Interstate Commerce Commission v. Transport Company Transport, Inc v. Transport Company
| Decision Date | 04 December 1961 |
| Docket Number | J-T,Nos. 17,18,s. 17 |
| Citation | 7 L.Ed.2d 147,82 S.Ct. 216,368 U.S. 81 |
| Parties | INTERSTATE COMMERCE COMMISSION, Appellant, v. TRANSPORT COMPANY, Inc., et al. U.S.A.C. TRANSPORT, INC., et al., Appellant, v.TRANSPORT COMPANY, Inc., et al |
| Court | U.S. Supreme Court |
On appeals from the United States District Court for the Western District of Missouri.
[Syllabus from pages 81-82 intentionally omitted] B. Franklin Taylor, Jr., Washington, D.C., for appellant in No. 17.
Roland Rice for appellants in No. 18.
Richard A. Solomon, Washington, D.C., for appellee United States, in both cases.
James W. Wrape, Memphis, Tenn., for appellee J-T Transp. Co., Inc., in both cases.
Robert W. Ginnane, Washington, D.C., for appellant in No. 53.
Roland Rice for appellants in Nos. 49 and 54.
Richard A. Solomon, Washington, D.C., for appellee United States in all three cases.
A. Alvis Layne, Washington, D.C., for remaining appellees in all three cases.
These are appeals from judgments of three-judge district courts, 28 U.S.C. § 1253, 28 U.S.C.A. § 1253, which set aside orders of the Interstate Commerce Commission denying applications for permits as contract carriers. 185 F.Supp. 838; 188 F.Supp. 160.
Appellee J—T Transport Company asked to extend its present operations as an irregular-route contract carrier of airplane parts to include carriage of aircraft landing gear bulkheads for Boeing Airplane Co. Boeing supported the application. Common carriers opposed the application, as did another carrier, U.S.A.C. Transport, Inc., appellant in No. 18. Boeing indicated it preferred the applicant over the other because of its unsatisfactory experience with the latter in other operations. Boeing indicated that contract carriage was more practicable in its experience than common carriage, as a contract carrier's operations could be better integrated with a manufacturer's production. Though the examiner recommended a grant of the permit, the Commission denied it (74 M.C.C. 324, 79 M.C.C. 695) saying that no attempt had been made to ascertain if the existing services were capable of meeting the needs of the shipper. It ruled that 'There is, in effect, a presumption that the services of existing carriers will be adversely affected by a loss of 'potential' traffic, even if they may not have handled it before.' 79 M.C.C. 695, 705. It held that the applicant had not established a need for this contract service and that the applicant had not shown 'the existing service' of the other carrier to be 'inadequate.' Id., 709. It indicated that a service 'not needed' cannot be found consistent with the public interest or the National Transportation Policy, as those terms are used in § 209(b) of the Interstate Commerce Act as amended, 71 Stat. 411, 49 U.S.C. § 309(b), 49 U.S.C.A. § 309(b). It said that the shippers did not require a distinct type of service that could not be provided by the protesting carrier, which was indeed in a position to provide any service needed and which would be adversely affected by a grant of this application, even though it never had had the business in question.
Appellee Raddish made application to carry canned goods as a contract carrier from three points in Arkansas and one in Oklahoma to various points in thirty-three States and to carry other goods on return. His application was supported by his prospective shippers and opposed by motor common carriers, appellants in No. 54, and by rail common carriers, appellants in No. 49.
Reddish showed that he delivered to customers who ordered goods in less-than-truckload amounts. These customers maintained low inventories and needed expedited deliveries in small quantities and on short notice. Some accepted deliveries only on certain days, a requirement calling for integration and coordination between shipper and customer. The shippers said that common carriage was an inadequate service for these shipments, as they were in such small lots that they often had to be carried in consolidated loads which caused delays in shipments. Moreover, it was shown that not all points would be served by one common carrier, making it necessary to unload the shipments and reload them on another carrier causing delays, misconsignment, and damage to goods. The shippers also testified that the cost of common carriage was prohibitive for less-than-truckload shipments and that if the Reddish application were denied they would use private carriage. The protesting motor common carriers testified they could render adequate service for these shipments and provide multiple pick-up and delivery services to most of the points by transferring the shipments to other carriers. The Examiner recommended that the application be granted. The Commission denied it, saying, inter alia, that the services needed by the shippers could be performed by existing common carriers, that they would be injured by the loss of potential traffic, and that the shippers' desire to obtain lower rates for less-than-truckload shipments was the primary reason for their support of the application, but was not a sufficient basis to justify a grant of authority to this contract carrier. 81 M.C.C. 35.
