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and they did. So the first round of general rate increases in the motor carrier area was considered by the entire Commission.

Now the Boards that I am talking about are the Board of Suspension, Fourth Section Board, Special Permission Board, and the Released Rates Board. These happen to be housed in the Bureau of Traffic. There are also the Review Boards which are in the Office of Proceedings, and to these have been delegated the issuance of a very large portion of our initial Commission reports on rate matters.

But here, too, I want to emphasize that parties to those cases are assured of the right of appeal. As a matter of factand I want to point this out—the record of the Boards' actions have been remarkably successful. In fiscal year 1968, for example, actions by the Board of Suspension involved 4,580 separate proposals

. Only 323 of those were appealed. In other words, the parties accepted the Board's action about 90 percent of the time. Now, it goes without saying that of the 10 percent, more or less, that came to the Commission or the Division on appeal, many were those of great complexity and of nationwide importance.

Now the general increase cases are discussed in chapter 3(c) of the Commission's report. In each of the cases, both rail and motor, the steadily rising cost for labor and material were largely, if not entirely responsible. At that point we faced for the first time, to my knowledge, a basic argument that to permit these increases to become effective would contribute to undesirable inflationary trends; and I emphasize to this committee that it has been the Commission's policy to scrutinize carefully each one of these proposals with that factor in mind because we felt that it was a substantial issue to be considered.

On the other hand, we felt it not to be in the public interest to require carriers to absorb all of the increases in the cost of labor and materials over which they have little or no control. From an eviden-7 tiary standpoint, however, we have taken the position that a carrier or group of carriers simply showing increased costs must also show capital requirements and the extent to which technology and increased efficiency have enabled them to absorb additional costs. Without that showing we have consistently refused to approve these general increases. Examples are cases involving the Middle Atlantic Conference, the Pacific Inland Tariff Bureau, and recently the Middle Western territory, where we simply did not have representative costs measured against revenue and lacked the necessary showing of their capital requirements.

I would like to add that this year the carrier rate bureaus so far have been far more responsive and have submitted more preliminary justification, so we are able to see in advance, and shippers are able to see, the extent to which the carriers require additional revenues in order to continue to render a viable and economically healthy transportation service.

It is known that higher increases have been proposed in the small shipments area, and this circumstance may prompt some questions. We would welcome them.

Actually the basis for the higher increases on small shipments is the fact that a 25-pound shipment, for example, moving 50 miles requires the same terminal handling and the same paper work as a 2,000-pound shipment moving 200 miles. Now with increased labor

costs in loading and unloading, and the clerical billing and collecting spread on small shipments, obviously the unit cost to the carriers is relatively higher than when a longer distance and a heavier shipment are involved.

Also small shipments necessarily have to receive more platform handling. Many of the larger shipments are loaded by shippers and unloaded by consignees. Since they require less service, they entail

less cost to the carrier. r I mention in the statement, Mr. Chairman, that on a nationwide

basis, 70 percent of the shipments of general commodity carriers fall into the “less than 500 pound” category. This numerical quantity of shipments, however, yields less than 30 percent of their revenues. This in itself doesn't prove anything. But assuming reasonable rate and distance categories, we have felt that cost-oriented rates are sound, and in fact are required if the motor carriers are to be expected to serve the small shipments traffic. And, of course, it is that area where we receive the major portion of complaints about service. And I, for one, favor this type of approach to ratemaking.

Now there have been some interesting developments recently that may be a step in the right direction. I have in mind a case in which the Eastern Central Rate Bureau is trying to present detailed cost studies related to various weight brackets, and for various distances. It is not a revenue proceeding in the sense that it will produce any additional dollars for the carriers, but it will enable them more nearly to recover their costs in the small shipment area, and on the other hand, to effect reductions on shipments weighing from 1,000 to 5,000 pounds. This proposal is mentioned in our report, so I won't detail it any further.

There is another point that frequently is misunderstood. Small shipments don't necessarily mean small shippers. Some shippers of small shipments are large industrial corporations.

