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There is an increasing trend toward mandatory delivary of LTL shipments from San Juan terminals (Puerto Nuevo, Isla Grande, and piers 8 and 11) to the consignee's door. Mandatory delivery may reduce congestion in the terminal area, reduce demurrage charges and generate greater efficiencies in traffic distribution. The special needs of small shippers and consignees, however, must be considered.
The Old San Juan (excluding piers 1 through 9) Puerto Nuevo and Isla Grande facilities appear to lack the amount of transit shed space needed to temporarily store cargo efficiently. The absence of adequate covered transit shed space is particularly felt by containership operators (ch. VI, sec. 2.b(3)). In addition, the allocation of marshalling yard space for parking trailers and berthing area at Puerto Nuevo and Isla Grande may be insufficient to accommodate efficiently present and expected growth in containerized traffic (ch. VI, sec. 2, b(1) and (2)). Recommendation
It is recommended that the Puerto Rico Ports Authority examine the amount of transit space, marshalling yard space and berthing area allocated to containership operators at Puetro Nuevo and Isla Grande and, if necessary, increase the amount of such space allocated to carriers. Plans for the development of additional transit shed space should relate the 1975 projected increase in traffic (app. C, table 1) and the carriers' to the expected growth in traffic.
The Commonwealth assesses higher dockage and wharfage rates against carriers and cargo in the trade between the U.S. mainland and Puerto Rico than those assessed in the U.S. Virgin Islands/Puerto Rican trade. The differentiation is based on the idea that short haul carriers or cargo have a lesser “ability to pay” than those in the long haul trade. Although there are many factors to be considered before it can be determined whether the practice is unjust or unreasonable, this practice may create problems regarding discrimination. Recommendation
It is recommended that the Commonwealth consider whether the foregoing differentiation (based on shorthaul carriers having a lesser "ability to pay” than those in the long-haul trade) is unreasonable.
Certain pier facilities at Old San Juan have become outmoded, inadequate, and inefficient. Although some corrections have come from recent improvements to the Old San Juan piers and some cargo handling operations have been relocated to the Puerto Nuevo and Isla Grande facilities, the problem of inadequate terminal facilities at Old San Juan still requires considerable attention in port development plans. Recommendations
It is recommended that:
a. The Puerto Rico Ports Authority, which has improved the Old San Juan piers considerably, increase the pace of modernization of piers and cargo handling facilities to accommodate traffic growth and counter the rising costs of transportation.
The large disparity in wharfage rates published by the Puerto Rico Ports Authority and domestic carriers (except SACAL) is questionable. This practice developed when breakbulk traffic was predominant and rates were quoted to the end of ship’s tackle in order to bridge the gap for handling services between the end of ship's tackle and place of rest onshore. Although containerization eliminated the extra handling process, the old wharfage rate structure remained; and, today, shippers are being assessed more wharfage by the carriers than the Ports Authority deems appropriate. Recommendation
It is recommended that domestic carriers state clearly in their tariffs the amount of wharfage being collected on behalf of the Ports Authority charge and define the services being rendered for the rest of the charge.
jected 100 percent increase in traffic because of space limitations and terminal conditions.
Most terminals leased by common carriers on the U.S. Atlantic coast can handle present and future traffic increases with little or no modification. However, terminals leased by TMT at Jacksonville and Miami would probably be unable to handle efficiently a pro
It is recommended that TMT arrange to improve its facilities at Jacksonville and Miami.
TRANSPORTATION AND DISTRIBUTION
IN PUERTO RICO
This chapter discusses insular trucking including traffic distribution patterns and pickup and delivery rate levels of containership operators on movements between the water carriers' terminals in Puerto Rico and the shippers' and consignees' places of business (sec. B). The chapter also deals with carriers' substitution of direct-call vessel service at Ponce and Mayagüez with overland trucking service from San Juan. Section C analyzes various aspects of Puerto Rico's trucking industry including size, composition, and quality of service and represents a joint study conducted by the FMC and the Public Service Commission of Puerto Rico. The Public Service Commission of Puerto Rico (PSC) is the independent regulatory agency acting under the auspices of the Puerto Rican government assigned the role, inter alia, of regulating motor carrier services operating on the Island.
tion by air. Further, for the most part, there are no major pipeline systems in Puerto Rico. (When such pipelines are built, they may be used to move petroleum derivatives from the refineries located on the southern sector of the Island to a few major consumption points, such as gas outlets in the metropolitan area of San Juan.) Thus, for the forseeable future, indications are that the overwhelming proportion of Puerto Rico's import traffic and associated inland transportation will not only continue to depend upon the pickup and delivery services rendered by the Island's trucking industry but will show an increasing demand for this service.
