No. MC-110117 (SUB-NO. 12)

KENDRICK CARTAGE CO.

EXTENSION-ALLIED OIL

COMPANY

Decided June 16, 1964

Upon petition, modification of permit heretofore issued in No. MC110117 (Sub-No. 5) found to be consistent with the public interest and the national transportation policy. Issuance of appropriate amended permit approved upon compliance with certain conditions, and petition in all other respects denied.

Daniel B. Johnson for petitioner.

Donald W. Smith for protestant.

REPORT OF THE COMMISSION ON PETITION

OPERATING RIGHTS REVIEW BOARD NUMBER 1, MEMBERS GAFFNEY, MILLS, AND SHOUP

BY THE BOARD:

Exceptions to the order recommended by the joint board were filed by petitioner, and protestant Girton Brothers, Inc., replied. Our conclusions differ from those recommended.

The petitioner, Kendrick Cartage Co., of Salem, Ill., is authorized, in part, to operate as a contract carrier by motor vehicle in the transportation of residual fuel oil, in bulk, in tank vehicles, from the refinery of Texaco, Inc., near Lawrenceville, Ill., to points in Indiana and Ohio, under a continuing contract or contracts with Boswell Oil Company, of Cincinnati, Ohio. By petition filed April 5, 1963, this carrier seeks to modify the permit in which such authority was granted by adding Ashland Oil and Refining Company, of Ashland, Ky., and a division of Ashland, Allied Oil Company, of Cleveland, Ohio, as shippers for whom it may render the same transportation service. The relief sought by the petition is opposed by Girton Brothers, Inc.

1The authority which petitioner seeks to have modified was issued as Interim Permit No. MC-110117 (Sub-No. 12). On May 26, 1961, however, this interim permit, together with Sub-Nos. 5, 9, and 11, were consolidated into permit No. MC-110117 (Sub-No. 5).

The joint board took official notice of the fact that at the time of hearing petitioner had on file with the Commission contracts with 11 shippers and had an application pending to serve another shipper.2 Based on these premises the joint board found that petitioner was serving more than a limited number of shippers and that it had failed to establish that the proposed extension of operation would be consistent with the public interest and the national transportation policy. It recommended that the petition be denied.

On exceptions petitioner asserts that since the hearing it has requested the Commission by letter to cancel certain of its contracts and that it now has contracts with only five shippers, including the two which it seeks to serve by this petition. It urges the granting of its petition. In reply protestant asserts that the letter referred to in the exceptions does not show that copies thereof were sent to the contracting shippers and does not request the cancellation of any contracts. It further argues that inasmuch as certain of petitioner's authority is unrestricted as to shippers which may be served, petitioner would not be precluded from filing additional contracts in connection with such unrestricted authority. It urges that the joint board's recommended denial be affirmed. The evidence, the joint board's recommendation, the exceptions, and the reply have been considered. We find the joint board's statement of facts to be correct in all material respects and we adopt it as our own. Certain of the pertinent facts will be restated for clarity of discussion.

Petitioner's status as a contract carrier under section 203(a)(15) of the Interstate Commerce Act, as amended August 22, 1957, has been confirmed. We take official notice of the fact that under its presently held permits petitioner now has contracts with five shippers, including the two supporting shippers which applicant herein seeks to serve from Texaco's plant site near Lawrenceville to points in Indiana and Ohio.

Petitioner under existing contract carrier authority is transporting petroleum products for the Ashland Oil and Refining Company from Princeton, Ind., to points in Illinois. Certain of its insulated trailers are suitable for the transportation of the shipper's commodity during cold weather, and its steel trailers can be utilized during the summer months. It proposes to dedicate two tractor-trailer units to the shipper's exclusive use.

2 No. MC-110117 (Sub-No. 22), for the transportation of molasses, in bulk, from St. Louis, Mo., and Muscatine, Iowa, to points in Illinois and Indiana.

Its drivers are thoroughly experienced in handling petroleum products, and keys to consignees' establishments are furnished drivers so that deliveries can be made after working hours. In some instances, consignees place their orders directly with petitioner; that supplier makes out bills of lading in the shipper's name; and petitioner signs as the shipper's agent. Petitioner proposes to furnish the same type of service to Ashland Oil and Refining Company and Allied Oil Company from Lawrenceville if the relief sought is granted.

