American Trucking Associations, Inc. v. Atchison, Topeka & Santa Fe Railway Co.American Trucking Associations, Inc. v. Atchison, Topeka & Santa Fe Railway Co.
delivered the opinion of the Court.
These three cases present the following question: Does the Interstate Commerce Commission have authority to promulgate rules providing (1) that railroads which offer trailer-on-flatcar (TOFC or “piggyback”) service to the
A three-judge district court, convened under 28 U. S. C. §§ 1336, 2284, 2321-2325, at the request of various railroads and freight forwarders, set aside the rules which the ICC had promulgated in a rulemaking proceeding initiated on its own motion.
The appellees are the railroads and freight forwarders who initiated the District Court proceeding. The appellants are the United States and the ICC (No. 60), together with the American Trucking Associations, Inc., et al. (No. 57), and the National Automobile Transporters Association (No. 59), which intervened below as defendants.
More specifically, the issue presented is the validity of Rules 2 and 3, promulgated by the Commission in
Ex parte 230, supra.
49 CFR §§ 500.2 and 500.3 (Supp. 1967). Rule 2 provides that “TOFC service, if offered by a rail carrier through its open-tariff publications, shall be made available” at the same charge to all other persons. In substance, it is a paraphrase of § 2 of the Interstate Commerce Act, 24 Stat. 379, as amended, 49 U. S. C. § 2 (hereinafter cited only to U. S. C.). Rule 3 provides that, with certain qualifications and subject to certain conditions, “motor common and contract carriers, water common and contract carriers, and freight forwarders may utilize TOFC service in the performance of all or any portion of their authorized service
The background of the controversy may be briefly described. The growth of trailer-on-flatcar service has been “explosive” since the latter half of the 1950’s.
1
From the time of passage in 1935 of Part II of the Act regulating motor carriers, until the institution of the present proceeding, the Commission appears to have regarded trailer-on-flatcar service not as bimodal, but as an adjunct of transportation by railroad — as a facility essentially of, by and for the railroads. This attitude is summed up by the ICC’s definition of TOFC in 1954 in
Movement of Highway Trailers by Rail,
293 I. C. C. 93 (the so-called
New Haven
case), which provided the basic legal framework upon which the development of TOFC traffic has been based. In that case, the Commission described TOFC or piggyback service as transportation of “a freight-laden trailer secured to a flatcar, which in turn is coupled in a train being drawn by a locomotive
Even prior to the New Haven case, beginning in 1939, in Substituted Freight Service, 232 I. C. C. 683, it was the Commission’s position that a railroad could grant or deny TOFC service to common carriers by motor. 3 Even if the railroad offered such service generally to the public, it could withhold it from for-hire motor carriers. Except for limited uses of rail open tariffs permitted by certain railroads, 4 contract and common carriers by motor participated in piggyback service only by agreement, including through route-joint rate arrangements between a railroad and a trucker (see Plan V, infra), and railroad acceptance of trailers or containers of truckers, the shipment moving under motor carrier tariffs and the railroad’s compensation being based upon a division of charges arrived at through negotiations between the carriers (Plan I, infra). These arrangements had to be voluntary for it has. been the prevailing view that the railroads, as common carriers, had no duty to service truckers under their open tariffs, and, although § 216 (c), 49 U. S. C. § 316 (c), authorizes motor common carriers to establish through routes and joint rates with rail common carriers, the Commission had no power to compel such joint arrangements.
Plan I (Joint Intermodal):
Railroad movement of trailers or containers of motor common carriers, with the shipment moving on one bill of lading and billing being done by the trucker. Traffic moves under rates in regular motor carrier tariffs, and the railroad’s compensation is arrived at by negotiation between the two carriers.
Plan II (All-Rail):
Door-to-door service performed by the railroad, which moves its own trailers or containers on flatcars under open tariffs usually similar to those of truckers.
Plan III (All-Rail):
Ramp-to-ramp rates to private shippers and freight forwarders, based on a flat open-tariff charge, regardless of the contents of trailers or containers, which are usually owned or leased by freight forwarders or shippers. No pick-up or delivery is performed by the railroad.
Plan IV (All-Rail):
Flat open-tariff charge for loaded- or empty-car movement, the railroad furnishing only power and rails. Shipper or forwarder furnishes a trailer or container-loaded flatcar, either owned or leased.
