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Statement of-Continued

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Graham, H. L., supervisor of shipments, Hobart Manufacturing Co.,
Troy, Ohio...

143

Gutman, Ben, Jr., president, Ben Gutman Truck Service, Inc., St.

Louis, Mo..

171

Handelsman, Bernard J., president, Textile Association of Los

Angeles, Los Angeles, Calif

77

Harrell

, J. William, general manager, Baltimore Shippers & Receivers

Association, Inc.--

98

Holliday, Gilbert R., office manager, Hillside plant, Callaway Mills
Co., La Grange, Ga----

168
Johnson, J. A., president, Harpeth Freight Lines, Inc., Franklin,
Tenn.

189

Joseph, Leonard, executive director, Manufacturers & Wholesalers

Association of San Francisco..

125

Kraemer, Philip G., director of transportation, Maryland Port

Authority

107

Lewis, Robert G., president, White's Delivery Service, Philadelphia,

Pa...

144

Lincoln, John C., general manager, Los Angeles Wholesale Institute,

and California Shippers Associates.--

132

McMaster, Ernest L., traffic manager, John Middleton, Inc., King of

Prussia, Pa..

181

Macdonald, Douglas R., president, Terminal Freight Cooperative

Association, Chicago, Ill -

68

Minardi, Robert A., president, Garden City Transportation Co., Ltd.,

San Jose, Calif.

Moir, G. Russell, chairman, board of governors, Freight Forwarders

Institute..

11, 20

Morrow, Giles, general counsel, Freight Forwarders Institute ---

11
Oliva, John A., counsel, Charter Oak Shippers Cooperative, Inc., of
Connecticut

105

Owen, Charles W., president, City Transfer, Inc., Santa Fe Springs,

Calif...

144

Quinn, Joseph L., traffic manager, Canteen Corp., Merchandise Mart,

Chicago, Ill..

161

Sakoutis, Steve, general traffic manager, Embassy Industries, Inc.,

Farmingdale, N.Y.

169

Scarpinito, Vincent J., general traffic manager, M. Lowenstein & Sons,
Inc., New York, N.Y

140
Singer, Charles, counsel, ITOFCA, Inc.

60
Smith, Charles L., chairman, General Freight Traffic Committee,
Traffic Executive Association-Eastern Railroads.

149
Smith, Claude G., traffic manager, Carpet and Rug Division, West
Point Pepperell, Inc., Dalton, Ga.--

166
Steffen, Howard R., traffic manager, Coats & Clark, Inc., Atlanta, Ga. 186
Strickland, Milton, Jr., office manager, Kex plant, Callaway Mills
Co., La Grange, Ga..

139
Takei, Kazuo, traffic manager in charge of consumer products, Leslie
Foods, Inc., Newark, Calif.--

139
Tobin, Stanley E., counsel, Los Angeles Wholesale Institute, and
California Shippers Associates..

132
Vreeland, Barrie, director of transportation, Commerce & Industry
Association of New York.

57

Walkup, Ward G., Jr., executive vice president, Walkup's Merchants

Express, San Francisco, Calif..

180

Washer, Charles A., transportation counsel, American Retail Fed-
eration -

113
Additional material submitted for the record by-

Acme Boot Co., Clarksville, Tenn., letter from Charles B. Shanks,
distribution manager.-

209

Acme Shear Co., Bridgeport, Conn., telegram from Louis F. Paradis,

traffic inanager...

202

American Institute for Shippers' Association, propored amendments
to section 409 of part IV of the Interstate Commerce Act.

104

Associated Products, Inc., New York, N.Y., letter from Rolf Kahn,

vice president, 5-Day Laboratories, Inc.

209

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Additional material submitted for the record by-Continued

Barry & Foley Motor Transportation, Inc., Worcester, Mass., letter

from F. Dalton Barry, president-treasurer..

Blocksom & Co., Michigan City, Ind., letter from J. E. Devereaux,

traffic manager..

British Industries Corp., Westbury, N.Y., letter from Harold Fried-

lander, traffic manager -

California Manufacturers Freight Association, telegram from Thomas

Kearns, president-

Carstensen Freight Lines, Clinton, Iowa, statement of Harold H.

Stevens, general traffic manager..

City Transfer, Inc.:

Letter dated December 27, 1967, from Robert O’Nan, president,

O’Nan Transportation Co., Carrollton, Ky.

Letter dated January 12, 1967, to American Trucking Associa-

tions, Inc., Washington, D.C..

Clipper Carloading Co.:

Exhibit A-Tons of freight received from shippers (table) --

Exhibit B-News articles concerning the small-shipment problem.
Coast Carloading Co., statement of Harry M. Baker, president
Deering Milliken, Inc., Spartanburg, S.C., letter from B. R. Bland,

general traffic manager

Florida Trucking Association, Inc., resolution adopted September 26,

1967, at its 30th annual convention, Miami Beach, Fla.

