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PAYMENT OF TRANSPORTATION CHARGES
tion 3, and Paragraph (1), Section 15, of the Interstate Commerce Act to the extension of credit on freight transported wholly by water, or partly by railroad and partly by water, under the circumstances described in the order when delivery or relinquishment of possession of the freight at destination is effected by or through the water line
On March 14, 1921, subsequent to the hearing and argument, upon application of the Oregon-Washington Railroad & Navigation Company, which expressed its intention to discontinue the water service, an order was entered dismissing its petition.
It is urged on behalf of the Association of Railway Executives that the Interstate Commerce Act extends to transportation of property partly by railroad and partly by water when both are used under a common control, management, or arrangement for a continuous carriage or shipment; and that while the provisions as to the extension of credit in Paragraph (2), Section 3, apply only to carriers "by railroad” it would result in an anomalous situation to hold that the provisions regarding credit apply only to transportation by railroad and not to transportation by water in connection with a railroad when both are used under a common control, management, or arrangement for a continuous carriage or shipment.
Section 2, Paragraph (1) of Section 3, and Paragraph (1) of Section 4, apply to "any common carrier subject to the provisions of this Act.” Paragraph (2), Section 4, is applicable to "a carrier by railroad.” Similar illustrations showing that some provisions of the Act apply to all carriers subject thereto and other provisions only to a certain class of carriers could be pointed out in other sections. We are constrained to find that Paragraph (2), Section 3, is inapplicable to freight transported wholly or partly by water when delivery or relinquishment of possession at destination is effected by or through the water line, but we have control over the extension of credit in such circumstances under other general provisions of the Act.
Section 1, Paragraph (6), prohibits any unreasonable practice. Section 2, and Paragraph (1) of Section 3, prohibit unjust discrimination and undue prejudice, and Paragraph (1), Section 15, authorizes the Commission, where any practice whatsoever of carriers subject to the Act is in violation of any of the provisions thereof, to determine and prescribe what practice is, or will be, just, fair, and reasonable. A considerable volume of traffic in this country moves partly by rail and partly by water in competition with all-rail routes. It is contended that the giving of credit is a practice which has a most influential bearing upon the movement of traffic. We find that the extension of credit on freight moving partly by water and partly by railroad when both are used under a common control, management, or arrangement for a continuous carriage or shipment, and when delivery or relinquishment of possession of the freight at destination is effected by or through the water line, is a practice subject to the provisions of Section 1, Paragraph (6); Section 2; Section 3, Paragraph (1), and Section 15, Paragraph (1) of the Interstate Commerce Act.
At the hearing the Alaska Steamship Company, hereinafter called the steamship company, presented no argument as to our jurisdiction, but asked that no order be entered herien requiring a departure from its present practices.
It operates between Tacoma and Seattle, Wash., and ports in Alaska, exchanging traffic with the rail lines at Tacoma and Seattle, and in Alaska with the Copper River & Northwestern Railway at Cordova, and the White Pass & Yukon Route at Skagway. On traffic delivered by the rail lines at Tacoma or Seattle for movement via the steamship company to points in Alaska the rail charges to Tacoma or Seattle are advanced by the steamship company to the rail lines at the time of delivery of the freight to the steamship company, and are billed forward by the latter as "advances.” The steamship company does not participate in joint rates with the rail lines at Tacoma or Seattle. The bulk of the traffic from points on the Copper River & Northwestern Railway for movement to the ports of Tacoma and Seattle consists of ore, which moves to a smelter in Tacoma. The tariffs provide through joint rates which are dependent upon the value of the ores as determined at the smelter. The ores are delivered at the smelter dock by the steamship company and the proper charges are not determinable until the ores are sampled and weighed at the smelter. As soon as this is completed on each delivery the smelter furnishes to the steamship company a statement of the exact weight and value of the shipment, whereupon the steamship company presents its freight bills, which are paid promptly by the smelter, usually within 96 hours after the bills are presented. There is a small tonnage of ore moving from points on the White Pass & Yukon Route via Skagway on through rates to the Tacoma smelter, and on such shipments the charges are handled in the same way as those moving from points on the Copper River & Northwestern Railway.
