i n 6/+ xX C

THROUGH ROUTES AND JOIN T RATESm >^

government

Storage

H E A R I N G

BEF ORE A

SUB COM MIT TEE OF THE

COMMITTEE ON

INTERS TAT E AND EOREIGN COMMERCE 

s HOUSE OE REP RESEN TATIV ES

EIGHTY -SE VE NT H CONGRESS

SECOND SESSION

ON

H.R. 7297 an d H.R. 7343

BILLS TO AMEND SECTIONS 216(c) AND 305(b) OF THE INT ERSTATE COMMERCE ACT, RELATING TO THE ESTABLISH MENT 

OF THROUGH ROUTES AND JOINT RATES

APRIL 4, 1962

Print ed f or the use of the 

Committee on I ntersta te and Foreign Commerce

82681

U.S . GOVER NM EN T PR IN TIN G O FFIC E

W ASH IN GTON : 19 62
; - it-*-

COMMITTEE ON INTE RSTATE AND FOREIGN COMMERCE

OR EN H AR RIS , Arkansas, Chairman

JOH N B E LL W IL LI AM S, Mississippi

PE T E R F. M A CK , Jr., Illinois

KEN N ETH A. RO BER TS, Alabama

M OR GA N M. M OU LD ER , Missouri

H A R LE Y O. ST A G G ERS, West Virginia

W ALTER RO GE RS , Texas

SA M UEL N. FR IE D E L, Maryla nd

TO R B E R T H. M ACD O N ALD , Massachusetts

GE ORG E M . RH ODE S, Pennsylvania

JOHN JA RM AN , Oklahoma

LE O W. O’ BR IE N , New Yor k

JOH N E. MO SS, California

JOH N D. D IN G ELL, Michigan

JOE M. KIL G OR E, Texas

PAU L G. RO GE RS , Florida

R O BER T W. H EM PH IL L, South Carolina

DA N RO ST EN KOW SK I, Illinois

JA M ES C. H E A L E Y , New Yor k

JOH N B. B E N N E T T , Michigan 

W IL LI AM L. SP RIN GER, Illinois 

PAU L F. SCH EN CK , Ohio 

J. AR T H U R YO U N GER, California 

H ARO LD R. CO LLI ER, Illinois 

M IL TO N W. GL ENN, New Jersey 

SAM U EL L. DEVIN E, Ohio 

A N CH ER N ELS EN, Minnesota 

H AS TI NGS KEIT H , Massachusetts 

W IL LA R D S. CU RTI N , Pennsylvania 

A B N E R W. SI BA L, Connecticut 

VERN ON W. TH OM SO N, Wisconsin 

P E T E R II. DO M IN IC K, Colorado

H ORAC E R. K O R N EG A Y, North Carolina

W. E. Williamson, Clerk

K enneth J. Paint er, Assis tan t Clerk

Professional Sta ff

A ndr ew Stev enson Sam G. Spal

K urt Borchardt M artin W. C unningham

Subcommittee on Transportation and Aeronautics

JOHN B E LL W IL LI AM S, Mississippi, Chairman

H A R L E Y O. ST A G G ERS, West Virginia W IL LI AM L. SP RIN GER, Illinois

SA M U EL N. FR IE D E L, Maryland H ARO LD R. CO LLI ER, Illinois

T O R B E R T H. M ACD O N ALD , Massachusetts SAM U EL L. DEVIN E, Ohio 

JOH N JA RM AN , Oklahoma

II
C O N T E N T S

Text of— Page

H.R. 7297_______________________________________ 2

H.R. 7343__________________________________________________ 2

Rep ort of—

Budget Bureau______________________________________________ 2

Commerce, Secretary of _______________________________________ 3

Federal Maritime Commission_________________________________ 4

Interst ate Commerce Commission______________________________ 6

Sta tem ent of—

Fort, James F., counsel, public affairs, American Trucking Associations,

In c______________________________________________________ 17

Fraley, Orrin H., vice president, Consolidated Freightways, Inc.,

Menlo Park, Calif_________________________________________ 18

Hammond, Harold F., executive vice president, Tra nsp ortation Association of America_________________________________________ 15

Murphy, Rup ert L., chairman, Interst ate Commerce Commission___ 12

Rivers, Hon. Ralph J., a Representative-at-L arge in Congress from

the State of Alaska_________________________________________ 7

Communications submitted to the committee—

American Merchan t Marine Institute , Inc., letter s ubm itte d by Alvin

Shapiro dated April 4, 1962__________________________________ 20

Ba rtle tt, Hon. E. L., a U.S. Senator from the Sta te of Alaska, letter

dated April 3, 1962_________________________________________ 10

Egan, Hon. William A., Governor, Sta te of Alaska, telegram dated

April 3, 1962______________________________________________ 10

Ingersoll, A. C., Jr., chairm an, Common Carrier Conference of Domestic Water Carriers, letter dated April 5, 1962_______________ 20

Sanders, Edward R., managing director, Alaska Carriers Association,

Inc., letter d ated Marc h 29, 1962_____________________________ 11

Seeliger, Al, president, Fairbanks Cham ber of Commerce, letter da ted

April 2, 1962______________________________________________ 10

Snedden, C. W., chairman, executive comm ittee, Alaska State Chamber of Commerce, lette r dated March 30, 1962_____ _____ _____ 11

m

THROUGH ROUTES AND JOINT RATES

W ED N ESD A Y , A P R IL 4, 19 62

House or Representatives,

Subcommittee on Transportation and Aeronautics

or the Committee on I nterstate and Foreign Commerce,

Washing ton, D.C.

The subcommittee met, pursuant to notice, a t 10:30 a.m., in room 

1334, New House Office Building, Hon. Harley O. Staggers presiding.

Mr. Staggers. The committee will come to order.

This morning we are met to consider H.R. 7297 and H.R. 7343. 

The Subcommittee on Transportation and Aeronautics is holding 

hearings this morning on two identical bills, H.R. 7297, introduced by 

Representative Rivers of Alaska, and H.R. 7343, introduced by Chairman Harris at the request of the In terstate Commerce Commission.

The purpose of these bills is exceedingly simple; it is merely to 

clarify the Interstate Commerce Act so that the users of motor-water 

services between Alaska or Hawaii and the other 48 States may have 

the same benefits of through routes and joint rates which are enjoyed 

by users of motor-water services among the other 48 States, and by 

users of rail-water or of any combination of air services among all 

of the 50 States.

The explanation, however, of the present statutory gap denying the 

benefits of through routes and joint rates to this particular class of 

users is more complex.

The statehood acts relating to both Alaska and Hawaii retained 

jurisdiction over water transportation between Alaska, Hawaii, and 

the other States in the Federal Maritime Commission. The Interstate 

Commerce Commission has taken the position, that in the absence of 

statu tory authority, carriers subject to the Commission’s jurisdiction 

cannot enter into through routes and joint rates with those subject to 

the Maritime Commission jurisdiction.

At present, statutory authority clearly exists for through routes 

and joint rates as to the following combinations of rail, motor, and 

water carriers subject to the jurisdiction of the Interstate Commerce 

Commission, air carriers subject to the Civil Aeronautics Board, and 

water carriers subject to the Federal Maritime Commission:

Air-all other carriers, Federal Aviation Act, section 1003; 

Rail-ICC water, Interstate Commerce Act, section 1(4) , 305 

(b ); .

Rail-FMC water, Interstate Commerce Act, section 1(1) ( a ); 

Rail-motor, In terstate Commerce Act, sction 216 (c) ; 

Motor-ICC water, Interstate Commerce Act, section 216(c). 

This leaves two combinations not covered, namely, ICC motor-FMC 

water, and ICC-water and FMC-water.

l
2 THROUGH ROUTES AND JOINT RATES

Section 216(c) of the Interstate Commerce Act authorizes through 

routes and joint rates by motor carriers and water carriers. The 

Commission has been consistent in construing the section to mean only 

water carriers subject to its jurisdiction under part II I. This, of 

course, is an impossible construction because part II I was not enacted 

until 1940, whereas section 216(c) of part II covering motor common 

carriers was enacted in 1935.

The bills before us today would make it crystal clear that section 

216(c) authorizes motor carriers to establish through routes and 

joint rates with water carriers to Alaska and to Hawaii, whether such 

water carriers are subject to the Interstate Commerce Act or to the 

Shipping Acts. It also collaterally would similarly authorize water 

carriers under the Interstate Commerce Act to establish such routes 

and rates with water carriers under the Shipping Acts.

It is the purpose of these hearings this morning to develop the need 

which may exist for this proposed legislation.

A copy of H.R. 7343, and various agency reports will be inserted 

in the record at this point.

(The aforementioned bill and reports follow:)

[H .R. 7297 an d H R. 734,3, 87 th Cong., 1s t sess.]

