Common carriers by motor, in interstate commerce, filed tariffs
providing rates on goods reshipped in the original packages as less
than truckload consignments immediately after their transportation
as parts of a truckload or carload consignment, and on less than
truckload goods which, on arrival at their immediate destination,
are to be immediately reshipped, in the original packages, as parts
of a truckload or carload consignment. The Interstate Commerce
Commission found the rates lower than other rates on like goods
between the same points; that practically they could be used only
by forwarders and a few large shippers; that they would operate for
the special benefit of forwarders, and would not benefit owners of
the goods shipped, and that forwarders would thereby be afforded
transportation at rates lower than those charged certain other
shippers under substantially similar circumstances and conditions,
in violation of § 216(d) of the Federal Motor Carrier Act.
Held:
1. That the Commission was justified in cancelling the proposed
tariffs. P.
310 U. S.
347.
2. Section 216(d) of the Motor Carrier Act, like provisions of
the Interstate Commerce Act, insures equality of rates for
substantially similar services. P.
310 U. S.
351.
3. Although the evidence was undisputed, it was for the
Commission to determine the question of undue preference and
discrimination. P.
310 U. S.
352.
4. The Commission was authorized to act in the matter on its own
motion, without complaint by shippers. P.
310 U. S.
353.
5. The Commission performs its duties in the interests of
shippers generally, of the national transportation system, and of
the public. P.
310 U. S. 354.
Reversed.
Page 310 U. S. 345
Appeal from a decree of the District Court of three judges,
which set aside an order of the Interstate Commerce Commission
cancelling tariffs of motor carriers.
MR. JUSTICE BLACK delivered the opinion of the Court.
Respondents are forty-one interstate common carriers operating
motor vehicles subject to the Interstate Commerce Commission under
the Federal Motor Carrier Act of 1935. [
Footnote 1] Our decision turns upon the validity of an
order of the Commission cancelling certain proposed tariffs of
these carriers upon the ground that they were unlawfully
discriminatory in affording lower rates to "forwarders" of freight
than to other shippers.
Forwarders utilize common carriers by rail and motor truck to
transport goods owned by others. They solicit and obtain many small
shipments, from various points within an area, and cause them to be
carried in less than truckload or carload lots to a concentration
center within the area. There, they are assembled by the forwarder
for further transportation in truckload or carload lots. Although
the forwarder gives owners of individual small shipments his own
contract corresponding in form to through bills of lading and
assumes responsibility for safe through carriage, the forwarder
customarily arranges for the pickup, assembly, and transportation
of the shipments by carriers for hire. And the forwarders, not the
owners of the goods, select the carriers and
Page 310 U. S. 346
route the shipments. Upon arrival of a truckload or carload of
the assembled small shipments at a distribution center, the bulk
shipment is broken up, the forwarder separates and takes possession
of the original small shipments and arranges, where necessary,
their further carriage to their various final destinations in the
area served by the particular distribution point. In this final
carriage of the small shipment to its ultimate destination, the
forwarder again utilizes carriers for hire to move these less than
truckload or carload lots. Thus, forwarders may use the service of
carriers to assemble shipments of less than truckload or carload
lots at their concentration center, to transport the assembled
truckload or carloads to a distribution center, and to carry the
broken up small shipments beyond their break-bulk distribution
center.
The forwarding business has been built upon the expectation that
a material part of the transportation which it causes to be
provided for small shippers can by consolidation of small shipments
be obtained at truckload or carload rates. For the forwarders'
business was originally made profitable because it could operate
upon the margin of profit represented by the difference between
railroad carload rates paid by the forwarder and the higher rates,
approximating less than carload rates, which the forwarder charged
the owner of a shipment. [
Footnote
2] But forwarders, in using railroads, enjoy no special tariff
rates, and pay the same published carload and less than carload
rates that other shippers pay. And the question here is not whether
the Commission should have approved as lawful lower rates for
truckloads than for smaller shipments, but whether the court
properly set aside the Commission's order which had directed
cancellation of respondents'
Page 310 U. S. 347
tariffs providing lower rates for certain less than truckload
shipments solely because they had previously been, or were intended
subsequently to be, consolidated in truckloads with other
individual shipments.
Upon the Commission's own motion, a hearing was held and the
Commission ordered the cancellation of these tariffs. [
Footnote 3] Respondents brought suit in
the District Court to set aside and restrain enforcement of the
Commission's order. A three-judge Court held the order void and
perpetually enjoined its enforcement. The case is here on direct
appeal by the United States and the Interstate Commerce Commission.
