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because motor carriers are becoming more selective, particularly so far as small shipments are concerned.
I dont think that the freight forwarders, who, in my opinion, should be classified as common carriers, are asking for any preferential treatment. I would like to see the forwarder industry be able to fairly meet other modes of transportation competition which would be in the interest of the shipping public.
Thank you very much.
STATEMENT OF J. ROBERT Evans, TRAFFIC MANAGER, NATIONAL LOCK Co. Gentlemen, my name is J. Robert Evans and I am the traffic manager of National Lock Co., 1902 7th Street, Rockford, Ill.
My company's position in this matter is in support of the freight forwarding industry because:
We are primarily a shipper of small shipments, who is quite concerned with spiraling freight costs and deterioration of service in handling of small shipments.
The trend in transportation has been to build bigger trucks and freight cars to meet the volume needs of the large shippers. Rates and accessorial services have been provided to give the large producers more for their money while still guaranteeing adequate profits for the carrier. But all too frequently the small shipper is lost in the shuffle and is finding it increasingly difficult to distribute his products.
The motor carriers, under the Interstate Commerce Act, are authorized to negotiate freight rates with the railroads. The freight forwarders, in our opinion, should be given equal treatment.
We use the services of both freight forwarders and motor carriers and feel that good healthy competition is in the interest of the shipping public. However, we believe the motor carriers have a definite advantage over the freight forwarders and, if not corrected, could result in less competition, poorer service, rising freight costs, etc.
We feel that passage of this bill would result in the freight forwarders being able to serve additional points as well as continuing services now offered. Furthermore, passage of this bill would be to the advantage of the local carriers, who are so vitally needed in the distribution of our products and are having such a difficult time operating.
Thank you very much, gentlemen, for allowing me to testify before your committee.
Mr. FRIEDEL. Thank you very much, Mr. Evans.
Our next witness is Mr. T. A. Drakes, traffic manager, Holman's Department Store, Pacific Grove, Calif.
You may proceed, Mr. Drakes.
STATEMENT OF THOMAS A. DRAKES, TRAFFIC MANAGER, HOL
MAN'S DEPARTMENT STORE, PACIFIC GROVE, CALIF. Mr. DRAKES. Gentlemen, regarding H.R. 10831, I filed a statement in support of the freight forwarding industry. Unless the committee has any questions in order to avoid redundancy I will let my statement stand for the record.
(Mr. Drakes' prepared statement follows:)
STATEMENT OF THOMAS A. DRAKES, TRAFFIC MANAGER, HOLMAN'S DEPARTMENT
STORE, PACIFIC GROVE, CALIF. My name is Thomas A. Drakes and I am traffic manager for Holman's Department Store, which is situated in Pacific Grove, Calif., on the Monterey Peninsula, in central California. Holman's Department Store has been established in Pacific Grove since 1891 and has ever since been a general department store operation. I have been employed as traffic manager for Holman's since 1952 and my experience before that time was chiefly with carriers.
Holman's uses freight forwarder service particularly with shipments received from eastern, southern and mid-western resources. These shipments comprise all types of commodities which a department store sells and in quantities which range from a few pounds to partial carload shipments. However, a substantial portion of our shipments are those relegated by carriers to a “small shipment" category. It has been our experience that freight forwarders with underlying rail carriage perform the most dependable transit service time all year around at a cost which is competitive with other media.
We are members of a shippers pool car association whose cars originate in a few terminal cities, such as New York, Chicago, Philadelphia, and Charlotte. However, because of the combination of assembly arbitrary rates from offline points, even with the depressed line-haul rate available in such pool cars plus a beyond San Francisco arbitrary rate, the combination of costs makes the pool car service more expensive than the published through rates of freight forwarders.
In general, I feel that it is essential that freight forwarders enjoy the same op portunity to negotiate contractural rates with rail carriers that their competitors in the motor truck industry have had for several months. There is a fairly wellestablished equity in the rate levels of freight forwarders and motor trucking companies and I believe that in the spirit of the national transportation policy, as has often been expressed by the Congress, a strong competitive relationship should exist for the betterment of all shippers and of the carriers themselves.
It seems that H.R. 10831 is well dedicated to this purpose.
Mr. FRIEDEL. Thank you very much. There are no questions. Your full statement is in the record.
Our next witness is Mr. J. R. Chamberlain, president of Aztec Transportation Co., San Diego, Calif.
STATEMENT OF JOHN R. CHAMBERLAIN, PRESIDENT, AZTEC
TRANSPORTATION CO., INC., SAN DIEGO, CALIF. Mr. CHAMBERLAIN. I want to express my appreciation to this committee for allowing this time to testify in favor of H.R. 10831.