Containerization and associated pickup and delivery services, hereinafter referred to as P/D service, are expected to play a central role in Puerto Rico's economic development. In 1967, there were an estimated 4,001 trucking firms operating in Puerto Rico: 20 large size firms; 37 medium size firms; 325 small size firms; and, 3,619 one-truck operators. Containerized traffic is largely transported by the Island's generally efficient large and medium size firms while specialized and seasonal cargoes are generally moved by the numerous and less efficient small size trucking firms and one-truck operators. In 1967, the large and medium
1. The Role of Trucking Services in Puerto
Rico's Economic Development For all practical purposes, trucking is the only means by which goods can be transported between various points on the Island. No railways are presently operating, there are no inland waterways, and general barge movements are limited to the transportation of a few bulk commodities over short intracoastal distances. Except for rare instances, the relatively small size of Puerto Rico acts to inhibit inland freight transporta
1 "Pickup and delivery service" (P/D service) is a trucking service contained in the tariffs of most water carriers. This service substantially covers the transportation of cargo from the premises of the carrier's term. inal to a platform or doorway accessible to the trucks at the consignee's place of business, residence or warehouse ; or from the consignee's place of business, residence or warehouse to the carrier's terminal. ? Large size trucking firms are comprised of 16 or
power units (trucks and/or tractors); medium size firms, 6 to 15 power units; small firms, 2 to 5 power units; and, one truck operators, one power unit.
size firms carried 2,782,851 tons and earned approximately $13,604,000, 70 percent of which was earned from transporting general TL and LTL cargoes under pickup and delivery services largely for cargo moving to and from the U.S. Although Puerto Rico's agriculture declined considerably during the past decade, onetruck operators grew from 2,200 in 1959 to 3,619 in 1967, in part due to Puerto Rico's liberal certification procedures and the ability of one-truck operators to stay alive by migrating during offseason work from farm and other specialized contract operations to the urban areas and carriage of general cargo. Trucking and P/D service are generally employed in two ways: (1) In common or contract carriage by the trucking industry and ocean carriers; and (2) in private carriage by owners of the goods to be moved. In most cases, Puerto Rico's manufacturers, large stores, and other major shippers or consignees move their products in TL or LTL lots under both common and contract P/D service arrangements employing a member of the 20 large size firms or a medium size trucker. Other shippers and consignees use members of the small and one-truck firms when these operators are not engaged in moving building materials or sugar. A smaller number of shippers and consignees, however, pickup and deliver their own cargoes utilizing privately owned equipment for this purpose when transportation requirements are of a special nature not compatible with common carrier trucking. Private trucking may be economically justified for a few large shippers with sufficient volume, such as Pueblo Supermarket and other major distribution services which primarily rely on lightweight and relatively inexpensive delivery trucks. But, there is a considerable amount of trucking in Puerto Rico by small shippers and consignees using costly equipment. Trucking P/D service problems uncovered by FMC representatives in Puerto Rico, the Commonwealth including PSC and EDA investigators, major ocean carriers, and large and medium size trucking firms, indicate that the transportation shortcomings existing primarily in the services offered by the numerous onetruck operators and some small trucking firms may have been important factors in certain customer's de
cisions to use their own trucks. Whenever serious shortcomings of Puerto Rico's trucking P/D services are responsible for the use of private trucking transportation, disturbing transportation problems are created because, with the volume and variety of their cargo movements reduced by the privately carried shipments, the regular common carrier truckers are less able to attain complete utilization of their own transportation equipment. Under these circumstances, regular common carrier service becomes less efficient and more expensive which, in turn, causes more shippers to resort to private carriage even though it may be less economical than the common carrier trucking service. The problems of island transportation and P/D services have a twofold impact on Puerto Rico's economy. They serve to reduce the profit available to the shippers/consignees from their present economic activities, and they inhibit not only the expansion of these activities by limiting the development of new industries and of larger markets for existing industries but also the geographic dispersion of industry desired by the Commonwealth (Chapter II). The result may be that plants will want to locate in the vicinity of the ocean terminals where they must depend less on trucking; and, as a result, the congestion in the major port cities could grow. It is widely recognized by the Common. wealth that the condition of the highway network in many parts of Puerto Rico is far less than satisfactory for the high volume of traffic moving to, from, and within Puerto Rico. This situation is beyond the trucking industry's control but it inevitably hampers P/D services and makes this trucking considerably more expensive.
Inadequacies in trucking contribute to inefficiency, under-utilization of equipment, and destructive rate competition. For these reasons, the Commonwealth. including Economic Development Administration and PSC, are becoming increasingly aware that Puerto Rico must have an efficient, economic, and more fully regulated motor carrier service moving over adequate highways. There is already on Puerto Rican statutes, a comprehensive law,discussed more fully in the following pages, which provides for regulation of motor car. riers. The PSC has made clear its intentions to more fully implement its regulatory responsibility under this law.
3 As one might observe, however, most Puerto Rican business firms do not have sufficient quantities of cargo to justify the initial purchase nor the full employment of their own trucks. In Puerto Rico, the two-way employ. ment of private trucks is economically feasible for only a limited number of shippers and consignecs. Trucking's economic justification depends upon the continuous and highly efficient use of its most profitable direction of travel. Such use, in turn, depends on a larger volume of freight movement than is usually generated by the predominantly small and medium sized operations of manufacturing industries and grocery stores in Puerto Rico.