There is a movement of cannery products from canneries located on the Copper River & Northwestern Railway to Seattle under through joint rates between the railroad and the steamship company. The rail charges to the port are paid by the steamship company upon delivery of the traffic to it at the port. The steamship company holds bonds for the payment of freight charges on all such shipments, and the payment of such charges is made at Seattle. The freight bills are presented at the end of each month and are usually paid promptly on presentation, but occasionally run for 10 days or so.
A small tonnage of miscellaneous freight moves under through rates from local points on the Copper River & Northwestern Railway and the White Pass & Yukon Route to Seattle. Charges on practically all such shipments are collected on delivery, except on miscellaneous shipments from the Kennecott mine, for which bills are returned to Alaska for paynient and on which the charges of the rail carriers are advanced by the steamship company.
PAYMENT OF TRANSPORTATION CHARGES
The steamship company contends that under its practice the revenues of the only two rail lines affected, the Copper River & Northwestern Railway and the White Pass & Yukon Route, both located in Alaska, are fully protected in their arrangements with it.
Apparently there is no good reason for a difference in practice with respect to the extension of credit where the transportation is by railroad and where partly by railroad and partly by water when both are under a common control, management, or arrangement for a continuous carriage or shipment.
Át the hearing the Pennsylvania Railroad Company filed a petition requesting that our original order be modified to provide that on export traffic delivered from railroad car or pier to vessel, directly or by lighter, freight bills shall be delivered to vessel owner or representative not later than the completion of loading of the vessel, and that the 96 hours of credit shall run from the 4.00 p. m. following the completion of such loading.
The situation with respect to which such relief is asked exists chiefly at the port of Baltimore. Åt that port some of the piers are owned by the ocean carriers, and some by the railroads. No relief is asked with respect to traffic delivered to the ocean carriers at their own piers. Settlement in such cases is made by the steamship companies on the individual carload or less-than-carload lots delivered.
Under a practice which existed long before Federal control and which continued throughout that period, settlement between the rail carriers and the ocean carrier of freight charges on export shipments loaded from the piers of rail carriers is made upon completion of the loading of the vessel. The water carriers insist that it is impossible, by reason of their method of accounting, to settle on individual shipments when delivered.
Ocean carriers customarily handle their accounts upon basis of each vessel as a unit. It is necessary that the vessel be properly trimmed as it is loaded, and to this end it is a common practice for the steamship company to receive freight in lots of 20 to 30 cars, particularly heavy commodities, such as steel, and load it into the steamer at various times during the entire loading period. The entire contents of a single car may be intended for a particular ship, but, due to the fact that the vessel must be properly trimmed, only a portion of the contents of the car may be loaded in the vessel, the remainder of the shipment being held in the car for another vessel. To require payment of the charges as the freight is delivered to the vessel would require numerous remittances on the same lot of freight.
On traffic originating inland which moves on through export bills of lading and on which the through charges have been prepared, the proportion accruing to the ocean carrier often exceeds the amount accruing to the rail carriers for the movement to the port. On 50 or 60 per cent of inland traffic there is a net balance of freight charges due to the water carrier. The steamship company prefers that its proportion of the through charges on prepaid shipments be retained by the rail carrier until the loading of the vessel is completed, when it is known by what steamer the freight is to be shipped and when the ship's manifest has been marked to indicate that the charges are not collectible at destination.
The freight bills on export traffic moving on local billing are usually rendered by the rail carriers on each shipment within 24 hours after actual delivery of the freight to the vessel. When the vessel is completely loaded and the manifest made up, the steamship company immediately checks up the freight bills with the freight on board and adjusts the charges with the rail carriers within 96 hours from the time of the completion of loading. The delay beyond the 96 hours from time of delivery of any of the shipments in the settlement of the charges is generally not more than two days.
