Opinion ID: 353957
Heading Depth: 1
Heading Rank: 9

Heading: the national transportation policy

Text: 42 Section 203(b)(8) of the Act provides that commercial zone exemption from federal regulation shall apply unless and to the extent that the Commission shall from time to time find that regulation is necessary to carry out the national transportation policy. The National Transportation Policy is set forth in the preamble to the Act, 49 U.S.C. preceding §§ 1, 301, 901 and 1001. It declares, inter alia, that the Act shall be administered to promote safe, adequate, economical, and efficient service; to foster sound economic conditions in transportation and among the several carriers; to encourage the establishment and maintenance of reasonable charges without unfair or destructive competitive practices; and to encourage fair wages and equitable working conditions. 43 Petitioners Short Haul Survival Committee, A-C Berwick, et al., American Trucking Associations, Inc., and numerous intervening petitioners assert that the Commission abused its discretion in concluding that the expansion of commercial zones would promote, rather than frustrate, the goals set forth in the National Transportation Policy. They claim that zone enlargement will drive large numbers of short-haul carriers out of business; that shippers will experience a loss of inexpensive, dependable service as a result; that unregulated carriers operating within the newly expanded zones will pose a safety hazard to the public; and that the new rules will result in lower wages and poorer working conditions for employees of trucking concerns. 44 Throughout the lengthy proceeding which culminated in the Report, shipper support for larger commercial zones was virtually unanimous. The reasons for this overwhelmingly positive response are not far to seek. Augmented zones and enlarged terminal areas will enable suburban shippers to contract with exempt local carriers, thereby placing them on an equal footing with shippers located within the old zones. The new rules will also enable long-haul carriers to serve suburban shippers directly without the need for costly, time-consuming interlining. The Commission rationally concluded on the basis of the evidence submitted that zone expansion will result in lower rates, shorter transit times and reduced cargo damage for suburban shippers, thereby fostering the National Transportation Policy's stated goal of economical and efficient service. 45 The Commission also concluded that its proposed rules were likely to benefit unregulated local carriers, long-haul carriers and freight forwarders as well. In its Report it noted that the expansion of commercial zones will enable local carriers who were previously confined to the central cities to recapture a share of the business generated by the many shippers who have relocated to the suburbs during the last three decades. The Commission also concluded that the new rules will improve the lot of long-haul carriers by enabling them to perform more single-line service, and benefit freight forwarders by enlarging the areas within which local cartage operators can act as agents for them in performing collection and delivery services. The Commission did not act irrationally or abuse its discretion in determining that zone expansion would have these salutary effects, thereby fostering sound economic conditions in transportation and among the several carriers. Substantial record evidence supports the Commission's conclusions. 46 Petitioners assert that the Commission ignored evidence that the new rules will have the effect of irreparably injuring short-haul carriers. They predict that cut-throat competition in the newly enlarged zones will sharply curtail their revenues and drive many short-haul concerns out of business. The Commission did not ignore the likely impact of the contemplated rule changes on short-haul carriers but rather analyzed the matter carefully in its Report and concluded that as a result of commercial zone expansion, 47 (s)hort-haul carriers will experience three types of adverse effects. First, some truck load traffic will be diverted by the ability of long-haul carriers to provide more single-line service. Secondly, they will lose protection from competition on those portions of their service routes encompassed by the expanded zones. Thirdly, in many cases the pecuniary value attached to their operating certificates will be substantially diminished. 48 Report, p. 128. 49 While it recognized that increased competition in the expended zones might result in decreased profits for short-haul carriers, the Commission concluded that the over all benefits to the public of more single-line service and greater flexibility of local operations within urban areas amply justifies our actions in this proceeding. Report, p. 128. We cannot say that the Commission acted irrationally in striking the balance among competing interests in this fashion. As the Supreme Court noted when faced with a similar challenge, 50 (t)he Commission's conclusion that consumer benefits outweighed any adverse impact upon the existing carriers reflects the kind of judgment that is entrusted to it, a power to weigh the competing interests and arrive at a balance that is deemed the public convenience and necessity. United States v. Pierce Auto Lines, 327 U.S. 515, 535-536, 66 S.Ct. 687, 697-98, 90 L.Ed. 821 (1946). If the Commission has drawn out and crystallized these competing interests (and) attempted to judge them with as much delicacy as the prospective nature of the inquiry permits, ICC v. J-T Transport Co., 368 U.S. 81, 89, 82 S.Ct. 204, 209, 7 L.Ed.2d 147 (1961), we can require no more. 51 Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 1974, 419 U.S. 281, 293-94, 95 S.Ct. 438, 446, 42 L.Ed.2d 447. 52 Petitioners assert that commercial zone expansion is likely to result in a marked decline in highway safety, predicting that extensive deregulation in and around many of our major cities will induce entry by the inadequately financed who will be forced to cut corners at the expense of safety. 53 Responsibility for establishing and enforcing highway traffic safety regulations was shifted from the Commission to the Department of Transportation's Federal Highway Administration in 1967. See, 49 U.S.C. § 1655(e). Safety rules promulgated by the Federal Highway Administration extend to regulated and unregulated carriers alike and will thus apply in full force to carriers operating within the newly expanded commercial zones. The Highway Administration announced in a notice published in the Federal Register on February 25, 1976, that the Commission's action would not affect coverage of its safety regulations. 41 Fed.Reg. 8175. 54 The Teamsters Union, an intervening petitioner, claims that zone expansion will lead to lower wages and inequitable working conditions for employees of trucking concerns but marshalls little concrete support for its position. Its arguments must be evaluated in light of the fact that local exempt carriers, whose scope of operation will be substantially increased as a result of the Commission's action, are often small, family-run enterprises which do not employ union drivers. The Teamsters argue, in effect, that the very existence of these concerns runs counter to the goals expressed in the National Transportation Policy. However, that Policy, which directs the Commission to administer the Act in a manner calculated to promote the public interest generally, rather than the Teamsters' interests specifically, does not prohibit carriers from employing non-union personnel.