Since May 1, 1951, railroads serving the port of Norfolk, Va.,
have refused to pay an allowance to the Army for the wharfage and
handling services the Army performs for itself on military export
traffic passing through Army base piers. In their tariffs, the
railroads assumed the obligation to furnish such services for all
shippers that complied with the tariffs, and accordingly furnished
the services for commercial shippers at public sections of the same
piers without additional charge. Because the Army provides these
services itself, it claimed a right to the $1.00 per ton paid by
the railroads on behalf of commercial shippers. A complaint
charging the railroads with violating the Interstate Commerce Act
was dismissed by the Interstate Commerce Commission, and the United
States sued to set aside the order.
in the circumstances of this case, the refusal of
the railroads to make the allowance to the Army did not subject the
Government to unjust discrimination and did not constitute an
unreasonable practice in violation of the Interstate Commerce Act.
Pp. 352 U. S.
(a) The circumstances of Army shipments are markedly different
from those of private shippers that received wharfage and handling
services; and the Army was treated identically with those shippers
who, for business reasons, did not care to comply with the tariff
requirements. Pp. 352 U. S.
(b) Although the Army hired the same private company as did the
railroads to operate the Army portion of the base, the Army's
control was "absolute." Pp. 352 U. S.
(c) The method of handling government freight did not comply
with the tariff requirements. P. 352 U. S.
(d) Any deviation from tariffs by carriers violates § 6(7) of
the Interstate Commerce Act unless they grant a concession to the
United States under § 22. P. 352 U. S.
(e) The Government was being treated just as any shipper who
decides not to take advantage of the services offered in the tariff
and takes deliveries of export rate traffic at private piers under
his own control. Pp. 352 U. S.
Page 352 U. S. 159
(f) That the Government took control of the piers to meet a
national emergency cannot convert the Government's operation of its
private piers into a category different from that of private
shippers. P. 352 U. S.
(g) The fact that the operations of the Government and the
railroads are in the same pier area is immaterial. P. 352 U. S.
(h) If the railroads gave an allowance in these circumstances,
excepting one given as a concession to the Government under § 22 of
the Act, they would have to give it at all private piers where the
shipper wanted to handle wharfage at its own discretion. P.
352 U. S.
(i) The Government has the right to have its shipments accorded
the same privileges given others; in emergencies, its traffic my
have "preference or priority in transportation," and it may be
granted and may accept preferences in rates, but it cannot
otherwise require extra services or allowances. P. 352 U. S.
(j) United States v. United States Smelting Co.,
339 U. S. 186
distinguished. P. 352 U. S.
(k) Whether circumstances and conditions are sufficiently
dissimilar to justify differences in rates or charges is a question
of fact for the Commission's determination. Pp. 352 U. S.
132 F. Supp. 34, affirmed.
Page 352 U. S. 160
MR. JUSTICE REED delivered the opinion of the Court.
This appeal requires a determination of whether railroads
serving the port of Norfolk, Virginia, must grant the United States
an allowance for the Government's performance of certain wharfage
and handling services on its own export freight. For shippers who
conform to the requirements of the tariff, the railroads assume
these charges as a part of the rate. The United States, however,
found it impractical to conform to the tariff requirements.
The present litigation was instituted pursuant to 28 U.S.C. §
2325, in a three-judge District Court of the District of Columbia
by the United States, through its Department of the Army, against
the Interstate Commerce Commission and the United States, to set
aside the Commission's order in United States v. Aberdeen &
Rockfish R. Co.,
289 I.C.C. 49. That order dismissed a
complaint filed by the United States on November 20, 1951, against
several named railroads charging them with violations of the
Interstate Commerce Act. The District Court, one judge dissenting,
dismissed the complaint. 132 F. Supp. 34. We noted probable
jurisdiction. 350 U.S. 930.
