Opinion
Nos. 31956 and 31957
Decided April 26, 1950.
Public Utilities Commission — Certificates of public convenience and necessity issued to railroad — Different and specialized or limited motor transportation service — Not necessary to give existing carriers opportunity to furnish same, when — Section 614-87, General Code — Less-than-carload freight formerly transported exclusively in railroad cars — Certificate limited to stations on rail line and through bills-of-lading shipments — Another certificate also restricted transporting shipments in through movements between key points — Granting rail carrier certificate for such restricted motor transportation service — Not unlawful or unreasonable — Economies of operation effected and more expeditious service rendered — No business taken from existing motor carriers or interference with their operations.
1. A certificate of public convenience and necessity issued by the Public Utilities Commission to a railroad company is a certificate for a different, specialized or limited transportation service and may be granted without first giving existing motor transportation companies a period of not less than 60 days in which to provide such service, under Section 614-87, General Code, where the certificate authorizes the railroad as a common carrier by motor vehicle to transport less-than-carload-lot freight, formerly transported exclusively in railroad cars, by motor vehicle between the railroad's local freight stations and over highways paralleling its tracks, and where the certificate provides that the railroad as a motor carrier shall not serve any point not a station on its rail lines and that the shipments shall be limited to those it receives from or delivers to itself as a rail carrier under a through bill of lading.
2. A certificate of public convenience and necessity issued by the Public Utilities Commission to a railroad company constitutes the authorization of a different, specialized or limited transportation service and may be granted by the commission without first giving existing transportation companies a period of not less than 60 days in which to provide such service, under Section 614-87, General Code, where the certificate authorizes the railroad as a common carrier by motor vehicle to transport less-than-carload-lot freight, formerly transported exclusively in railroad cars, by motor vehicle between the railroad's local freight stations and over highways paralleling its tracks, and where the certificate is restricted in that the railroad as a motor carrier shall not serve any point not a freight station on its rail lines, and in that the shipments are limited to less than carload lots, moving only to and from freight stations on the railroad's line under through bills of lading and tariffs of the carrier and conditioned further that no shipment shall be transported by the railroad as a motor carrier in a through movement between designated key points or to, through or from more than one of such points.
3. Where a rail carrier, by substituting motor transportation service for less-than-carload-lot shipments, can effect large economies of operation, can give more efficient and expeditious service to its shippers and receivers and does not take from existing motor transportation carriers any of their business or interfere with their operations, it is not unreasonable or unlawful for the Public Utilities Commission to grant a certificate of public convenience and necessity for such motor transportation service under proper, reasonable and lawful restrictions.
APPEALS from the Public Utilities Commission.
The two instant cases are appeals from the Public Utilities Commission and the appellants will hereinafter be designated as protestants, the appellee as the commission and the New York Central Railroad Company, which was granted certificates of convenience and necessity by the commission, as applicant.
Applicant is a consolidated railroad corporation organized under the laws of Ohio and other states and is a common carrier.
Cause No. 31956 concerns that portion of applicant's railroad known as its Alliance branch, which is 87.6 miles long and extends between the villages of Phalanx on the north and Dillonvale on the south, serving 15 freight stations in an area generally coal mining, industrial and agricultural in character. The railroad line is roughly paralleled by highways and roads. All the stations on the line are small villages with the exception of the city of Alliance. The branch has no connection by any New York Central line with the main or any other New York Central line and its freight trains are operated between Cleveland and the Alliance branch over the rails of other railroad companies, which connect with the Alliance branch at Alliance. The applicant serves no stations between Cleveland and the Alliance branch.
Cause No. 31957 concerns applicant's Ohio Big Four district which is the Ohio part of applicant's Big Four district and consists of approximately 850 miles of railroad lines roughly paralleled by highways and roads and serves 148 freight stations in generally manufacturing and agricultural territories, which stations are located in several large cities, a number of county seats and many small cities and villages.
The Interstate Commerce Commission, in 1948, issued certificates of convenience and necessity to applicant in reference to both its Alliance branch and its entire Big Four district to furnish interstate service by motor truck auxiliary and supplemental to its rail service, the motor carrier service on the Alliance branch being limited to freight which has an immediately prior or immediately subsequent movement by rail, whereas the shipments by motor vehicle in the Big Four district were subject to no such condition but were limited by a key point restriction which will be hereinafter explained.
In cause No. 31956 the order of the Public Utilities Commission granting the certificate to applicant, which was issued on February 4, 1949, contained no prior-or-subsequent-rail-haul restriction but did contain the following restrictions with reference to transportation of freight by truck:
"Conditioned that the service authorized herein shall be limited to service which is auxiliary to, or supplemental of rail service of the New York Central Railroad Company. Said carrier shall not serve any point not a station on the rail line of the railroad.
