Mr. PICKLE. Thank you. Mr. FRIEDEL. Mr. Devine. Mr. DEVINE. Mr. Macdonald, as president of your association, you say in the statement you are authorized to speak for the association, and for the 42 companies who belong to the association. Mr. MACDONALD. Yes, sir; I have Mr. DEVINE. Does that represent the members of your association? Mr. MACDONALD. Yes, sir. Mr. DEVINE. You have some very substantial companies you are speaking for. Would you say that your position is that of the Boeing Co., Continental Can Co., Federated Department Stores, General Dynamics, North American Aviation, and Sears, Roebuck? Mr. MACDONALD. Yes, sir; all of those. Mr. DEVINE. You have some pretty substantial voices in there. Mr. FRIEDEL. Mr. Kuykendall? Mr. KUYKENDALL. Most of us are in a little bit of a fog here. May a freight forwarder, when he puts together a carload-I understand that he is only allowed to accept less than a carload or less than a truckload quantity. When he puts together a carload of commodities or merchandise, or whatever it is, may he negotiate in any way under present laws and regulations a rate from a railroad less than the ICC regulated rate for that certain haul? Mr. MACDONALD. I am going to have to say that to my knowledge the answer to that is "No," other than going through the normal ratemaking procedures, such as I outlined before. Mr. KUYKENDALL. There is no way that a piggyback man, who is a member of your association Mr. MACDONALD. No, we are not allowed to. Mr. KUYKENDALL. Say one of the trucklines goes to a railroad; may he negotiate a piggyback rate less than the ICC rate for the haul; is that correct? Mr. MACDONALD. Yes. Mr. KUYKENDALL. So we have one man negotiating for the hauling of a trailer load of goods for less than another man can haul it. Mr. MACDONALD. Normally the motor hauler is performing services greater than Mr. KUYKENDALL. I am talking about the man who is going to put that trailer on the railroad and pays the railroad. That has nothing to do with services. I am not talking about what he charges his customer. I am talking about what you pay the railroad. Mr. MACDONALD. Right. Mr. KUYKENDALL. A trucker can pay the railroad less money to take the same trailer over the same distance than a forwarder can for the same goods? Mr. MACDONALD. Or any other shipper. Mr. KUYKENDALL. Or any other shipper? Mr. MACDONALD. Right. Mr. KUYKENDALL. Thank you. Mr. FRIEDEL. Mr. Macdonald, are you familiar with the amendment that the Shippers Association of Baltimore has proposed? Mr. MACDONALD. I am sorry, sir, I did not hear about that proposal until I entered the room this morning, and it was not considered at all in our testimony or in our conversations. Mr. FRIEDEL. You are not prepared to speak for or against the amendment? Mr. MACDONALD. It has a lot of ramifications as far as I am concerned, and I would therefore not want to speak for the association on that. Mr. FRIEDEL. Thank you very much. Our next witness will be John V. Hoey, Jr., president, National Textile Traffic Bureau, Inc. Mr. Hoey? (No response.) Mr. FRIEDEL. Mr. Harvey A. Burke, manager, Physical Distribution, Buxton, Inc., Springfield, Mass. STATEMENT OF HARVEY A. BURKE, MANAGER, PHYSICAL DISTRIBUTION, BUXTON, INC., AGAWAM, MASS. Mr. BURKE. Mr. Chairman, as I said this morning, I want to be brief. My name is Harvey Burke, and I am the manager of physical distribution for Buxton, Inc., located at Agawam, Mass. We are primarily in the manufacture of leather goods and jewel cases and belts. In that our company is directly involved in distributing our products to all parts of the country, we want to speak in favor of this particular bill for two reasons, mainly. We are interested in service and, of course, cost to our customer. Through experience we find that the freight forwarder has been able to give us far better service-quicker service. This is the lifeline of getting our goods to our particular customers. We use all modes of freight, through the rails, air, and truck, but the most consistent service that we can get has been through the freight forwarder. We ship quite a bit of our goods to the west coast. They cut our loadtime down, through their handling, by considerable time. The other point is the possible savings to our customer. I say to our customer, and I am sure that other people here ship as well on à collect basis; so, if there is any saving that is going to be realized through this, it is going to go direct to our customer. We, therefore, would be in favor of this bill. That is the end of my statement. (Mr. Burke's prepared statement follows:) STATEMENT OF HARVEY A. BURKE, MANAGER OF PHYSICAL DISTRIBUTION, BUXTON, INO., AGAWAM, Mass. Thank you for allowing me to appear in behalf of my company favoring the House of Representatives Bill H.R. 10831. My name is Harvey Burke. I am Manager of Physical Distribution of Buxton. Inc., Agawam, Massachusetts. Buxton, Inc., manufactures men's and women's accessories, leather