The petition is supported by Allied and Ashland. As they will execute a single contract, they will hereinafter be called the shipper. At present the considered commodity moves from Louisville, Ky., or Cattletsburg, Ky., to points in Indiana and Ohio, in common carriage. The shipper's consignees are industrial users, and during 1962, 1.5 million gallons of fuel oil were transported to Connorsville, Ind., 2.5 million gallons to Kokomo, Ind., 7 million gallons to Middletown, Ohio, and 7 million gallons to Cincinnati. In addition, the shipper has salesmen throughout the destination States soliciting new business, and it considers the entire area as a sales potential. The shipper asserts there is no motor carrier in the area able to provide the required service, with the exception of Refiners whose route through Louisville would be circuitous. The shipper considers it more economical to serve Indiana and Ohio customers from Lawrenceville, and it will utilize petitioner's personalized service under a bilateral contract if the petition is granted. It states that protestant has not solicited its traffic, but in any case, its service would not be adequate since it could not serve points in Ohio. It has utilized petitioner's service from Princeton, Ind., to points in Illinois, and found it very satisfactory.

As pertinent, protestant is authorized as a motor contract carrier to transport petroleum products, in bulk, from Lawrenceville to points in Indiana on and south of U. S. Highway 24, an area which includes Kokomo and Connorsville, and has on file with this Commission contracts with 10 shippers. Terminals are maintained at Indianapolis, Lawrenceville, and East St. Louis, Mo. Eight of its tank trailers used in the transportation of the considered commodity are insulated and it is willing to dedicate equipment to the shipper's exclusive use. It will also provide keystop service where required. Protestant has idle equipment suitable for the handling of this traffic, and contends that a grant of the petition will deprive it of potential traffic.

Section 203(a)(15) of the act defines, as pertinent, a contract carrier as one which operates under contract "with one person or a limited number of persons." Since the 1957 amendments to the act, the Commission, pursuant to the provisions of section 209(b) of the act, generally has limited authority granted to contract carriers to service performed for named shippers. This petition is supported by a shipper which is now using petitioner's service. Petitioner presently has contracts with five shippers, and a grant of the authority sought herein will not increase the number of shippers with which it has contracts. The evidence establishes that the supporting shipper requires an extension of petitioner's present service for the movement of its products from Lawrenceville to points in Indiana and Ohio and that the proposed operation will serve a useful public purpose responsive to the distinct needs of the shipper. In view of the fact that petitioner is already serving the supporting shipper which desires to use the service now authorized in the consolidated Sub-No. 5 permit, it does not appear that modification of this permit to include the shipper and its division will affect petitioner's status as a contract carrier. See Umthun Trucking Co. Ext.-Phosphatic Feed Supplements, 91 M.C.C. 691. Protestant's contention that the petition should be denied because certain of the presently held authority is unrestricted as to named shippers, is based upon conjecture and the instant proceeding it being considered in its particular merits.

It is observed that the petition is opposed only by a contract carrier. While a contract carrier has standing to appear in opposition to an application for operating authority, the interests of such contract carrier normally are protected only in unusual circumstances, as when it already is serving the supporting shipper or has obtained its authority with such shipper's support. In general, the Commission has granted applications for contract carrier authority if the alternative would be to require a shipper to contract unwillingly with a given contract carrier. Muzzillo Contract Carrier Application, 94 M.C.C. 563.

We find that the restriction in permit No. MC-110117 (Sub-No. 5) which limits the operations authorized to a transportation of residual fuel oil service to be performed under a continuing contract or contracts with Boswell Oil Company, of Cincinnati, Ohio, should be modified by limiting the operations authorized to a transportation service to be performed under continuing contracts with Boswell Oil Company, of Cincinnati, Ohio, Allied Oil Company, a division of Ashland Oil and Refining Company, of Cleveland, Ohio,

and Ashland Oil and Refining Company, of Ashland, Ky.; that such modification will be consistent with the public interest and the national transportation policy; that petitioner is entitled to an amended permit authorizing such service; and that the petition in all other respects should be denied.

Upon compliance by petitioner with the requirements of sections 215, 218, and 221(c) of the act, with the Commission's rules and regulations thereunder, and with the requirements established in Contracts of Contract Carriers, 1 M.C.C. 628, within the time specified in the order entered concurrently herein, an appropriate permit will be issued.

An appropriate order will be entered.

95 M.C.C.