[Federal Register Volume 64, Number 19 (Friday, January 29, 1999)]
[Notices]
[Pages 4743-4744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2224]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Docket No. MC-F-20941]
Groendyke Transport, Inc., Manfredi Motor Transit Co., Miller
Transporters, Inc., Superior Carriers, Incorporated, and Trimac
Transportation, Inc.--Pooling Agreement
AGENCY: Surface Transportation Board.
ACTION: Request for comments from interested parties and order of
suspension.
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SUMMARY: Pursuant to 49 U.S.C. 14302(c)(3), we are (1) requesting
public comments on an application filed by nine motor carriers of bulk
commodities to pool some of their services, traffic, and revenues and
(2) suspending operation of the pooling agreement pending a final
decision on the application.
DATES: Comments must be filed by March 1, 1999. Applicant's reply to
the comments is due by March 22, 1999.
ADDRESSES: Send an original and 10 copies of any comments referring to
STB Docket No. MC-F-20941 to: Surface Transportation Board, Office of
the Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC
20423-0001. In addition, send one copy of comments to applicants'
representative: James A. Calderwood, Zuckert, Scoutt & Rasenberger, 888
17th Street, N.W., Washington, DC 20006.
FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1609.
[TDD for the hearing impaired: (202) 565-1695.]
SUPPLEMENTARY INFORMATION: By application filed on November 20, 1998,
nine motor carriers 1 seek authority to pool some of their
services, traffic, and revenues pursuant to 49 U.S.C. 14302 and our
regulations to implement this provision at 49 CFR 1184. The carriers
are all licensed by the United States Department of Transportation
(DOT) to carry bulk commodities that are often classified as
``hazardous materials'' by DOT. In general, the bulk commodities
transported by applicants are chemical products that cannot be mixed
with other cargo in the same load and require specialized equipment and
handling procedures. The equipment must usually be cleaned after each
delivery.
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\1\ The nine motor carriers are: Groendyke Transport, Inc.;
Manfredi Motor Transit Co.; Miller Transporters, Inc.; Superior
Carriers, Inc., and Central Transport, Inc., both wholly owned
subsidiaries of Superior Carriers, Incorporated, a noncarrier; and
Liquid Transporters, Inc., Quality Services Tanklines, Inc., Trimac
Transportation Services (Western), Inc., and Universal Transport,
Inc., all four of which are wholly owned subsidiaries of Trimac
Transportation, Inc., a noncarrier.
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By their pooling agreement, applicants plan to establish a ``joint
venture corporation'' (JVC) that will (1) coordinate their operations
so as to avoid traffic imbalances and empty mileage and (2) share and
coordinate their acquisition, use, and cleaning of the specialized
cleaning equipment required for their operations. The pooling agreement
has no expiration date. Each of the five owners of the JVC will have a
20% equity interest in it, and representation on the JVC's Board of
Directors will be equal among the five owners.2 Each of the
five owners will make an initial contribution to the JVC to cover
expenses associated with its formation and initial operations. The
JVC's board will hire its own staff.
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\2\ The parent owners will act on behalf of their subsidiary
regulated carriers: see n.1 herein.
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The operations of the JVC can be summarized in their essential
aspects as follows:
1. Load Balancing. Each carrier will regularly notify the JVC about
the points where it will have empty equipment or need loads and the
points where it cannot handle the loads offered to it. The JVC will
endeavor to reconcile available equipment with needs ``in a fair and
equitable manner.'' Not less than monthly, the JVC will report to its
carrier members as to ``the number of loads transported under the joint
venture corporation arrangement along with the volumes and points
served.''
2. Cleaning equipment. The carrier members will assist each other
in the provision of cleaning equipment, make cleaning facilities
available on an equal basis, establish procedures for the use and
cleaning of such equipment, and share information and compile records
concerning such use. In addition, ``[m]ember carriers owning or
controlling particular cleaning facilities will be responsible for the
safe and efficient operation of such facilities * * *''
3. Funding. The JVC may establish charges to its member carriers to
fund its operations.
4. Participation. A carrier member may terminate its participation
by giving 30 days notice, subject to fulfillment of its prior
obligations, and, if its permit is revoked by DOT, its operational
participation will be automatically suspended.