goods, jewelry cases and belts. Buxton, Inc., has manufacturing plants at Agawam, Mass., Attleboro, Mass., and Los Angeles, California. We employ in excess of 1500 people in the manufacturing of our products. In my capacity as Manager of Physical Distribution, I am responsible for the shipment of our products from our manufacturing plants, as well as our distribution centers in Los Angeles and San Francisco, Calif.; Evanston, Ill.; Dallas, Tex.; Atlanta, Ga.; Metuchen, N.J. In facilitating our logistic problems, we use all modes of transportation, including motor carrier, Railway Express, air freight and freight forwarder. Because of the nature of our products, which as you know are in the consumer product field, we ship from our distribution centers to almost every city, town and burg in the United States. It is also significant that our shipments are normally small shipments or package freight and often fall in the category of minimum shipments. Because of the freight forwarder's ability to handle small shipments, we use the freight forwarder to a major extent in transporting our goods. During the year 1967, our total shipments moving in freight forwarder service exceeded three million pounds. This represents about 's of our total shipping tonnage. Again, I emphasize the important fact that this tonnage is made up of many small shipments to retail stores everywhere in the United States. We urge passage of H.R. 10831 primarily because it gives the freight forwarder a right to make contracts with the railroads, a privilege the motor carrier presently enjoys and which the freight forwarder must have in order to remain competitive. It is essential to our business that all modes of transportation be equal so that we may have an opportunity to market our goods throughout the United States. As an example of the importance of the freight forwarder to us, during the year 1967 our firm's shipments of a bulky product going to the West Coast was suddenly jeopardized because of our inability to ship the product on a competitive basis. While we were well acquainted with the problems that the various carriers were encountering in order to handle this bulky product, we could not be sympathetic simply because it would put us out of business on the West Coast with this product. Frankly, the freight forwarder because of his unique ability to handle bulky freight was the only mode of transportation that came to our rescue while competitive modes of transportation refused to make any effort to assist us. It is quite possible that under other circumstances we might have been confronted with just the opposite situation, that is to say that the freight forwarder would not assist us whereas another mode would solve the problem. The importance of bringing this example to your attention is that in this particular instance we had access to more than one type carrier to solve our problem. It is for this reason that we are so strongly in favor of H.R. 10831 which merely assures that the freight forwarder will remain equal and competitive with other carriers in interstate commerce. We feel that the necessary safeguards exist in the Interstate Commerce Act and specifically in part IV, 409 (b), wherein all contracts must be filed with the Interstate Commerce Commission for review, investigation, and approval. Passage of this legislation is to the best interest of the shipping public. Mr. FRIEDEL. Do you have any questions? Mr. PICKLE. Are you a shipper association, a representative of a shipper association?" Mr. BURKE. No, sir. I am a distribution manager for a private company, Buxton, Inc. Mr. PICKLE. You represent just this one company, Buxton? Mr. BURKE. That is correct. Mr. PICKLE. Thank you. Mr. FRIEDEL. You ship small shipments, less than carload lots? Mr. BURKE. I would say that better than 90 percent of our shipments are in a minimum class. Mr. FRIEDEL. And you use freight forwarders in doing this? Mr. BURKE. Yes. Mr. FRIEDEL. And to all parts of the United States; is that correct? Mr. BURKE. That is correct. Mr. FRIEDEL. Do you have any problems with the railroads in getting shipments to certain areas? Mr. BURKE. We have problems in certain areas on pickup. We haven't had this problem with the freight forwarders. To the west coast, for instance, we were getting delay of up to 14 days. We have 89-367-68- -6 gone through and made a study as to what we have done, and the freight forwarder has cut it down to 7 days. Our product is of high value. This means you have an inventory element from time to time. Mr. FRIEDEL. In other words, you get better service from a freight forwarder than you do from the railroads; is that it? Mr. BURKE. We get it through the freight forwarder. Mr. FRIEDEL. But you get better service through the freight forwarder than from the railroad? Mr. BURKE. That is correct. Mr. FRIEDEL. Mr. Devine? Mr. DEVINE. Mr. Burke, you are manager of physical distribution for Buxton. What does that mean, shipping