INVESTIGATION AND SUSPENSION DOCKET No. 4703

CRANBERRIES FROM MASSACHUSETTS

RIVER, N. Y.

TO HARLEM

Submitted October 30, 1939. Decided December 15, 1939

Proposed reduced rates on cranberries, in carloads, from points in southeastern Massachusetts to Harlem River, N. Y., found justified. Order of suspension vacated, and proceeding discontinued.

H. D. Boynton for respondent.

1. C. Bailey, Bernard Joseph Rubenstein, and Frederick D. Rugg for protestants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS MAHAFFIE, ALLDREDGE, AND PATTERSON BY DIVISION 3:

By schedules filed to become effective September 14, 1939, The New York, New Haven and Hartford Railroad Company (Howard S. Palmer, Henry B. Sawyer, and James L. Loomis, trustees), hereinafter called respondent, proposed to reduce its rates on cranberries, in carloads, from certain points in southeastern Massachusetts to Harlem River, N. Y. Upon protest of The New England Motor Rate Bureau, Incorporated, operation of the schedules was suspended until April 14, 1940. Frederick D. Rugg, of Plymouth, Mass., appeared at the hearing as a protestant but offered no evidence. Rates will be stated in amounts per 100 pounds.

Harlem River is respondent's railhead in the Bronx from whence New York deliveries are made. The proposed rates were published to meet motor-carrier competition. According to figures promulgated by the United States Department of Agriculture, the New York market received from eastern Massachusetts in the season of 19381939 only 6 carloads of cranberries by rail; but the equivalent of about 74 carloads moved in by truck. These amounts do not include cranberries moving to manufacturers of sauces and jellies in New York, who last year received the equivalent of about 100 carloads, all by truck. It is particularly this latter business that respondent hopes to attract. If the proposed rates are put into effect and are thereafter found not low enough to accomplish the desired result, respondent expects to consider further reductions. The cran

berry movement begins early in October and runs for 5 months or more, being heaviest just before Thanksgiving and Christmas.

On August 12, 1939, when the proposed schedules were filed, respondent's rate from the origins to Harlem River and other delivery points in the metropolitan area of New York was 40 cents, equal to the fourth-class rate in effect prior to the eastern class-rate revision, but effective September 14, 1939, there were increases, under authority of Fruits, Vegetables, and Hay in Official Territory, 232 I. C. C. 701, 715. Fourth class was there authorized, but the present rates are on the column 45-K basis, which is lower than fourth class. The present rates range from 42 to 47 cents, minimum 24,000 pounds. The proposed rates are 30 and 35 cents. The latter rate would apply only from Orleans, Brewster, and Harwich, Mass., which are the most distant points and are located on Cape Cod. No change is proposed in the minimum. The distances from origins to destination range from 213 to 272 miles.

The proposed rates are 10 cents below the commonly used truck rates, minimum 20,000 pounds. However, the truck rates include store-door delivery in Manhattan, Brooklyn, and the Bronx. The truck rates are those prescribed as minima in New England Motor Carrier Rates, 8 M. C. C. 287, as modified by supplemental reports, 9 M. C. C. 737 and 10 M. C. C. 522. The trucks also maintain rates 6 cents higher than these, which higher rates contemplate stops at any four points of origin within a radius of 15 miles of each other to pick up small lots destined for one truckload delivery in New York. From a competitive standpoint respondent is out of the business so far as stops of this kind are concerned, because the stops must be at intermediate points, for which respondent's charge is $6.93.

Respondent's present rates apply to its downtown piers, but the proposed rates are limited to platform or team-track delivery at Harlem River. Respondent was of the opinion that it could not afford to extend the proposed rates to the downtown delivery points because of the high costs of float service beyond Harlem River and unloading service at the piers. Nor did respondent feel that it could well absorb the cost of trucking from Harlem River in order to make store-door delivery to produce terminals, warehouses, and manufacturing plants throughout the city. These costs are understood to range as high as 18 cents per 100 pounds. In Pick-Up and Delivery in Official Territory, 218 I. C. C. 441, 450, the trucking of less-than-carload freight in Manhattan was found to cost as much as 16.5 cents per 100 pounds. Under the proposed rates loading and unloading would be done by the shipper and consignee.

