(Also see Section on Ex Parte 104, Part II)
Switching is that service performed in moving cars from place to place within a certain area of a station. Switching service differs from transportation service in that the latter consists in the moving of cars from one city or town to another. Transportation service is often defined as a "Line-haul," and a switching service preceding or following a transportation service is defined as "Line-haul Switching." A switching service performed in connection with a car loaded at one place to be unloaded at another place, when both places are within the switching limits of the same station, is defined as "Terminal Switching.')
SWITCHING: Definition
Switching is not as easy to define as might first appear. Boston Wool Trade
Assn. vs. Director General, 69 1. C. C. 282. However, the Commission said in Des
Moines Union Switching 231 1. C. C. 638, "Switching consists of all
movements of railway cars on their own wheels other, than those in road trains
running between stations, and also the movements of locomotives and motorcars
under their own power incidental to such car movements. It excludes movements of
yard locomotives within yard limits when assisting road trains in and out of
terminals."
There are several classes of switching as follows:
The present switching limits at Boston of the Boston & Maine, hereinafter termed defendant, are,-for the most part, those defined in Boston Wool Trade Assn. v. Director General, 69 1. C. C. 282, and do not follow the municipal boundaries of the city.On the other hand where the switching limits or deliveries are not named in the carriers tariffs it has been held that the switching rates applied to the entire area served by defendant within the incorporated city limits, and not merely to some undefined section or portion of the city. Koenig Coal Co. v. H. V. Ry. Co., 63 1. C. C. 392, and cited with approval in B. Nicoll & Co. v. Boston & Maine R. R. 148 1. C. C. 217. Otherwise such limits must be determined by the area within which carriers actually render switching service. Helena Traffic Bur. v. Director General et al 77 1. C. C. 197; Kaisas City Pump Co. v. Alton Ry. Co. 216 1. C. C. 363, 365.
Complainants herein have their yards located in a strictly residential section and are approximately 4 miles from an industrial section. The only industries of any nature in close proximity to complainants' plants are a few greenhouses. The disabilities, if any, that complainants suffer are due without question to their location.
When Charges and Rules Apply
The transportation rates of the carriers apply from the regularly established points
for receiving freight from the general public at one station to the regularly
established points for the delivery of freight to the general public at another
station. Line-haul freight received or delivered at private or assigned sidings
within the switching limits of a station is subject to the line-haul switching
charges, rules and regulations applicable at the station where the switching
service is performed.
Freight received at a point within the switching limits of
a station, to be delivered at another point within the switching limits of the
same station, is subject to terminal switching charges, rules and regulations
applicable at the station where the service is performed. This service is
sometimes called "Local Transportation," but a better term is
"Terminal Switching," as distinguished from "Line-haul
Switching."
Charges for line-haul switching service are not usually made in
the following cases:
Public Team Tracks
Ordinarily a carrier will not permit the loading of cars on its Public
Team Tracks (tracks assigned for the use of the general public in loading or
unloading carload shipments) when the cars are not to be handled in its
line-haul service from the shipping point; nor does a carrier usually permit
the unloading on such tracks of cars not brought into the destination in its
own line-haul service. The Public Team Tracks of a carrier are tained at the
sole expense of the carrier to accommodate patrons of its line-haul When two
or naore carriers enter the same station, one cannot have the use and
benefit of another carrier's facilities for the accomnaodation of the public
in the receipt and delivery of carload shipments, without arranging therefor
by special agreement.
And by the same token, carriers generally at
localities where connecting lines switch- ing is absorbed, will not absorb
such connecting carriers switching charges on traffic loaded or to be
unloaded on Public Team Tracks. In the absence of unjust discrimination or
undue prejudice the Commission may not require a line-haul carrier to absorb
a connection's switching charge. See Switching Charges on Crushed Stone, 186
1. C. C. 322, 327, and cases cited therein. However, see-Interchange
Switching at Wichita, 61 1. C. C. 205, where it is stated: A carrier is
entitled to reasonable compensation for switching or other services but is
not justified in attempting to restrict traffic to its own lines by making
an excessive charge for switching to or from its connections.
