GOVERNMENT BILL OF LADING NO. TPS-351527 DURING DECEMBER 1942.

YOU CLAIMED AND WERE PAID $153.05, COMPUTED ON THE BASIS OF A RATE OF $2.11 PER 100 POUNDS REDUCED BY LAND GRANT TO $1.33087 PER 100 POUNDS. THE AUDIT OF THE PAYMENT VOUCHER BY OUR TRANSPORTATION DIVISION IT WAS DETERMINED THAT THE CHARGES WERE FOR COMPUTATION ON THE BASIS OF A CARLOAD RATE OF $1.12 PER 100 POUNDS REDUCED BY LANDGRANT DEDUCTION TO $0.70643 PER 100 POUNDS, CARLOAD MINIMUM WEIGHT 12,000 POUNDS, PROVIDED IN ITEM 7670 OF ILLINOIS FREIGHT ASSOCIATION TARIFF NO. 90 AND IN TARIFF NO. 15-E, I.C.C. NOS. 530 AND 485, RESPECTIVELY. UPON YOUR FAILURE TO REFUND THE OVERPAYMENT OF $68.28, THIS AMOUNT WAS RECOVERED IN DECEMBER 1946 BY DEDUCTION FROM AMOUNTS OTHERWISE DUE YOU. THEREAFTER, YOU RECLAIMED, PERBILL NO. TPS-314-A, THE AMOUNT DEDUCTED AND THIS CLAIM WAS DISALLOWED FOR THE REASON THAT THE RECORD DID NOT INDICATE THAT THE SHIPMENT WAS DELIVERED TO YOUR COMPANY AS A LESS-THAN-CARLOAD SHIPMENT. YOU NOW REQUEST REVIEW OF THE SETTLEMENT DISALLOWING YOUR CLAIM AND THE ALLOWANCE OF $68.28, AND YOU URGE THAT "PICK-UP SERVICE WAS TENDERED PER PHOTO COPY OF OUR AGENT'S FREIGHT BILL, ATTACHED; THEREFORE, CARLOAD RATE NOT APPLICABLE. SEE CLASSIFICATION 15, RULE 15, SECTION 1-B.'

THIS SHIPMENT WAS TRANSPORTED ON GOVERNMENT BILL OF LADING NO. TPS 351527 WHICH SHOWED ON ITS FACE THAT THE SHIPMENT WAS PROCURED FROM THE SHIPPER, KROEHLER MANUFACTURING COMPANY, UNDER CONTRACT TPS-55126 AND PURCHASE ORDER NO. C-23600 ON AN F.O.B. KANKAKEE, ILLINOIS, BASIS. THUS, THE SHIPMENT WAS TO BE DELIVERED BY THAT COMPANY ON BOARD THE CARS AT KANKAKEE WITHOUT EXPENSE TO THE GOVERNMENT.

THE RECORD SHOWS THAT YOU ARE CLAIMING $153.05 FOR THE TRANSPORTATION OF THIS SHIPMENT WEIGHING 11,500 POUNDS, WHEREAS YOU ADMIT, IN EFFECT, THAT HAD THIS SHIPMENT WEIGHED 12,000 POUNDS, OR 500 POUNDS MORE THAN IT DID, THE GOVERNMENT WOULD HAVE BEEN ENTITLED TO THE TRANSPORTATION FOR $84.77. THUS, YOU ARE CLAIMING OVER 80 PERCENT GREATER REVENUE FOR TRANSPORTING A SHIPMENT WEIGHING 11,500 POUNDS THAN FOR A SHIPMENT OF 12,000 POUNDS.

IN A SOMEWHAT SIMILAR SITUATION, CRANE CO. V. ALTON R. CO., 268 I.C.C. 511, 513, INVOLVING THE CLASSIFICATION RULE RELIED ON BY YOU TO SUSTAIN CHARGES BASED UPON THE LESS-THAN-CARLOAD RATE, THE INTERSTATE COMMERCE COMMISSION SAID THAT, COMPARED WITH THE CHARGES FOR A MINIMUM CARLOAD, THE COMPLAINANT HAD TO PAY 87 PERCENT GREATER CHARGES FOR 39 PERCENT LESS WEIGHT; THAT THE CIRCUMSTANCES SURROUNDING THIS SHIPMENT WERE NOT UNUSUAL; THAT SIMILAR RESULTS WILL OCCUR UNDER THE RULE WHENEVER PICKUP OR DELIVERY SERVICE IS PERFORMED ON A SHIPMENT WHICH COMPRISES A SUBSTANTIAL PORTION OF A CARLOAD AND THERE IS A LARGE DIFFERENCE BETWEEN THE CORRESPONDING CARLOAD AND LESS-THAN-CARLOAD RATES; AND THAT SUCH AN EXCEPTION TO THE RULE IS "PATENTLY UNJUST AND UNREASONABLE" WHEN IT RESULTS IN THE EXACTION (AS IN THE CASE THERE UNDER CONSIDERATION) OF CHARGES WHICH "ARE EXTORTIONATE, UNJUST, AND UNREASONABLE.' THE INTERSTATE COMMERCE COMMISSION FOUND THAT THE CHARGES BASED ON THE LESS-THAN-CARLOAD RATE WERE UNJUST AND UNREASONABLE TO THE EXTENT THAT THEY EXCEEDED THE CHARGES FOR A MINIMUM CARLOAD AT THE CARLOAD RATE, PLUS THE USUAL CHARGES FOR UNLOADING THE ACTUAL WEIGHT SHIPPED. ALSO SEE CARNATION CO. V. SOUTHERN PACIFIC CO., 269 I.C.C. 470, WHERE THE COMMISSION STATED THAT THE DISCREPANCY BETWEEN THE CHARGES WAS SO SUBSTANTIAL AS TO CREATE DOUBT AS TO THE JUSTIFICATION FOR THE DIFFERENCE; THAT SIMILAR RESULTS WOULD ENSUE WHENEVER PICKUP AND LOADING SERVICE IS PERFORMED ON A SHIPMENT THAT WEIGHS SLIGHTLY LESS THAN THE CARLOAD MINIMUM WEIGHT, AND THERE IS A SUBSTANTIAL DIFFERENCE BETWEEN THE CARLOAD AND LESS THAN-CARLOAD RATES; AND THAT NO JUSTIFICATION APPEARS FOR THE EXCEPTION TO THE RULE INVOLVED WHEN, AS IN THE INSTANCE UNDER CONSIDERATION, RESULTS IN THE APPLICATION OF CHARGES WHICH PATENTLY ARE UNJUST AND UNREASONABLE.

IT APPEARS, THEREFORE, THAT IF, AS YOU URGE, PICKUP SERVICE AT THE POINT OF ORIGIN WAS RENDERED IN CONNECTION WITH THIS SHIPMENT, THE TRANSPORTATION CHARGES URGED BY YOU TO BE APPLICABLE BECAUSE OF SUCH DELIVERY SERVICE WOULD BE CLEARLY IN THE CATEGORY OF CHARGES WHICH "PATENTLY ARE UNJUST AND UNREASONABLE," AS WAS SAID IN THE CITED CARNATION COMPANY CASE, OR WHICH ARE "EXTORTIONATE, UNJUST AND UNREASONABLE," AS WAS SAID IN THE CRANE CASE, TO THE EXTENT THAT THEY EXCEEDED THE CHARGES FOR A MINIMUM CARLOAD AT THE CARLOAD RATE, PLUS REASONABLE COMPENSATION FOR SUCH ACCESSORIAL SERVICES AS WERE PERFORMED.