Since May 1, 1951, the railroads have refused to pay an
allowance to the Army for the wharfage and handling [Footnote 1
] services the Army performs on
military export traffic passing through Army base piers in Norfolk,
Virginia. The railroads have assumed in their tariffs the
Page 352 U. S. 161
furnish these accessorial services for all shippers that comply
with their tariffs. And, in accordance with these tariffs, the
railroads have furnished the services for commercial shippers at
public sections of the same piers without additional charge. These
services were performed for the Army and the railroads by the same
private company -- for the Army under contract to carry out its
orders for terminal and storage services; for the railroads by
contract to act as the carriers' agent in accordance with their
The Army sought a determination that the railroads' refusal to
make an allowance to it to the same extent that the railroads paid
the private company, Stevenson & Young, for handling of private
shipments subjected the Government to unjust discrimination and
constituted an unreasonable practice in violation of §§ 1, 2, 3,
and 6 of the Interstate Commerce Act. [Footnote 2
] The Army also requested
Page 352 U. S. 162
an order that the railroads cease and desist from such refusal
in the future. [Footnote 3
The transfer of export freight from rail carriers to outbound
water carriers is made on piers or wharves that allow the unloading
of freight from railroad cars to within reach of ships' tackle.
Railroads are under no statutory obligation to furnish such piers
or to unload carlot freight, Pennsylvania R. Co. v. Kittaning
Iron & Steel Mfg. Co., 253 U. S. 319
253 U. S. 323
] In general, the
railroads have taken on the duty of wharfage and handling for
freight consigned for overseas shipment. [Footnote 5
] In some instances, railroads have charged
for the use of the piers ("wharfage") and the necessary "handling"
separately from their charge for
Page 352 U. S. 163
line haul transportation. In other cases, there has been only a
single factor export rate (one inclusive charge) providing for
limited shipside delivery with the railroad furnishing these
accessorial services pursuant to their tariffs at no extra charge
to the shipper. The latter practice has been generally followed by
railroads serving North Atlantic ports. Where railroads do not have
their own piers, they have provided these services by contracting
with commercial terminal operators.
The Norfolk piers, involved in this matter, were managed by such
operators. They were built by the United States after World War I,
and have been leased in part or in whole to a series of commercial
operators since then. The leases were cancelled during World War
II, but they were leased to Stevenson & Young, a private
terminal operator, at tne end of that war. The railroads here
involved, using the single factor shipside rate described above,
contracted with Stevenson & Young, as their agent, to perform
the wharfage and handling for 25� per ton for wharfage and 75� per
ton for handling on both commercial and military freight. But, with
the advent of the Korean hostilities, the Government again
cancelled the leases, and the Army took entire control of the
piers. Apparently the military shipments require special handling
and storage. To assure its complete satisfaction, the Army hired
Stevenson & Young to perform those services under a general
pier-operating contract for the Army. [Footnote 6
Page 352 U. S. 164
The unused portions of the piers were later released by the
Government, by a contract dated December 28, 1951, for the
commercial operations of Stevenson & Young. By that contract,
Stevenson & Young leased the unused parts for 1952 from the
United States, for a public commercial maritime terminal. It was
over these leased portions of the piers that the lessee carried on
its public warehousing activities in accordance with the railroad
A typical tariff arrangement appears in the note below. It is
the basic exhibit in this case. [Footnote 7
] It was bottomed on
Page 352 U. S. 165
a contract of April 5, 1947, between the Pennsylvania Railroad
and Stevenson & Young. By that contract, Stevenson & Young,
as a public wharfinger, agreed to act "as directed by the Railroad"
and as its agent for wharfage and handling of "export, import,
coastwise and intercoastal freight" in accordance with the tariff
upon the facilities it acquired on the Army base. The agent assumed
responsibility for freight charges and care of freight in its
charge. It agreed, paragraph 4, that:
"The Terminal [Stevenson & Young] shall provide adequate
facilities for the handling and storage of the freight subject to
this agreement, shall provide access to the Railroad or its agent,
the Norfolk and Portsmouth Belt Line Railroad, for the delivery of
cars to and from shipside without interference or
Page 352 U. S. 166
interruption, and shall load and unload cars promptly without
delay of freight or railroad equipment."
Paragraph 13 said:
"This agreement shall terminate absolutely and immediately
whenever the Terminal ceases to operate the said facilities as a
public wharfinger for the handling of freight, and in any event
shall be terminable by either party on thirty days notice in
A large amount of private commercial traffic continued over the
released portions of the piers, and the railroads continued to
absorb the cost of that wharfage and handling by paying Stevenson
& Young $1.00 per ton of freight.
The result of the Army's insistence on operating its own pier
facilities is that the Army pays the same export rates without
receiving wharfage and handling services as commercial shippers do
for whom the railroads provide those services at no additional
charge. Because the Army provides these services itself, it claims
a right to the $1.00 per ton payment paid by the railroads on
behalf of the commercial shippers.
