Statement of-Continued Graham, H. L., supervisor of shipments, Hobart Manufacturing Co., Page 143 Holliday, Gilbert R., office manager, Hillside plant, Callaway Mills Johnson, J. A., president, Harpeth Freight Lines, Inc., Franklin, 168 189 Kraemer, Philip G., director of transportation, Maryland Port Lincoln, John C., general manager, Los Angeles Wholesale Institute, and California Shippers Associates___ McMaster, Ernest L., traffic manager, John Middleton, Inc., King of Macdonald, Douglas R., president, Terminal Freight Cooperative Minardi, Robert A., president, Garden City Transportation Co., Ltd., Moir, G. Russell, chairman, board of governors, Freight Forwarders Morrow, Giles, general counsel, Freight Forwarders Institute___. Oliva, John A., counsel, Charter Oak Shippers Cooperative, Inc., of Quinn, Joseph L., traffic manager, Canteen Corp., Merchandise Mart, 161 Scarpinito, Vincent J., general traffic manager, M. Lowenstein & Sons, Sakoutis, Steve, general traffic manager, Embassy Industries, Inc., 169 Steffen, Howard R., traffic manager, Coats & Clark, Inc., Atlanta, Ga Strickland, Milton, Jr., office manager, Kex plant, Callaway Mills Takei, Kazuo, traffic manager in charge of consumer products, Leslie 139 Tobin, Stanley E., counsel, Los Angeles Wholesale Institute, and 132 Vreeland, Barrie, director of transportation, Commerce & Industry 57 Washer, Charles A., transportation counsel, American Retail Fed- 113 Additional material submitted for the record by- Acme Boot Co., Clarksville, Tenn., letter from Charles B. Shanks, 209 American Institute for Shippers' Association, proposed amendments Associated Products, Inc., New York, N. Y., letter from Rolf Kahn, 104 Additional material submitted for the record by-Continued Barry & Foley Motor Transportation, Inc., Worcester, Mass., letter California Manufacturers Freight Association, telegram from Thomas 202 Clipper Carloading Co.: Exhibit A-Tons of freight received from shippers (table) - - Florida Trucking Association, Inc., resolution adopted September 26, Text of section 409 of part IV of the Interstate Commerce Act, Views on amendments proposed by ICC and certain shippers' 33 Hammond Organ Co., Chicago, Ill., letter from R. N. Spitzer, traffic 206 Holman Transfer Co., Portland, Oreg., letter from Leonard P. Clark, 214 Houston Merchants Shippers Association, Inc., Houston, Tex., letter 205 International Brotherhood of Teamsters, Chauffeurs, Warehousemen Mid-Tennessee Freight Association, telegram from Harry Zimmer- 202 National Industrial Traffic League: Rates of return of class A freight 122 National Retail Merchants Association, statement of Charles A. 193 New England Industrial Traffic League, Worcester, Mass., letter from John T. Floyd, chairman, Legislative Matters Committee New York Life Insurance Co., New Providence, NJ, letter from N. V. Trimarchi, manager, Supply Department.. Norcrest China Co., Portland, Oreg, letter from William S. Naito, Sears, Roebuck & Co., Chicago, Ill, letter from R. E. Studnicka, 203 Additional material submitted for the record by--Continued Page Selover Trucking Co., Inc., South River, N.J., statement of Donald 200 Shippers' Conference of Greater New York, Inc., New York, N.Y., letter from T. J. O'Neill, president_-- 204 Smith-Corona Marchant (SCM) Corp., New York, N.Y., statement of C. G. Lundquist, general traffic manager.. 195 203 S. S. Kresge Co., Detroit, Mich., letter from H. E. Chapman, general Star Pin Co., The, letter from Robert P. Porter, treasurer. Traffic Executive Association-Eastern Railroads: Letter dated Trans-Postal Systems, Inc., New York, N.Y., statement of R. J. 214 70 192 158 191 Vinton Co., Portland, Oreg., letter from F. C. Curl, traffic manager-- 208 213 White Stag Manufacturing Co., Portland, Oreg., letter from John F. 211 Wilshire Center Chamber of Commerce, Los Angeles, Calif., statement of Richard C. Childs, president__ 195 Wingard & Co., Inc., Tacoma, Wash., letter from A. R. Wingard, president. 208 Wyatt Industries, Inc., Houston, Tex., statement of E. M. Burk, traffic manager.. Wunda Weve Carpet Co., Greenville, S.C., letter from Bobby M. 208 199 FREIGHT FORWARDER-TOFC CONTRACTS TUESDAY, JANUARY 23, 1968 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON TRANSPORTATION AND AERONAUTICS, Washington, 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." Hon. HARLEY O. STAGGERS, OFFICE OF THE SECRETARY OF TRANSPORTATION, Washington, D.C., October 27, 1968. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, 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 |