Less than Carload Freight
The switching charges, rules and regulations of the carriers do not as a
rule apply to a single less than carload shipment unless handled upon
basis of carload charges. In many cases the carriers will handle a less
than carload shipment in switching service only when loaded in one car and on the same day with
other less than carload freight from the same consignor or for the same
consignee, and then the weight of the shipments combined must not be less
than a specified number of pounds, usually 8,000 or 12,000 pounds, depending
upon the commodity.
Charges
A carrier is entitled to reasonable compensation for
switching to and from connecting lines, but may not restrict traffic to its
own line by excessive charges therefor. Roessler and Hasslacher Chemical
Co., Inc., v. B. & 0. R. R., 178 1. C. C. 518, 521. Such charges should
he sufficient to insure a proper return for services performed Reciprocal
Switching at Chicago, 155 1. C. C. 450, Switching at Montgomery, Ala., 213
1. 0. C. 75.
Switching services are usually charged for at so much per car,
and the charge includes the switching of the car one way empty. A flat
switching charge is generally the most de- sirable, in that it relieves
carrier of much work and places all shippers on the same level. See 120 I.C.C.
216. Mitchell Chamber of Commerce v. C., M. & St. P. Ry., 129 I.C.C.
451, 456. When a car is loaded on the tracks of one carrier and
switched to and handled in the transportation service of another carrier
from the point of shipment, the latter generally issues the bill of lading
and pays the former its switching charge. Originating carriers which perform
switching services only do not usually issue bills of lading. M.&St.L.R.R.
v. P.&P.U.Ry., 69 I.C.C.412.
The switching charge and
the transportation charge are collected from the shipper or consignee by the
carrier performing the transportation service, unless the switching charge
is absorbed in the transportation charge. In the latter event, the shipper
or consignee Charges I)ays only the transportation charge. The same
principles likewise apply as to a car switched at the destination from the
tracks of the carrier performing the transportation service to sidings on
the tracks of another carrier at that point. The carrier performing the
transportation service usually makes no charge for its own switching service
from or to sidings located on its track within the switching limits of a
station. Receipt or delivery on private or industrial tracks is merely the
equivalent of a similar service on team tracks. Diversion and Reconsignment
Rules, 61 1. C. C. 385, 391.
In certain cases the Commission has approved
the flat charge on the grounds that it would seem more practical by
reducing clerical work, avoiding the expense of weighing cars and preventing
any discrimination which might arise from weighing some cars and not others.
See Switching at St. Louis and East St. Louis, 120 1. C. C. 216. Considering
the relatively short hauls within the Kansas City District, flat charges
would be proper for application to complainants' shipments. Greater
uniformity would result from the establishment of such charges.
Sonken-Salamba Co. v. Chicago & A., 181 I.C.C. 249.
Absorption
At stations
reached by two or more carriers, cars are often loaded at private or
assigned sidings on the tracks of one carrier and switched to another
carrier to be handled in the tatter's transportation service; or, after
being handled in the transportation service of one carrier, they are
delivered at the destination to another carrier to be switched by the latter
to private or assigned sidings located on the latter's track for delivery
to the consignees. In such cases any switching done by the carrier
performing the transportation service is generally included in the
transportation rate, and the charge of the other carrier or its switching
service is extra, and is paid by the shipper or consignee, unless the
switching tariff of the carrier performing the transportation service,
applicable at the station where the switching is done, provides that it will
absorb the switching charge of the other carrier.
The switching charge of
one carrier is usually absorbed in the transportation charge of another
carrier when both carriers are competing for traffic between the points
involved. To illustrate: Carriers A and B compete at equal transportation
rates for Traffic between Points C and D, as shown in the following
illustration: (for diagram see p 381)
Shippers at Point C, having private or assigned sidings on the
tracks of Carrier A, would not have to pay switching charges on carload
freight loaded at their sidings and forwarded to Point D via Carrier A; but
if forwarded via Carrier B, Carrier A would make a charge for switching the
car to Carrier B, and this charge would have to be paid by the shipper or
the consignee, unless Carrier B has made provision in its tariff that it
will absorb the switching charges of Carrier A on cars loaded on private and
assigned sidings located on the tracks of Carrier A at Point C and destined
to Point D. And Carrier B would be obliged to do this if it desired or
expected to handle any of the traffic. Shippers usually seek the cheapest
practicable route from one point to another. If a carrier desires to handle
competitive traffic, it is usually obliged to do so at competitive rates,
unless it has something to offer in the way of special service or facilities
to offset higher rates or extra charges.