The proposed rates are below the reasonable maximum level permitted in Fruits, Vegetables, and Hay in Official Territory, supra, but respondent regards them as reasonably compensatory and states that they will not impose a burden on other traffic. For the year 1938 respondent's system revenues for local and joint traffic averaged $42.82 per carload, 31.9 cents per car-mile, and 17.14 mills per ton-mile, for an average haul of 134.28 miles and an average load of 18.24 tons. Respondent equates these revenue figures by using the rate of progression of the class-rate scale for zone A in New England prescribed in the eastern class-rate revision. For a representative distance of 251 miles from Barnstable, Mass., to Harlem River, respondent arrives at the figures shown below, which are compared with the revenue that would accrue at the proposed rates and the minimum of 24,000 pounds, which latter is often exceeded by the actual weight:

The protesting truck organization does not object to equality in rates but protests the differences proposed in favor of respondent. It shows that, while respondent last season handled over 235,000 barrels of cranberries from eastern Massachusetts to all destinations, the trucks handled only about 60,000 barrels.

This protestant points out that the proposed rates are blanketed back for considerable distances, applying to intermediate points such as Bridgeport and New Haven, Conn., where the truck rates are considerably higher than those to New York and from 10 to 20 cents higher than the proposed rates. Respondent does not think it could have justified fourth-section relief, and protestant admits that it would have opposed such relief. The truck rates to these intermediate points apply on any quantity, the rate from Barnstable to New Haven, for example, being 40 cents, compared with the proposed rate of 30 cents and the present less-than-carload rate of 59 cents. The proposed rate would apply on a shipment of over 12,200 pounds, because the charges on that basis would be lower than at the less-than-carload rate and actual weight. Traffic to the intermediate points is negligible, and little, if any, of it moves in carloads.

Both respondent and the trucks afford overnight service, and apparently the principal consideration which the shippers take into account is the difference in total delivered cost of transportation.

We find that respondent has justified the proposed schedules. An order will be entered vacating the order of suspension and discontinuing this proceeding.

ALLDREDGE, Commissioner, dissenting:

I cannot agree with the decision of the majority in this case. The rail rates are proposed as a means of meeting motortruck competition, but they are substantially below the minimum level fixed by the Commission for the competitive truck lines. While differences in service as between respondent and competitive motor carriers in the transportation of cranberries from the origins here involved to New York may justify some difference in rates, the spread proposed by respondent, in my opinion, is excessive. Considering the cranberry traffic as a whole, the rail carriers appear to have done very well in their competition with motortrucks under the existing rate adjustment. The preponderance of the tonnage of this commodity originating in the area in question has moved by the rail lines according to the evidence of record. I see no adequate reason for such a radical disturbance of the rate structure as the rail carriers here propose to create.

235 I. C. C.

FOURTH SECTION APPLICATION No. 17844

CANNED PINEAPPLES TO CHICAGO AND MILWAUKEE

Submitted September 26, 1939. Decided December 15, 1939

Authority granted, on conditions, to establish and maintain import rates on canned pineapples and pineapple juice, in straight carloads, or in mixed carloads with other canned goods, from Pacific coast ports to Chicago, Ill., and Milwaukee, Wis., without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act.

L. N. Bradshaw, R. E. Wedekind, and Gerald E. Duffy for appli

cants.

T. G. Differding, Walter A. Rohde, Ralph A. Bentley, E. M. Brinckman, Louis A. Schwartz, M. G. deQuevedo, J. A. Little, Edwin Vail, C. A. Mitchell, W. G. Oliphant, E. A. Read, Phil G. Safford, J. H. Tedrow, and E. H. Thornton for various interested parties.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND CASKIE BY DIVISION 2:

1

By this application, as amended, carriers parties to Agent L. E. Kipp's tariffs I. C. C. Nos. 1402 and 1419 apply for authority to establish and maintain an alternative import rate on pineapples, other than frozen, and pineapple juice (unfermented), other than frozen, in glass, earthenware, or metal cans, in boxes, herein referred to as canned pineapples, in straight carloads, or in mixed carloads with other canned goods, from Pacific coast ports to Chicago, Ill., and Milwaukee, Wis., without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. A hearing was held, and we have had the benefit of oral argument. The application originally contained a prayer, and evidence was adduced at hearing, for similar relief in reduced rates to St. Louis, Mo., and other Mississippi River crossings, but at oral argument applicants stated that they desired to amend the application by withdrawing these rates

1 Alameda, Long Beach, Los Angeles Harbor (East San Pedro, San Pedro, and Wilmington), Oakland, Port Costa, Richmond, San Diego, and San Francisco, Calif.; Albina, Astoria, East Portland, Marshfield, North Bend, Portland, and St. Johns, Oreg.; Aberdeen, Everett, Hoquiam, Longview, Olympia, Raymond, Seattle, South Bend, and Tacoma, Wash., and New Westminster, Prince Rupert, Vancouver, and Victoria, British Columbia, Canada.