Freight Forwarders Institute:

Text of section 409 of part IV of the Interstate Commerce Act,

with proposed changes indicated in italic.

Views on amendments proposed by ICC and certain shippers'

associations, letter dated February 5, 1968..

Hammond Organ Co., Chicago, Ill., letter from R. N. Spitzer, traffic

supervisor -

Holman Transfer Co., Portland, Oreg., letter from Leonard P. Clark,

vice president.

Houston Merchants Shippers Association, Inc., Houston, Tex., letter

from W.J. Wallace, secretary
International Brotherhood of Teamsters, Chauffeurs, Warehousemen

& Helpers, letter from Carlos Moore, legislative director --
Interstate Commerce Commission: Letter dated March 8, 1968, re-

plying to comments of Freight Forwarders Institute on amendments
proposed by the ICC and certain shippers' associations...
ITOFCA, Inc.:

Appendix A-Membership list-

Appendix B-Officers and directors.

Lifschultz Fast Freight, Chicago, Ill., statement of H. L. Rosenthal,

general traffic manager.

Mattel, Inc., Hawthorne, Calif., letter from J. K. Christensen, mana-

ger of traffic..

Mid-Tennessee Freight Association, telegram from Harry Zimmer-

man, president.

National Conference of Nonprofit Shipping Associations, Inc.,

statement of Joe G. Fender, counsel.

National Industrial Traffic League: Rates of return of class A freight

forwarders, 1957-66 (table).
National Retail Merchants Association, statement of Charles A.

Binder, vice president..

New England Industrial Traffic League, Worcester, Mass., letter

from John T. Floyd, chairman, Legislative Matters Committee..

New York Life Insurance Co., New Providence, N.J., letter from

N. V. Trimarchi, manager, Supply Department--

Norcrest China Co., Portland, Oreg., letter from William S. Naito,

vice president.

Outboard Marine Corp., statement of Joseph A. Illes, director of

transportation.---

Rol-Away Truck Manufacturing Co., Inc., Portland, Oreg., letter

from Marjorie M. Nelson, secretary-

Sears, Roebuck & Co., Chicago, Ill., letter from R. E. Studnicka,

regional traffic manager..

205

202

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64
66

202

122

193

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Additional material submitted for the record by_Continued

Selover Trucking Co., Inc., South River, N.J., statement of Donald

A. Mac Millan, president.
Shippers' Conference of Greater New York, Inc., New York, N.Y.,

letter from T. J. O'Neill, president.----
Smith-Corona Marchant (SCM) Corp., New York, N.Y., statement

of C. G. Lundquist, general traffic manager.
S. S. Kresge Co., Detroit, Mich., letter from H. E. Chapman, general

traffic manager---
Star Pin Co., The, letter from Robert P. Porter, treasurer.
Terminal Freight Cooperative Association, membership list-
Threads, Inc., Gastonia, N.C., statement of E. A. Bolick, vice pres-

ident
Traffic Executive Association-Eastern Railroads: Letter dated

January 29, 1968, re rail carriers share of revenue under joint

rate movements, plan 1, TOFC.
Trans-Postal Systems, Inc., New York, N.Y., statement of R. J.

Stewart, president.
Vinton Co., Portland, Oreg., letter from F. C. Curl, traffic manager--
Warner-Chilcott Laboratories, Morris Plains, N.J., letter from C. P.

Leslie, traffic supervisor.-
White Stag Manufacturing Co., Portland, Oreg., letter from John F.

Staudenmaier, Jr., traffic manager.
Wilshire Center Chamber of Commerce, Los Angeles, Calif., state-

ment of Richard C. Childs, president..
Wingard & Co., Inc., Tacoma, Wash., letter from A. R. Wingard,

president.--
Wunda Weve Carpet Co., Greenville, S.C., letter from Bobby M.

Green, manager of physical distribution..
Wyatt Industries, Inc., Houston, Tex., statement of E. M. Burk,

traffic manager..

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208

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FREIGHT FORWARDER-TOFC CONTRACTS

TUESDAY, JANUARY 23, 1968

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON TRANSPORTATION AND AERONAUTICS,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

D.C.

The subcommittee met at 10 a.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. Samuel N. Friedel (chairman of the subcommittee) presiding:

Mr. FRIEDEL. The Subcommittee on Transportation and Aeronautics today is commencing hearings on H.R. 10831, a bill which I introduced by request, which would amend section 409 of part IV of the Interstate Commerce Act, so as to authorize contracts between freight forwarders and the railroads.

Part IV regulates freight forwarders as common carriers of freight in their relationship to shippers which utilize their services. Except for section 409, the freight forwarders in their relationships with the other carriers regulated by the Interstate Commerce Act are not treated as carriers but simply as shippers.