If a car were loaded on a private
or assigned siding on the tracks of Carrier A at Point D and shipped to
Point E on Carrier B, as shown in the above illustration, Carrier B would
not absorb the charges of Carrier A for switching the car to the tracks of
Carrier B, because no competition exists between Carriers A and B in the
movement of traffic from Point D to Point E.
Fourth-section order No. 5
authorized the absorption of switching charges by carriers at competitive
points while refusing to absorb such charges at noncompetitive stations,
even though such absorption resulted in greater charges to more distant
points than to intermediate points. Switching and other accessorial
charges, 214 I.C.C. 279, 281.
This does not mean the carriers are at
liberty carte blanche to absorb or not to absorb connecting line switching
according to their individual likes or dislikes. There is always the check
of the Interstate Commerce Act which, with respect to any arrangement the
carriers may make, operates as an insurance against prejudice, unlawful
discrimination and the exaction of unreasonable rates. A case in point is
the recent decision of the Commission in I.&S. 3867-Absorption of
Switching Charges at Mobile, Ala.-196 I.C.C. 465 wherein the carriers were
not permitted to cancel an arrangement whereby the terminal ,switching
charges on so-called non-competitive traffic were absorbed. In discussing
the facts reference is made to a leading case on the point, i. e., Richmond
Chamber of Commerce v. S. A. L. Ry. Co.,44 1. C. C. 455. This was
primarily a Section 2 case in which the Commission found that the practice
of certain carriers serving- Richmond of absorbing switching charges only
when the switching line competed with the line-haul carrier, while refusing
to absorb such charges when the switching line did not compete with the
line-haul carrier, constituted unjust discrimination under Section 2 when
switching service performed was substantially similar. This decision was
sustained in S. A. L. Ry. Co. v. U. S., 249 Fed. 368 and affirmed by the U.
S. Supreme Court, 254 U. S. 57. Similar decision rendered with respect to
switching at Grand Rapids, Mich. National Spring W. Co. v. Director
General, etc., 60 1. C. C. 564. The principle established by this case was
followed in another case worthy of note; namely, Norfolk-Portsmouth Freight
Traffic Commission v. Aberdeen & R. R. R. Co., 159 1. C. C. 177. In this
case the Commission found:
That defendants' practice of absorbing switching charges at Norfolk-Portsmouth only when the switching line actually competes with the line-haul carrier on traffic moving between Norfolk-Portsmouth and points in North Carolina, South Carolina, Georgia, Florida, Alabama, and Tennessee, and declining to do so when no such competition exists on like traffic moving between the same points, is unjustly discriminatory against shippers in Norfolk-Portsmouth who are required to pay such switching charges.Failure of D.&H. to absorb at Albany on imported woodpulp found to violate tariff provisions, 213 1. C. C. 538.
Reciprocity
The Commission has held that a carrier cannot
justify an inequality in interchange- switching service and charges on the
ground of a difference in the degree of reciprocity as between the carriers
involved. Buffalo, R. & P. Ry. Co. v. Pennsylvania Co., 29 1. C. C. 114.
Affirmed in Pennsylvania Co. v. United States, 236 U. S. 351. City of
Sheboygan, Wisconsin v. Chicago & North Western Railway Company, 227 1.
C. C. 472.
By reciprocal switching is meant switching to or from a
connection with another carrier where that other carrier has a line haul.
Rochester Switching Case, 95 1. C. C. 30.
Generally the basis of reciprocal
switching is the ability of each carrier party to the arrangement to
reciprocate in a substantial degree to the other. North Shore Material Co.
v. Chicago & N. W. Ry. Co., 173 1. C. C. 546. Switching charges such as
that which complainant here seeks to have applied to its shipments are made
without regard to the cost of the service and, therefore, may not, as
defendant contends be an accurate measure of a reasonable charge for a
particular switching service. Oakes Co. v. M. St. P. & S. S. M. Ry. Co.,
77 I.C.C.93. Having elected to perform the service, defendant must
provide a reasonable charge therefor. Thatcher Mfg. Co. v. Director General,
57 I.C.C. 246.
The Commission has frequently said that railroads should
endeavor to conduct their switching operations for other carriers without
loss, and the charges for such service based on cost are preferable to
nominal charges based on so called reciprocity in service; Nashville
Switching, 40 1. C. C. 474; Switching Charges at Texas Points, 197 1. C. C.