Plan V (Joint Intermodal):
Joint railroad-truck or other combination of coordinated service rates. Either mode may solicit traffic for through movement, and traffic moves on originating carrier’s bill of lading.
While data are not available precisely to define the growth of traffic under the various plans, the evidence indicates that major growth has been primarily in the
Faced with the explosive growth of piggyback service on the basis of principles which had evolved in the infancy of the development of piggyback, the Commission by notice dated June 29, 1962, commenced this proceeding which was its “first general investigation of what is probably the most significant recent development in transportation — trailer-on-flatcar or piggyback service.” 322 I. C. C., at 303. Proposed rules were furnished to participants, opportunity was given to all of them to file statements, and an examiners’ report was filed. After exceptions and oral argument, the Commission rendered
The three-judge District Court concluded that Rules 2 and 3 (and Rule 5, id., § 500.5, insofar as it amplified those Rules) exceeded the Commission’s authority and set them aside. In substance it held that the Interstate Commerce Act did not forbid a railroad to refuse to carry the trailers or containers of a competing mode of carrier; that the structure and plan of the Act, as well as the specific absence of compulsory power to the Commission in § 216 (c), which authorizes voluntary joint rates and through routes by motor and rail carriers, indicated that the ICC is not at liberty to require the railroads to provide TOFC service to competing modes; that provisions of the Act regulating freight forwarders impelled the same conclusions; and that the Commission’s long history of support for the position which its rules now repudiate, as well as legislative history, compelled rejection of the rules now promulgated. We disagree.
We first consider Rule 2, which raises the question whether the Commission may by rule require that if a railroad offers TOFC service to the public through its open-tariff publications, it must make that service available to “any person” without discrimination. We begin by noting the obvious fact that the Interstate Commerce Act codified the common-law obligations of railroads as common carriers. From the earliest days, common carriers have had a duty to carry all goods offered for transportation. See, e.
g., New Jersey Steam Nav. Co.
v.
Merchants’ Bank,
Section 1 (4) of the Act, 49 U. S. C. § 1 (4), provides that it shall be the duty of common carriers by rail to provide transportation “upon reasonable request therefor” and to establish just and reasonable rates. Section 2, 49 U. S. C. § 2, prohibits discriminatory rates or charges. Section 3 (1), 49 U. S. C. § 3 (1), forbids undue
“The contention that a carrier when goods are tendered to him for transportation can make the mere ownership of the goods the test of the duty to carry, or, what is equivalent, may discriminate in fixing the charge for carriage, not upon any difference inhering in the goods or in the cost of the service rendered in transporting them, but upon the mere circumstance that the shipper is or is not the real owner of the goods is so in conflict with the obvious and elementary duty resting upon a carrier, and so destructive of the rights of shippers as to demonstrate the unsoundness of the proposition by its mere statement.”220 U. S., at 252 .
This Court was faced with an intermodal problem, comparable to that in the present cases, in
United States
v.
Pennsylvania R. Co.,
“There is no language in the present Act which specifically commands that railroads must interchange their cars with connecting water lines. We cannot agree with the contention that the absenceof specific language indicates a purpose of Congress not to require such an interchange. True, Congress has specified with precise language some obligations which railroads must assume. But all legislation dealing with this problem since the first Act in 1887, 24 Stat. 379, has contained broad language to indicate the scope of the law. The very complexities of the subject have necessarily caused Congress to cast its regulatory provisions in general terms. Congress has, in general, left the contents of these terms to be spelled out in particular cases by administrative and judicial action, and in the light of the Congressional purpose to foster an efficient and fair national transportation system. Cf. Chicago, R. I. & P. R. Co. v. United States, 274 U. S. 29 , 36; Interstate Commerce Commission v. Railway Labor Executives Assn.,315 U. S. 373 , 376-377.”323 U. S., at 616 .