In the light of the special circumstances surrounding the handling of export traffic we find that the period of 96 hours heretofore fixed by us for the payment of transportation rates and charges, in so far as applicable to export traffic which is loaded into vessels direct from railroad cars or piers, or from such cars or piers by means of lighters, may be computed from the first 4.00 p. m. following the time when the vessel is completely loaded, freight bills to be delivered to vessel owner or his representative not later than the day on which the loading of the vessel is completed. Our order of June 4, 1920, prescribing regulations effective July 1, 1920, will be modified accordingly.
At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its Office in Washington, D. C.,
on the 12th day of August, A. D. 1921. It appearing, That on June 4, 1920, the Commission entered its report and order in the above-entitled proceeding, and that on November 10, 1920, said proceeding was reopened for further hearing and argument upon the question of the application of Paragraph (2) of Section 3 and Paragraph (1) of Section 15 of the Interstate Commerce Act to the extension of credit on freight transported wholly by water or partly by railroad and partly by water when delivery or relinquishment of possession of the freight at destination is effected by or through the water line;
It further appearing, That such further hearing and full investigation of the matters and things involved have been had, and that the Commission, on the date hereof, has made and filed a report on further hearing containing its findings of fact and conclusions thereon, which said report is hereby referred to and made a part hereof:
It is ordered, That the said order of June 4, 1920, be, and it is hereby, so modified as to provide that the period of 96 hours fixed for the payment of transportation rates and charges, in so far as applicable to export traffic which
PAYMENT OF TRANSPORTATION CHARGES
is loaded into vessels direct from railroad cars or piers, or from such cars or piers by means of lighters, may be computed from the first 4.00 p. m. following the time when the vessel is completely loaded, freight bills to be delivered to vessel owner or his representative not later than the day on which the loading of the vessel is completed.
By the Commission.
IN RE SECTION 3 OF THE INTERSTATE COMMERCE ACT, AS AMENDED BY SECTION 406 OF THE
TRANSPORTATION ACT, 1920. Submitted March 31, 1922. Decided June 13, 1922. 69 I. C. C., 381. Petition of the McCloud River Railroad Company for modification of the 96-hour credit rule prescribed, 57 I. C. C.,
591, on traffic from and to Bartle, Calif., criginating at or consigned to certain interior points not served by railroad, granted.
The original report and order herein, 57 I. C. C., 591, prescribed rules and regulations for the prompt payment of transportation rates and charges, and fixed 96 hours as the maximum time for which the carriers should extend credit.
On November 28, 1921, the McCloud River Railroad Company filed a petition for relief from the provisions of our original order in so far as they are applicable to charges on freight from and to Bartle, Calif., when destined to or from interior points not served by railroad, but by stage or truck, in Siskiyou, Shasta, and Modoc Counties, Calif. Petitioner avers that it is impossible for mail to reach such points within 96 hours, and asks for a modification permitting the extension of 30 days' credit to shippers and receivers of freight located at the interior points.
The McCloud River Railroad connects with the Southern Pacific at Sisson, Calif., on the western slope of Mount Shasta, 338 miles north of San Francisco, Calif. Its line extends around the base of the mountain southeasterly a distance of 36 miles to Bartle. At the latter point petitioner maintains three warehouses for the handling of freight fro and to interior points, such as Dana, Glenburn, Fall River Mills, McArthur, Pittville, Bieber, Adin, Lookout, and Alturas, which are not served by railroad. Practically no freight is consigned to or from Bartle proper. There is no bank at Bartle and no telephone service from that station to the interior points.
