8. Storage service different terminal charges.

Where mail transported in storage service, other than in destination storage and destination relay storage car service, moves in a car or cars originating on a railroad which receives different terminal charges from those applicable to a railroad over which the car or cars subsequently move, the per car and per piece terminal charges shall be applied at point of loading for the loading and at a point of unloading for the unloading, and payment shall be made to the loading and to the unloading railroad for the service each performs on the basis of one-half the terminal charges prescribed for each railroad. Payment of terminal charges to the loading railroad shall be made on the basis of a prorate of the per car charge at any point where more than 30 feet of storage mail is loaded in such car or cars and on the basis of the piece rate at any point where the volume of storage mail loaded in such car or cars does not exceed 30 feet. Payment of terminal charges to the unloading railroad shall be made on the basis of a prorate of the per car charge at any point where more than 30 feet of storage mail is unloaded from such car or cars, and on the basis of the piece rate where the volume of storage mail unloaded at any point from such car or cars does not exceed 30 feet.

9. Measurements.

(a) In determining the inside lengths of full railway post office cars, apartment railway post office cars, and storage cars and baggage cars used for transportation of mail as the basis of payment, fractions of a foot shall be disregarded if 6 inches or under and credit given for a full foot if over 6 inches. No deduction shall be made in such storage cars and baggage cars for the space occupied by interior fittings provided they do not occupy, in the aggregate, more than 1 linear foot of space. Where they occupy, in the aggregate, more than 1 linear foot of space, the entire space occupied thereby shall be deducted. In ascertaining the amount of space occupied by the interior fittings, obstructions which do not materially affect the clear storage space may be disregarded.

(b) The Postmaster General, upon notification to the railroads and with their presence and assistance, shall conduct tests at least once in 2 years to determine the number of sacks and outside parcels that will fill 3 linear feet of space, both sides of a car, and the results thereof shall be reflected in changes, when necessary in the count of sacks and outside parcels as the basis for measurement of lesser units of storage space, except that in exceptional cases lesser units of storage space of 15 feet or over may be determined by measurement when mutually agreed upon by the Department and the railroad. In no case shall payment be made for more space than the inside length of the car or compartment.

10. Side, terminal, or transfer service.

Where railroads are required by the Post Office Department to perform side, terminal, or transfer service, they shall be separately compensated for such service, unless the service is performed in or directly contiguous to railway terminals or depots. The amount to be paid therefor shall be measured by the amount paid by the railroad to contractors, plus 3 percent; and where the service is performed by agents or employees of the railroad the payment shall be for the value of the pro rata time of such railway agents or employees while engaged in rendering the service, including cost of vehicular service that may be necessary, with the addition of 3 percent. In computing the value of the pro rata time of such agents or employees there shall be included base pay; 3 percent of base pay representing vacation allowance; and the applicable railroad retirement and unemployment insurance taxes at the rates in

effect when the service is rendered. Railroad retirement and unemployment insurance taxes shall be excluded in computing the additional 3 percent. Where railroads contract for such service, contracts shall be let to the lowest responsible bidder upon advertisement. Readjustment for such service shall be made annually. Railroads shall submit certified copies of each contract to the Department on or before July 1 of each year showing the rate of payment for the ensuing year, and the amounts specified in such contracts, plus 3 percent, shall be accepted as the basis of payment by the Department heretofore described. Railroads shall also furnish the Department each year, on or before July 1, a detailed statement of the daily time consumed in handling the mails by their agents or employees at each point where side, terminal, or transfer service is performed, which statement shall be verified by a responsible official of each railroad conversant with the facts, and such verified statement shall compute the pro rata payment of the agent or employee performing the service, based on the time actually consumed, and the amounts named in the statement plus 3 percent shall constitute the basis of payment for the next ensuing year, unless in special cases, for good cause, the Department may require further statements and verifications from any particular railroad at other periods of the year.

11. Payment monthly.

Payments for transportation of the mail and the service connected therewith shall be made each month after the service has been performed.

304 I. C. C.

INVESTIGATION AND SUSPENSION DOCKET No. M-10670

YEAST FROM ST. LOUIS TO FORT WORTH AND DALLAS

Decided June 3, 1958

Proposed reduced truckload rate on compressed yeast, other than dry, from St. Louis, Mo., to Dallas and Fort Worth, Tex., found just and reasonable. Order of suspension vacated, and proceeding discontinued.

Dean McCoy for respondent.

