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out their case. By contrast, a complaint against the terms, conditions, or compensation set forth in contracts authorizd by section 109 ( a ) would be filed by a stranger to these agreements. In view of the unique regulatory nature of these agreements, it seems reasonable in this situation to impose the burden of proof on the parties in possession of the requisite information whenever they are called into question. We do not share the Institute's fear that this provision will result in "endless" litigation. The Commission possesses adequate power to deal with frivolous complaints and we do not believe that a complaining party will lightly undertake the time and expense involved in pursuing a totally groundless complaint.

The second matter raised in your letter concerns an amendment to H.R. 10831 proposed by the shippers' associations which, if adopted, would bring such associations within the scope of this bill. We agree with the institute that this proposal should be rejected. At the present time, shipper associations operate under an exemption from Part IV of the Interstate Commerce Act and the Commission's regulation by virtue of section 402(c) of the Act; at best, this exemption has been difficult for the Commission to enforce. Although they would still be exempt from all other provisions of the Act, the shippers' association would, under their proposal, be entitled the benefits of one section, section 409(a). In our opinion, it does not seem either appropriate or desirable to permit an exempt shipper association to share in these benefits without any of the regulatory constraints which are imposed on forwarders subject to Part IV of the Act.

In sum, we believe that our second proposed amendment to H.R. 10831 should be adopted and that the proposed amendment of the shippers' association should be rejected. Sincerely yours,

PAUL J. TIERNEY, Chairman, Mr. PICKLE. The next witness will be Mr. Jerry Chambers, president of the Clipper Carloading Co.

I understand that your statement is brief and you may read it if

you wish.

STATEMENT OF JERRY CHAMBERS, PRESIDENT, CLIPPER

CARLOADING CO.

sir, if I may.

Mr. CHAMBERS. Yes, it is.
My statement is comparatively brief and I would like to read it,
Mr. PICKLE. You may do so.

Mr. CHAMBERS. Mr. Chairman and gentlemen of the committee, my name is Jerry Chambers and I am the president of Clipper Carloading Co., a common carrier freight forwarder operating under permit No. FF-128 issued by the Interstate Commerce Commission. Our general offices are located at 3401 West Pershing Road, Chicago, Ill. 60632.

Clipper Carloading Co. was established by me in 1938, and I have been its president since that time. With the exception of 3 years in the Army during World War II, I have personally directed its activities for over a quarter of a century.

The bill before you, if passed, and enacted into law, will have beneficial and lasting effects upon not only the freight forwarding industry but the shipping public as well.

If it is not passed, gentlemen, I seriously question the ability of the freight forwarding industry to survive and continue to serve the public.

This bill provides that the freight forwarder may make the same agreed rates with the railroads that motor carriers now make. It does not give us any advantage not presently enjoyed by motor carriers. Let us examine the record.

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In exhibit A (p. 46), I have shown a comparison of the tonnage handled by rail 1.c.l., freight forwarders, and motor carriers, using 1943 as a base year. If you will examine exhibit A, you will note that the motor carrier movement of tonnage has increased tremendously. The freight forwarder decreased and the rail 1.c.l. has become almost nonexistent.

The railroads have lost 93 percent of the less-carload tonnage that they handled. The freight forwarders have lost 15 percent. The motor carriers have gained 258 percent.

The motor carriers have increased their less-carload tonnage at the expense of the railroads and freight forwarders.

The disadvantages under which freight forwarders operate are too great for us to continue. Compared to the motor carriers, these disadvantages are:

(a) The motor carriers may and do make agreed rates with the railroads which are as much as 40 percent under the rates that freight forwarders must pay. Recently the railroads have expanded the use of agreed rates with motor carriers considerably.

(6) In addition, when agreed rates are not available, they may ship trailers by rail at exactly the same rate the freight forwarders must pay. A recent Supreme Court decision made this arailable to the motor carriers.

(c) They have the alternative choice of shipping a trailer over the highway or by rail piggyback, depending upon which is cheapest.

(d) They may distribute over a much wider territory than freight forwarders because their operating rights permit them to

They may also, and do, purchase short-haul carriers for the purpose of assembly and distribution. Freight forwarders may distribute with their own equipment only in a terminal area. To move beyond that area, we must employ short-haul carriers and we may not purchase these carriers, which are used for assem

bly and distribution purposes. Less-carload business is extremely difficult to handle. Proof of this is the fact that the railroads are almost entirely out of the 1.c.l. business, because their losses in handling it were so great. Motor carriers are becoming more and more selective in handling less-carload traffic, and shippers and the commission are very concerned about this.

Here I refer to exhibit B. (See p. 46.) This simply quotes the small number of articles that have appeared concerning the small-shipment problem on the difficulties of securing adequate, reasonable cost transportation on small shipments.

Freight forwarders are handling this most difficult type of freight. Our average shipment is 500 pounds, very considerably less than the average shipment handled by trucking companies.

The shipping public generally recognizes the benefits of freight forwarder service and are anxious to retain freight forwarders as a competitive factor in 1.c.1. transportation. Shipper witnesses will testify to this.