In terms of the Interstate Commerce Act, the Government bases
its argument on two grounds:
"The railroads' refusal to absorb wharfage and handling charges
on Army freight to the same extent that they absorb such charges on
civilian freight moving over the same piers under identical rates
is unjustly discriminatory in violation of Section 2 of the
Interstate Commerce Act."
"The railroads' refusal to pay for wharfage and handling on Army
freight was an unjust and unreasonable practice in violation of
Section 1(6) of the Act. "
Page 352 U. S. 167
It should be noted that the United States is not attacking the
form of the tariff, which provides for both line haul service and
the accessorial services in the single factor export rate.
] Consequently, this
case involves only charged discrimination and injustice. Cf.
United States v. Interstate Commerce Commission, 337 U.
, 337 U. S.
-438. In short, the United States seeks to be
excepted from the tariff requirement that calls for the shipper to
use a public wharfinger under contract to the railroads for
performance of the wharfage and handling. [Footnote 9
Page 352 U. S. 168
This controversy is similar to one that arose out of the Army's
cancellation of the Norfolk pier leases during World War II,
United States v. Aberdeen & Rockfish R. Co.,
I.C.C. 141. Interpreting railroad practices much like those now
before this Court, the I.C.C. determined that the Army was not
being discriminated against. However, on review, the Court of
Appeals for the District of Columbia remanded the case to the
I.C.C. for further exposition and clarification. 91 U.S.App.D.C.
178, 198 F.2d 958. On remand, the I.C.C. reaffirmed its earlier
determination, and no appeal has been taken from that order. 294
I.C.C. 203. Because the question of whether the Army was
discriminated against following the Government's World War II lease
cancellation has never been finally passed upon, the District of
Columbia ruling is not inconsistent with the Commission's
conclusion in this litigation.
The Government asserts that it is charged more on its export
shipments through the Norfolk Army Base than commercial shippers
under substantially similar circumstances. Such an exaction would
be, of course, an unjust and unreasonable practice of
discrimination. But it seems apparent that the circumstances of
Army shipments are markedly different from those of private
shippers that receive wharfage and handling services. Moreover, it
seems equally clear that the Army is treated identically with those
shippers who, for business reasons, do not care to comply with the
The Army routed its export shipments direct to itself at the
Army base as consignee. As is shown by the contracts summarized
above, the entire Army base property was under military control
except for the commercial
Page 352 U. S. 169
operations of Stevenson & Young. The base included piers,
bulkheads, railways and storage warehouses, and railroad switches,
tracks and yards. The Commission found that the Army had determined
"that ports of embarkation must be operated by personnel of the
military service and civilian employees of the Government." 289
I.C.C. at 53. [Footnote
Although the Army hired the Stevenson company to operate the
Army portion of the base, the Army's control was "absolute."
"[An Army yardmaster] is on duty at all times to give
instructions for disposition of cars of Army freight delivered at
the base. When either the Belt Line or the Virginian has cars for
delivery, the yard clerk at the base is notified by telephone. If
placement at a pier or warehouse is ready for any of those cars,
the carrier is told where to make delivery. These instructions are
confirmed in writing and handed to the conductor when he arrives at
the base. Cars for which placement orders are not ready are left in
the pier No. 1 yard by the Belt Line and in the
Page 352 U. S. 170
uptown yard by the Virginian, in accordance with a general
understanding as to the disposition of such cars."
289 I.C.C. at 54-55. Such direction was necessary. As the
Commanding Officer said, in regard to switching and placing by the
"The Witness: If you would let them switch themselves, they have
to know what they are doing, we have to give them the switch list
and know what to do with it."
"* * * *"
"Q. Will you permit them to do it at their own convenience, in
an orderly manner?"
"A. I don't know how any business can be run if you run it at
the convenience of someone else. They couldn't possibly do it at
their own convenience unless their convenience coincided with our
"Q. And yet you couldn't permit the terminal operator to operate
in a normal way."
"A. No, because that involves a management problem. You would
have to have a management team in here to settle the accounts of
the terminal operator. They don't work for nothing, as you quite
well know. Somebody has to monitor all that, manage the whole
thing, and direct the bringing in of the cargo. That is all in
over-lay staff of ours, which is large enough."