In
Seatrain,
this Court emphatically rejected the analysis upon which the District Court here essentially based its position — that since the Act regulates rail, motor, and water carriers separately, in Titles I, II, and III, the Commission may not compel the mutual furnishing of services and facilities other than as expressly directed. Recognizing that in the case of water carriers (as distinguished from motor carriers), the Act specifically directs railroads to establish through routes with them, the Court held that this is not the end of the railroads’ obligation or the limit of the Commission’s power. On the contrary, the Court, relying on the National Transportation Policy (49 U. S. C. preceding § 1), held that the Act is designed “to provide a completely integrated interstate regulatory system over motor, railroad, and water carriers . . .” 323 U. S., at
“The 1940 Transportation Act is divided into three parts, the first relating to railroads, the second to motor vehicles, and the third to water carriers. That Act, as had each previous amendment of the original 1887 Act, expanded the scope of regulation in this field and correlatively broadened the Commission’s powers. The interrelationship of the three parts of the Act was made manifest by its declaration of a 'national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each.’ The declared objective was that of ‘developing, coordinating, and preserving a national transportation system by water, highway, and rail, . . . adequate to meet the needs of the commerce of the United States ....’ Congress further' admonished that ‘all of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy.’ 54 Stat. 899.”323 U. S., at 616-617 .
In view of this, we cannot accept arguments based upon arguable inference from nonspecific statutory language, limiting the Commission’s power to adopt rules which, essentially, reflect its judgment in light of current facts as to the proper interrelationship of several modes of transportation with respect to an important new development. For example, § 216 (c), 49 U. S. C. § 316 (c), authorizes the railroads to enter into voluntary arrangements for through routes and joint rates with motor carriers. There is no Commission power to compel the railroads to do so, and it is argued that from this we
It is also argued that a proviso to § 3 (1) of the Act, 49 U. S. C. § 3 (1), demonstrates that Congress did not intend to inhibit the railroads from discriminating against motor carriers. This contention, strenuously supported, is without merit. Section 3 (1) broadly prohibits any common carrier by rail from giving “any undue or unreasonable preference” to any person, locality or type of traffic. It then sets forth this proviso: “Provided, however, That this paragraph shall not be construed to apply to discrimination, prejudice, or disadvantage to the traffic of any other carrier of whatever description.” This is language more notable for its awkwardness than for its clarity; but it certainly was not intended, as appellees urge, to grant license to discriminate against traffic offered to the railroad by another carrier. We have noted above that this Court has clearly held that such discrimination is not permissible. Moreover, there is an intelligible meaning which can be ascribed to the proviso and which is consistent with its history. The proviso means that the prohibition against “undue or unreasonable preference or advantage” is not to be construed to forbid practices, otherwise lawful, solely because they operate to the prejudice of another carrier. It was in these terms that the language of the proviso was explained by Senator Wheeler, the bill’s sponsor. The proviso was taken almost verbatim from § 216 (d) of the Motor Carrier Act, 1935, 49 Stat. 558 (now 49 U. S. C. § 316 (d)). Explaining it, Senator Wheeler said:
“Paragraph (d) . . . prohibits unjust discrimination or undue prejudice or disadvantage. The committee has added a provision that this prohibition shall not be construed to apply to the traffic of any other carrier of whatever description.
“In other words, some of the truck and bus operators were afraid that the railroads would come in and complain, and we added this provision so as doubly to protect the truck and bus operators.
“This provision is added to meet the objection of certain interests that the original paragraph might have been construed so as to make it unlawful for a motor carrier to charge a rate which would place a rail carrier or any other carrier at a disadvantage. This contention is not well founded in our judgment inasmuch as the provisions of this paragraph are substantially the same as those in section 3 (1) of the Interstate Commerce Act, which has been in effect since 1887, and have always been interpreted as covering unequal and unjust treatment by a carrier of its patrons. However, as I said, to make assurance double sure, this provision was added.” 79 Cong. Rec. 5656 (1935). (Italics added.)
Accordingly, we are remitted to consideration of the provisions of the Act which, in the most general terms, require the railroads to perform as common carriers. It is not our duty, of course, to concern ourselves with a nice evaluation of the arguments as to whether the Commission pursued the course of wisdom in ordering the railroads to make piggyback service available to motor carriers if it is offered to others on open-tariff rates. It is our task to scrutinize the Commission’s authority, not the substance of its exercise. We conclude that, in light of the mandate of the National Transportation Policy, the Commission had authority derived from the common-carrier obligations of the railroads as reflected in §§ 1 (4), 2, and 3 (1) of the Act to promulgate Rule 2 requiring
II.