department? Mr. BURKE. No, sir. I have the responsibility of getting our product to all parts of the world, and also maintaining distribution service in all parts of the world. Í manage distribution centers, and I have a staff which runs these. Mr. DEVINE. You say on page 2 of your statement that the freight forwarder is important to you because of your "inability to ship the products on a competitive basis." Would you enlarge on that a little bit? Mr. BURKE. The context of that was that we had a recent situation on the west coast where we could not expand our business. Our major competitor is located in the Midwest. Our product, as well as theirs, is a fair trade item. We ship, say, a $5 wallet to the west coast. This gentleman also ships a $5 wallet to the west coast. Then the prime factor becomes as to what the freight is that is involved. I will have to say the product is almost equal in quality as such. So, therefore, we would not be able to expand our operation out there. Mr. DEVINE. Is that generally the same problem in shipping from the Midwest to Massachusetts? Mr. BURKE. I am quite certain-I will not go on record as saying this that they ship from there by freight forwarder as well. Mr. FRIEDEL. Mr. Kuykendall? Mr. KUYKENDALL. Mr. Burke, what do you hope to gain from the passage of the bill you are recommending passage of? Mr. BURKE. I am hoping this would give us lower cost, or certainly maintain the cost of freight. Mr. KUYKENDALL. Who is going to pay the difference in this income, here, to the industry? Mr. BURKE. I am concerned with actually who is going to get the savings. I hope it will be the retailer. Mr. KUYKENDALL. You are primarily here to get the savings; is that correct? I don't blame you. Mr. BURKE. Savings for our particular customer, which is the consumer. Mr. KUYKENDALL. Most men in your position are interested in the stockholders, too. Mr. BURKE. Yes, sir. Mr. KUYKENDALL. Why do you think that the freight forwarders who are here asking for this legislation for survival, they say, were able to, without this legislation, give you such a tremendous advantage when you switched to them? Mr. BURKE. I don't believe it is a point of survival, personally. As I mentioned before, I like to see these people improve their scope of operation, and this is why I would give this testimony on their behalf. Mr. KUYKENDALL. What percentage of your overall freight would you say stays in a truck from the time you release it until the time it arrives at a retail store? Mr. BURKE. Stays in a truck? Mr. KUYKENDALL. Yes. Mr. BURKE. I would say 90 percent or better, to the time it gets to the ultimate consumer. Mr. KUYKENDALL. How much of this goes piggyback? Mr. BURKE. I would say two-thirds of it. Mr. KUYKENDALL. Thank you. Mr. FRIEDEL. Thank you very much, Mr. Burke. Our next witness will be Mr. Bernard Handelsman, president of the Textile Association of Los Angeles. STATEMENT OF BERNARD J. HANDELSMAN, PRESIDENT, TEXTILE ASSOCIATION OF LOS ANGELES, LOS ANGELES, CALIF. Mr. HANDELSMAN. I would like to make my statement a matter of record and paraphrase it, if I may. Mr. FRIEDEL. Just a minute until we get copies of the statement. All right, you may proceed, Mr. Handelsman. Mr. HANDELSMAN. Thank you. My name is Bernard Handelsman. I am president of the Textile Association of Los Angeles. Our association is made up of many members. Our sources are located in many of the Eastern, Northeastern and Southern States. It is estimated that our members ship in dollar volume to California soft goods industry in excess of three-quarter billion dollars a year of textile and allied products. As independent representatives, representing these textile industries on the west coast, we compete, using the following accommodations: styling, fashion trends, textures of new fabrics, etc. It is very important to our customer to have the product availability of these new fabrics, and this is based on the foresight and willingness of our mills and industry to invest in the idiosyncracies and the idocies of a fashionconscious American public. Actually, this industry on the west coast has made the average American woman and average American man the best dressed in the world today. We are the fashion and manufacturing leaders in sportswear. We can only have equal competitive opportunity, if all the segments involved in making our products available to the California market (which includes the movement of shipments, practically all of which are 1.c.l. shipments) that all these specialized services to our industry have equal competitive opportunities. Thank you, sir. (Mr. Handelsman's prepared statement follows:) STATEMENT OF BERNARD J. HANDELSMAN, PRESIDENT, TEXTILE ASSOCIATION OF LOS ANGELES, LOS ANGELES, CALIF. Please accept my grateful thanks for allowing me to appear before your Committee to testify in favor of House of Representatives Bill H.R. 10831. My name is Bernard Handelsman. I am president of the Textile Association of Los |