My name is John R. Chamberlain and I am president of Aztec Transportation Co., Inc., and vice president of Aztec Forwarding Co. Aztec Transportation Co., is a member of the California Trucking Association, and a member of the San Diego Chamber of Commerce, in which organizations I have an active part. My company is also an active member of the National Defense Transportation Association.
Eighteen years ago I personally started Aztec Transportation Co., with one truck and have expanded it to a fleet of 65 trucks doing a gross revenue of approximately $735,000 in 1967. Part of the growth and the stability of our business has been due to our relationship with the forwarders, as they do not compete with us in pickup or in distribution of freight from the railheads.
I am here to speak in favor of the passage of H.R. 10831, which I feel will remove an injustice to freight forwarders under the act as it now stands. The present law gives the long-haul motor carrier an advantage over the freight forwarders that is neither just nor reasonable. This affects not only the freight forwarders but also the short-haul carriers such as my company. We depend to a large extent upon the revenue derived from the freight forwarders in the areas we serve, and we desire to maintain the good service that the customer wants and is justified in expecting.
I can see no reason why this bill should not be passed as it asks for nothing other than parity with the long-haul motor carriers. Anything
less than this would be unjust, not only to the freight forwarders but the short-haul carrier, and the general public as well
. There appears to be nothing written in H.R. 10831 which would give the freight forwarders an advantage. It expresses merely an equal opportunity to compete on even terms with others in the transportation industry.
I believe passage of this bill would materially aid the ICC's often expressed interest in maintaining a more coordinated national transportation system. It would be a means of reducing, to a degree, the small shipment problem, and would be in the interest of greater equality of treatment of the various classes of carriers.
I wish to thank this committee for allowing me to appear before it, and to express an opinion relative to the bill known as H.R. 10831.
Mr. FRIEDEL. Thank you, Mr. Chamberlain. Are there any questions of this witness?
Our next witness is Mr. Robert F. Brambley, traffic manager, Kwikset, a division of Emhart Corp., Anaheim, Calif.
STATEMENT OF ROBERT F. BRAMBLEY, TRAFFIC MANAGER,
KWIKSET DIVISION OF EMHART CORP., ANAHEIM, CALIF.
Mr. BRAMBLEY. Thank you, Mr. Chairman, I have a short statement.
Mr. FRIEDEL. If you will summarize your full statement, it will be in the record.
Mr. BRAMBLEY. I represent Kwikset Division of Emhart Corp., manufacturer of residential hardware, a strong competitor of National Lock Co. I must agree with them that I am here in favor of H.R. 10831.
As I stated in my prepared statement, the present freight forwarder service in their operation subject to part IÙ of the Interstate Commerce Act is done in three portions. Basically the pickup and transport of a shipment to a point of consolidation, a line-haul movement from the point of consolidation to a point of distribution.
The first and third portions of the movement are handled under contract arrangements with local carriers whereas the second and largest part of the movement is not under contract.
There are those who oppose H.R. 10831_who feel that rate cutting would run wild if the bill were adopted. It is my opinion that safeguards are built into all rate negotiations be they contract or not, and they must be submitted to the Interstate Commerce Commission where they can be denied, suspended, or investigated.
The changes in the methods and modes of transport during the past few years, and I believe this is a very important change which is being proposed, has not been detrimental to either the shipper or the carrier.
Examples of this are the present oceangoing trailer-carrying ships, the present jumbo freighters now in operation today with lifting capacities of 90,000 to 100,000 pounds as well as additional large, oversize equipment. This has been all to the advantage of the shipping public. I urge that the committee recommend the adoption of this bill to keep us in a check-and-balance system between the freight forwarders and the motor carriers.
At the present time, Kwikset is a large and small shipper. I will state some facts. On a recent survey I made, out of 310 shipments we made during a 5-day period, each of these shipments weighing less than 10,000 pounds, 228 of the 310 were less than 500 pounds.
There are proposals presently before the Transcontinental Motor Carrier Rate Bureau in Denver, Colo., which will be heard beginning next Monday, which will add a 50-cent charge then per hundredweight on all shipments moving in transcontinental service via the motor carriers.
In January of 1966 the motor carriers entered into competitive operation with the freight forwarders serving points in the States of Maine, New Hampshire, and Vermont. There is a proposal now before the motor carriers to withdraw all through rates in those three States.
The motor carriers in many cases have become, and this is a matter in which we are becoming very selective in their handling and I feel that the check and balance between the freight forwarders and the motor carriers is good for the sound economic transportation picture in the United States.
Therefore, Mr. Chairman, I urge the adoption of the bill, H.R. 10831.