Clinton J. Ihrig for protestant.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS WINCHELL, MURPHY, and Minor BY DIVISION 2:

The modified procedure was followed. Due and timely execution of our functions under section 216 (g) of the Interstate Commerce Act imperatively requires that no recommended report and order be issued in this proceeding. Requested findings not discussed in this report nor reflected in our findings or conclusions have been considered and found not justified.

1

By schedules filed to become effective on January 3, 1958, the Middlewest Motor Freight Bureau, hereinafter called the bureau, published a reduced commodity rate 1 of $1.45, minimum 30,000 pounds, on yeast, compressed, other than dry, from St. Louis, Mo., to Dallas and Fort Worth, Tex., 659 and 686, miles, respectively, at the request of Lee Way Motor Freight, Inc., hereinafter called the respondent, a motor common carrier, under its right of independent action. As published, the proposed rate is not restricted to use by that carrier only. Upon protest of the bureau and southwestern-territory railroads, the operation of the proposed schedules was suspended to and including August 2, 1958.

The shipper, Anheuser-Busch, Inc., is the only manufacturer of yeast at St. Louis, and the only large volume shipper of yeast to Dallas and Fort Worth. It ships about 5,120,476 pounds of compressed yeast annually over the respondent's lines. The commodity must be transported under refrigeration at temperatures ranging from 33° to 45° Fahrenheit. It has a retail value of from 16.5 to 23.5 cents per pound and a density of approximately 60 pounds a cubic foot. Because of its perishable nature, compressed yeast re

1 Rates are stated per 100 pounds.

quires fast dispatch, and motor-carrier service provides 1-day delivery from St. Louis to Dallas and Fort Worth. Delivery by rail occurs the second or third morning after departure from St. Louis, which renders that type of service unacceptable to the shipper. No shipments by rail have been made since 1947, and no appearance was entered by the rail carriers.

The respondent transports an average of four shipments of yeast per week to Fort Worth, with stopoff for partial unloading at Dallas. In an effort to reduce transportation costs on this commodity and thus permit the marketing of its product on a more favorable basis in competition with a competitor located at Dallas, Anheuser-Busch, Inc., is considering the use of privately owned vehicles. In the face of this, the respondent proposed the instant reduction, with its higher minimum, which would retain this traffic and at the same time induce heavier loading and reduce from 4 to 3 the number of shipments required per week.

The respondent's present rate to Dallas and Fort Worth is $1.61, minimum 20,000 pounds, which produces minimum truck-mile earnings of 48.8 and 46.9 cents, respectively. Under the proposed rate, these earnings would be increased to a minimum of 65 cents to Dallas and 63.4 cents to Fort Worth. The proposed rate on a truckload to Fort Worth would yield a minimum of $445, including a $10 stopoff charge at Dallas. The respondent's estimated truckload costs on this traffic would be, for pickup and delivery, $42.83; billing and collecting, 67 cents; line haul, including refrigerator service, $318.83; and loss and damage, 29 cents, or a total out-of-pocket cost of $362.62, reflecting an operating ratio of 81.5 percent. No platform costs are involved in this service.

Based on the tonnage transported during the period July 1 to December 27, 1957, and a schedule of 3 loads a week, the shipper estimates its costs for handling the movement in private carriage with leased equipment to Fort Worth as $1.24 per 100 pounds, or 29.62 cents a mile. As pointed out by the bureau, if accurate, this cost indicates that the shipper pays a substantial premium for motor common carrier service on this traffic, and would continue to do so under the proposed rate. The shipper states that while it contemplates private carriage as a last resort, the proposed adjustment would be satisfactory. It urges that increased volume and regularity of movement merit commensurate reductions in rates, and points out that the proposal would require it to maintain higher inventories.

The bureau does not contest the respondent's cost estimates, but contends that the proposed rate is not competitively required, and is unreasonably low. In the light of the cost data presented and other

facts of record, neither of these contentions has adequate factual support.

Carriers have a right to initiate lawful rates calculated to obtain or retain desired traffic. To prohibit the respondent from establishing a rate on what is shown to be a just and reasonable level would be unfair to carrier and shipper alike, and would be inconsistent with the national transportation policy. The evidence before us is convincing that the rate proposed would be reasonably compensatory and would not constitute a destructive competitive practice.

We find that the proposed schedules are just and reasonable. An order will be entered vacating the order of suspension and discontinuing the proceeding.

304 I. C. C.