It is urged by the respondent that the proposed rate would be compensatory, but no showing in support thereof was made. Based on the short highway distance of 325 miles between Jacksonville and Atlanta, the truck-mile earnings based on the proposed minimum would be less than 32 cents. The protestants compare these earnings with the respondent's 1957 system-average expense of over 50 cents a truck-mile. No evidence was offered by the respondent as to what its cost would be in handling this traffic. In these circumstances, the respondent has failed to sustain its burden of proof that the proposed rate would be compensatory.

As indicated, the 43-cent rate was published by the respondent to meet an identical rail rate on traffic, subject to the same minimum weight. However, both parties differ as to what was, in fact, the applicable rail rate which the respondent is here attempting to meet. The protestants state that their 43-cent rate is intended to apply on pulpboard or fiberboard, not corrugated or indented, minimum 60,000 pounds, and that the rate applicable on corrugated and indented pulpboard or fiberboard, minimum 24,000 pounds, is 54 cents.

The protestants disagree with the construction accorded the rail tariff by the respondent, but concede that an ambiguity may have existed therein. Accordingly, effective on July 30, 1958, they canceled the disputed 43-cent rate, and the applicable rail rate on corrugated or indented pulpboard or fiberboard then became 54 cents, minimum 24,000 pounds. Thus, the 43-cent rail rate, upon which the respondent relies, is no longer in effect.

We find that the suspended schedules are not shown to be just and reasonable. An order will be entered requiring their cancellation and discontinuing the proceeding.

304 I. C. C.

INVESTIGATION AND SUSPENSION DOCKET No. M-10589

ALUMINUM ARTICLES-HANCOCK-TRUCKING,

INCORPORATED

Decided July 25, 1958

Proposed reduced truckload rates on aluminum ingots from Detroit, Mich., to Campbell, Columbus, Hubbard, and Youngstown, Ohio, and on aluminum articles from certain points in Illinois, Kentucky, Michigan, Missouri, Ohio, and Pennsylvania to Newburgh, Ind., found just and reasonable. Proceeding discontinued.

M. R. Lahee for respondent.

Louis T. Duernick and H. A. Welty for protestants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS TUGGLE, MURPHY, AND MINOR BY DIVISION 3:

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 December 14, 1957, the respondent, Hancock-Trucking, Inc. (Sheldon A. Key, trustee), a motor common carrier, proposed to establish reduced commodity rates on aluminum ingots, minimum 30,000 pounds, from Detroit, Mich., to Campbell, Columbus, Hubbard, and Youngstown, Ohio, and on aluminum articles, minimum 30,000 pounds, from points in Kentucky, Michigan, Missouri, Ohio, and Pennsylvania, and minima 20,000 and 30,000 pounds from Chicago, Ill., to a plant of the Aluminum Company of America (Alcoa) under construction near Newburgh, Ind. Upon protests of the Central States Motor Freight Bureau, hereinafter called the bureau, and central-territory railroads, the operation of the proposed schedules was suspended to and including July 13, 1958, and the respondent has voluntarily postponed their effective date until October 10, 1958.

The respondent objects to the admission of the statement of facts and argument filed by the rail protestants, on the ground that the latter's protest was not timely filed and that it failed to indicate any in

1 Rates are stated per 100 pounds.

terest in the proceeding, and thus that those protestants may not be regarded as parties thereto. Rule 1.42 of our General Rules of Practice requires, among other things, that such a protest shall reach the Commission at least 12 days before the effective date of the protested schedules, and that it shall indicate therein in what respect the protested matter is considered unlawful. The protest was received on December 2, 1957, exactly 12 days prior to the date the proposed schedules were to become effective, and therein the protestants expressed reliance upon the same grounds as did the bureau in its protest. The rail protestants were properly made parties to this proceeding, and their statement of facts and argument was properly received in evidence. The objection is overruled.

Considering first the rates on ingots, the respondent's present rates from Detroit to the Ohio points are generally the same as those published by the bureau for its member carriers. The proposed rate is 47 cents, minimum 30,000 pounds, to the contiguous points of Youngstown, Campbell, and Hubbard, and would alternate with the present rate of 49 cents, minimum 20,000 pounds. To Columbus, the proposed rate is 49 cents, minimum 30,000 pounds, which is 18 cents under the present rate of 67 cents, minimum 20,000 pounds, and 7 cents lower than the corresponding rail rate.