A B IL L To am en d se ctions 21 6(c)! an d 30 5( b) of th e In te rs ta te Comm erc e Act, re la ting 

to th e es ta blish m en t of th ro ugh ro ut es an d jo in t ra te s

Be i t enacted by the Senate and House of R epresentatives o f the United States

of America in Congress assembled, Th at subsection (c) of section 216 of the 

Interstate Commerce Act, as amended (49 U.S.C. 3 16 (c)), is amended by adding 

at the end thereof the following new sen tence: “As used in this subsection, the 

term ‘common car riers by wa ter ’ includes water common carriers subject to 

the Shipping Act, 1916, as amended, or the Inte rcoasta l Shipping Act of 1933, 

as amended (including persons who hold themselves out to transport goods by 

wa ter but who do not own or operate vessels) engaged in the tran spo rtation of 

prop erty in intersta te or foreign commerce between Alaska or Hawaii on the one 

hand, and, on the other, the other States of the Union, and through routes and 

joint rat es so established and all classifications, regulations, and practices in 

connection therewith shall be subject to the provisions of this pa rt.”

Sec. 2. Subsection (b) of section 305 of the In terstate Commerce Act, as 

amended (49 U.S.C. 90 5(b)), is amended by inserting between the second and 

third sentences thereof the following new sen tence: “Common car riers by w ater 

subject to this part may also establish reasonable through routes and join t rates , 

charges, and classifications with common car riers by water subject to the Shipping Act, 1916, as amended, or the Inte rco astal Shipping Act, 1933. as amended 

(including persons who hold themselves out to transp ort goods but who do not 

own or operate vessels) engaged in the tran spo rtation of property in inters tate 

or foreign commerce between Alaska or Hawaii on the one hand, and, on the 

other, the o ther State s of the Union, and such through routes and join t rates, and 

all classifications, regulations, and practices established in connection therewith 

shall be subject to the provisions of th is p art.”

E xecutiv e Off ice of tiie P res ide nt,

B ureau of th e B udget,

Washington, D.C., March 29,1962.

Hon. Oren H arr is,

Chairman, Committee on In ter sta te and Foreign Commerce,

House o f Representatives, Washington, D.C.

Dear Mr. C ha irma n : T his is in reply to your requests of J une 9 and Jun e 12,

1961, for reports on H.R. 7297 and H.R. 7343, bills to amend sections 216(c) 

and 305(b) of the In terstate Commerce Act, rela ting to the estab lishm ent of 

through routes and jo int rates.

The Burea u of the Budget favo rs the enactment of legislation which would 

auth orize through routes and joint rat es for car riers serving Alaska and Hawaii
THROUGH ROUTES AND JOINT RATES 3

and th e oth er Sta te s. How ev er, we wo uld p re fe r th e en ac tm en t of S. 1725, 

also pe nd ing be fore yo ur co mmittee , sin ce it wou ld au th ori ze th e es ta bl is hm en t 

of a jo in t bo ar d to review su ch ra te s ra th er th an pr ov id e fo r th eir review by th e 

In te rs ta te C om me rce C om mi ssion alon e.

The w ate r carr ie rs which wo uld be invo lved in th ro ugh ro ute s an d jo in t 

ra te s au th ori ze d by II.R . 7279 an d II.R . 7343 a re und er th e re gula to ry re sp on ­

si bi lity of th e F ed er al M ar iti m e Co mm ission . The mot or carr ie rs an d fr ei ght 

fo rw ard ers a re su bje ct to In te rs ta te Co mm erc e Co mm ission re gu la tion . It 

th er ef ore see ms pre fe ra ble to pr ov id e th a t th e th ro ugh ro ute s an d jo in t ra te s 

be su bj ec t to th e review of a jo in t bo ar d com posed of re pre se nta tives of th e 

ex is ting tr an sp o rt ati o n re gula to ry ag en cies in ord er to ass ure th e avai la bility 

in th e re gula to ry bo dy of expert kn ow led ge of ea ch of th e carr ie rs inv olv ed.

The B ure au of th e Bud ge t th ere fo re reco mmen ds th e en ac tm en t of S. 1725, 

if am en de d as su gg es ted in our re port to yo u dat ed Octo be r 26, 1962, ra th er 

th an e it her H.R. 7297 o r H.R. 7343.

Sinc erely yo urs,

P h il ip S. H ug he s,

Assistant Director for Legislative Reference.

T he Secretary of Comm erce,

Washington, D.C., April lh

 1962. Hon. Oren H arris,

Chairman, Committee on Inte rstate and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. Cha irman : Thi s is in fu rt h er repl y to you r re qu es t fo r th e vie ws 

of th is D ep ar tm en t on S. 1725, a bil l to per m it th e es ta blish m en t of th ro ug h 

se rv ices an d jo in t ra te s fo r carr ie rs se rv in g A lask a or H aw ai i an d th e oth er 

S ta te s an d to es ta blish a bo ar d to review such ra te s, an d H.R. 7297 an d H.R. 

7343, bills to am en d se ct ions 21 6( c) an d 30 5( b) of th e In te rs ta te Co mm erc e 

Act, re la ti ng to th e e st ab lish m en t of th ro ug h ro ute s an d jo in t ra te s.

S. 1725 wou ld perm it a ir carr ie rs su bj ec t to th e Fed er al Aviatio n Act of 

1958, com mo n carr ie rs su bj ec t to th e In te rs ta te Co mm erc e Act, an d com mon 

carr ie rs by w ate r su bje ct to th e Sh ipping Ac t of 1916 or th e In te rc oast al Sh ippi ng Ac t of 1933, to es ta blish th ro ug h ro ut es and jo in t ra te s w ith an y ot her 

su ch comm on carr ie rs in co nn ec tio n w ith th e tr an sp o rt ati o n of pro per ty b etw ee n 

A lask a or H aw ai i and t he oth er St at es .

S. 1725 wou ld also pr ov id e fo r th e es ta bl is hm en t of a jo in t bo ar d com pos ed 

of on e mem be r ea ch from am on g th e mem be rshi p of th e In te rs ta te Co mm erc e 

Co mm ission , th e Federa l M ar iti m e B oa rd (C om missio n) an d th e Civ il Aeron au ­

ti cs Boa rd , to se rv e fo r 1 ye ar , but eli gible fo r re ap po in tm en t. Th e jo in t bo ar d 

wou ld pa ss up on th e la w fu ln es s of su ch jo in t ra te s an d re la te d m att ers re fe rr ed 

to i t by one of th e th re e p art ic ip ati ng agencies .

H.R. 7297 an d H.R. 7343 wo uld im plem en t a le gis la tive reco m men da tio n in 

th e 74th Ann ua l R ep or t of th e In te rs ta te Co mm erc e Co mm ission th a t sections 

21 6( c) an d 30 5( b) of th e In te rs ta te Comm erc e Act be am en de d so as to a u th o rize th e volu nta ry es ta blish m en t of th ro ug h ro ute s an d jo in t ra te s be tw ee n motor 

an d w ate r comm on carr ie rs su bj ec t, re sp ec tiv ely, to p art s II an d III of th e 

act an d comm on carr ie rs by w ate r su bj ec t to th e ju ri sd ic tion of th e Fed er al 

M ar iti m e B oa rd (C om missio n) on in te rs ta te tra ffi c betw ee n Alask a or H aw ai i 

and th e oth er Sta te s.

U nd er ex is ting law , comm on carr ie rs su bj ec t se ve ra lly to th e ju ri sd ic tion of 

di ff er en t F ed er al re gula to ry ag en cies may no t, in th e ab senc e of sta tu to ry 

auth ori ty , es ta blish th ro ugh ro ut es an d jo in t ra te s w ith each ot he r. As w as 

po in te d ou t in Se na te Rejio rt No. 443. 87tl i Co ng res s, 1st ses sio n, which ac co mpa ni ed S. 1725, in ord er to mo ve goo ds be tw ee n A lask a an d H aw ai i an d th e 

oth er Sta te s, ar ra ngem ents m us t be mad e by a sh ip jie r w ith ea ch on e of th e 

carr ie rs ha nd ling th e traffic. If five carr ie rs are inv olved in mo ving th e goods 

from or ig in to de st in at io n, five se par at e contr acts are ne ce ss ar y, an d five 

se para te ra te s m us t be as ce rtai ne d, of ten from a la rg e nu m be r of ta ri ff s on 

file w ith th e va ri ous ag en cies an d a t di ff er en t loca tio ns . T his is ex pe ns iv e 

an d tim e co ns um ing bo th to th e sh ip pe rs an d carr ie rs . In ad di tion , ea ch of 

th e carr ie rs w ith which such contr ac ts are mad e is lia bl e fo r los s an d da m ag e 

th a t may oc cu r on ly w hi le th e fr ei ght is be ing han dl ed by th a t carr ie r. The 

fix ing of such li ab ility on a carr ie r whe n a nu m be r of tr an sp o rt ati o n compa ni es hav e ha nd le d th e fr eig h t p lace s a gre at bur de n on th e sh ip pe r.
4 THROUGH ROUTES AND JOINT RATES

Enac tmen t of S. 1725 will allow the shipper to make one con tract with the 

originating carrier on behalf of all carriers handling the goods, and to ascertai n 

the rate for the through movement by consulting a single tariff. The shipping 

contract would call for the payment of a single tran spo rtation charge.

Enactment of H.R. 7297 and H.R. 7343 would, on the other hand, extend 

the benefits of joint rat es only to users of motor-water services between Alaska 

or Hawaii and the oth er States, which would be similar to those now enjoyed 

by shippers by rail and water on such traffic. Furtherm ore, neither of such 

bills provides for the establish ment of a joint board to regulate rates and 

related matters. The establishm ent of such a board is necessary as a means 

of encouraging coordination between certain of the different modes of tra ns ­

portation.