* The relationship of highway development to transportation is discussed more fully in chapter II.
5 Puerto Rico Laws Anna.; title 27, sec. 1002; 1004 (a) and (b); and, 1005 (a), (b), and (c).
2. Public Service Commission of Puerto
3. Survey by FMC and PSC
Local P/D services are under the jurisdiction of the PSC. The PSC regulates not only surface "public carriers" but also contract carriers".?
Although trucking firms are not presently required to file cost information or financial reports with the PSC, the PSG may require that common and contract trucking firms establish and maintain an exact, detailed, and continuing inventory of all useful property and to keep current accounts and records showing the original cost of such physical property. Furthermore, even though the PSC does not presently require trucking rates to be filed with the PSC and exercises only limited control over such rates, the powers of the PSC over rates, charges, and practices are broad. The PSC has power, for example, to approve all new surface rates 9 and to prescribe fair and reasonable rates for surface common carriers. In the case of surface con. tract carriers, if any minimum rate is incompatible with the public interest and offers advantages or undue preference to such contract carriers, the PSC may prescribe such fair and reasonable minimum rates as it may deem necessary or desirable.10 Moreover, if the PSC determines after a hearing that any rate collected or any practice put into effect by any surface common or contract trucking firm is unfair, unreasonable or establishes unfair or undue preference, or that the rate collected exceeds the rate which is filed, published, and effective at the time the service was rendered, it may order the surface common or contract carrier to pay the aggrieved party within a reasonable time for the damages sustained because of the unfair, unreasonable or unlawful practice or rate.11
At the outset of the Puerto Rican-Virgin Island trade study, an FMC survey of Puerto Rico's transportation system, conducted by means of about 2,400 questionnaires, revealed numerous P/D transportation problems which may have adversely affected the southbound flow of U.S. domestic commerce. Because P/D problems often increase the cost of through sea and land cargo movements and inflate price levels, the FMC, therefore, arranged with the PSC to conduct a joint survey of the Island's trucking industry with the intent of improving Puerto Rico's overall transportation system. (Details of this survey and its findings comprise section C of this chapter.) The FMC and PSC trucking survey was conducted as follows. First, a survey of the principal FMC-regulated containership operators was conducted by an FMC official in Puerto Rico in order to obtain comments regarding insular P/D services and corresponding rate levels. Second, eight field investigators furnished by the Commonwealth conducted a broad survey of Puerto Rico's large, medium, and small trucking firms; 13 and one-truck operators to ascertain the present nature and description of the Island's trucking industry, its rates, practices, quality of service, and the effect of competition on trucking services. The integration and analysis of data developed by these surveys was done principally by the FMC in Washington, D.C. Finally, a survey of Puerto Rico's industries was conducted by means of questionnaires and personal interviews in order to collect comments regarding the rate levels and quality of service of local trucking firms, both public carriers and contract carriers. The industries selected for exam. ination were drawn from a list taken from the Puerto Rico Department of Labor, Census of Manufacturing Industries in Puerto Rico. It named 2,408 manufacturers including 1,600 EDA-sponsored firms, which were operating in 1968. Of these 2,408 manufacturers, approximately 160 firms (a 6.6 percent sample distributed geographically throughout the Island) were
• The PSC, created by law No. 70, approved Dec. 6, 1917 (amended in 1967), regulates all motor vehicle freight companies. These companies are defined as including "Any person who, as a public carrier, owns, controls, operates, manages any motor vehicle used for the transportation of freight over any public overland highway, regardless of whether such transportation is carried out between fixed terminals or through regular or irregular routes."
* The PSC Act of 1917 did not provide for the regulation of motor vehicle contract carriers. This type of carrier came under the jurisdiction of the PSC by the Act of 1962. (Puerto Rico Laws Anna.; title 27, Sec. 1002(n). Contract carriers were defined as including: "Any person, except public carriers, engaged for pay under individual contract or agreement, in the transportation of passengers or property in motor vehicles or watercraft between points in Puerto Rico even when said transportation is carried out incidentally to the operation of any other business or activity whether or not for profit."
& Id. Sec. 1102. 'Id. Sec. 1003. 20 Id. Sec. 1104 (a) and (b). 11 The PSC has certification authority over motor carriers. It may also establish standards for service and determine the equipment to be used by surface common carriers; and also may require these carriers to make all
such repairs, changes, alterations, additions, extensions and improvements on and about their equipment and service as may be reasonably necessary and proper for the safety, comfort, convenience and service of their patrons and employees. It also has power to require from public carriers insurance policies, or copies thereof, or that they act as self-insurers. It has the same authority in relation to contract carriers' operations, except that it may not require them to carry out improvements or extensions to the service or to decrease their properties. (Id. Sec. 1105 (a), (b), and (c).
12 In February 1968, Paul Gonzalez, Chief, Branch of Trade Studies and Special Projects, FMC, visited the San Juan offices of Sea Land, TMT, SACAL, GPRL, and Berwind.
13 For a description of large, medium, and small trucking firms, see section C of this chapter.