This Army control over the movement of freight of those portions
of the piers that were not leased to Stevenson & Young left the
railroads serving the base without authority in those areas to
direct the switching, spotting,
Page 352 U. S. 171
and removal of the cars according to their own convenience. 289
I.C.C. at 64.
The fact that the Army controls its areas of the base, and the
fact that the railroads handle their own wharfage and switching on
their portions as they choose, are not mere formal differences.
They are factors in traffic movement.
"It is the right of every shipper, including the Government as
here concerned, to prohibit a carrier from performing switching
upon private tracks, even though the carrier might be willing and
able to perform the service. When so prohibited by the shipper, as
was here done by the Army, the carrier's obligation to perform the
service is discharged, and the payment of allowances to the shipper
for its performance of the service, in whole or in part, would be
unlawful, except as a voluntary concession of the carriers to the
Government under section 22."
289 I.C.C. at 65.
The problems of the assumption by the carriers of the costs of
wharfage and handling at ports have a long history. The Norfolk
area has not been an exception, as has been heretofore indicated.
p. 352 U. S. 168
When the Government again in 1951 found it
desirable to cancel the leases, it was familiar with the various
facets of the controversy over wharfage and handling. [Footnote 11
Page 352 U. S. 172
It is obvious that the method of handling government freight
does not comply with the tariff requirements. It does not move over
wharf properties owned, leased, and operated by the Stevenson
company "as a public terminal facility of the rail carriers." Rule
"At all times during that period, military traffic was stored on
and handled over wharf and other properties on the Army Base which
were under the exclusive control of the Army."
289 I.C.C. at 60. Any deviation from tariffs by carriers
violates § 6(7) of the Act, 49 U.S.C. § 6(7), unless they grant a
concession under § 22. [Footnote
The Government actually is being treated just as any shipper who
decides not to take advantage of the services offered in the
tariff. It seeks a preference over these other shippers who take
deliveries of export rate traffic at piers under their own control,
so-called private piers. The general practice at North Atlantic
ports is to refuse to absorb handling charges at private piers,
even though they are absorbed where the carriers have control of
Page 352 U. S. 173
The record shows 84 private piers along the Atlantic Coast where
the railroads make no allowance or compensation for handling or
wharfage. It was testified:
"One of the principal limitations on the port practices which I
shall mention is the restriction of the loading practice to
railroad or other public piers, as distinguished from private piers
operated by shippers."
There was no evidence to the contrary, and the Commission
accepted that situation as a fact. 289 I.C.C. at 58, 61, 63. The
difference between a public and a private pier under the tariffs is
whether the railroads have control of the areas directly or through
their agents, or whether the shipper or consignee has control.
There is no objection to such a practice generally, whether the
line haul rates and the handling rates are stated in a single
factor rate or separately. To require the carriers to furnish such
accessorial services at every private pier would disperse the
traffic, cause the maintenance of more crews or watchmen, and thus
add to the cost of transportation.
The Government contends that it is not in the same position as
other shippers who control private piers, because it took control
of the Norfolk piers to meet a national emergency. But we think
that the emergency cannot convert the Government's operation of its
private piers into a category different from that of private
shippers. [Footnote 13
Page 352 U. S. 174
And the fact that the operations of the Government and the
railroads are in the same pier area seems to us immaterial. If the
railroads gave an allowance here, excepting one given under § 22 of
the Act, they would have to give it at all private piers where the
shipper wanted to handle wharfage at its own discretion. Cf.
Merchants' Warehouse Co. v. United States, 283 U.
; Weyerhaeuser Timber Co. v. Pennsylvania R.
229 I.C.C. 463.
The Government has the right to have its shipments accorded the
same privileges given others. Moreover, in emergencies, its traffic
may have "preference or priority in transportation," 49 U.S.C. §
1(15)(d), and it may be granted and may accept preferences in
rates. [Footnote 14
] But the
Government cannot otherwise require extra services or allowances.
In the situation here presented, it could have used the same
facilities as commercial shippers and obtained the benefits of the
tariff. The evidence to this effect is uncontradicted. [Footnote 15
] The Commission accepted
it as a fact. 289 I.C.C. at 58, 60-61, 63.