The Department of Commerce favors, therefore, the enactment of S. 1725, 

and is opposed to enactmen t of legislation sim ilar to H.R. 7297, and H.R. 7343 

unless such legislation is modified as to inco rporate the provisions of S. 1725.

The Bureau of the Budget advises there is no objection to the submission 

of this re port from the standpoint of the adm inistration’s program.

Sincerely yours,

Edward Gudeman,

Under Secretary of Commerce.

F ederal Maritime Com mission,

Washington, D.C., April 17,1962.

Hon. Oren H arris,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. Chairma n: The Federal Maritime Commission h as noted H.R. 7297 

and H.R. 7343, which are bills to amend sections 216(c) and 305(b) of the In terstate Commerce Act rela ting to the establish ment of through routes and joint 

rates and wishes to offer the following co mments :

H.R. 7297 and H.R. 7343 are iden tical bills which are designed to permit 

common carrie rs by motor vehicle and common carrie rs by wa ter subject to 

the Interst ate Commerce Act to enter into through routes with common ca rriers 

by water subject to the Shipping Act, 1916, as amended, or the Inte rcoasta l 

Shipping Act, 1933, as amended, in the trades between Alaska or Haw aii on 

the one hand and the other States of th e Union on the other.

With thi s purpose we are in accord. However, these bills do not provide 

for coordination of all modes of transp ortation and they lack balance. Through 

transp ortation under a single bill of lading and under a single factor, allinclusive through rate between any point in the continental United States and 

places in Alaska or Hawaii is highly desirable and will fac ilitate the conduct 

of trade. To accomplish this, different types of tran sportation must be coordinated, This in itself is not difficult and is made even less difficult by the development of conta inerization. The real difficulty arises from the fact th at the 

different tyi>es of tran sportat ion are subject to the jurisdiction of different regulato ry agencies. H.R. 7297 and H.R. 7343 seek to overcome this by making 

through routes and joint rates between wa ter car riers subject to the Shipping 

Act, 1D16, and car riers subject to the Interstate Commerce Act (tru ck or water) 

all subject to the provisions of the Interstate Commerce Act and, of course, 

as such under the regulatory control of the Inter sta te Commerce Commission.

The one essential and irreplaceable link in any through route between the 

States of Alaska and Hawaii and the other 4S States is performed by the water 

carriers who operate subject to the provisions of the Shipping Act, 1916, and 

the Intercoastal Shipping Act, 1933. We can foresee complications and problems re sulting from the fact tha t pa rt of such carri ers’ traffic would be regulated 

by the Federal Maritime Commission pursu ant to the Shipping Act and the 

Inte rcoasta l Act and part by the Interstate Commerce Commission pursuant to 

the trucking provisions of the In terstate Commerce Act and the rates and 

charges for th is imp ortant portion that would move by water over through routes 

would not even be filed with the Federal Maritime Commission—the agency 

charged with the primary regulation of such carriers.

It was to avoid the development of such a situation that S. 1725 was introduced, providing for the creation of a joint board composed of representatives of 

the thre e regulatory agencies which would be concerned with the estab lishm ent 

of through routes and joint through rates for car riers by land, sea, and air.
THROUGH ROUTES AND JOINT RATES O

S. 1725 would estab lish a joi nt board, composed of one member each from the 

membership of the In terstate Commerce Commission, the Federal Maritime 

Board (now Federal Martime Commission), and the Civil Aeronautics Board, 

to pass upon questions which might arise as to the lawfulness of such through 

rates. However, this joint board would only come into play when questions 

were raised concerning the lawfulness of the joint through rat es which the dif ­

feren t types of carriers would be a uthorized to establish. Tariffs setting for th 

these through rates would be tiled with the regu latory agency having jurisdiction over the carrier. Thus each agency would have a complete record as to all 

charg es aud practices of carriers subject to its jurisdiction and its functions 

would not be impaired in adm inistering the provisions of the laws entrusted to 

it. This would be of pa rticular value in general rate cases.

The purpose of the joint board is to encourage and make possible the coordinatio n of the activities of various forms of transpo rtation for the general benefit 

of the public. Representation by each of the three regulatory agencies was 

contemplated not with the idea of playing one agency aga inst the other in advocating and supporting conditions favorable to the form of transp ortation subject 

to its jurisdictio n but, rat her, th at each would bring to the connnon forum 

knowledge and experience as to the type of tran spo rtation with which each was 

most familiar.

The placing of the control over joint rat es in the hands of any one of these 

agencies without participation by the others would prev ent this contribution 

of knowledge peculiar to each form of tran spo rtation engaging in the through 

route. It is our view that the estab lishm ent of through routes to be partic ipated in by various types of tran spo rtation can be best accomplished if it is 

done without undue interference with the functions of the agencies regulating 

the various forms of transp ortation or impairing the laws they admin ister.

It would appear that this is consistent with the Pre sident’s views as expressed in his message on transp ortation issued under date of April 5, 1962, 

wherein he st at ed :

“For many years some regu latory agencies have been authorized to appoint 

joint boards to act on proposals for interc arr ier ser vices; but they have taken 

virtually no initiati ve to foster these arrangements which could greatly increase 

service and convenience to the general public and open up new opportunities 

for all carrier s. I recommend, therefore, that Congress declare as a ma tter 

of public policy that through routes and joint rat es should be vigorously encouraged, and auth orize all transp ortation agencies to participate in joint 

boards.”

Additionally, it may be noted that H.It. 7297 and II.R. 7343 would only perm it 

the establish ment of through routes with joint through rates between motor 

carriers and water car riers subject to the Interst ate Commerce Act and water 

carriers subject to the Shipping Act, 1916 and/o r Interc oas tal Shipping Act, 

1933, thus leaving out air carr iers, which, as ai r transp ortation of freight increases, should become of increasing importance in the development of a truly 

inte gra ted tran spo rtation system. It may be noted th at S. 1725 provides for 

the voluntary coordination of water, rail, truck, and air.

The joint-board approach is designed to give fair consideration to all forms 

of transp ortation partici pating in through routes. Shippers and carriers appearing before the Senate Committee on Commerce almost with out exception 

favored the concept of a joint board composed of represen tatives of the three 

transp ortation agencies.

We thin k the desired coordination of transp ortation facilities can best be 

obtained by the joint-board approach. Land, air, and water all offer different 

transp ortation fac ilities; they are not the same and cann ot be fitted into the 

same regu latory pattern . We still advocate coordination of our various modes 

of tran spo rtation in the intere st of efficiency and economy but we do not consider that this will be fully accomplished through the means set for th in H.It. 

7297 and II.R. 7343. We therefore feel that these bills should not be favorably 

reported but we continue to urge the enactment of S. 1725 which seems to 

provide the fai res t method and the method most likely to succeed in coordinating 

through tran spo rtation by different carrier modes.

The Bureau of the Budget has advised there would be no objection to th e. 

submission of this report from the stan dpoint of the administration’s program.

Sincerely yours,

T hos. E. Stak em, Ch air ma n

82681—62-----2

19 62
6 THROUGH ROUTES AND JOINT RATES

I nte rs ta te Com mer ce Co m m is sio n ,

Offic e of t h e Ch a ir m a n , 

Washington, D.C., June 11/, 1961.

Hon. Ore n H arris,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D.C.

D ear C h air m a n H ar ris : Yesterday I received your letter dated Jun e 12, 1961, 

enclosing copies of a bill, II.R. 7343, introduced by you, to amend sections 216(c) 

and 305(b) of tbe Inter sta te Commerce Act, rela ting to the estab lishm ent of 

through routes and joint rates, and requesting a repo rt and comments thereon.

This proposed measure would give effect to Legislative Recommendation No. 

12 in the Commission’s 74th annual report. Copies of the dr aft bill, together 

with a statement of justification therefor, were tran smitte d to you with my 

letter of May 8,1961, requesting introduction.

Your assistance in introducing this proposed m easure is very much appreciated. 

Sincerely,

E veret t H u tc h in so n , Chairman.

I nte rs ta te Com mer ce Co m m is sio n ,

Offic e of t h e Ch a ir m a n , 

Washington, D.C., May 8,1961.

Hon. Ore n H arris,

Chairman, Committee on Inters tate and Foreign Commerce,

House of Representatives, Washington, D.C.

D ear C h air m a n H ar ris : I am subm itting herewith for your consideration and 

introduction 40 copies each of dr af t bills, together with statements of justification therefor, which would give effect to Legislative Recommendations Nos. 2 

and 12 in the Commission’s 74th annual report.

Your as sistance in introducing these bills and scheduling hearin gs thereon will 

be very much appreciated.

Sincerely,

E veret t H u tc h in so n , Chairman.