513. Des Moines Union Switching, 231 I.C.C.665.
The fact, however, that
interchange switching rates are or are not reciprocal, is unimportant, as
the so called reciprocal theory of establishing switching charges has been
condemned by us in several cases. Reciprocal Switching at Kansas City, 68 I.
C.C. 591. Switching at High Point, 203 I.C.C.629.
Reciprocal switching
charges are generally made without strict regard to cost of service and
sometimes are only nominal. They are based on the ability of each carrier to
compen- sate the other in like manner for services rendered, if not at the
one place than at another served by the same carriers. North Shore Material
Co. v. Chicago & N. W. Ry. Co., 173 1. C. C. 543; J. W. Miller Co. v.
Chicago, M. St. P. & P. R. Co., 173 1. C. C. 51, 53. Clearly such rates
are not a fair measure of the reasonableness of other switching rates. Oakes
Co. v. Minneapolis, St. P. & S. S. M. Ry. Co., 77 1. C. C. 93.
Reciprocity is a factor extraneous to the service and so "indefinite,
uncertain, and speculative," as well as variable, that it is not
entitled to weight as a reason for differentiating in charges. U. S. War
Dept. v. Abilene & S. Ry. Co., 77 1. C. C. 317. Carriers should endeavor
to conduct their switch- ing operations for other carriers without loss, and
charges for their services based on cost are preferable to nominal charges
based on so called reciprocity in service. Switching at Galesburg, Ill., 31
I.C.C. 294; Nashville Switching, 40 1. C. C. 474; Switching Charges at
Texas Points, 197 I.C.C. 513, 530; Reciprocal Switching at Richmond, Va.,
222 I.C.C. 783.
Discrimination
Reverting to the example shown under the caption of
"Absorption," it seems, on the surface, that Carrier B
discriminates against shippers having sidings on the tracks of Carrier A at
Point D through its practice of not absorbing the switching charges on their
shipments to Point E, while at the same time making no charge for switching
shipments loaded at sidings on its own tracks at Point D and destined to
Point E. But the fairness of this practice becomes apparent when it is
pointed out that this free switching service it one of the inducements
which a carrier offers to have industries locate on its tracks. And this is
a very attractive inducement, especially when the carrier serves a large
territory. Furthermore, any advantage which the shipper located on the
tracks of Carrier B has in not having to pay switching charges on shipments
routed via Carrier B is very likely offset by the advantage which the
shipper located on the tracks of Carrier A has in not having to pay
switching charges on shipments routed via Carrier A.
The practice of a
carrier in absorbing the switching charges of another carrier is greatly
advantageous to shippers, -because two routes thus become available at the
same rates.
" We have in a number of cases found that carriers may
lawfully absorb switching charges on competitive traffic, and refuse to
absorb such charges on traffic that is not competitive, so long as all
shippers similarly situated are treated alike." Crown Willamette Paper
Co. v. A. T. & S. F. Ry., 49 I. C. C. 613; Detroit Board of Trade v. W.
Ry. Co., 88 I.C.C. 413; Federal Match Corporation v. Great Northern Ry.
Co. et al, 128 I.C.C. 415.
The charge maintained for the same or similar
services in the surrounding territory is generally the best yardstick for
measuring the charge, and is often the determining factor. A flat charge
throughout a district is generally preferable. Boston Wool Trade Asso. v.
Director General, 69 1. C. C. 282, 301; Switching at St. Louis and East St.
Louis, Mo., 120 1. C. C. 216, 222; Mitchell Chamber of Commerce v. C. M.
& St. P. Ry. Co., 129 C. C. 451; Fitchburg, G. & E. L. Co. v. B.
& M. R. R., 164 1. C. C. 487.
In Detroit Board of Trade v. W. Ry. Co.,
88 1. C. C. 413, the Commission found that the carrier's election to absorb
the charge for switching to one elevator while at the sametime refusing to
absorb it in like amount to others similarly situated at Detroit, Mich.,
resulted in unjust discrimination and undue prejudice in violation of
Sections 2 and 3 of the Act. General Petroleum Corp' v. A. T. & S. F. Ry.