"Shipments transported by said carrier shall be limited to those which it receives from or delivers to the railroad under a through bill of lading."
In cause No. 31957, the order of the commission granting the certificate to applicant to haul freight by motor truck, which was issued on May 20, 1949, contained no prior-or-subsequent-rail-haul restriction, but did contain the following:
"Conditioned that the service authorized herein shall be limited to service which is auxiliary to, or supplemental of, rail service of the New York Central Railroad Company. Said carrier shall not serve any point not a freight station on the rail line of the railroad. Shipments transported by said carrier shall be limited to l.c.l. shipments moving only to and from freight stations of the New York Central Railroad Company under through bills of lading and tariffs of said company.
"Conditioned further, that no shipments shall be transported by said carrier as a common carrier by motor vehicle in a through movement between any of the following points, or through or to or from more than one of said points: Cincinnati, Dayton, Springfield, Bellefontaine, Columbus, Galion-Marion (considered as one), Bryan, Sandusky, Ansonia-Greenville (considered as one) and Cleveland, Ohio."
The last-above-quoted paragraphs set forth what is known as the key point restriction and the key points named are the same as those named for Ohio in the Interstate Commerce Commission certificate as hereinbefore mentioned.
The term, "l.c.l.," in the above restriction means less than carload lot. The l.c.l. service which had been furnished by applicant on both its Alliance branch and Big Four system by all rail operation was accomplished by the use of peddler cars which furnished triweekly or biweekly service.
The present service, according to the testimony before the attorney examiner of the commission, whose findings in favor of the applicant were confirmed by the commission, was not satisfactory to the shipping public and was cumbersome and costly. Nine shippers and receivers of l.c.l. freight testified in cause No. 31956 and 89 shippers and receivers of l.c.l. freight testified in cause No. 31957. The testimony was to the effect that the shippers had need of daily service, that service by truck would enable the shippers to avoid delay to their customers and that generally the truck service would be of greatly increased value to them over the service they had been getting by all rail movement. A large number of the witnesses testified as to complaints they had against the service being provided by existing motor transportation companies and some of the witnesses testified that they had no existing truck service.
As the result of studies, it was demonstrated that the auxiliary motor truck service contemplated in the certificates would greatly expedite the service to shippers and receivers and would increase the efficiency of the service of applicant in daily intercity or through freight trains between applicant's larger stations, known as break-bulk and concentration points corresponding to the key point stations, at which points the l.c.l. shipments were broken and redistributed.
The testimony showed that the substituted motor carrier service contemplated in the certificate would accomplish economies and savings in the operations of applicant in the amount of more than $68,000 annually on its Alliance branch and $203,000 annually in its Ohio Big Four district.
In cause No. 31956, no protestant offered any testimony and the attorney examiner found that applicant's proposed motor vehicle operations did not parallel or duplicate any existing rights of any protestant, and that applicant is not attempting to reach out for new transportation business but is merely seeking to perform a more efficient handling of its existing business.
In cause No. 31957, the attorney examiner found that the protestants failed to show that the traffic and revenues of existing motor carriers would be adversely and materially affected by the proposed substituted service of applicant and failed to show that the proposed service of applicant will conflict with or duplicate the service of existing carriers.
Mr. Elber J. Shover and Mr. Robert N. Krier, for appellants.
Mr. Herbert S. Duffy, attorney general, and Mr. Kenneth B. Johnston, for appellee.
In the instant cases it is obvious that the transportation services authorized by the certificates issued by the commission are specialized or limited, and new certificates of public convenience and necessity authorizing such service may be granted by the commission without first giving existing motor transportation companies a period of not less than 60 days in which to provide such service, under Section 614-87, General Code. Cleveland, Columbus Cincinnati Highways, Inc., v. Public Utilities Commission 144 Ohio St. 557, 60 N.E.2d 166; Norwalk Truck Lines Co. v. Public Utilities Commission, 148 Ohio St. 247, 74 N.E.2d 328.
There is no doubt of the authority to issue to a railroad company a certificate of public convenience and necessity authorizing such company to transport property as a common carrier by motor vehicle. Section 8746-1, General Code. Cleveland, Columbus Cincinnati Highways, Inc., v. Public Utilities Commission, supra; Norwalk Truck Lines Co. v. Public Utilities Commission, supra.
In cause No. 31956, applicant, in its substituted service, is restricted in that it is not permitted to serve any point not a station on its rail lines and shipments are limited to those which it receives from or delivers to the railroad under through bills of lading.
In cause No. 31957, not only are the above restrictions contained in the certificate for substituted service, but, under the key point system of restriction, applicant may not carry freight by motor between key points or through, to or from more than one of such points.