Rule 3, in general, authorizes “motor common and contract carriers, water common and contract carriers, and freight forwarders” to “utilize TOFC service in the performance of all or any portion of their authorized service through the use of open-tariff TOFC rates published by a rail carrier.” At the outset, as discussed above, we reject the contention that the railroads, despite their common-carrier obligations and the absence of an exception thereto in the Act, may exclude carriers by competing modes of transportation from access to their publicly offered services and facilities; and we do not accept the argument that § 216 (c), 49 U. S. C. § 316 (c), which authorizes voluntary through route and joint rate arrangements between railroads and truckers, implies that the railroads have no other obligation to motor carriers and that no other obligation may be imposed upon them by the ICC in this respect. That contention is refuted by the Seatmin case, supra.
It is strenuously contended, however, that whatever may be the railroads’ duty, common carriers by motor vehicle may not be authorized to substitute transportation by rail for the transportation by road which is the basis of their franchise — except with the agreement of the railroad. It is this exception that saps the argument of some of its force, if not its fervor. One would assume that if the motor carriers are not authorized by their franchise under the Act to substitute transportation by rail for transportation by road, they could not do so with the consent of the railroads. But neither the railroads, most of which, by agreement, provide
But, regardless of this, there is no adequate reason to construe the Act so as to deprive the Commission of the power to authorize the carriers by motor vehicle to use TOFC when that service is offered by railroads to the public on open tariff. The Interstate Commerce
It is true, as we have stated, that the Commission for over 25 years has insisted that railroad concurrence is essential for trucker use of TOFC services. In
Substituted Freight Service,
232 I. C. C. 683, the Commission held' that a person may not be both a carrier and a shipper as to the same service. See also
Ringsby Truck Lines, Inc.
v.
Atchison, T. & S. F. R. Co.,
263 I. C. C. 139, 141 (1945); and the
New Haven
case, 293 I. C. C. 93, 104-105 (1954). But see the earlier contrary holding in
Trucks on Flat Cars Between Chicago and Twin Cities,
216 I. C. C. 435 (1936). The Commission’s Report argues that
Substituted Freight Service,
correctly understood, does not proscribe the kind of substituted service here at issue, “in which one common carrier service is substituted for another through the use of an
It is true that the attention of the Congress had been called to the need for action to secure the relief which the Commission subsequently granted in its rules. In February 1962, the American Trucking Associations, in the course of oral argument in
Gordon’s Transports, Inc.
v.
Strickland Transp. Co.,
318 I. C. C. 395, sustained
sub nom. Strickland Transportation Co.
v.
United States,
The final argument to which we must address ourselves is vigorously made by the freight forwarder appellees. Freight forwarding is authorized and regulated in Part IV of the Interstate Commerce Act (49 U. S. C. § 1001
et seq.).
This Part was enacted in 1942 (56 Stat. 284). A freight forwarder is defined as “any person which (otherwise than as a carrier . . . [by rail, motor vehicle or water]) holds itself out to the general public as a common carrier to transport or provide transportation of property, . . . and which . . . (A) assembles and consolidates . . . shipments . . . and (B) assumes responsibility for the transportation of such property . . . and (C) utilizes, for the whole or any part of the transportation of such shipments, the services of” a rail, motor vehicle or water carrier. §402 (a) (5), 49 U. S. C. § 1002 (a)(5). It cannot perform the physical transportation except in its terminal areas. § 410 (h), 49 U. S. C. § 1010 (h). It assembles shipments, consolidates
It is obvious that there is a good deal of overlap between the work of the freight forwarders and that of the other common carriers. The freight forwarders’ argument here is that the Act authorizes only freight forwarders to engage in the assembly and consolidation of shipments and the subsequent use of rail facilities for transportation, and that permitting the truckers to engage in this sort of service, by means of TOFC on open tariffs, is to authorize them to engage in this service in violation of the Act’s prohibition against licensing other carriers as freight forwarders.
Forwarders are presently permitted to utilize railroad open-tariff TOFC service.
Movement of Highway Trailers by Rail,
293 I. C. C. 93, 111 (1954). They may even quote trailer-load rates in competition with truckers and with rails.
Eastern Express, Inc.
v.