Co., 146 1. C. C. 194. Globe Grain & Milling Co. v. Atchison, T. &
S. F. Ry. Co., 173 1. C. C. 199.
Switching at Charlotte, N. C. Restrictions
proposed by Southern R. R. as to limiting the number of industries to and
from switching would be performed, justified. 183 1. C. C. 651. 1. & S.
Docket No. 3867, proposed cancellation of the absorption of switching
charges of the Terminal Ry., Alabama State Docks at Mobile, Ala., on
imported fertilizer and materials destined to non-competitive points, found
not justified, 196 1. C. C. 465.
It does not appear that any of these other
commodities are competitive with crushed stone, and in certain circumstances
switching charges may lawfully be absorbed on some commodities and not on
others. Globe Grain & Milling Co. v. Atchison, T. & S. F. Ry. Co.,
173 1. C. C. 193; Switching Stone at Greencastle, 208 1. C. C. 185.
Establishing increase switching charge for one carrier's traffic while lower
charges are concurrently maintained for similar switching service performed
for other carriers would result in unjust discrimination and undue
prejudice. Louisville & N. v. Cincinnati N. 0. -1-. 11., 2(ii 1. 0. 0.
2'5, Reciprocal Switching at Birmingham, Ala., 219 1. 0. 0. 581.
In Docket No. 27938 Minneapolis Traffic Ass'n v. Chicago & N. W., 241 I.C.
C. 207 (July, 1940) carrier's practice of adding switching charges of
connecting lines to line-haul rates on grain and products and non-absorption
of switching charges when carriers do not compete with line-haul carriers,
that carriers be required to absorb switching charge on all shipments at
Twin Cities, Duluth, and Superior in like manner they do at Milwaukee,
Chicago, Peoria, etc., considered and the Commission said: Rules and
practices governing the absorption of connecting-line switching charges will
be unreasonable v,o the extent that they result in aggregate transportation
charges which exceed, or may exceed, charges based upon line-haul rates from
and to the same points which resulted from the Commission's decision in
Grain and Grain Products, 205 1. C. C. 301, 215 1. C. C. 83; 223 1. C. C.
235; 229 1. C. C. 9; plus the general increases of 1937-38, but without the
addition of connecting-line switching charges. On reopening in 245 1. C. C.
11 (March, 1941) commission made more specific findings but in the main
reaffirmed 241 I. C. C. 207.
Reasonableness of Charges
The Commission has rendered some important
decisions with respect to the absorption and establishment of switching
services and charges, among which are the following:
In a proceeding to
determine the propriety of switching charges it is immaterial whether such
charges are absorbed by the carrier or paid for by the shippers. They are
considered as though they were to be charged for by the carrier and paid for
by the shipper. True, the carrier is entitled to make a charge for its
service if it sees fit, but it is entitled only to a reasonable compensation
for the service performed. Its charge may not be so high as to restrict or
deter a particular movement. Switching Absorptions, 47 1. C. C., 583;
Detroit Switching Charges, 28 1. C. C., 94; Interchange Switching at
Wichita, 61 1. C. C., 205; Mitchell v. C. M. & St. P. Ry., 129 1. C. C.,
455; Reciprocal Switching at Evansville, 155 1. C., C., 450.
So far as the
shipping public is concerned, the effect of a switching absorption is to
establish a joint rate. Southern Roads Co. v. G. H. & S. A. Ry. Co., 140
1. C. C., 413. The burden, therefore, is upon respondents to justify the
increased charge to the shipper which would result under the suspended
schedules. Absorption of Chicago & Eastern Illinois Railway Company's
Reciprocal Switching Charges at Evansville, Ind., 153 1. C. C. 595.
Switching Grain in St. Louis District 232 1. C. C. 450.
Defendant may be
required to switch the traffic here under consideration at a charge which
takes into account the cost of the service, the value of the property used,
and the circumstance that defendant would be deprived of the line haul. See
Switching Absorptions, 47 1. C. C., 583; Hastings Commercial Club v. C. M.
& St. P. Ry. Co., 107 1. C. C., 208, and Port Arthur Chamber of Commerce
v. T. & F. S. Ry. Co., 136 1. C. C., 597.