The cases turn on the meaning of language added to the Act in 1957.
Our decision in United States v. Contract Steel Carriers, 350 U.S. 409, 76 S.Ct. 461, 100 L.Ed. 482, held that a contract carrier, rendering a specialized service in the sense that it hauled only a limited group of commodities over irregular routes, did not become a common carrier because it reached for new business within the limits of its license. That decision caused concern to the Commission which proposed amendments to the Act.1 It proposed that § 203(a) (15) be amended so as to define a contract carrier as one who engages in transportation by motor vehicle 'under continuing contracts with one person or a limited number of persons for the furnishing of transportation services of a special and individual nature required by the customer and not provided by common carriers.' It also proposed that § 209(b) be amended by adding an additional requirement for issuance of a contract carrier permit, viz., 'that existing common carriers are unwilling or unable to provide the type of service for which a need has been shown.'
These amendments were vigorously opposed in some quarters.2 The addition to § 203(a)(15) was objected to on the ground that many contract carriers would be driven out of business because they could not meet the test of performing a service 'not provided by common carriers.' The change in § 209(b) was opposed because it would be impossible for a contract carrier to prove that competing common carriers were 'unwilling' to render the service and very difficult for it to prove that common carriers were 'unable' to render the service, as the applicant would have no intimate knowledge of the business of the opposing carriers.
The Commission bowed to these objections;3 and the bill as it passed eliminated the proposed changes except the ones that changed the result of our decision in United States v. Contract Steel Carriers, supra.4 Section 203(a)(15), however, was amended, so far as material here, by adding to the description of the term 'contract carrier by motor vehicle' one who furnishes 'transportation services designed to meet the distinct need of each individual customer.'5 And § 209(b) was amended by adding a sentence which sets forth five factors the Commission shall consider in determining whether the permit should issue:
'In determining whether issuance of a permit will be consistent with the public interest and the national trans- portation policy declared in (this Act), the Commission shall consider (1) the number of shippers to be served by the applicant, (2) the nature of the service proposed, (3) the effect which granting the permit would have upon the services of the protesting carriers and (4) the effect which denying the permit would have upon the applicant and/or its shipper and (5) the changing character of that shipper's requirements.' (Numerals added.)
It seems clear from these provisions that the adequacy of existing services is a criterion to be considered by the Commission, as it is instructed to consider 'the effect which granting the permit would have upon the services of the protesting carriers,' as well as the effect of a denial upon the shippers. Or to put the matter otherwise, the question of the need of the shipping public for the proposed service necessarily includes the question whether the extent, nature, character, and suitability of existing, available service makes the proposed service out of line with the requirements of the national transportation policy. But the adequacy of existing facilities or the willingness or ability of existing carriers to render the new service is not determinative. The 'effect which denying the permit would have upon the applicant and/or its shipper and the changing character of that shipper's requirements' have additional relevance. This is a phase of the problem reflected in the broadened definition of 'a contract carrier by motor vehicle'—one who furnishes transportation services 'designed to meet the distinct need of each individual customer.' § 203(a)(15). It means, we think, that the 'distinct need' of shippers for the new contract carrier service must be weighed against the adequacy of existing services. The Commission indulged in 'a presumption that the services of existing carriers will be adversely affected by a loss of 'potential' traffic, even if they may not have handled it before.' 79 M.C.C. 695, 705. The effect of the presumption is in substance to limit competing contract carriage to services 'not provided' by existing carriers—a provision that the Commission sought unsuccessfully to have incorporated into the Act. We see no room for a presumption in favor of, or against, any of the five factors on which findings must...
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