Prior to July 1, 1920, petitioner maintained regular schedules for the handling of mail in connection with star routes to and from the interior points. Subsequent to December, 1920, on account of loss of business, petitioner abandoned the regular mail service, and the Post Office Department changed the base of the star routes from Bartle to Redding, Calif. Redding is on the Southern Pacific, about 78 miles south of Sisson. The average distance from Bartle to the interior points appears to be about 45 miles, and the minimum distance by star route from Redding is about 68 miles, as compared with the former minimum distance of about 24 miles from Bartle.
When freight bills are mailed to shippers and receivers of freight at the interior points the letters must go by way of Sisson, Southern Pacific to Redding, and star routes to interior points. At times, during the winter months, the star-route service is by toboggan, and is uncertain. In many cases it has required as long as from a month to six weeks before replies to letters addressed to the interior points could be received. Petitioner estimates that 30 days is about the minimum time within which collection of freight charges can be made under the circumstances.
Freight consigned to these interior points is turned over to independent freighters, or truckmen, who do not make regular trips, and it is inadvisable to depend upon them for delivery of freight bills. The trucks seldom take a complete shipment, and it is necessary for petitioner to hold part lots in its warehouses at Bartle, which are maintained for this particular service.
In the light of the special circumstances surrounding the traffic here considered we find that the period of 96 hours heretofore fixed by us for the payment of transportation rates and charges, in so far as applicable to freight from and to Bartle when destined to or from the above-described interior points not served by railroad, may be computed from the first 4.00 p. m. following 26 days after the mailing by petitioner of the freight bills for such traffic. Our order of June 4, 1920, prescribing regulations effective July 1, 1920, will be modified accordingly.
ORDER. At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its Office in Washington, D. C.,
on the 13th day of June, A. D. 1922. It appearing, That on June 4, 1920, the Commission entered its report and order in the above-entitled proceeding, and that on February 6, 1922, said proceeding was reopened for further hearing upon the question of the propriety and lawfulness of the relief requested by the McCloud River Railroad Company from the provisions of said order;
It further appearing, That said further hearing and full investigation of the matters and things involved have been had, and that the Commission, on the date hereof, has made and filed a report on further hearing containing its findings of fact and conclusions thereon, which said report is hereby referred to and made a part hereof:
It is ordered, That the said order of June 4, 1920, be, and it is hereby, so modified as to provide that the period of 96 hours fixed for the payment of transportation rates and charges, in so far as applicable to freight from and to Bartle, Calif., when destined to or from interior points described in the report, in Siskiyou, Shasta, and Modoc Counties, Calif., not served by railroad, may be computed from the first 4.00 p. m. following 26 days after the mailing by petitioner, McCloud River Railroad Company, of the freight bills for such traffic.
By the Commission.
CO-OPERATION BETWEEN SHIPPERS AND CARRIERS
There is probably no point of contact between the common carriers of this country and the shipping public which is productive of more controversy and embarrassment than that arising from the consideration and adjustment of claims due to the loss of or injury to freight and the application of erroneous rates and weights in the assessment of freight charges. That this unfortunate condition should exist is not surprising, when it is considered that nearly all trade conducted between manufacturer and consumer necessarily embraces rail and/or water transportation, consequently making the carrier an important intermediary in the field of commerce.
There was a time in the history of American railroads when the adjustment of claims was the particular branch of service to the efficiency of which but indifferent attention was given, except possibly in the direction of retarding settlements. Naturally this attitude was not productive of sympathetic or cordial relations between them and their patrons, but, to the advantage of all interests, there has developed during the last twenty years a radical change in the disposition of carriers toward the rights of shippers, likewise a marked reciprocal sentiment on the part of the latter.
This progress can be ascribed in the main to the general advance in business methods; a clear conception of and regard for equitable principles of business; the establishment of laws and regulations more clearly defining the duties and responsibilities of carriers to the public;. the extension of through billing and loading arrangements whereby the movement of freight is facilitated, and the adoption of uniform rules and practices; so that whatever may have been the prevailing conditions years ago, substantial progress in the direction of intelligent, courteous and prompt adjustments, the three fundamentals most appreciated by claimants, has been made by the carriers.