Page 352 U. S. 175
The Commission drew from the above circumstances a conclusion
that the tariffs and conduct of the railroads are not shown to have
The United States argues that carriers cannot perform
accessorial services in such a way that "some shippers would pay an
identical line haul rate for less service than that required by
other industrial plants." United States v. United States
Smelting Co., 339 U. S. 186
339 U. S. 197
To do so would indeed violate § 2 of the Interstate Commerce Act.
] But the
case is not apposite. We affirmed a Commission
order enjoining intra-plant car switching and spotting services
after termination of the line haul. It terminated at a "convenient
point" on a siding at consignee's plant. Our decision there turned
on and upheld the Commission's power to determine the end point of
the line haul. Because the line haul tariffs included only car
movement to and from that convenient point, some shippers received
more service than others for the line haul rate. 339 U.S. at
339 U. S. 197
] Thus, our
determination was based on the unlawful preference allowed some
shippers by the tariffs, since those discriminated against could
not get the same service as other shippers.
Furthermore, whether the circumstances and conditions are
sufficiently dissimilar to justify differences in rates
Page 352 U. S. 176
or charges is a question of fact for the Commission's
The District Court dismissed the complaint on the record before
the Commission, and we affirm.
MR. JUSTICE BRENNAN took no part in the consideration or
decision of this case.
"Wharfage refers to the provision of space on the docks for
storage of freight pending transfer between freight cars and cargo
vessels; handling refers to the unloading of goods from freight
cars and placing them on the docks within reach of ship's tackle. .
United States v. Interstate Commerce Commission,
U.S.App.D.C. 178 at 182, 198 F.2d 958 at 962. See Wharfage
Charges at Atlantic & Gulf Ports,
157 I.C.C. 663, 672.
"It is made the duty of all common carriers subject to the
provisions of this chapter to establish, observe, and enforce just
and reasonable classifications of property for transportation, with
reference to which rates, tariffs, regulations, or practices are or
may be made or prescribed, and just and reasonable regulations and
practices affecting classifications, rates, or tariffs . . . which
may be necessary or proper to secure the safe and prompt receipt,
handling, transportation, and delivery of property subject to the
provisions of this chapter upon just and reasonable terms, and
every unjust and unreasonable classification, regulation, and
practice is prohibited and declared to be unlawful."
49 U.S.C. § 1(6).
"If any common carrier subject to the provisions of this chapter
shall, directly or indirectly, by any special rate, rebate,
drawback, or other device, charge, demand, collect, or receive from
any person or persons a greater or less compensation for any
service rendered or to be rendered, in the transportation of
passengers or property, subject to the provisions of this chapter,
than it charges, demands, collects, or receives from any other
person or persons for doing for him or them a like and
contemporaneous service in the transportation of a like kind of
traffic under substantially similar circumstances and conditions,
such common carrier shall be deemed guilty of unjust
discrimination, which is prohibited and declared to be
49 U.S.C. § 2.
"It shall be unlawful for any common carrier subject to the
provisions of this chapter to make, give, or cause any undue or
unreasonable preference or advantage to any particular person,
company, firm, corporation, association, locality, port, port
district, gateway, transit point, region, district, territory, or
any particular description of traffic, in any respect whatsoever;
or to subject . . . any particular description of traffic to any
undue or unreasonable prejudice or disadvantage in any respect
whatsoever. . . ."
49 U.S.C. § 3(1).
As §§ 1(6), 2 and 3(1) of the Act only are material on this
appeal, they alone are quoted in pertinent part.
No reparations were requested in this proceeding. However, as
the Government indicates, if the railroads' refusal to pay for
wharfage and handling is held to be a violation of the Act, the
Government may deduct the prior "overpayments" from future sums due
the railroads. See
49 U.S.C. § 66.
289 I.C.C. at 61.
They can assume such and similar accessorial services by tariffs
approved by the Commission as fair. See Baltimore & Ohio R.
Co. v. United States, 305 U. S. 507
305 U. S. 524
It is discrimination or unfairness in the tariffs that calls for
correction. United States v. United States Smelting Co.,
339 U. S. 186
339 U. S.
-197. Such determinations are on a case-by-case
basis. See, e.g., United States v. Wabash R. Co.,
321 U. S. 403
It called for performance of
"all terminal and pier warehouse intransit storage services
excluding physical plant facilities (piers, warehouses, etc.); all
checking and clerking services in connection therewith; all
policing (sweeping and cleaning) services; and such other terminal
services (excluding vessel checking and stevedoring; watchmen and
guard service; utilities and maintenance of premises service) as
may be designated herein, and, in connection therewith, . . . [the
performance of] all the duties of a terminal operator in such areas
of the Norfolk Army Base or at any pier in or about the Hampton
Roads harbor area as may be designated by the Contracting Officer.