R ec om men da tion No. 12

This proposed bill would give effect to Legislative Recommendation No. 12 

of the I ntersta te Commerce Commission as set forth on page 191 of its 74tli annual 

report as follow s:

“We recommend that sections 216(c) and 305(b) be amended to authorize 

the volu ntary establishm ent of through routes and joint rat es between motor 

and water common carrie rs subject, respectively, to parts II and II I of the 

act and common car riers by water subject to the jurisdiction of the Federal 

Maritime Board on intersta te traffic between Alaska or Haw aii and the other 

States.”

ju s t if ic a t io n

The pui-pose of the atta ched dr aft bill is to provide a means of extending 

to the users of motor-water services and to the users of a combination of water 

services 1

 between Alaska or Haw aii and the other States and benefits of join t 

rates sim ilar to those now enjoyed by shippers by rail-and-water on such 

traffic.

Under the Tra nsporta tion Act of 1940, the jurisdiction of the Inter sta te 

Commerce Commission over water car riers was limited to commerce between 

the States. Jurisdiction over waterborne traffic between the States and the 

then Territories of Alaska and Haw aii, as well as between the States and other 

areas, was continued in the Federal Maritime Board. Except for provisions 

in the Alaska and Hawaii statehood acts preserving the jurisdic tion of the 

Maritime Board over water transp ortation between Alaska, Hawaii, and the 

other States, such jurisdic tion would have devolved automatically upon the 

Inter sta te Commerce Commission upon the admission of Alaska and Hawaii 

into the Union, and the through route and join t rate problem which the draft

1

 Performed by a water carrier regulated by the Inter sta te Commerce Commission and 

a water carrier regulated by the Federal Maritime Board.
THROUGH ROUTES AND JOINT RATES 7

bill proposes to solve would not have arisen. However, under existing law, 

common ca rriers subject severally to the jurisdiction of differe nt Federal regulatory agencies may not, in the absence of statutory authority, establish through 

routes and joint rates with each other.

Such authority exists under pa rt I of the Interstate Commerce Act with 

respect to the voluntary establish ment of join t rates between railroads subject 

to the jurisdic tion of the Interst ate Commerce Commission and wa ter car riers 

operating between Alaska or Hawaii and the contiguous States, including wa ter 

car riers regulated by the Maritime Board. Such autho rity does not exist, however, with respect to motor and water common carriers subject to the Commission’s jurisdiction and common car riers by water subject to the jurisd iction of the Maritime Board. There is also no autho rity for the estab lishm ent 

of single-factor through rates on rail-water-rail movements between Alaska and 

the other States because the Government owned-and-operated Alaska Railroad 

is not s ubject to the ju risd iction of any regulatory agency.

With the advent of statehood for Alaska and Hawaii, the regulatory pattern 

for transp ortation between those and other States became exceedingly complex, 

involving a number of statutes, several regulatory agencies, and certain water 

car riers which, because of the effect of the aforementioned provisions in the 

stateh ood acts, remain unregulated by any Federal regulatory agency. This 

entire situatio n represents a novel dep artu re from the tradition al regulatory 

scheme insofar as transp ortation in intersta te commerce is concern ed; hence the 

need for special legislation if shippers in the Alaska or Hawaiian trade are to 

enjoy the benefits of single-factor through rates on traffic moving by motor-andwater or by a combination of water services.

The estab lishm ent of such through routes and joi nt rates would perm it a 

shipper to make one contract with the originating carrier on behalf of all 

car riers participating in the arrangement and would enable him to ascertain 

the rate for such through movement by consulting a single tariff inste ad of many 

as may be necessary at present. The shipper and consignee would also have 

the advantages given by section 20(11) and similar provisions in other parts of 

the Inter sta te Commerce Act of recovering from eith er the originating or delivering car rier for loss or damage caused by any carri er partici pating in the 

through movement. In addition, experience has shown that because of the 

economy of established channels of commerce through which sub stantial traffic 

may flow, and because of reduced accounting and freigh t rate calculation costs 

joint rates are generally lower than a combination of local rat es of connecting 

carrie rs not p articipatin g in through service arrangements.

While it is recognized th at this proposed measure would not, because of the 

unregulated sta tus of (he Alaska Railroad, permit, full realization of th e benefits 

to be derived from the establish ment of through routes and joint rates , it is 

an important and necessary step in tha t direction. It is therefore urged tha t 

the Congress give early and favorable consideration to the enactmen t thereof.

Mr. Staggers. Our first witness this morning will be Hon. Ralph J. 

Rivers, a Member of Congress from Alaska.

STATEMENT OF HON. RALPH J. RIVERS, A REPRESENTATIVE-ATLARGE IN CONGRESS FROM THE STATE OF ALASKA

Mr. Rivers. Mr. Chairman and members, the privilege of appearing before this committee in support of this legislation is much appreciated. As this committee well knows, the problems of Alaska in 

regard to transportation are numerous and complex. Some of these 

complexities also apply to Hawaii. Thus it appears to me tha t the 

best approach toward the solution of these problems is to proceed one 

step at a time, which is precisely what the committee is doing by virtue 

of the consideration it is now giving to my bill H.R. 7297 and a like 

bill introduced by our colleague, Mr. Harris, chairman of the full 

commit lee.

The complexity I mention is historical. At the tu rn of the century 

when the gold rushes to Alaska and the Klondike were underway,
8 THROUGH ROUTES AND JOINT RATES

all available ships were pressed into service to transpo rt the avalanche 

of stampeders from west coast ports to Alaska. In due course the 

railroads in the 48 States were put under the regulatory authority of 

the Interstate Commerce Commission, as were the coastwise shipping 

lines engaged in commerce between the States, and as were the trucking services engaged in interstate commerce. Throughout the intervening years, Alaska’s waterborne traffic was put under and has continued under the jurisdiction of the Federal Maritime Board (recently under the Federal Maritime Commission) ; the Alaska Railroad, operated by the Department of the Interior, has remained unregulated, and, until statehood, Alaska’s trucking industry remained 

unregulated. Lacking regulation in the railbelt area between Seward 

and Fairbanks, cutthroat competition in the field of overland transportation developed. A first step was taken toward stabilization of 

transportation in this area, pursuant to statehood, when trucking 

was put under the regulatory authority of the ICC.

And I am speaking of trucking in Alaska.

As to routes and rates, the continental railroads and waterborne 

carriers operating in the Alaska trade were allowed to voluntarily 

establish joint rates under authority prescribed in part I of the Int erstate Commerce Act. This limited authorization lias prevailed as to 

the continental railroads and the Alaska waterborne carriers notwithstanding the fact that each has been and still is regulated by a different 

Federal regulatory agency, as I have above indicated. However, this 

is as far as this kind of flexibility has progressed. By virtue of the 

general rule carried out under existing law, common carriers subject 

to the jurisdiction of different Federal regulatory agencies, respectively, may not, in the absence of specific statutory authority, establish 

through routes and joint rates with each other. The bills before us 

would provide the required authority for all the types of carriers I 

have ment ioned to voluntarily establish through routes and joint rates 

with each other, with the possible exception of the unregulated Alaska 

Railroad. In a sense, however, this legislation would also permit the 

Alaska Railroad to voluntarily participate in the proposed through 

route and joint, rate arrangements because neither the bills before us 

nor any provision of existing law prohibit same. Participation by the 

Alaska Railroad in such arrangements would simply rest upon the 

authority of the Secretary of the Interior to operate said railroad in 

the public interest and for the purpose of developing a large area of 

Alaska. Other carriers who might enter into a through route and 

joint rate arrangement with the Alaska Railroad would necessarily 

file with the ICC for approval, and presumably—all other things 

being equal—the route in question and the joint rate would be approved. Expressions to the contrary which may have heretofore been 

voiced by the ICC could be changed administratively to coincide with 

the broad intent and purpose of the legislation now before us.

Alaska’s trucking firms would, of course, be expressly authorized 

to enter into the type of agreements of which I speak as well as trucking firms in the southerly 48 States, and coastwise vessel operators 

under the jurisdiction of the ICC would be enabled to enter into such 

agreements with the Alaska waterborne carriers who are under the 

jurisdiction of the Federal Maritime Commission.
THROUGH ROUTES AND JOINT RATES 9

Altho ugh ai r ca rri ers are not incl ude d, the volume of cargo the y 

haul to Alask a is a very minor percen tage of the total movement of 

good s to Ala ska. A design fo r wo rki ng ai r ca rri ers int o arra ng ements for throug h rou tes and joint rates is a matter th at requires 

fu rthe r study and which can be tak en up later.

A clea r and succinct sum mary o f what this legisla tion would accompli sh is ably set fo rth by Senator W arren Magnuson on pag es 7233 

and 7234 of the Congres sional Record of May 11, 1961, from which I 

quote as fo llo ws :

The establishm ent of such through routes and joint rates would perm it a 

shipper to make one con trac t with the originating carrier on beha lf of all car ­

riers participating in the arra ngemen t and would enable him to ascertain the 

rate for such through movement by consulting a single tariff instead of many 

as may be necessary at present. The shipper and consignee would also have 

the advanta ges given by section 20(11) and similar provisions in other parts of 

the Interstate Commerce Act of recovering from eith er the originatin g or delivering carrier for loss or damage sustained by any carrier partici pating in the 

through movement. In addition, experience has shown that because of the 

economy of established channels of commerce through which sub stan tial traffic 

may flow, and because of reduced accounting and freigh t rate calculation costs, 

joint rates are generally lower tha n a combination of local rates of connecting 

carrie rs not partic ipating in through service arrangem ents.