[
Footnote 4]
Respondents' tariffs would be available to forwarders who
arrange assembling, transportation, and distribution services in
the trade areas surrounding concentration and break-bulk centers in
Illinois, Wisconsin, and Indiana. And the Commission found that,
"In practical effect, these rates can be used by few, if any
shippers, except the forwarders." Since, in its opinion, these
tariffs were "materially lower than respondents' local rates on
like traffic between the same points," [
Footnote 5] the Commission found that
"the forwarders . . . and possibly a few large shippers . . .
will be afforded transportation at rates lower than the rates . . .
charged certain other shippers under substantially similar
circumstances and conditions, in violation of § 216(d). [
Footnote 6]"
In the view we take, it becomes
Page 310 U. S. 348
unnecessary to consider additional grounds upon which the
Commission found the tariffs violated another section of the Act.
[
Footnote 7]
So far as pertinent here, the tariffs before us propose rates
for transportation of commodities in less than truckload lots. All
commodities (with exceptions not here material) are, as a group,
given the same special rate. In general, respondents' other tariffs
provide rates which vary for different types of commodities.
Accordingly, if the suspended rates were in effect, transportation
of the same commodity over the same haul might cost a forwarder
less than other shippers.
The findings of the Commission and the supporting evidence
[
Footnote 8] reveal that local
less than truckload rates charged shippers are, in many if not most
instances, greater than rates on like commodities between the same
points to be afforded forwarders under the proposed tariffs which
the Commission ordered cancelled. However, upon reviewing the
identical evidence which the Commission had considered, the court
below drew inferences opposite to those of the Commission, and
disagreed with its conclusion that, in operation, the disputed
tariffs would violate § 216(d), which forbids undue preferences and
advantages that lead to unjust discrimination. The exercise of
judgment by the Commission and by the court
Page 310 U. S. 349
in appraising the same evidence has led to these opposing
conclusions.
The tariffs apply on
"'All freight' [except as otherwise provided] . . . which has
been transported to . . . [an] origin station . . as a part of a
truckload consignment or carload consignment moving under tariffs
or schedules lawfully on file with the Interstate Commerce
Commission and immediately reshipped in the original packages as an
L.T.L. [less than truckload] shipment: or"
"'All freight,' . . . which is to be transported to . . . [a
named] destination station . . . as an L.T.L. shipment, and
immediately reshipped in the original package as part of a
truckload consignment or carload consignment moving under tariffs
or schedules lawfully on file with the Interstate Commerce
Commission."
It is evident that these special tariffs are available only to
shippers who intend and are able (a) to arrange immediate further
transportation in carloads or truckloads for commodities that have
been carried in less than truckload lots, or (b) to move
commodities in less than truckload lots, immediately after they
have been carried as part of a carload or truckload. While, as has
been noted, some few large shippers may possibly avail of the
tariffs, there is no question about the finding of the court below
that the "principal traffic which will be carried under the
suspended rates is what is called by the Commission
freight
forwarder traffic.'"
Almost since its inception, the Commission has been called upon
to exercise its judgment relative to the Interstate Commerce Act as
applied to forwarders. [
Footnote
9] Initial hostility of the railroads caused them to deny
forwarders the advantage of their published rates. However,
when
Page 310 U. S. 350
called upon to decide, the Commission held that the railroads'
action discriminated against forwarders and declared forwarders to
be entitled as shippers to published carload rates. This Court
sustained the action of the Commission. [
Footnote 10]
About 1920, prior to the Motor Carriers Act, forwarders began to
utilize motor carriers. Forwarders and truckers operated under
individual contracts providing divisions of the complete line haul
charge. After the tariff provisions of the Motor Carriers Act went
into effect, forwarders filed tariff schedules with the Interstate
Commerce Commission on the assumption that they were subject to the
Act as common carriers. Tariffs so filed were, however, ordered
cancelled by the Commission upon the ground that forwarders were
not motor carriers subject to the Act. A three-judge District Court
upheld the Commission, [
Footnote
11] and this Court affirmed. [
Footnote 12]
Here, the complaint itself has alleged that the so-called
"proportional" tariffs under consideration "name rates which are
identical with" the divisions of through L.C.L. rates which
respondents would have received had the forwarders' tariffs been
upheld. And, as stated by the Commission,
"Stripped of protective coloring, these rates are published as
proportional rates primarily as a matter of expediency to serve the
purpose of certain freight forwarders and to perpetuate in another
form so-called divisions of purported joint rates of the freight
forwarded."