If the freight forwarder is eliminated from the transportation picture, shippers will be forced to negotiate with motor carriers on rate matters on 1.c.l freight.

do so.

The motor carriers opposition to this bill is basically limited to longhaul carriers who would benefit by having the freight forwarders out of business.

Short-haul motor carriers tend to support the freight forwarder requesting the passage of this bill because they will be at a considerable disadvantage if the freight forwarders do not survive. Motor carrier witnesses will testify to this.

Some shipper associations have opposed the bill. I feel that this question should be asked of the organizations who testify in opposition to this: If the statement of the forwarders is correct that they must have this bill to survive, would you prefer to see them go out of business rather than have this bill passed?

Our industry has a great deal to offer to the national transportation system, to intermodal transportation and to the shipping public but we will not be able to contribute unless the gross inequity which confronts us in the instant case is removed. We seek only equality under the law with motor carriers. We do not seek any preferential treatment or competitive advantage.

Gentlemen, please look favorably upon this bill and assist it in becoming law. Thank you for allowing me to express my views to you.

Now I have an addendum, which is on the last page of my submitted statement, and it is very short. I feel that it is important that this be included. It reads as follows.

Freight forwarders serve a very substantial portion of the shipping public.

In the New York-New Jersey metropolitan area alone, there are 50,000 manufacturers. In the Chicago metropolitan area there are 14,500 manufacturers.

It is very important that all of these companies have available to them excellent and competitive transportation facilities.

The motor carrier will quickly have a monopoly on 1.c.l. transportation if this bill is not passed.

Thank you, gentlemen.

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YEAR 1942

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171

1965

1959

1963 1905

1964

EXHIBIT B

[From Transport Topics, Jan. 1, 1968)

ICC FOCUSING ON CHARGES OF TRAFFIC PICKING

ANNUAL REPORT ASSERTS SOME CARRIERS REFUSE TO HAUL CERTAIN CARGO DESPITE

TARIFFS

The Interstate Commerce Commission, in its annual report, has advised Congress that the ICC "has been directing increased attention to the actions of those motor carriers which are alleged to be picking and choosing traffic at the expense of the public, thereby disregarding their obligations to serve the public under operating authority issued by the Commission.”

[From Journal of Commerce, Jan. 11, 1968]
SMALL LOTS STILL MAJOR ICC PROBLEM

WASHINGTON, January 10.-Small shipments, described by the outgoing chairman of the Interstate Commerce Commission last year as one of ICC's biggest problems, still remain a trouble spot, in the opinion of new Chairman Paul J. Tierney.

Again like his predecessor, Mr. Tierney would like Congress to give ICC the right to order joint rates and through routes to solve the problem. It would also help intermodal coordination, he felt.

[From Traffic World magazine, July 29, 1967)

DIFFICULTIES IN SMALL-SHIPMENT TRANSPORT For thousands of shippers and for other thousands of carriers and carrier executives, the question of what can be done to make possible the provision of small-shipment transportation service at such rates and of such character as will make the service mutually beneficial to carrier and customer remains, as it has for months and years, at the top of any list of current national transportation problems.

(From Traffic World, Apr. 29, 1967) NEW ICC POLICY DESIGNED To Put PRESSURE ON MOTOR CARRIERS TO GIVE SERVICE

Motor common carriers who “pick and choose" their traffic, failing to give uniform service to the public under their operating authorities, may find difficulty in seeking additional rights, in view of a new Interstate Commerce Commission policy.

Mr. FRIEDEL. Thank you, Mr. Chambers, for your very short, informative statement. Mr. Ronan, do you have any questions?

Mr. Ronan. No questions, Mr. Chairman.
Mr. FRIEDEL. Mr. Devine?
Mr. DEVINE. No questions.
Mr. FRIEDEL. Mr. Kuykendall ?
Mr. KUYKENDALL. No questions.
Mr. FRIEDEL. I want to thank you, Mr. Chambers.
Mr. CHAMBERS. Thank you.

Mr. FRIEDEL. We have a long list of witnesses. We are going to recess at 12 or 12:15. I would like to know if any of the following witnesses would like to file their statements for the record because we have many, many witnesses for tomorrow and Thursday.

Mr. Vincent Bordelon, Washington representative of the Los Ingeles Chamber of Commerce.

Mr. BORDELOX. Yes, I would like to file my statement. However, I would like to highlight two or three points in that statement if I may.

Mr. FRIEDEL. You may proceed.

STATEMENT OF VINCENT BORDELON, WASHINGTON REPRESENTA

TIVE, LOS ANGELES AREA CHAMBER OF COMMERCE

Mr. BORDELON. I am the manager of the Washington office of the Los Angeles Area Chamber of Commerce. This matter is quite important to us. As you probably recognize as a chamber of commerce we do subscribe to the free enterprise system.

Basically your free enterprise system is based on competition. We also believe then in strong competition but we think where you have two competitors that one competitor should not have an advantage over the other.

We feel that this legislation will equalize the freight forwarders with the motor carriers and give them an opportunity to compete fairly.

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