Mr. C hairm an, Alask ans , who bring in over 90 pe rce nt o f everyt hin g 

the y consume, have lo ng com plained o f t he h igh freigh t rat es in cid ent 

to the long ha ul fro m Sea ttle, W ash ., to Alask a, and high r ate s wi thin 

Alaska, and othe r difficulties in cident to th eir trans po rtatio n prob lems, 

and would welcome passage of a mea sure such as the bills before us. 

The busin ess com munity advocates th is legislation as a means of 

expedit ing the movement of goods in tran si t bound fo r Alask a wi th 

inc ide nta l reduct ion of the cost price lan ded, and the consumers of 

Alask a would welcome such red uction in consumer pric es as might 

result.

Mr. Ch airma n, m ay I go off the reco rd f or a mom ent ?

Mr. Staggers. Yes, of course.

(D iscussion off the record .)

Mr. R ivers. Bac k on the record. Mr. Ch airma n, I have the follo wing com munica tion s sup po rti ng the legis lation now be fore th e subcommittee.

Th e first is add ressed to H on. J oh n Bell W illiam s, chairma n of this 

subcomm ittee, an d sign ed by E. L. Bar tle tt, the senior Senator fro m 

Ala ska.

Th e next is a telegra m, d ate d Ap ril 3, from William A. Eg an , Govern or of Alask a.

Th e next is add ressed to the Subcom mittee on Tr an sp or tatio n bu t 

sent to me for subm ission here, and it is sign ed by A1 Seelige r, presiden t, Fa irb an ks Cha mber of Commerce, and it is a su pp ortin g sta tement f rom th e Fa irb an ks Chamber of Commerce.

I have a l etter d ate d Ma rch 29, 1962, signed by E dw ar d R. Sanders, 

sta tin g the su pp ort of the Alask a Ca rri ers Ass ocia tion, Inc ., whi ch 

is the truckers association o f Ala ska.

Mr. Staggers. W ith ou t objection, the y will be inc lud ed in the 

record.
10 THROUGH ROUTES AND JOINT RATES

(The aforementioned documents follow:)

U.S. Senate,

Committee on Armed Services,

April S, 1962.

Hon. J ohn Bell Williams,

Chairman, Subcommittee on Transportation, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C.

Dear Mr. Chairman : Fo r a number of years I have been vitally concerned

with providing some means which would perm it the estab lishm ent of join t rates 

and through routes for carrie rs serving Alaska or Haw aii and the other States. 

I have introduced legislation on this subject in the 86th Congress and in the 1st 

session of the 87th Congress. Extensive hearings have been conducted on this 

In introducing this legislation I have repeatedly pointed out the numerous 

tran spo rtation problems that plague Alaska and Hawaii and the car riers serving 

these two State s. I have recited ihe benefits that would accrue to the shipping 

public by th e enactment of this legislation.

Passage of H.R. 7297, introduced by Representative Rivers of Alaska, or H.R.

7343, introduced by Chairman Oren Harris , would allow the shipper to or from 

Alaska or Haw aii to make one con trac t with the originating carrier on behalf 

of all carriers handling the goods and to ascerta in the rate for through movement by consulting a single tariff.

Although the legislation which I have previously introduced would permit 

the service to be provided by the creation of a joint board, I have always recognized that this was not necessarily the absolute or last word on the subject. 

I therefo re deeply apprecia te the atte ntion that the committee has given to this 

problem. I have consistently supported, and do support, legislation which would 

provide th is type of service.

Sincerely yours,

E. L. Bartlett.

[Te legram ]

J uneau, Alaska, April 3,1962. Hon. Ralph J. Rivers,

House of Representatives, Neiv House Office Building,

Washington, D.C.

State of Alaska strongly suppo rts legislation under which all c arr iers in Alaska 

trade could be authorized to offer the public the savings and improved service 

which can be made available by the employment of join t rates and through 

routes. Federal regulatory body must have ju risdiction to establish single facto r 

joint through rates if maximum efficiency and economy in transp ortation so 

necessary to A laska ’s economic development is to be realized.

William A. Egan, Governor.

Fairbanks Chamber of Commerce,

Fairbanks, Alaska, April 2, 1962.

Subcommittee on Transportation,

House Committee on Inter sta te and Foreign Commerce,

Hon. Ralph J. Rivers,

House Office Building, Washington, D.C.

Gentlemen : The Fairba nks Chamber of Commerce wishes to take this means 

of advising you of our enthusiastic supp ort of H.R. 7297 which has been introduced by Representative Ralph J. Rivers and which is now under consideration 

by your committee.

Mr. Rivers already knows of our unenviable position of being forced to pay 

the highest freigh t rates as a community of any under the American flag. The 

present rates are discriminatory in th at we are not given the benefit, as others 

are, of through rates or joint rate s. In other words our freight must be moved 

in two stages. First from the supplier or shipper to Seattle w here it is rehandled 

and rebilled and from there on to us in the interior of Alaska. We feel that we 

should be entitled to the privileges of join t billing and common routing so that 

shipping costs can be reduced.
THROUGH ROUTES AND JOINT RATES 11

If the Congress is tru ly interested in the development of Alaska, and we feel 

certain it is, then regulating legislation should he enacted without delay. H.R. 

7297 will go a long way toward providing such regulation which will in turn 

mean lower shipping costs on merchandise destined for Alaska and make possible accelerated development of Alaska.

Thank you for your consideration of tliis matte r.

Sincerely,

Al Seeliger, President.

Alaska Carriers Association, I nc.,

Anchorage, Alaska, March 29, 1962.

Hon. J ohn Bell Will iam s,

Chairman, Subcommittee on Transportation,

Committee on Inter sta te and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. William s : I have had some correspondence with Congresman Ralph 

Rive rs of the House and with many other persons in the Senate and otherwise 

who have an inte rest in the passage of legislation to place the Alaska Railroad 

under the economic jurisdiction of the Inter sta te Commerce Commission and 

other legislation to place the jurisdiction of through routes and joint rates under 

the ICC. All ar e apparen tly cognizant of the real and present need for successful passage of tliis legislation, and the executive committee of the Alaska Carriers Association, Inc., urges me to express to you the ir urgent requ est th at you 

hold hearings on these two bills in the very immediate fut ure looking toward 

the ir release to the floor of the House for action and th at your committee report 

them out favorably and there after work as diligently a s possible for their successful passage.

We will deeply apprecia te your understanding of the very real and immediate 

need for favorable action on these two bills as well as similar action in the Senate 

in o rder to alleviate the deplorable situ atio n that exists in connection with shipments moving w ithin Alaska and on shipments moving to and from Alaska when 

wa ter c arr iers now regulated by the Federal Maritime Commission are invdf^ed. 

Sincerely yours,

Edward R. Sanders, Managing Director.

Mr. Rivers. I also have a statement from the Alaska State Chamber 

of Commerce, addressed to the Subcommittee on Transportatifojn, sent 

to me to be submitted at this time.

And I offer that.

Mr. Staggers. All right.

(The aforementioned letter follows:) \ /.

Alaska State Chamber of Commebc^X. 

Fairbanks, Alaska, March

Subcommittee on Transportation, ’'* "* *'

House Committee on Inte rstate and Foreign Commerce,

Hon. Ralph J. Rivers, House Office Building, Washington, D.C.

Gentlemen : The Alaska Sta te Chamber of Commerce is pleased to see your 

committee giving consideration to H.R. 7297, introduced by our Representative,

Hon. Ralph J. Rivers.

The Alaska State Chamber of Commerce has long recognized that development 

of America’s larg est State, which will enrichen the economy of our country, is 

in large pa rt contingent upon efficient lower cost of tran spo rtation connecting 

Alaska with the smaller S tates.

At the present time Alaska is one of the very few places under the American 

flag where Americans do not enjoy the privilege of through routes and joint 

rates. For all practical purposes, at the present time virtually all shipments 

between Alaska and the southern 48 States involve at least one intermediate 

stop, reha ndling and rebilling. Our organizatio n feels through routing under 

joint billing would constitute a very significant improvement in service to the 

public, and simultaneously enhance the flow of commerce bringing man ufactured 

goods to Alaska and transp orting the fruit of Alaska’s rich resources to our 

sis ter States.
12 THROUGH ROUTES AND JOINT RATES

We respectively present, our opinion th at suitable regulating legislation is 

needed in the public interest. We feel th at c arrie r offering 12-raonths’ service, 

including service to and from destinations where tonnage is not sufficient for 

profitable operation, should be given reasonable protection under regulating 

legislation. We believe that such year-around carrie rs are in some cases 

prese ntly suffering needless adverse economic effect from unregulated operation 

of contract car riers and other seasonal car riers who do not offer service throughout the year.

From our admittedly layman’s viewpoint, we believe regulation under authority of the Inter sta te Commerce Commission would be in the best inte rest 

of the public and the principal carrie rs involved. Inau guratio n of railroad 

car-barge service to and from Alaska in the immediate fut ure appe ars to add 

weight to tha t viewpoint.

We respectfully request your favorable consideration of H.R. 7297. We 

sincerely believe enactmen t of this or sim ilar legislation will be in the best 

public interest.

Sincerely,

C. W. Snedden,

Chairman, Executi ve Committee.