So small shipments, carriers argue, must return enough revenue to at least meet costs unless they are to be required to render a service at a loss with the more service they render the more they lose. Now, that is their position. Of course, unless actual losses are established on the record the argument is meaningless. But if established, we feel we should act responsibly.

Senator PROUTY, Mr. Chairman.
Senator HARTKE. Yes, Senator Prouty.

Senator PROUTY. In my State we have quite a number of small v manufacturers of furniture, and they are having great difficulty in

getting motor carriers to take their shipments at comparable prevailing rates. Now, is there anything that can be done about that? It is constituting a great problem for these relatively small manufacturers.

Commissioner WALRATH. That is a combination problem, Senator Prouty; it is both a service and a rate problem. And perhaps it involves even a side issue of rate classification. We have had complaints not only from your area, but from all over the country, that the furniture shippers are having great difficulty in getting service on uncrated furniture, especially

when it has to move on more than one line and has to be interchanged. Very recently the Commission took action in that area by refusing to let an individual carrier cancel out his joint route and rate arrangements and his interchange arrangements with other carriers. The Commission took the position that as long as he retained

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joint rates and through rates on other commodities, he should be required to do the same on furniture traffic. That case I think is on appeal right now.

But in this connection, there is in progress a rulemaking proceeding with which I believe Commissioner Murphy is familiar. In that proceeding, we are trying to resolve some of the transportation problems of furniture shippers. But your question is a good one and is difficult to answer. The carriers claim that uncrated furniture is undesirable freight, subject to relatively heavy damage and it has minimum density.

Senator PROUTY. Thank you.

Commissioner WALRATH. I think, Mr. Chairman, that, subject to questions, that is about all I want to highlight in the rate area at the moment.

Mrs. Brown. That concludes the work of the divisions, the vice chairmanship, and the chairmanship, Mr. Chairman.

Senator HARTKE. All right, now I have several questions that I am going to ask, and I think that since the Commission is made up as it is, with the Chairman being in a position of having certain responsibilities, but at the same time having a temporary position, that probably we should look to answers from all of the Commissioners to all of the questions, especially those in which they feel they would like to make an answer and not necessarily in response only to those questions which come within the Divisions in which they are. If a Commissioner who is in a separate Division would like to make a comment, we will be happy to hear from him.

But before I proceed to that, Senator Prouty, do you have any questions you would like to ask?

Senator PROUTY. Thank you, Mr. Chairman.

In the report of June 1 you requested an additional number of agents in the car service area. I think you want to increase them from 49 to 72, plus 12 clerk-stenographer positions. Will that help significantly to solve the boxcar shortage?

Mrs. Brown. Well, that is a hard question to answer, Senator, but I will try. And I will let anybody else respond at the table who would like to.

We have had a higher number of car service agents or people in this area of work in the past than we have at the present time. In all candor, I will have to tell you we had a car shortage then, too. We had problems then, and we have got problems now. The freight traffic of the railroads grows, and, in handling this traffic, the car shortages also grow. We used to have peaks and valleys in this area. And so actually, just as your single question of would this mean more car service agents or people working in this area take care of the car shortage situation-maybe that is minimizing what you said-it will be helpful. We believe it will be helpful because we feel an inadequacy here. However, it is only one step. The car shortage thing is very serious.

Senator PROUTY. In the hearing held in May before this subcommittee this again relates to the boxcar shortage-you submitted a detailed report which, in essence, stated we do not have statistical data, sufficient data to solve the problem, and yet in your June report you make definite recommendations. Did you acquire that statistical data in that 1 month period!

Mrs. BROWN. We didn't really have time to obtain any type of statistical material. We had to use what was available then in order to make a report to you. We feel that the information that we had to work with in this area simply isn't enough. However, we try to do with what we have. We are not trying to say that we are not going to do anything because we don't have enough.

Senator PROUTY. In the joint report to the National Transportation Policy Committee in 1961, it was recommended that a national freight carpool be established. Doesn't that sort of approach seem to have more merit today perhaps than it did in 1961 !

Mrs. Brown. I will have to tell you that I hear this type of proposal mentioned a lot more now than I did 5 years ago when I came to the Commission. If you would like any Commissioner here to respond in this area, I will be glad for them to. We have Commissioners that have served a long time.