Switching charges are based
largely on average conditions within switching districts, and not the cost
of any particular service. A charge which may seem excessive for some
particular movement within a district may not, on the other hand, cover the
cost of the service in others. The question to determine is whether the
charge is adequate for serving the district as a whole. Rochester Switching
Case, 95 1. C. C. 30, 45.
These increased charges are proposed not for the
purpose of obtaining the small amount of additional revenue which would
probably result if they became effective, but for the avowed purpose of
discouraging, through the medium of what amounts to a penalty charge, the
use in switching service of special equipment, and thus to increase the
availability of such equipment for line-haul service. The charge is urged by
respondents as necessary in the interest of the conservation of their
equipment. The right to impose reasonable charges for such a purpose is
clear The efficient use of freight cars is an essential of an adequate transportation system, Turner Lumber Co. v. C. M. & St. P. Ry., 271 U.
S. 259. But this object should not be accomplished through the medium of an
unreasonable penalty charge, or of a penalty which in its operation
affects unjustly certain shippers. Switching charges at Seattle, Tacoma and
Portland,, I. & S. Docket 3357, 165, 1. C. C. 22.
Switching at Natchez, Miss., 181 1. C. C. 171, proposed increases not permitted.
Terminal Refrigerating Co. v. A. T. & S. F. Ry., 181 I.C.C. 441, Trunk
Line required
to absorb switching charge on non- competitive interstate shipments at Los
Angeles. Union Gas & Electric Co. v. L. & N. R. R., 181 1. C. C.
75.6, local switching charges L. & N. R. R. in the Cincinnati, Ohio,
Covington and Newport, Ky. districts ordered in 176 1. C. C. 205, affirmed.
1. & S. Docket No. 3565, increase in asphaltum and petroleum rates in
the Cincinnati-Covington switching district found not justified. 182 1. C.
C. 151.
Flanley Grain Co. v. C. & N. W. R. R., carriers not required to
pay terminal switching charges at Sioux City, Iowa, 192 1. C. C. 505, and
the Commission further stated the following: "We are not persuaded
that the mere failure to absorb switching charges at Sioux City, whereas
switching charges of a somewhat similar nature were absorbed at other
points, in the absence of any showing as to the services performed or the
actual transportation involved on shipments moving through the respective
points, is sufficient to establish the unreasonableness of the charges
assessed. Dodge County Lumber Co. V. A. C. L. R. R. Co., 146 I.C.C. 221. In
many cases we have stated that in the absence of unjust discrimination or
undue prejudice we cannot require a line-haul carrier to absorb a
connection's switching charge. See Switching Charges on Crushed Stone, 186
I.C.C. 322, Absorption of Switching at Butte, Mont., 204 1. C. C. 11, and
Standard Packing Co. v. South Omaha Term. Ry., 229 1. C. C. 479.
I.&S. Docket No. 3856, proposed increased switching charges at Fort Wayne, Ind.,
on the part of the Lake Erie & Ft. Wayne R. R., found not justified, 195
1. C. C. 739, and in this case without actual cost studies. The proposed
inefftm to $9.00 per car was denied but based on evidence an inereme from
$3.60 to $5.60 was in order.
Charges for switching should be sufficient to
insure a proper return for the services performed; Reciprocal Switching
Charges, 155 1. C. C. 450; Switching Charges at Texas Points, 197 1. C. C.
513.
Under average conditions the services rendered by respondents in
connection with this water-born traffic involve a much greater amount of
labor and expense than does line-haul transportation. In Blackmer &
Post Pipe Co. v. Wabash Ry. Co., 161 1. C. C 74, and Switching Fruit and
Vegetables at Baltimore, 201 1. C. C. 697 the Commission said:
As distance
is not necessarily a controlling factor in switching costs, the time
consumed in rendering the service being more important, it is impracticable
to reflect the same refinements of rate making in switch ing rates as in
line-haul rates. Switching at St. Louis and East St. Louis, 120 1. C. C.
216. 222.
The Commission has said that in determining the measure of a
switching charge consideration may be given to the cost of the service, the
value of the property used, and the circumstances that the switching carrier
will be deprived of the line haul. That interterminal switching charges
should be somewhat higher than those for corresponding reciprocal switching.
Switching at Kansas City, Mo.-Rans. and Related Pointe 1. & S. Docket
No. 3495Y 178 1. C. C. 97.
see: The Freight Traffic Rebook, 1944, p.377- p385. Article continues to p392.