Mr. Rivers. I n closing, Mr. Chairman, I thank you and the other 

members of this subcommittee for the kind attention which you have 

accorded me.

Mr. Staggers. Thank you, Congressman.

Do you have any questions, Mr. Jarma n ?

Mr. J arman. I have no questions, Mr. Chairman, hut I would like 

to welcome our colleague to the committee and compliment him on 

an excellent statement.

Mr. Rivers. Thank you.

Mr. Staggers. Thank you very kindly, Mr. Rivers.

Our next witness will be the Honorable Rupert L. Murphy, Chairman of the Interstate Commerce Commission of Washington.

Gentlemen, might I say at this point tha t I do not believe we have 

any opposition to this bill and, for the sake of brevity, any of you 

tha t can, if you care to submit your statement or summarize it, it will 

be welcome; or if you care to read it, it is all right.

But if there is anyone in opposition we certainly want to hear 

them and hear them out all the way.

STAT EMENT OF RU PERT L. MU RPHY, CHA IRMAN, INT ERSTATE 

COMMERCE COMMISSION, WASHINGTON, D.C.

Mr. Murphy. Thank you, Mr. Chairman.

Mr. Chairman, before I present the statement on behalf of the Commission, may I introduce the members of the Commission who are 

in attendance?

Mr. Staggers. Yes.

Mr. Murphy. Commissioners Donald P. McPherson, of Pennsylvania, and Abe McGregor Goff, of Idaho, and we also have with us 

several staff members: Mr. Raymond Krebill, Assistant Director of 

the Bureau of W ater Carriers and Freight Forwarders; Mr. Lee R. 

Nowell, Director of the Bureau of Water Carriers and Freight Fo rwarders; Mr. Robert Newel, Assistant Director of the Bureau of 

Traffic, and Mr. Irvin Koch, Assistant Director of the Bureau of 

Rates and Practices.

And, of course, we have Mr. Hiram Spicer, our Legislative Counsel 

and Mr. Dale Hardin, our Congressional Liaison Officer.
THROUGH ROUTES AND JOINT RATES 13

Mr. Staggers. We are glad to have all of these distinguished people 

with us today. You may proceed.

Mr. Murphy. Mr. Chairman, and members of the subcommittee, my 

name is Rupert L. Murphy. I am the present Chairman of the Interstate Commerce Commission and have served in tha t capacity since 

January 1 of th is year. I am appearing today on the Commission’s 

behalf to testify on two bills, H.R. 7343 and II.R. 7279. H.R. 7343 

was introduced at the Commission’s request to give effect to Legislative Recommendation No. 17 contained in our 75th annual repo rt to 

the Congress. Since H.R. 7297 is an identical bill, my comments with 

respect to H.R. 7343 are equally applicable to H.R. 7297.

H.R. 7343 would provide a means of extending to the users of 

motor-water services and to the users of certain combinations of 

water services between Alaska or Hawaii and the other States the 

benefits resulting from joint rates similar to those new enjoyed by 

shippers by rail-and-water on such traffic.

Under the Transportation Act of 1940, our jurisdiction over water 

carriers was limited to commerce between the States. Jurisd iction 

over waterborne traffic between the States and what were then the 

Territories of Alaska and Hawaii, as well as between the States and 

other areas, was continued in the Federal Maritime Commission. 

Except for provisions in the Alaska and Hawaii statehood acts preserving the jurisdiction of the Maritime Commission over water 

transp ortation between Alaska, Hawaii, and the other States, such 

jurisdiction would have devolved automatically upon the Interstate 

Commerce Commision upon the admission of Alaska and Hawaii into 

the Union. Thus, the through route and joint rate problem which 

H.R. 7343 proposes to solve would not have arisen. Under existing 

law, common carriers subject severally to the jurisdiction of different 

Federal regulatory agencies cannot, in the absence of specific statutory 

authority, establish through routes and joint rates with each other.

According to Senate Report No. 1163, 85th Congress, 1st session, on 

S. 49 (the Senate Alaska statehood bill), the reason that this problem 

was not disposed of was:

* * * The committee (the Senate Committee on Interior and Insular Affairs) 

did not feel that the statehood bill was a proper place to change the law which 

is applicable to the complicated conditions existing in the transportation industry in Alaska. This is particularly true of water transportation.

Thus, it is the intention of the committee to leave all transportation matters 

for later study and legislation if any is required. In the meantime the authority over transportation will remain in the status quo * * *.

While the language of the report is broad enough to include all 

transportation by all modes of carriage, the plan words of section 

27(b) of the statehood bill relate only to water transportation.

Federal Maritime Commission jurisdiction over waterborne commerce between Hawaii and the other States was apparently continued 

for the same reason, the Senate Inte rior and Insular Affairs Committee stating, in part, in its report (S. Rept. No. 86th Cong., 1st 

sess.) on S. 50 (the Senate Hawaii statehood bill) th at:

* * * The committee does not feel t hat the statehood bill is the place to confuse shipping procedures, authorities, and regulations.

Coordination of service by different modes of transportation subject to the jurisdiction of the Interstate Commerce Commission by 

means of through routes and joint rates is provided for in various
14 THROUGH ROUTES AND JOINT RATES

provisions of the Interstate Commerce Act. Section 216(c), for example, permits motor common carriers to enter into such arrangements 

with common carriers by railroad, express, and water.

The only carriers of different modes subject to our jurisdiction 

which may be compelled to establish through routes and joint rates 

with each other are railroads and water common carriers subject to 

parts I and I II of the act, respectively.

As to the establishment of through routes and joint rates by carriers subject severally to the Interstate Commerce Act, the Shipping 

Acts, and the Federal Aviation Act, with each other and with other 

carriers, air carriers may, under section 1003 of the Federal Aviation 

Act, establish through service and joint rates with other common carriers. Also, under section 1(1) (a) of the Interstate Commerce Act, 

railroads subject to the jurisdiction of the Interstate Commerce Commission and common carriers by water subject to the jurisdiction of 

the Maritime Commission may voluntarily establish through routes 

and joint rates. Tariffs covering such arrangements are filed with the 

Interstate Commerce Commission and are subject to our jurisdiction.

Some motor carriers, in conjunction with water and rail lines, have 

established in their own name single factor through rates on traffic 

moving between points in Alaska and the 48 contiguous States by entering into agreements with steamship companies under section 15 of 

the Shipping Act of 1916. Under such arrangements the motor carrier is regarded as a nonvessel operating water carrier. It is our 

understanding that similar arrangements have been entered into with 

respect to Hawaiian traffic.

Specifically, authority now exists, under part I of the Interstate 

Commerce Act, with respect to the voluntary establishment, of joint 

rates between railroads subject to the jurisdiction of the Interstate 

Commerce Commission and water carriers operating between Alaska 

or Hawaii and the contiguous States, including water carriers regulated by the Maritime Commission. Such authority does not exist, 

however, with respect to motor and water common carriers subject to 

the Commission’s .jurisdiction and common carriers by water subject 

to the jurisdiction of the Maritime Commission. Neither is there any 

authority for the establishment of single factor through rates on railwater-rail movements between Alaska and the other States. This is 

because the Government owned and operated Alaska Railroad is not 

subject to the jurisdiction of any regulatory agency. In 1960, the 

Senate and House Interstate and Foreign Commerce Committees, recognizing the conditions that exist, held hearings on, and reported, 

measures which would have provided for economic regulation of the 

Alaska Railroad. The bill passed both Houses, but was vetoed by 

President Eisenhower. A similar bill is now pending in this Congress, and we hope it will be taken up shortly and enacted into law.

With the advent of statehood for Alaska and Hawaii, the regulatory pattern for transportation between those and other States became exceedingly complex, involving a number of statutes, several 

regulatory agencies, and certain water carriers which, as I have said, 

because of the effect of the provisions in the statehood acts, remain 

unregulated by any Federal regulatory agency. This entire situation 

represents a novel departure from the traditional regulatory scheme 

insofar as transportation in interstate commerce is concerned. There 

is an undeniable need for legislation if shippers in the Alaskan or
THROUGH ROUTES AND JOINT RATES 15

Hawaiian trade are to enjoy the benefits of single factor through rates 

on traffic moving by motor-and-water or by a combination of water 

services.

The availability of such through routes and joint rates would enable a shipper to make one contract with the origin ating carrier on 

behalf of all carriers participatin g in the arrangement. In addition, 

the shipper could ascertain the rate for such through movement by 

consulting a single tariff' instead of many as may be necessary at 

present. Both shipper and consignee would have the advantages 

given by section 20(11) and similar provisions in other parts of the 

Interstate Commerce Act of recovering from either the originating 

or delivering carrier for loss or damage caused by any carrier participating in the through movement. Finally, experience has shown that 

because of the economy of established channels of commerce through 

which substantial traffic may flow, and reduced freigh t rate calculation 

costs, joint rates are generally lower than a combination of local 

rates of connecting carriers not participating in through service 

arrangements.

We are fully aware tha t H.R. 7343 would not, because of the unregulated status of the Alaska Railroad, permit full realization of the 

benefits that could be derived from the establishment of through 

routes and joint rates. We are convinced, however, that it is an important and necessary step in the right direction.