Under the most favorable circumstances more or less loss and damage must be expected to result from the numerous incidents that cannot be foreseen or avoided by either the shipper or the carrier, hence a service perfectly performed will not eliminate some of the causes for which claims are made. It is, however, beyond question that a more general spirit of co-operation between those who ship and those who are in immediate charge of the receipting for and handling of freight can, without material increase of effort or expense, greatly reduce the present serious and annoying losses, thereby conserving to the shipper, the railroad, and the consignee many of the millions that are now utterly lost. The interests of the manufacturer, the merchant, and the carrier are so closely interwoven that the attitude of one toward the other often determines the welfare of all. The necessity, therefore, for hearty co-operation between the maker, transporter, and consumer of goods is imperative if a fair measure of profit is to be achieved by each.
While the careless and rough handling to which freight is subjected in stations and on transfer platforms of carriers is often inexcusable, one of the most common causes of damage to merchandise freight is the inadequacy of packages or containers, in either construction or material, to withstand the several handlings they must FREIGHT CLAIMS
receive in their movement to destination. The increasing cost of material for boxing and crating has doubtless influenced the adoption of less or lighter material that only appears sufficient at the commencement of its journey. Add to this the increasing train loads to meet heavier volumes of traffic, the demand for faster movement of freight, the extension of trade areas necessitating longer hauls and more transfers, and we find the reason for many of the losses for which carriers are held accountable.
Shippers who fully realize that the payment of claims is small compensation for the indirect loss their business must sustain, who appreciate the importance of so protecting their shipments that damage will not result from the ordinary treatment they must be expected to encounter, and who so secure their packages that pilfery may not easily be committed without leaving evidence of the act, have fewer claims to file and experience less difficulty in obtaining prompt settlement of
those they present. Their shipping costs in material and labor may be slightly increased by the adoption of these "Safety First” principles, but their comparative freedom from the annoyances incident to loss or injury to their goods, with the possible attendant loss of customers, is ample compensation.
Freight that is insecurely or inadequately packed or improperly marked should not be accepted for transportation by carrier, but in the acceptance of a shipment the carrier thereupon undertakes its carriage and delivery to the consignee in the same condition as when received. If the commodity is of a fragile character, or is easily injured by contact with other freight, or if insecurely packed, special care should be taken in handling and stowing in car. In case of damage the carrier is responsible, regardless of the condition in which received. If the packages or pieces are not fully marked with name of consignee and destination, and become astray or wrongly delivered, the carrier is responsible. If upon opening a case of merchandise the consignee fails to find all the articles invoiced to him, or if some article is found broken, the carrier is frequently called to account, notwithstanding the several opportunities for mistakes or accidents to occur in packing or unpacking, the occasional acts of dishonesty or carelessness on the part of truckmen or others having access to the goods before and after shipment. These are all elements which deserve consideration in determining the responsibility for loss or damage.
The proper packing of freight is a form of insurance to which the consignee is entitled and which he should require at the hand of his shipper.
The proper preparation of shipments to enable them to withstand ordinary wear and tear of transportation, is a duty which the shipper owes alike to himself, to the customer whom he is serving, and whose patronage may be assumed to be valuable to him, and to the carrier who is trying to serve both.
The failure to properly prepare shipments for transportation furnishes a large contribution to claim accounts, as well as delay, expense and dissatisfaction to the shipper and consignee. This would be greatly minimized by the exercise of care to see that material of sufficient quality and strength is used in the construction of bags, boxes, bales and other containers, and, in the case of goods shipped in straps, that the individual packages are securely held in place, having in view the weight of the contents which it is desired to protect.
Valuable scientific data on the construction and nailing of boxes and crates to secure maximum strength of package and protection of contents has been compiled by the Forest Products Laboratory of the United States Department of Agriculture, and by the Freight Container Bureau of the American Railway Association.