The respondent urges that the proposed rates are competitively necessary, and that the present minimum weight results in inefficient use of equipment, since 20,000 pounds of this commodity will not fill a trailer. It emphasizes that the heavy flow of its traffic is into Detroit, and the proposed rate would encourage the movement of traffic from Detroit in the direction of its light tonnage. The rate reductions in connection with increased minimum weights, it is stated, would reduce the respondent's operating costs and also afford some benefit to the shipper.

The minimum truck-mile revenue from the proposed rate to Youngstown, 227 miles, would be 62.1 cents compared with 43.1 cents from the present rate; and to Columbus, 190 miles, the minimum yield per mile would be 77.4 cents, compared with 70.5 cents at the present rate. The respondent's system-average expenses for the years 1955, 1956, and 1957, respectively, were 46.8, 49.3, and 52.7 cents a truck-mile.

The bureau states that it is not aware of any competition that would make the proposed rates necessary. It and the rail protestants submit that because the present actual average loadings are not of record, it is impossible to test the assertion that the proposed rates would provide increased revenue. It argues that for comparative purposes, average loadings under the existing rate should be used.

The respondent's operating ratio was slightly over 100 percent in the last 3 years, and the bureau contends that the financial stress indicated, together with lack of cost and traffic data hereon does not allow a finding of compensativeness.

It is stated by the bureau that the rate presently maintained to Youngstown and Hubbard was published to meet the competition of carriers participating in a commodity tariff issued by the Motor Carriers Tariff Bureau, which does not reflect recent general increases. It refers to rates on aluminum ingots from Detroit to various centralterritory destinations representing 20.9 to 39.3 percent of first class. The proposed rates reflect 23.9 and 27.3 percent of the corresponding first-class rates. While the proposed rates, expressed as a percentage of first class, are on a slightly lower level than the average of the rate percentages adduced by the bureau, the proposals are subject to a minimum weight which is higher than that of most of the compared rates. The destinations to which the proposed rates apply are admittedly in a depressed rate area.

For haulers of general commodities, where actual costs for individual movements are not readily available, system-average costs may be compared with calculated revenues, and if the latter exceed the former by substantial amounts, a conclusion is generally warranted that proposed rates on truckload movements are compensatory, especially since system-average costs usually include those attributable to less-than-truckload traffic. Here, the yields from the proposed rates to Youngstown, for example, would exceed the system-average costs by approximately 10 cents a truck-mile, and since the proposals for the most part represent only slight reductions under the present rates published by the respondent and the bureau, and are accompanied by a substantially increased minimum weight, they appear to us to be reasonably compensatory. The rate to Columbus would exceed the average costs by about 25 cents a truck-mile, and it would result in improved minimum earnings. The increases in the minimum weight should result in more economical transportation. There is no indication that these proposed rates would endanger to any material extent the present rate structure in this area.

The proposed rates on aluminum articles were published to supplant class 40 rates maintained by the bureau, as well as the respondents, from 10 origins to Evansville, a base point near the shipper's plant at Newburgh. The rates were published to apply on materials inbound to be used in the final stages of the plant's construction.

The following table, compiled from exhibits of record, shows the present motor-carrier and rail rates maintained on aluminum articles from the considered central-territory origins, together with the minimum truck-mile earnings therefrom and from the proposed rates.

It will be noted that the minimum truck-mile yields from the proposed 30,000-pound rates range from 56.4 to 98.4 cents, and average about 66.5 cents, or about 5.6 cents a truck-mile more than under the present rates. The protestants criticize the lack of data concerning operating costs and average loading. Considering the lengths of these hauls, and comparing the foregoing yields from the proposed rates with the system-average expenses, we are satisfied that the proposed rates are reasonably compensatory. The proposed 30,000-pound rates exceed the 40,000-pound rail rates by 2 to 5 cents, and the record is not persuasive that any of these rates constitutes an unfair or destructive competitive practice.

The rail protestants fear that the suspended rates to the Alcoa plant will be used later to justify depressed rates from that plant to the 10 origins here concerned on the theory that the outbound products should move at lower rates than those on these articles inbound. We are not advised what the outbound articles will be; moreover, the respondent expressed its willingness to cancel these proposed rates when the plant, presently in the final stages of construction, is completed.

We find that the proposed rates are just and reasonable. An order will be entered discontinuing the proceeding.