. . ."
"Statement of Excerpts from Penna. R.R. Tariff ICC 3007, Setting
Forth the Regulations and the Compensation Which the Penna. R.R.
Will Pay to the Norfolk Terminals Division of Stevenson &
Young, Inc., for Wharfage Facilities Furnished and Handling
Services Performed at Norfolk, Va."
". . . wharfage and handling charges published in Norfolk and
Portsmouth Belt Line Railroad Company Tariff No. 6-J. I.C.C. 105,
will be included in the freight rate to or from Norfolk, Va., on
Export, Import, Intercoastal and Coastwise freight traffic, any
quantity, . . . subject to the following conditions:"
"* * * *"
"(b) When receipt from or delivery to vessel is in rail service
over wharf properties owned or leased by Norfolk Terminals Division
of Stevenson & Young, Inc., and operated by Norfolk Terminals
Division of Stevenson & Young, Inc., as a public terminal
facility of the rail carriers."
"[On January 1, 1952, the above rule (b) was changed. As the
change strengthened the tariff in favor of the railroads, it is not
289 I.C.C. at 59.]"
"* * * *"
"The Pennsylvania Railroad Company will pay to Norfolk Terminals
Division of Stevenson & Young, Inc., as its agent, for wharfage
facilities furnished and hanling services performed on traffic
described and conforming to the conditions specified above,
compensating in the following amounts in cents per 100 pounds,
except as otherwise provided."
[Generally] 1 1/4 3 3/4 or 75 cents per ton
[There were exceptions]
"(1) (a) Handling Charges will not be absorbed on freight in
open cars, except on lumber,. . . ."
"(b) When stowing in open cars is required, handling charge of
1/2 cent per 100 pounds or 10 cents per 2000 pounds will be
absorbed on lumber, all kinds. . . ."
"(2) (a) Wharfage and/or handling charges will not be absorbed
on freight accorded literage, or on Grain or any other inbound or
outbound traffic milled, mixed, malted, or stored in transit at the
wharf properties operated by Norfolk Terminals Division of
Stevenson & Young, Inc. [or numerous other warehouses and
"(b) In all other respects on Export, Import, Intercoastal, and
Coastwise traffic, the wharfage, handling, storage and/or other
charges applicable at the wharf properties operated by Norfolk
Terminals Division of Stevenson & Young, Inc. [or numerous
other warehouses and terminals] will be in addition to the rate to
and from Norfolk, Va. or Portsmouth, Va., as the case may be,
published in tariffs lawfully on file with the Interstate Commerce
See United States v. Aberdeen & Rockfish R. Co.,
289 I.C.C. at 61. It seems clear that such an attack could be made
if present conditions justified a reexamination. The War Department
attacked the practice in 1921, but its objection was overruled by
the I.C.C. in 1929, after a thorough investigation, in a 6-5 vote.
Wharfage Charges at Atlantic and Gulf Ports,
663, 678-686. Separation was sought largely to force the railroads
to increase terminal charges so that competitive municipal and
other non-railroad wharfingers might expand to develop better port
facilities. The Commission reached the conclusion that such
separation was inadvisable, and there was no evidence of injury
from such practice.
"The carriers afford port facilities in competition with each
other at the ports and a competitive condition exists which can not
be eliminated by the mere segregation of uniform port charges. If
the port charges were uniform at all ports, the carriers still
could meet competition by shrinking their line haul rates. If the
port charges were different at each port, the carriers having the
larger charge could shrink their line haul rates sufficiently to
offset the larger port charge, and the real substance of the
present ship-side rates, where they exist, would be
at 684. It was the sensitivity of the foreign
importers and domestic ports to rates so stated that led to this
conclusion. In the highly competitive railway network, export
traffic is an important factor to the carriers and the ports. Costs
of port handling vary widely, 157 I.C.C. at 673. Such variations
are now absorbed in the practice of quoting shipside delivery in
Such an exception is beyond the requirements of § 6(8) of the
Act that provides for preference and precedence for United States
shipments in emergencies.