5. Shippers. The carriers certify that the rates set under the
agreement do not contravene the restrictions on collective ratemaking
in 49 U.S.C. Subtitle IV and our regulations.3 Each carrier
member will deal separately with shippers as to rates, contracts, and
service. Rates will not be set by the JVC or its staff and will not be
subject to discussion or agreements between JVC members.
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\3\ The last sentence of numbered paragraph 7 of the pooling
agreement provides: ``The joint venture corporation will establish a
uniform rate structure applicable to transportation services
rendered through the joint venture corporation.'' We presume that
this provision concerns payment for services that the carriers will
render to each other and would not allow the JVC to provide
regulated transportation services to be billed to shippers.
Applicants should notify us if we are incorrect in this presumption.
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Under the pooling agreement, carriers will sometimes have to
collect charges from their customers for services that will actually be
performed by other carriers. The particular carrier member responsible
for contractual
[[Page 4744]]
arrangements with a particular shipper will collect charges from the
shipper and compensate the carriers that actually perform the services.
The JVC will facilitate such compensation, acting as a clearinghouse
and record keeper.
On January 7, 1999, Schneider National Bulk Carriers, Inc.
(Schneider) filed a letter reply in opposition to the agreement, urging
us to set the matter for hearing. Schneider asserts that the agreement
is too vague; that it would unduly concentrate the market; that it
would allow the participants to function as a de facto rate bureau;
that it would permit improper ``signals'' of price movements; that
uniform equipment costs could improperly influence carrier rates; and
that the agreement would improperly allow division of the market.
Interested persons may obtain a copy of Schneider's letter reply by
contacting counsel for Schneider, Mr. Stephen M. Ferris, Esq., who may
be reached at (920) 592-3896.
On January 15, 1999, Liquid Transport Corporation (LTC) filed a
petition urging us to reject the agreement or to request comments from
the public. LTC asserts that the proposal, which it concludes is not a
pooling agreement but is instead a ``Return Loads Bureau'' and
equipment cleaning service, is of major transportation importance
because it will adversely affect the ability of other carriers to
compete for this traffic; that the proposal will restrain competition
and effectively constitute collective ratemaking; and that any benefits
it may produce will not justify the harm it will cause. Interested
persons may obtain a copy of LTC's petition by contacting counsel for
LTC, Mr. Terry G. Fewell, Esq., who may be reached at (317) 637-1777.
Under 49 U.S.C. 14302(c)(2), the Board must determine whether the
proposed pool is of major transportation importance and whether there
is a substantial likelihood that the agreement will unduly restrain
competition. If we determine that neither of these two factors exists,
we are required to approve the agreement without a hearing. Before we
attempt to make those determinations, we will seek public comments on
the application and on the issues raised by Schneider and LTC.
So that we may issue a final decision on the application after the
comments are analyzed, commenters should also address whether, even if
the agreement is of major transportation importance or there is a
substantial likelihood that the agreement will unduly restrain
competition, the agreement should nevertheless be approved under 49
U.S.C. 14302(c)(3) because it would foster better service to the public
or operational economies.
Because the applicant carriers bear the burden of proof, we will
allow them to respond to the public comments.
Under 49 U.S.C. 14302(c)(3), we are required to suspend operation
of the proposed agreement pending a final decision, and we hereby do
so.
Board decisions and notices are available at our website at
``WWW.STB.DOT.GOV.''
This notice and order will not significantly affect either the
quality of the human environment or the conservation of energy
resources.
It is ordered:
1. A hearing on the pooling application is commenced as described
in this notice.
2. Effective on the date of publication, the operation of the
proposed pooling agreement is suspended pending completion of this
hearing and issuance of a final decision.
3. A copy of this notice will be served on the U.S. Department of
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue, N.W.,
Washington, DC 20530.
Decided: January 25, 1999.
By the Board, Chairman Morgan and Vice Chairman Clyburn.
Vernon A. Williams.
Secretary.
[FR Doc. 99-2224 Filed 1-28-99; 8:45 am]
BILLING CODE 4915-00-P