We strongly urge favorable consideration of H.R. 7343 or H.R. 

7297. Mr. Chairman, we appreciate this opportunity to appear today and 

express our views on these bills. If there are any questions, 1 would 

be glad to try to answer them.

Mr. Friedel (presiding). Thank you, Mr. Murphy, for your statement.

It is my understanding that the railroads in Alaska are now owned 

by the Government but they may be sold to private industry. Is that 

t rue ?

Mr. Murphy. I do not believe I can answer that, Mr. Chairman. 

That is possibly true, but I would not know.

Mr. Friedel. The next gentleman is Mr. Harold F. Hammond, executive vice president of the Transportation Association of America.

Mr. Hammond.

STAT EMENT 0E HAROLD F. HAMMOND, EXECUTIVE VICE PR ESI ­

DENT, TRANSPORTATION ASSOCIATION OF AME RICA , WA SH INGTON, D.C.

Mr. Hammond. Mr. Chairman and members of the committee, my 

name is Harold F. Hammond. I am executive vice president of the 

Transportation Association of America, with general offices in 

Washington, D.C.

I have with me Robert Redding, vice president and counsel of TAA.

I am appearing today on behalf of the association to support the 

enactment of legislation embodied in H.R. 7343 and H.R. 7297 which 

would amend the Interstate Commerce Act regarding through routes 

and joint rates.
16 THROUGH ROUTES AND JOINT RATES

These bills, ide nti cal in con tent, pe rta in to the tra ns po rta tio n of 

prop erty betw en Al aska or Ha wa ii on the one hand and the other 

State s of th e U nio n on the other . First , they would pe rm it the est ablish ment of th ro ug h service a nd j oint rat es by m otor common carriers 

under In te rs ta te Commerce Commission juris dic tio n and wa ter common carriers subje ct to th e juris diction o f t he F ed era l M ari tim e Commission. Second, thes e bills would autho riz e throug h service and 

joint rate s by w ater common ca rri ers u nd er ICC jurisd iction and w ate r 

common ear ner s u nd er FMC jur isd iction .

On Ja nuar y 16, 1962, th e TA A board of dir ectors autho rized su ppo rt “of any suitable mechanism whereby vo lunta ry throug h rou tes 

and j oint ra tes can be esta blis hed on interstate traffic between the contin ental Uni ted State s on th e one ha nd and noncontiguous State s and 

territo rie s on the oth er, as well as among the la tter State s and te rr itories.” Th is position was supp orted by the TA A user, investor, 

freigh t forw ard er, highway, pip eline, railr oa d, and wa ter ca rrier 

panels, wi th th e ai r tran sp or t panel n ot op posing.

Ac cor din gly , the throug h route an d jo in t rate arr angeme nts contem pla ted by H.R. 7343 and H.R . 7297 fa ll wi thin the frame wo rk of 

TA A’s pres ent policy and we su pp ort t he ir enactment.

As you may know, TA A is composed of all kin ds of users, inv estment inte rests, and airline s, frei gh t forw ard ers , trucks, railro ads, oil 

pipe lines, and water carriers.

The me rits of this pro posal well war ra nt its autho riz ati on by the 

Congress. The concept of throu gh r outes and jo int rat es has been in ­

corpo rated in the In tersta te Com merce Ac t fo r ma ny years. Th ere 

are va rying provisions au thorizi ng the trans po rta tio n of prop erty on 

eit he r a compu lsory or permissive basis as amo ng the differing modes 

of t rans po rta tio n sub ject to IC C jur isd iction .

The establishm ent of such t hr ou gh service a nd jo int ra tes is of value 

to both the ca rri ers and the shipp ers in th at a joint rate r at he r th an 

a com bination of local ra tes is possible, a sing le bill o f lad ing will su ffice, and single c arrie r responsi bility also prevails. The coo rdination 

of tran sp or t servic es is greatly enh anced, pe rm itting commodities to 

move freely from one mode of tran sp or tatio n to anoth er witho ut in ­

ter ru ption o r du plication of services and facilities.

These a dvantag es are p artic ularly de sirabl e in pr om oting an d d eveloping the flow of commerce in the im po rta nt and gro wing ma rke ts 

covered by th is legislation.

I t should also be pointed out th at the enactment of thi s leg isla tion 

will, fo r th e first tim e, pe rm it th e esta blishme nt of t hrou gh service and 

joi nt rat es by the combinations of c arr ier s iden tified in the bills, which 

are the only modes of tra ns po rt not now aut horized to establish such 

coo rdinated service.

We sinc erely h ope the subcomm ittee will recognize the need fo r such 

service and ap preciat e the f act th at i t is be ing supported by the modes 

of tra ns po rta tio n rep res ented on the T AA ca rri er p anels, as desc ribed 

above, as well as by the rep res entat ive grou p of users and investors 

serving on the TAA user and investor panels.

We hop e th at the subcomm ittee will be able to move forw ard in 

reco mmending enactm ent of such legislation, in ord er th at passage may 

be assured du ring the pendin g 2d session of th e 87th Congress.

Mr. F riedel. Th an k you, Mr. Hamm ond.
THROUGH ROUTES AND JOINT RATES 17

Mr. Friedel. Mr. Springer ?

Mr. Springer. Mr. Hammond, it is my understanding that at the. 

present time water and motor cannot overlap. Is tha t right ?

Mr. Hammond. Tha t is correct. Water-water.

Mr. Springer. Water-water?

Mr. Hammond. Yes. It was brought out before you came in, I 

think, Mr. Springer, tha t the only two gaps tha t exist today is in 

motor and deep water and in inland water and deep water. Those 

are the two gaps.

Mr. Springer. Those two gaps are all ? Is that right ?

Mr. Hammond. Tha t is right, and these bills will till both of those 

gaps.

Mr. Springer. Thank you, Mr. Chairman.

Mr. Friedel. Thank you, Mr. Hammond.

Our next witness is Mr. James F. Fort, counsel, public affairs, of the 

American Trucking Associations, Inc.

Mr. Fort.

STATEM ENT OE JAMES F. FONT, COUNSEL, PUB LIC A FFAIRS , AM ERICAN TRU CKING ASSOCIATIONS, INC., WASHINGT ON, D.C.

Mr. F ort. Mr. Chairman, and gentlemen of the subcommittee, my 

name is James F. Fort. I am counsel—public affairs of the American 

Trucking Associations, Inc., with offices at 1616 P Street NW., Washington, D.C. As the subcommittee knows, ATA is the national trade 

association of the trucking industry representing all forms of motor 

carriers of property both private and for hire and having affiliated 

State associations in 49 States.

The trucking industry supports H.R. 7297 and H.R. 7343. These 

bills are identical and are designed to improve the transportation 

situation between Hawaii, Alaska, and the other States by providing 

for the establishment of through routes and joint rates within the 

framework of the Interstate Commerce Act.

As the committee knows, the advent of statehood for Alaska and 

Hawaii created new and troublesome problems for the Interstate Commerce Commission, and for shippers and carriers engaged in tra nsportation to and from these new States. The statehood acts for both 

these new States contained provisions retaining jurisdiction over water 

transportation to and from them in the hands of the then Federal 

Maritime Board; however, the act of statehood brought Alaska 

motor carriers (engaged in interstate commerce) within the Interstate 

Commerce Act. This situation confounded an already confused 

picture and made some solution very nearly imperative.

H.R. 7297 and H.R. 7343 treat this problem in a direct feasible, and 

simple manner by giving the Interstate Commerce Commission jurisdiction over through route and joint rate arrangements. The bills 

would amend section 216(c) and 305(b) of the Interstate Commerce 

Act to provide for the establishment of permissive through routes and 

joint rates between motor carriers and oceangoing water carriers. 

These sections of the act presently permit through routes and joint 

rates, for example, between motor and rail carriers or between motor 

carriers and barge operators.
18 THROUGH ROUTES AND JOINT RATES

Wh ile several oth er legislative p roposals have been made in th e pas t 

few yea rs to tre at this prob lem, none of them seems to have been so 

practic al as t he one before you today. In testimo ny at several e arl ier 

hea rings on this subject we have ref rai ned from endorsing specific 

bills and h ave simply poi nted to the need of the shipp ers and c arr iers 

alike for some solution which will perm it the use of a single fac tor 

throug h rate from inland points in the contiguous 48 State s to points 

in o ur new Sta tes. How ever, because i t accomplishes what needs to be 

done and does it within the fra me wo rk of the In terstate Commerce 

Act, we endorse H .R. 7297 and H .R. 7343, and we urge pr om pt passage 

of e ith er of these bills.

Th an k you, Air. Cha irm an.

Air. F riedel. Th an k you, Air. Fo rt, for a very short and precise 

statem ent.

Ou r nex t w itness w ill be Air. Orrin H. Frale y, vice p resident of the 

Con solidated Frei ghtw ays, Inc .

Air. Frale y.

STATEMENT OF ORRIN H. FRALEY, VICE PRESIDENT, CONSOLIDATED FREIGHTWAYS, INC., MENLO PARK, CALIF.