This conclusion was amply supported by testimony of a Government
witness, the Commanding Officer, Hampton Roads, Port of
"Only such personnel has the requisite training in the intricate
nomenclature pertaining to the items and to the documentation
required in connection with the proper loading and dispatching of
"A vast amount of pre-stowage planning of vessels in a port of
embarkation must precede the labor of actual loading. Precise
knowledge of overseas requirements must be available. Therefore,
controls required to be exercised of all shipments must be
absolute. These begin when freight is ordered shipped from points
of origin and continue until the various commodities reach their
final destination overseas."
The Government's request for export rates on its war shipments
was granted by the railroads so that commercial and government
export freight had the same rates. Cf. War Materials Reparation
294 I.C.C. 5. This was a substantial concession by the
railroads, contrary to their tariffs, and done only because of § 22
of the Interstate Commerce Act, 49 U.S.C. § 22, allowing
concessions to the United States. 289 I.C.C. at 63. The railroads
have also spotted cars for the Army after delivery in the storage
yards without extra charge. Other shippers would be charged for
such service. 289 I.C.C. at 55. See United States v. American
Sheet & Tin Plate Co., 301 U. S. 402
Such relaxation of possible additional charges by the railroads
does not decide the Army's claim for allowances for handling. The
Commission did take the concessions into consideration, however, as
to the fairness of the refusal to grant the claimed allowances. 289
I.C.C. at 64.
Although the Government seeks only an allowance of the published
charge absorbed by the carriers of $1.00 per ton, the kind of
service it requires in its area is illustrated by the fact that it
pays $2.87 for handling. 289 I.C.C. at 61 et seq.
The Army's reliance on Atchison, T. & S.F. R. Co. v.
United States, 232 U. S. 199
misplaced. There, this Court sustained the Commission in granting a
shipper of fruit the right to pre-cool the car and contents,
although the carriers were in a position to refrigerate, though not
in the better way. As the carriers were not in a position to
perform the service properly, they could not, by a tariff, deny the
consignor such right.
"Nothing in this chapter shall prevent the . . . handling of
property free or at reduced rates for the United States. . . ." 49
U.S.C. § 22.
"If it were not for the fact that the Government has reasons for
handling its water-borne traffic differently from commercial
shippers, there would be no reason why the Government should not
use public piers like other shippers. There is no question but that
a private shipper operating his own pier and handling his own
traffic in a manner similar to the operation of the Norfolk Army
Base today would not be entitled to the port rates."
289 I.C.C. at 63:
"Evidence presented by the defendants supports their position
that it is not unreasonable to refuse to extend wharfage and
handling services to traffic handled over private piers when the
shipper does not wish to use adequate facilities of the defendants.
The defendants serving the Norfolk port area have had available
port facilities more than ample to handle all the military traffic
moving over the Army Base at Norfolk, at least on and since May 1,
49 U.S.C. § 2, n
A typical tariff reads:
"Delivery of a line haul carload shipment destined to smelter at
Leadville, Colo., will include movement within smelter plant over
track scales, to and from thaw-house, to and from a smelter
sampler, or to and from a combination sampler and concentrator to a
designated unloading point indicated by the sampling company."
339 U.S. at 339 U. S. 196
See also United States Smelting & Refining Co.,
I.C.C. 476, 478.
L. T. Barringer & Co. v. United States,
319 U. S. 1
319 U. S. 6
"Whether those circumstances and conditions are sufficiently
dissimilar to justify a difference in rates, or whether, on the
other hand, the difference in rates constitutes an unjust
discrimination because based primarily on considerations relating
to the identity or competitive position of the particular shipper,
rather than to circumstances attending the transportation service,
is a question of fact for the Commission's determination. Hence,
its conclusion that, in view of all the relevant facts and
circumstances, a rate or practice either is or is not unjustly
discriminatory within the meaning of § 2 of the Act will not be
disturbed here unless we can say that its finding is unsupported by
evidence or without rational basis, or rests on an erroneous
construction of the statute."
For the same reasons, in Baltimore & Ohio R. Co. v.
United States, 305 U. S. 507
305 U. S. 526
dealing with storage of goods in transit, and United States v.