(Mr. Brambley's prepared statement follows:)
STATEMENT OF ROBERT F. BRAMBLEY, TRAFFIC MANAGER, KWIKSET DIVISION,
EMHART CORP., ANAHEIM, CALIF. My name is Robert F. Brambley and I am the traffic manager of Kwikset-Division of Emhart Corp., with the office and production facility located at 516 East Santa Ana St., Anaheim, Calif. I am appearing in support of H.R. 10831 which will permit, if adopted, the wording of section 409 (a) Part IV of the Interstate Commerce Act so as to allow freight forwarders governed by part IV of the Interstate Commerce Act to negotiate and enter into contracts with common carriers by railroad who are subject to part I of the Interstate Commerce Act.
Kwikset is a division of the Emhart Corporation and said Emhart Corp., is a Connecticut Corp. Kwikset's sole operation is located at Anaheim, Calif., with all production and shipping done from that point. Our principal product is residential hardware with our distribution being to the Fifty States, District of Columbia and seventeen foreign countries.
In the daily operation of our business we utilize the services of various modes of transportation—water, railroad, motor carrier, freight forwarder, air freight and express to transport raw materials and finished goods.
Under the present operation the freight forwarders subject to part IV of the Interstate Commerce Act perform their services in three portions. First, they must pick-up and transport a shipment from the point of origin to a consolidating point. Second, the shipment is transported from the point of consolidation to a destination point. Third and lastly, the shipment is then transported to the ultimate consumer. The first and third portion of the movement is handled under contract arrangements with the second and largest part of the movement not under contract.
The adoption of H.R. 10831 will bring the entire transport via freight forwarder under contract arrangements and would remove the present discriminatory faction in that motor carriers, subject to part II of the Interstate Commerce Act can enter into contract agreements with railroad carriers who are subject to part I of the Interstate Commerce Act. The motor carriers have had this privilege for over two decades.
There are those opposed to H.R. 10831 who feel that rate cutting would run rampant if the bill is adopted into law. Safeguards are built into all rate negotiations, be they contract or not, in that they must be submitted to the Interstate Commerce Commission and can be denied or suspended and investigated. This includes contractual agreements.
Of all the points brought out by those opposed to H.R. 10831, in my opinion, there is another worth considering and that is the possible reduction of revenue to railroads by contract arrangements with this said reduction being passed on to the shipping public in higher general freight rates.
After careful consideration this argument wouldn't stand up as any student of transportation economics knows. This bill would place rail freight forwarders on an equal status which would tend to generate more railroad traffic which in turn would better utilize the huge railroad facility available which in turn would reduce the per unit cost for the rail lines.
Changes in methods of transport during the past few years has not been detrimental to either the shipper or the carrier. The advent of trailer carrying oceangoing vessels for example has brought down the per unit costs, not increased them. The air freighter in operation today has also brought dowon the shipping costs as has the utilization of jumbo or oversize railroad equipment.
If the foregoing is true, then we can expect that if contractual arrangements are permitted between the freight forwarders and the railroad carriers it will be reflected in lower shipping and handling costs which would be passed on to the consumer.
As I have already pointed out, the freight forwarder contracts for two segments of the transportation utilized by him, we then support H.R. 10831 to enable him to perform the complete transportation under contract agreement. Contract agreements between the railroad carriers and the freight forwarders will also open up new areas where it is not now presently economical for freight forwarders to operate.
I respectfully urge that this committee recommend adoption of this bill, H.R. 10831, thereby bringing about equality between two of our substantial forms of transportation, freight forwarders and motor carriers in permitting them both the provisions of contractual agreements with railroad carriers.
Mr. FRIEDEL. Thank you. Are there any questions?
Mr. KUYKENDALL. Yes, I think we should correct the record on one point, Mr. Brambley. I don't know whether you were here for all the testimony this morning but the arrangement made between a railroad and a truckline for piggyback service is not regulated and is not published.
The rates that would be allowed to be negotiated under this legislation would not be published. I just wanted to clarify the record.
Mr. FRIEDEL. Thank you. Our next witness is Mr. J. L. Anderson, president of Anderson Cartage, Stockton, Calif.
STATEMENT OF JACK L. ANDERSON, PRESIDENT, ANDERSON
CARTAGE, STOCKTON, CALIF.
Mr. ANDERSON. Thank you, Mr. Chairman.
Mr. ANDERSON. I have a prepared statement which I would like to present for the record.
Mr. FRIEDEL. Are you in favor or opposed to this bill?
STATEMENT OF JACK L. ANDERSON, PRESIDENT, ANDERSON CARTAGE, STOCKTON,
My name is Jack L. Anderson, I am the president, member of the board of directors and control 100 percent of the stock of Anderson Cartage, a California corporation, with principal offices located at 430 North Aurora Street, Stockton, Calif.
Anderson Cartage owns and operates a public warehouse in Stockton, Calif., under authority of the Public Utilities Commission of the State of California.
The principal business of the corporation is transportation of property for hire as a common carrier under authority of certificates of Public Convenience and Necessity duly issued by the Interstate Commerce Commission and the