These various restrictions demonstrate that the service for l.c.l. shipments authorized in the two certificates constitutes different and specialized or limited transportation. Indeed, protestants in argument concede this point and have no objection to the issuance of the certificates involved in the instant cases except that in each certificate there should be a further restriction, to wit, "all shipments transported shall receive a prior or subsequent movement by rail in rail cars under a through bill of lading."
That provision was in the Interstate Commerce Commission certificate granted to applicant for its Alliance branch, but it is of no practical utility because all applicant's interstate commerce on its Alliance branch must originate in Cleveland and, therefore, is transported by rail to Alliance, where it is further transported by rail in carload lots and by truck in less than carload lots.
If such a restriction for which protestants contend were put into the Alliance-branch certificate, it would defeat the whole object of the substituted service. The result would be that peddler cars would have to be utilized by applicant for the movement of l.c.l. freight on the Alliance branch, which would destroy the economies of motor freight operation as well as bring back the delay and inconveniences complained of by shippers and receivers. As a matter of fact, according to the attorney examiner's report, only 31 per cent of the l.c.l. shipments handled by applicant on the Alliance branch are intrastate, and of this amount the proportion of intrastate shipments moving entirely on the Alliance branch without a previous rail movement consists of a total of not over 10 or 12 shipments per year, which is less than 1 per cent of the total l.c.l. shipments on the branch.
In cause No. 31956, rather than the order of the commission being unreasonable and unlawful in issuing its certificate without the prior-or-subsequent-movement-by-rail provision, it seems to us that it would be unreasonable to put such provision into the certificate, applicable to such a trifling amount of freight handling, and thus seriously detract from the benefits of the substituted motor transport service, not only as to applicant but to the shippers and receivers on the Alliance branch.
In the case of Cleveland, Columbus Cincinnati Highways, Inc., v. Public Utilities Commission, supra, the order of the commission, which was affirmed by this court, was the granting of a motor transportation certificate of convenience and necessity to a subsidiary corporation of the Pennsylvania Railroad Company. Such order restricted operation to l.c.l. freight between railroad stations of the railroad company as follows: "Restricted to points which are stations of the Pennsylvania Railroad Company and to freight moving under bills of lading and tariffs of said railroad." The restriction contained no prior-or-subsequent-rail-haul provision. It is true that in the service provided there was no motor transport hauling without a prior or subsequent rail movement. However, there was no prohibition against it.
In Section 614-83, General Code, which discloses the policy of this state in the regulation of transportation by common and contract carriers by motor vehicle, it is provided that there should be co-operation with the federal government and the several states. Although the Interstate Commerce Commission certificate to applicant with reference to its Alliance division did contain a prior-or-subsequent-rail-movement provision, no such provision was in the Interstate Commerce Commission certificate to applicant in relation to its Big Four system. Instead, there was the key point restriction just as in the certificate the issuance of which forms the basis of the appeal in cause No. 31957 where the amount of motor transport hauling by applicant without prior or subsequent rail movement is trifling. A study indicates that of all the shipments on the 850 miles of applicant's Ohio Big Four system, 12.5 per cent are intrastate and only approximately 2.2 per cent of the total shipments or about 3 1/2 tons per day will receive no prior or subsequent rail movement.
Protestants contend that, even though shipments without prior or subsequent rail movement in both the instant cases may be insignificant, nevertheless the certificates open the door to expanded movements of that kind. That, however, is a matter for the future and it would be unreasonable to take away the economies and advantages to both applicant and its shippers and receivers by compelling the imposition of prior-or-subsequent-rail-movement conditions to the motor transport service of applicant.
L.c.l. shipments from and to the smaller communities along applicant's rail lines have heretofore been accomplished by using peddler freight cars which, as has been said, constituted a costly, inefficient and delayed operation and we cannot see that the commission violated any rule of reason or any law in granting the certificates in the instant cases for the improved motor transport service with the restrictions which the issued certificates contain.
It should be remembered that the applicant was serving all the communities concerned in the instant cases years before there was any such thing as motor transport service, and, although motor transport service is highly desirable and beneficial when carried on in the public interest, the benefits of it should be enjoyed by railroads when those benefits can be ordered without violating the law and where they are in the public interest. It is to the public interest that railroads be afforded reasonable and lawful opportunities to effect economies and to improve service to shippers and receivers along railroad lines.
We hold that the orders of the commission in the instant cases are not unreasonable or unlawful, and they are affirmed.
Orders affirmed.
WEYGANDT, C.J., MATTHIAS, HART, ZIMMERMAN, TURNER and TAFT, JJ., concur.