American Tin Plate Co., 301 U. S. 402
301 U. S.
-408, dealing with post-line haul switching
practices, this Court has upheld the Commission's determination of
other shippers and its prohibitory
orders. See Seaboard Air Line R. Co. v. United States,
254 U. S. 57
Merchants' Warehouse Co. v. United States, 283 U.
; United States v. Wabash R. Co.,
321 U. S. 403
321 U. S.
MR. JUSTICE BLACK, with whom THE CHIEF JUSTICE concurs,
From the very beginning, the Interstate Commerce Act has made it
unlawful for railroads to discriminate by charging some shippers
more than others for carrying the same kind of freight the same
distance. The provisions of the Act make it clear that the ban on
such discrimination cannot be evaded by any contrivance or guise
Page 352 U. S. 177
accomplishes the prohibited end. In the present case, the
undisputed evidence, as well as the Interstate Commerce
Commission's findings, convinces me beyond doubt that the railroads
are subjecting the United States, as a shipper, to precisely the
kind of discrimination which the Act prohibits. When the mass of
verbiage which has befogged this case is stripped away, the issues
are not complex, and no expert guidance is needed for their proper
The Government owns several piers at Norfolk, Virginia which are
connected by tracks with the main lines of certain major railroads.
Storage space is provided on the piers for freight. For many years,
the piers were leased to a private terminal operator. This operator
has a contract which the railroads hauling to the piers to perform
handling and wharfage services with respect to their freight. The
railroads pay the operator $1 per ton for these services. They do
not charge shippers separately for this handling and wharfage, but
instead include the cost with the transportation charges in a
single line haul rate.
Shipments by the United States through the piers were handled
exactly the same as any other shipment. The operator, acting under
contract with the railroads, performed the necessary unloading and
storage; the railroads paid it $1 per ton for these services; and
the Government paid the railroads the single rate covering both
transportation and pier services. The Government was not required
to pay anything in addition to this single rate.
In 1951, however, with the outbreak of the Korean conflict, the
Government found it necessary to operate directly certain portions
of the piers in order to facilitate the shipment of military
supplies. The Government hired the same operator who was acting for
the railroads to perform the same services in handling government
shipments as he had before. The sole difference was that the
operator acted under contract with the Government, and
Page 352 U. S. 178
was paid by it, rather than by the railroads. The railroads
continued to charge the same line haul rate as before, however, on
government shipments. The Government requested that the railroads
continue to pay the $1 per ton for handling and wharfage of its
shipments. The railroads refused. The net result is that the
Government receives less services from the railroads than other
shippers although it pays the same rate. Or stated in a more
familiar manner, it is compelled to pay more than other shippers
for the same transportation even though they all ship the same kind
of freight from the same points to the same pier.
Nothing in the record below or in the arguments presented to us
justifies this plain discrimination. There is no finding, nor even
any indication, that it costs the railroads one penny more to
transport freight to the portions of the pier operated by the
Government than to the immediately adjacent parts of the pier
operated by their agent. And the mere fact that a discriminatory
rate is embedded in a tariff does not make it legal.
It is claimed that the railroads can establish a general rule
that they will not pay for wharfage and handling costs at private
piers. This is undoubtedly true, but it does not follow that they
can include within the line haul rate charges for handling services
at such piers that the railroads do not perform. Under any
realistic appraisal, the railroads' costs for handling and wharfage
services in the present situation are included as a part of their
line haul rate, and are in no sense a "free service." The
Government is compelled to pay this rate to get its goods
transported. But, as the Interstate Commerce Commission expressly
found, wartime conditions make it wholly impractical for the
Government in shipping certain military goods to use the wharfage
and handling services provided by the railroads under this rate.
The Government is entitled to recover that portion of the "line
Page 352 U. S. 179
rate which it is charged for services that it cannot use. That
is all it claims. There is no reason why the railroads should be
allowed to operate in a manner that exacts a transportation charge
from all shippers for benefits that some can enjoy and others,
although in exactly the same situation, cannot. As this Court said
in Union Pacific R. Co. v. Updike Grain Co., 222 U.
, 222 U. S.
"A rule apparently fair on its face and reasonable in its terms
may, in fact, be unfair and unreasonable if it operates so as to
give one an advantage of which another, similarly situated, cannot
I would reverse the judgment below.