Commissioner WALRATH. May I?
Mrs. Brown. You certainly may.

Commissioner WALRATH. Mr. Chairman, I would like to express a personal thought that I have considered for some time. I have not discussed it with the Commission. But back in 1963 when I was Chairman of this Commission we had essentially the same car service problems we have now. And I have talked informally with other Government agencies about it.

I don't intend to imply that any fault lies with the Department of Agriculture, that Department, of course, has to use many grain cars and at times during the height of the harvest season. I realize those shipments have to move when they have to move, depending upon the requirements of our economy and out international agreements and those things.

It seemed to me that someone might seriously consider--not the Commission, we have no jurisdiction—whether other Government agencies, the Defense Department, for example, and Commodity Credit Corporation, might not find it desirable to own and use the cars needed for their peak season movements, and in slack periods these could be leased to the railroads from a general pool.

I talked with Secretary Boyd when he was the Secretary of the Department of Transportation about this. He left before anything could be done about it. But I hope my chairman and my brothers

don't mind my making this suggestion. I think it is an area that might Lbe looked into.

Senator PROUTY. Thank you very much. That is a very interesting suggestion.

I have a good many questions here, but in deference to other members of the subcommittee, Mr. Chairman, I would like to file them with the committee and have them appear in the record with the answers.

Senator HARTKE. That will be fine. The questions will be submitted to the Commission and the answers from the Commission will be made a part of the record.

Senator PROUTY. Thank you, Mr. Chairman.
Senator HARTKE. Senator Hansen.

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1 The questions and answers referred to appear on p. 341.

Senator HANSEN. I have no questions. But I think I will take the same opportunity as Senator Prouty.

GENERAL QUESTIONS

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Senator HARTKE. Those questions can be submitted.

I would like to direct this to the entire Commission. When you? look at the ICC how do you envisage the role of the Interstate Commerce Commission in regard to the total economic policies of the United States? Now that's a nice one. Where do you want to start?

Mrs. BROWN. Do I have a volunteer?
Senator HARTKE. Well, maybe we can get 11 answers, I'm not sure.
Mrs. Brown. We will respond as you would like us to.

Senator HARTKE. Let me add a secondary question in relation to that. The total economic policy of the United States first, and then back to a question about which I became involved in a little discussion. That is the question as to whether or not we have a national transportation policy in the United States today, and just how do you envisage the role of the Interstate Commerce Commission as it relates to the total national transportation picture; and related to that, whether you feel there is a problem of jurisdictional conflict. But I really want to start from the top, where you are in this total economic picture of the United States of America, what is your role in that picture!

Mrs. BROWN. Do you feel that we can start with the law as it is enacted now? By that I mean the ICC

Senator HARTKE. I am not looking at the law. I am looking at your role. Let me try to clarify what I am speaking about. You are an independent agency at the present time created by law, one of the earliest independent agencies in existence, responsible to the Congress in the field of interstate commerce. How do you look upon that responsibility as it relates to the economics of the country? What is your role, what is your place?

Mrs. Brown. Commissioner Tierney.
Senator HARTKE. Commissioner Tierney.

Commissioner TIERNEY. I will stick my nose into this, Senator. I think the problem you raise is a very important one. It is an important one in the sense of what we are all discussing today.

Senator HARTKE. Just a minute. I do not know whether our unfortunate friends in the back who didn't get a seat can hear. Can you hear him back there? All right, fine. Go right ahead, Commissioner.

Commissioner TIERNEY. It is important in the sense of what we all talk about today is coordination, a coordination not only of transportation regulation, but transportation itself. And I think the Commission has said in the past there have been aspects of the law, and I suspect of the national transportation policy, where that coordination doesn't exist, or there is unequal treatment in the sense that some modes are promoted, we have no opportunity to promote some, so in a a sense you don't have the equality that you should have from the standpoint of looking at all the modes, individually and together.

And our function, of course, as you know, we are in a segmented slot in a sense, we are looking at it from the transportation point, we are confined to surface transportation.

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