Respondents contend that the Commission improperly concluded
that the cancelled tariffs create undue preferences or advantages
resulting in unjust discriminations in
Page 310 U. S. 351
violation of § 216(d) because there was no evidence that the
suspended rates would subject any particular person or type of
traffic to disadvantage or injury; while the suspended rates,
applicable on all classes of traffic, might be lower as to some
commodities, the aggregate compensation from them would not be less
than that from like local traffic if all such local traffic is
considered; services rendered by respondents to the forwarders are
unlike, and less burdensome than, local services rendered
individual shippers; services rendered the forwarders are on longer
hauls than on other local less than truckload commodity traffic;
terminal services rendered forwarders by respondents are less
expensive than in the case of other shippers; forwarders bear the
expense of soliciting business, thereby relieving respondents of
that burden; the only evidence before the Commission was introduced
by respondents, and no shippers complained of injury. [
Footnote 13]
Weighty as these arguments were, they did not persuade the
Commission that forwarders could, without discrimination, be given
lower L.T.L. rates than other shippers. The Commission was
impressed by the facts that the proposed rates were not in reality
available to all of the shipping public, and, in practical effect,
would operate for the special benefit of the forwarders, and would
not benefit the owner of goods shipped; that § 216(d) of the Act
represented a manifestation of the congressional purpose in Part I,
§ 2, and Part II, § 202(a) of the Interstate Commerce Act, to
prevent favoritism by insuring equality of treatment on rates for
substantially similar services, and that the proposed tariff would
afford
"forwarders . . . and possibly a very few large shippers . . .
transportation at rates lower
Page 310 U. S. 352
than the rates which . . . [would] be charged certain other
shippers under substantially similar circumstances and conditions,
in violation of § 216(d)."
Moved by these considerations, the Commission concluded that the
mere fact that forwarders might ordinarily furnish a volume of
traffic greater than but identical in kind with that furnished by
individual shippers did not justify lower rates for forwarders.
"It is not disputable that, from the beginning, the very purpose
for which the Commission was created was to bring into existence a
body which, from its peculiar character, would be most fitted to
primarily decide whether, from facts, disputed or undisputed, in a
given case, preference or discrimination existed. [
Footnote 14]"
And where a court substituted
"its judgment as to the existence of preference for that of the
Commission, on the ground that, where there was no dispute as to
the facts it had a right to do so, [the court] obviously exerted an
authority not conferred upon it by the statute. [
Footnote 15]"
So here, it has been pointed out that there was no dispute in
the evidence before the Commission, all of which was introduced by
respondents. But the differing inferences as to discrimination
finding possible support in that evidence are made to stand out by
the persuasive reasoning advanced in both the majority and minority
opinions of the Commission. The Interstate Commerce Act does not
attempt to define an unlawful discrimination with mathematical
precision. Instead, different treatment for similar transportation
services is made an unlawful discrimination when "undue," "unjust,"
"unfair," and "unreasonable." And the courts have always recognized
that Congress intended to commit to the Commission the
determination, by application of an informed judgment
Page 310 U. S. 353
to existing facts, of the existence of forbidden preferences,
advantages, and discrimination. [
Footnote 16]
A special allowance to a forwarder as an inducement to ship
goods by a particular carrier would be an illegal rebate. [
Footnote 17] Similarly, and as
previously pointed out, forwarders are shippers protected by the
Interstate Commerce Act from discrimination by carriers. [
Footnote 18] As shippers, forwarders
do business subject to the paramount principle that Congress
intended our national transportation system to operate without
favoritism. Pursuant to its duty to apply that principle upon a
national scale, the Commission can prevent unjust rate
discrimination by carriers against other shippers and in favor of
forwarders. The particular problem here involved is but a segment
of the larger complicated national problem of rates with which the
Commission must deal. As exemplified by this record, the Commission
is "informed by experience" [
Footnote 19] of years in its consideration of the
relationship of forwarders to our national transportation
system.
The fact that the Commission acted on its motion without
complaints by individual shippers did not detract
Page 310 U. S. 354
from the Commission's power to protect and maintain a
transportation system free from partiality to particular shippers.