United States,
The mere fact that the truckers, by reason of the Commission’s Rules 2 and 3, may utilize open-tariff TOFC service, where offered generally, certainly does not convert their activity into freight forwarding, in conflict with the Act. It is clear that where the railroad agrees, the trucker may use this service, and that a motor vehicle common carrier may assemble, consolidate, transport by piggyback in these circumstances, and distribute after arrival at the railroad terminus. The fact that the Commission enlarges this additional possibility of transportation of the truckers’ trailers may be a competitive fact of some significance, but it does not convert the truckers into freight forwarders, nor deprive the latter of the exclusive rights specified in the Act.
III.
The controlling fact of the matter is that all piggyback service is, by its essential nature, bimodal.
10
It partakes of both the railroad and the trucking functions. The proper allocation of these bimodal functions involves complex considerations. It is not and cannot be precise or mathematical. Railroads are not now confined to the
Accordingly, the decision below is
Reversed
Notes
322 I. C. C., at 305. The Commission observed, “There can be little doubt that piggybacking has been a decisive factor in returning to the railroads a substantial volume of traffic that previously had been moving by other modes of transportation, private and for-hire.” Id., at 307. It found that “In 1957 a total of 57 class I railroads were participating in TOFC tariffs; in mid-1963 there were 100 class I roads doing so. In 1955, 32 railroads reported a total of 168,150 TOFC carloadings, for a weekly average of 3,234. In 1959, 50 reporting railroads showed totals of 415,156 annual and 7,984 weekly average carloadings for TOFC. For 1963, 63 reporting railroads indicated continued growth to approximately 797,500 loaded TOFC ears, a weekly rate of approximately 12,700 [15,300] loadings.” Id., at 309.
For a statement of the Commission’s earlier position, prior to enactment of Part II of the Interstate Commerce Act, see
Trucks on Flat Cars Between Chicago and Twin Cities,
216 I. C. C. 435 (1936), where it was held that motor carriers, like any other competing mode of unregulated transportation (compare
ICC
v.
Delaware, L. & W. R. Co.,
Section 1 (4) of the Act, 49 U. S. C. § 1 (4), imposes a duty on railroads to establish joint through routes and rates with water carriers, but there is no such provision with respect to motor carriers. See §216 (c), 49 U. S. C. §316 (c).
Cf.
Gordon’s Transports, Inc.
v.
Strickland Transp. Co.,
318 I. C. C. 395, 396-397, sustained
sub nom. Strickland Transportation Co.
v.
United States,
There is “no Plan I service of any type available between mid-west points east of the tier of states of Wyoming, Colorado, and New Mexico, on the one hand, and, on the other hand, points in the states west thereof. Transcontinental railroads operating between the latter points have elected not to offer any form of Plan I service to motor carriers between such points.” Pacific Inter-mountain Express Co., Supplemental Statement of W. S. Pilling (R. 123).
See,
e. g., Great Western R. Co.
v.
Sutton,
L. R. 4 H. L. 226 (1869);
London & N. W. R. Co.
v.
Evershed,
3 App. Cas. 1029 (1878);
Wight
v.
United States,
A suit attacking the validity of Plan I service is pending. Lone Star Package Car Co. v. United States, Civ. No. 4-355 (D. C. N. D. Tex.).
In important respects, motor carrier use of open-tariff TOFC differs from a motor-rail through route-joint rate TOFC arrangement. Hence the District Court’s exception for open-tariff TOFC where the railroad consents cannot be justified as based upon the voluntary through route and joint rate provision of the Act. §216 (c), 49 U. S. C. §316 (c).
It should also be noted that the legislation proposed by the ICC itself (S. 3510 and H. R. 12362, 87th Cong., 2d Sess. (1962); S. 676 and H. R. 2088, 88th Cong., 1st Sess. (1963)) would have required railroads to establish motor-rail through routes and joint rates and granted the Commission power to compel such arrangements — which is quite different from entitling motor carriers to use railroad open tariffs.
As the ICC observed: “What [those who object to- open-tariff TOFC] overlook is that all TOFC service is inherently bimodal in that its basic characteristic is the combination of the inherent advantages of rail and motor transportation . . . .” 322 I. C. C., at 329. Thus, the District Court’s view of the statutory compartmentalization of transportation as either rail or motor or water, fails to recognize the primary fact about TOFC, which in any of its varieties cannot be made to fit the District Court’s rigid modal conceptualization.
Cf.
United States
v.
Rock Island Co.,