Air. F raley. Air. Ch airma n, and gentlemen of the subcommittee, 

my name is Or rin II. Frale y. I am a vice pre sident o f Con solidated 

Freig htw ays, Inc., Alenlo Pa rk , Calif. Ou r com pany has been engag ed since 1929 in the common carriage of freigh t by mo tor vehicle, 

st ar ting o rig ina lly in the Pacific N ort hw est a nd subsequently en larging its opera tion until it now serves points in 37 State s with routes 

ext endin g fro m the west co ast to the east coast an d from the Ca nadia n 

borde r to the Alexican border. Con solidated Freig htwa ys also conducts mo tor ca rri er opera tions in Ala ska, between Alask a and the 

Pacific Northwest, and in western Canada throug h a sub sidiary .

AVe app ea r in su pp ort of II.R. 7297 an d H.R. 7343 since it has been 

our policy and practic e fo r a numb er o f yea rs to seek permissiv e joint 

rates, not only with oth er mo tor carriers but with oth er modes of 

tra ns po rta tio n as well. Th is has resu lted in our engagin g in pigg yback service with several rai lro ads, and havin g both joint mo tor-air 

rates with ai r carriers and joint mo tor- barge rates wi th inl and water 

car riers. How ever, un de r pre sen t law, we have been una ble to establish joint r ates with common c arrie rs by water sub ject to the Sh ippin g 

Act, 1916, as amended, or the Int erc oasta l Sh ipping Act, 1933, as 

amended. AVliile such joint rat es are desirable gen era lly as a tran spo rta tio n practic e, they are pa rti cu larly necessary in the Ala ska opera tion. I wou ld like to briefly describe this opera tion in ord er to 

illus tra te su ch need.

In 1957, Consolida ted F reightway s acquired G arr iso n Fas t Freig ht, 

Inc., a mo tor ca rri er op erating between Sea ttle, Wash ., and Ala skan 

points, as well as wi thin Ala ska, utilizin g Alask a Steamship Co. 

vessels for the wa ter mov ement of the hig hway trai lers between 

Se attle and the Alaska ports. Technological imp roveme nts now permi t co nversion of th e hig hw ay se mitrailers into container s by removal 

of the un derca rriage fra me and wheels befo re loa din g on the ship.

Pri or to Alask a s tate hoo d, only the wa ter movement portio n of this 

coo rdinated opera tion was subject to regula tion, such tra ns po rta tio n
THROUGH ROUTES AND JOINT RATES 19

bein g under the jurisd iction of the Fe deral Maritim e Board (now 

Fe de ral Ma riti me Com mission ). Ga rri son’s Se attle-Alask a traffic 

was handled p ursu an t to ta rif fs filed w ith th e F ed era l Ma riti me Bo ard 

by Ga rrison and Ala ska Ste am in accordance with an agreem ent a pproved by th e Board u nder section 15 of the S hipp ing A ct, 1916. The 

res ult was to provide the sh ipping pub lic with a throug h bill of 

lad ing , a single fac tor rat e, and single ca rrier responsibility from 

origi n in Seattle to the stor e doo r in Ala ska. Th is opera tion had 

economic me rit since it fac ilitat ed , prior to shipm ent, det erm ina tion 

of the exact tran sp ortatio n cost and it enabled the sh ippe r to deal 

with a sing le ca rri er f or obta ini ng service, tra cin g, and the processing 

of claims.

Up on the adv ent of Alask a stateho od in 1959, mo tor c arrie r tran spo rta tio n in inter sta te commerce in Alask a became s ubject to reg ulatio n by the In terstate Comm erce Commission bu t wa ter carriage between po rts in the contiguous 48 Sta tes and p orts in A las ka continued 

to be reg ula ted by the Federal Ma riti me Board . Con solidated 

Fr eigh t ways, as a mo tor ca rri er, in order to clarify the issues raised 

by stateho od, a tte mp ted to file a joi nt ta rif f between itself a nd a reg ulated wa ter c arr ier , only to have both the In tersta te C ommerce Commission and the F edera l M aritim e B oard reje ct the tarif f on th e ground 

th at neith er reg ula tor y agen cy had jur isd iction over the enti re movement and thu s, as a matt er of law, n eit he r could a ccept the tar iff. The 

resu lt of this rejection has been th at any tra ns po rta tio n of freigh t 

to the new State s of Alask a and Ha wa ii, which req uired in pa rt 

movement by a regu lated w ate r c arrie r could not be afford ed the economy of a joint rate . The Ga rrison division has continued to operate 

between Se attle and Alask a po rts only in accorda nce with tariffs filed 

in its ca pac ity as a common c arrie r by water, nonvessel.

II.R . 7297 and H.R. 7343 are iden tica l bills. E ither would, if 

enacted into law, not only pe rm it joint rates between points such as 

Se att le and points within Alaska, b ut would also pe rm it j oi nt rate s between points withi n the contigu ous 48 State s and points within 

Alaska. Such joint rat es are to the best intere st of both the ca rri er 

and the shipper .

In 1959, we testified before th is com mittee in s up po rt of other legislative pro posals relative to this same problem. A t th at tim e, we 

went fu rthe r into de tail; tod ay, we think this sta tem ent sufficient but 

should the committee desire fu rthe r inform ation, we will be glad to 

furnish it. We ear nestly request enactment of legislation to remedy 

the lack of jo int r ate s in the Alaska tra de and feel the b ills conside red 

tod ay will pro vid e this.

Tha nk you.

Mr. F riedel. Th an k you, Mr. F raley .

On pag e 4 of your state me nt, th e second pa ra gr ap h you men tion, in 

spe aking of II.R . 7297 and H .R. 7343, th at —

eith er would, if enacted into law, not only permit join t rate s between points such 

as Seattle and points with in Alaska but would also permit joint rat es between 

points within the contiguous 48 States and points with in Alaska.

Xow, my question is thi s: H ow would this affect Ha wa ii?

Mr. F raley. Th e same wou ld be tru e with resp ect to Haw aii. The 

reason we did not men tion Ha wa ii in ou r sta tem ent is th at we h ave 

withd raw n from the H aw aii an tra de , but i t w ould have the same effect.
20 THROUGH ROUTES AND JOINT RATES

Mr. F riedel. In other words, it is the other 49 States instead of 48 

States?

Mr. F raley. Tha t is right.

Mr. Friedel. Thank you, Mr. Fraley.

Are there any other witnesses ?

We have a letter here from the American Merchant Marine In ­

stitute, Inc., dated April 4, 1962; and also a letter from the Common 

Carrier Conference of Domestic Water Carriers, dated April 5, 1962.

We will have these inserted into the record.

(The aforementioned letters follo w:)

American Merchant Marine Institute, Inc.,

Washington, D.C., A pril 4,1962.

Hon. J ohn Bell Williams,

Chairman, Subcommittee on Tran sportation and Aeronautics, Committee on Interstate and Foreign Commerce, U.S. House of Representatives, Washington, D.C.

Dear Mr. Williams : The American Merchant Marine Ins titu te, Inc., the 

larg est national association representing American shipowners and operators, 

on all coasts of the United States, favo rs enac tment of H.R. 7297 and H.R. 7343, 

iden tical bills which would provide extension to the users of motor-water services 

and to the users of a combination of water services between Alaska or Hawaii 

and the other States of the benefits of joint rates sim ilar to those now available 

to shippers by ra il an d water on such traffic.

This legislation seems an adeq uate approach in orde r to perm it the esta blishment of through routes and join t rate s, there by allowing a shipper to make one 

contract with the originating carrier on behalf of all carriers who are parties 

to the tran spo rtation arrangem ent. This would enable him to determine with 

certainty the rat e for the through movement by consulting a single tariff—a 

procedure not possible under existing law.

We consider a proposal along these lines may well serve as a major step in 

solving an existing burdensome problem, and therefo re urge your favorable 

action thereon.

We ask th at this letter be made a pa rt of the written record of the bills.

* Yours very truly,

Alvin Shapiro.

The Common Carrier Conference of Domestic Water Carriers,

St. Louis, Mo., April 5,1962.

Hon. J ohn Bell Williams,

Chairman, Transportation and Aeronautics Subcommittee, House Inters tate and

Foreign Commerce Committee, Washington, D.C.

Dear Chairman Williams : It has come to our atte ntion th at hearings were 

held on April 4 on two bills, H.R. 7297 and H.R. 7343 to perm it the establish ­

ment of joint truck-water rates between points in the United States and points 

in Alaska and Haw aii, subject to the jurisdiction of the Interst ate Commerce 

Commission. The Common Ca rrie r Conference of Domestic Wa ter Carriers 

would like to have testified in support of these proposals but our consideratio n 

of these bills could not be scheduled any sooner than our Washington meeting 

on April 4. We were, therefore, unable to provide a witness in tim e to testify a t 

the hearing.

It is, however, our desire to go on record in supp ort of these proposals. This 

letter is to ask you to include in the record of the hearings the support of the 

Common Ca rrie r Conference of Domestic Wa ter Carriers, representing common 

car riers by w ate r in the coastal, intercoa stal, Gre at Lakes, and inla nd wate rways 

service, of H.R. 7297 and H.R. 7343. >

Respectfully yours,

A. C. I ngersoll, Jr. , Chairman.

Mr. Friedel. The meeting is now adjourned.

(Whereupon, at 11:11 a.m., the hearing was adjourned.)