The Commission acted in its capacity as a public agency, and
carried out duties imposed upon it by Congress in the interest of
shippers generally, the national transportation system, and the
public interest. [
Footnote
20] Its order was the embodiment of the Commission's judgment
that the proposed tariff was a discrimination prohibited by the
Act. "The judgment so exercised, being supported by ample evidence,
is conclusive." [
Footnote
21]
The judgment of the court below is reversed, and the bill is
ordered dismissed.
Reversed.
[
Footnote 1]
49 Stat. 543.
[
Footnote 2]
See Interstate Commerce Comm'n v. Delaware, L. & W. R.
Co., 220 U. S. 235,
220 U. S.
243.
[
Footnote 3]
Division 5 first reported, 10 M.C.C. 556. On reconsideration,
the report was by the Commission, 17 M.C.C. 573.
[
Footnote 4]
28 U.S.Code, §§ 45, 45a, 47a, 345.
[
Footnote 5]
Two Commissioners, in dissent, thought this was "true only in
part. They are lower than some, but by no means all, of the
corresponding local rates."
[
Footnote 6]
Sec. 216(d):
"It shall be unlawful for any common carrier by motor vehicle
engaged in interstate or foreign commerce to make, give, or cause
any undue or unreasonable preference or advantage to any particular
person, port, gateway, locality, or description of traffic in any
respect whatsoever, or to subject any particular person, port,
gateway, locality, or description of traffic to any unjust
discrimination or any undue or unreasonable prejudice or
disadvantage in any respect whatsoever:
Provided, however,
That this paragraph shall not be construed to apply to
discriminations, prejudice or disadvantage to the traffic of any
other carrier of whatever description."
[
Footnote 7]
See Sec. 217(a), (b).
[
Footnote 8]
The District Court found that some of the local "rates are
higher and some lower than the suspended rate," but the average
revenue derived by the respondents from local rates "per hundred
pounds . . . upon the whole, is less than" that produced by the
suspended rates.
[
Footnote 9]
See, e.g., Export Shipping Co. v. Wabash R. Co., 14
I.C.C. 437; Freight Forwarding Investigation, 229 I.C.C. 201; Acme
Fast Freight, Inc., Common Carrier Application, 8 M.C.C. 211.
[
Footnote 10]
Interstate Commerce Comm'n v. Delaware, L. & W. R.
Co., 220 U. S. 235.
[
Footnote 11]
8 M.C.C. 211;
Acme Fast Freight, Inc. v. United
States, 30 F. Supp.
968.
[
Footnote 12]
Acme Fast Freight, Inc. v. United States, 309 U.S.
638.
[
Footnote 13]
These arguments for sustaining the tariffs were all forcefully
presented in the dissenting opinion of Chairman Eastman, concurred
in by Commissioner Mahaffie.
[
Footnote 14]
United States v. Louisville & Nashville R. Co.,
235 U. S. 314,
235 U. S.
320.
[
Footnote 15]
Id.
[
Footnote 16]
Swayne & Hoyt Ltd. v. United States, 300 U.
S. 297,
300 U. S. 304;
Interstate Commerce Comm'n v. Del., L. & W. R. Co.,
supra, at
220 U. S. 255;
Manufacturers' Ry. Co. v. United States, 246 U.
S. 457,
246 U. S. 481;
Texas & Pac. Ry. Co. v. Interstate Commerce Comm'n,
162 U. S. 197,
represents an apparent exception at an early date before the
function of the Commission had become fully outlined against the
background of time and the empiric pattern of litigation.
(Commission's bill to enforce its holding that the difference
between domestic and imported merchandise could not justify
different rates between the port of reception and point of
delivery, ordered dismissed).
[
Footnote 17]
Lehigh Valley R. Co. v. United States, 243 U.
S. 444.
[
Footnote 18]
Interstate Commerce Comm'n v. Del., L. & W. R. Co,
supra, at
220 U. S.
255.
[
Footnote 19]
Cf. Standard Oil Co. v. United States, 283 U.
S. 235,
283 U. S. 239;
Illinois Central R. Co. v. Interstate Commerce Comm'n,
206 U. S. 441,
206 U. S.
454.
[
Footnote 20]
Cf. Inland Steel Co. v. United States, 306 U.
S. 153,
306 U. S.
157.
[
Footnote 21]
United States v. Illinois Central R. Co., 263 U.
S. 515,
263 U. S.
525-526.