Section 409, which has been amended several times, provides that freight forwarders under part IV may enter into contracts with common carriers by motor vehicle subject to part II of the act. In such relationship the compensation paid under the contracts is comparable with divisions of a joint rate rather than with compensation received by carriers from shippers under a published tariff.

The bill, H.R. 10831, simply extends the scope of section 409 so that freight forwarders could make contracts with railroads as well as with motor carriers as the statute now provides. It is the same proposal as that before the committee in 1956 when hearings were held on H.R. 9548 (84th Congress) with the exception that it is proposed now that forwarders may enter into any type of contract, not merely that of “piggybacking,

At this point we shall include in the record a copy of H.R. 10831 as well as the letters which have been received from the agencies commenting upon the legislation.

(The bill, H.R. 10831, and departmental reports thereon, follows:)

[H.R. 10831, 90th Cong., first sess.)

A BILL To amend section 409 of part IV of the Interstate Commerce Act, as amended, to

authorize contracts between freight forwarders and railroads Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (a) of section 409 of the Interstate Commerce Act (49 U.S.C. 1009(a)), as amended, is amended to read as follows:

"Sec. 409. (a) Nothing in this Act shall be construed to prevent freight forwarders subject to this part from entering into or operating under contracts with

common carriers by railroad subject to part I of this Act, or from entering into or continuing to operate under contracts with common carriers by motor vehicle subject to part II of this Act, governing the utilization by such freight forwarders of the services and instrumentalities of such common carriers by railroad or motor vehicle and the compensation to be paid therefor: Provided, That in the case of such contracts it shall be the duty of the parties thereto to establish just, reasonable, and equitable terms, conditions, and compensation which shall not unduly prefer or prejudice any of such participants or any other freight forwarder and shall be consistent with the national transportation policy declared in this Act: And provided further, That in the case of line-haul transportation by common carriers by motor vehicle between concentration points and breakbulk points in truckload lots where such line-haul transportation is for a total distance of four hundred and fifty highway miles or more, such contracts shall not permit payment to such common carriers by motor vehicle of compensation which is lower than would be received under rates or charges established under part II of this Act."

Sec. 2. The heading of section 409 is changed to read as follows: "UTILIZATION BY FREIGHT FORWARDERS OF SERVICES OF COMMON CARRIERS BY RAILROAD AND BY MOTOR VEHICLES."

OFFICE OF THE SECRETARY OF TRANSPORTATION,

Washington, D.C., October 27, 1968. Hon. HARLEY O. STAGGERS, Chairman, Committee on Interstate and Foreign Commerce, House of Representa

tives, Washington, D.C. DEAR MR. CHAIRMAN: This is in reply to your request for the views of this Department concerning H.R. 10831, a bill to amend section 409 of part IV of the Interstate Commerce Act, as amended, to authorize contracts between freight forwarders and railroads.

Since this proposal involves considerations present in H.R. 6533, a bill now before the Committee, dealing with joint rates and through movements between surface transportation common carriers subject to the jurisdiction of the Interstate Commerce Commission, our comments will also make reference to the latter bill.

In the comments of the Department of Transportation of August 25, 1967, supporting H.R. 6533, we noted in passing that “this legislation would at long last bring greater equality of regulation among all of the various surface modes of transportation subject to the Interstate Commerce Act except freight forwarders, an omission from the bill the Department regards as unfortunate.” The Department of Transportation continues to be of the opinion that freight forwarders should be included within the scope of H.R. 6533. Forwarders perform a muchneeded public service, particularly for shippers and consignees of small shipments. In this regard, it should be emphasized that one of the primary purposes of H.R. 6533 is to aid in the movement of such traffic. Moreover, with the rapid development of trailer-on-flat car movements by the railroads, we believe that as a matter of competitive equality freight forwarders should be permitted to participate to a greater degree in the different TOFC plans and other types of joint arrangements with railroads since many of these arrangements are now available to motor carriers. For example, with the decision of the Interstate Commerce Commission in Ex Parte 230, Substituted Service-Piggyback, 322 I.C.C. 301, recently affirmed by the Supreme Court, the so-called "open tariff” regulations of the Commission permit motor carriers to share in plan III TOFC operations. Forwarders, however, are excluded from participating in plan I arrangements, a valid coordinated joint intermodal service.

H.R. 10831, however, takes a somewhat different approach. It would amend section 409(a) of the Interstate Commerce Act so as to permit freight forwarders to enter into contracts with rail common carriers subject to the limitation that the parties to these contracts establish them on just, reasonable, and equitable terms which shall not unduly prefer or prejudice either party to the contract or any other freight forwarder and which shall be consistent with the National Transportation Policy. With this amendment, freight forwarders would be placed in the same position with regard to railroads as they now are under present law with regard to motor carriers, except that as to contracts involving the linehaul transportation of truckload lots of forwarder traffic between concentration points and break-bulk points where the distance is 450 miles or more, contracts

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