Whatever transportation service or facility the law requires the
carriers to supply they have the right to furnish.
Under § 15 of the Act to Regulate Commerce, as amended by
the Hepburn Act, the carrier has not only the duty, but the right,
to furnish all ice needed in refrigeration.
A carrier cannot be compelled to keep facilities for the benefit
of shippers and the shippers allowed to furnish these facilities
themselves.
The carrier cannot compel a shipper of fruit to have it
refrigerated.
When ice is actually needed and used in transportation of fruit,
it depends upon the circumstances of each case whether the icing is
a part of preparation which can be done by the shipper or part of
refrigeration which the carrier has the exclusive right to
furnish.
Neither the carrier nor the shipper can insist upon wasteful or
expensive service in transportation for which the consumer must
ultimately pay. In this regard, the court will consider the
interests of the public.
Loading the car, by whomsoever done, must be such as to prepare
the freight for shipment, and a consignor may, in the absence of a
regularly filed tariff covering this work, not only put perishable
freight, such as fruit, in a car placed at his warehouse, but may
do all other acts, including icing, necessary to fit the fruit for
shipment and filling bunkers in the car with ice for its
preservation.
Filing a tariff withdrawing a privilege to shippers affects a
practice and a rule within the meaning of the Act to Regulate
Commerce, and the Commission has power under § 15, as amended
by the Hepburn Act, to determine after a hearing whether the new
rate is unreasonable, and if so what is just, and require the
carrier to conform to the rates and practice prescribed by it.
An order of the Commission fixing carload rates apparently
excluding any compensation for hauling the ice necessary for
refrigerating is not confiscatory when it appears that the rate for
the fruit itself practically includes the rate for the ice.
In a suit based entirely on reasonableness of carload rates, the
issue of whether it discriminates against shippers of small lots
will not be
Page 232 U. S. 200
considered when that issue is not presented on any assignment of
error in this Court.
What are proper rates for transportation and fair charges for
facilities furnished and services rendered, and differences between
carload and less than carload lots, are all ratemaking matter
committed to the Commission and within its discretion.
The courts have no power to fix rates or establish practices,
and cannot interfere with those fixed and established by the
Commission except in cases where the orders are void.
Interstate Commerce Commission v. Un. Pac. R. Co.,
222 U. S.
547.
204 F. 647 affirmed.
In 1909, associations representing California fruit growers
filed with the Commerce Commission complaints against numerous
railroad companies attacking the freight and refrigeration charges
on citrus fruit shipped from California to Eastern points. Much
testimony was taken, from which it appeared that the orange crop
amounted to about 50,000 cars per annum, of which the 20,000
shipped in warm weather required some form of refrigeration in
order to keep the fruit in condition for use at the end of the
journey. At the close of the first hearing, June 11, 1910, the
Commission held (19 I.C.C. 148) that $1.15 per cwt. was a
reasonable freight rate on oranges. Other questions in the case
were postponed until January 14, 1911, when the Commission made a
report (20 I.C.C. 106) as to the reasonableness of the carriers'
charges of $62.50 per car for refrigeration and $30 for services in
shipments pre-cooled by the consignor.
The Commission found that, in refrigeration by the carriers,
they furnished all the ice and performed all of the services,
including reicing
en route. It found that there was a
total of about 11 tons of ice furnished, but, owing to the melting,
the average weight of the ice hauled was 8,000 lbs., the freight on
which to Chicago was $.25 per 100. It cost something to repair the
bunkers, and the Commission recognized the right to include an
additional sum to cover risk and profit.
Page 232 U. S. 201
The total revenue of $345.30 from such shipments was made up of
the following items:
Freight on 27,200 lbs. of oranges at $1.15. $312.80
Cost of 11 tons of ice. . . . . . . . . . . $30.00
Freight on 8,000 lbs. average weight of
ice hauled at $.25. . . . . . . . . . . . 20.00
Damage to bunkers . . . . . . . . . . . . . 5.00
Sum to cover risk and profit. . . . . . . . 7.50
62.50
-------
Gross receipts. . . . . . . . . . . . . . . $375.30
Less cost of ice. . . . . . . . . . . . . . 30.00
-------
Freight and refrigeration charges $345.30
The Commission found that the charge of $62.50 for refrigeration
services was reasonable.
It further appeared that the government had conducted certain
experiments with a view of determining whether an advantage would
not be derived from pre-cooling the fruit before the bunkers were
filled with ice. There was testimony that the carriers had reached
the conclusion that, if the fruit was pre-cooled before the
movement of the car began, there would be a corresponding saving in
the amount of ice needed in the bunkers. They accordingly had
erected plants at which the fruit could be pre-cooled, and included
such pre-cooling service in the regular refrigeration charge of
$62.50.
Certain shippers claimed that better results were obtained where
the fruit was pre-cooled immediately after it was taken from the
grove and before it was placed in the car. They therefore adopted a
method in which the shipper chills the fruit, cools the car,
furnishes the ice, and fills the bunkers at a cost to himself of
$32.50. The carrier, for its services in connection with hauling
such pre-cooled shipment, charged $30, intending thereby to make
the rates on
Page 232 U. S. 202
pre-cooled fruits the same, whether the pre-cooling was by the
shipper or the carrier. In determining whether this $30 was a
reasonable charge for service rendered by the carrier in hauling
fruit pre-cooled by the shipper, the Commission said (20 I.C.C.
120) that no reicing was necessary en route, and that
"it would be a liberal estimate to put the average weight of ice
during the entire journey at 5,000 lbs. For the hauling of this
ice, the carriers are entitled to fair compensation, as they are in
the case of standard refrigeration."
There is also an
"expense in providing and keeping in repair the ice bunkers. . .
. The carrier is therefore entitled to this additional cost, which
is about $5 per car per trip one way."
Ibid.
Where the fruit is pre-cooled by the shipper, the boxes are
packed so much closer together that the load is one sixth greater
than in case of shipments pre-cooled and refrigerated by the
carrier. The result is that the revenue from a car of fruit
pre-cooled by the shipper would be
Freight on 33,000 lbs. of oranges at $1.15 . . . . . . . .
$379.50
Freight on 5,000 lbs. of ice at 25 cents per hundred . . .
12.50
Damages to bunkers (and profit allowed?) . . . . . . . . .
7.50
-------
$399.50
or $54 more than the revenue of $345.30 from a car pre-cooled
and refrigerated by the carrier.
The Commission further said:
"As bearing upon the reasonableness of the rate, the carriers
showed the cost of the movement of these oranges per gross ton --
that is, per ton of combined weight of car and of contents, as
compared with other articles -- claiming that this was the true
basis upon which to fix rates. So treating these pre-cooled
shipments, it will be found that the carrier receives more per
gross ton for handling the pre-cooled car than for either the
ventilated or the refrigerated shipment. By every canon of
ratemaking which has been applied by carriers in the past, or which
is relied upon by them now,
Page 232 U. S. 203
these pre-cooled shipments at the standard rate, without
additional compensation, are better business than either the
ventilated or the refrigerated movement. Clearly, these growers who
have devised and perfected this system of shipment should not be
compelled to pay for the privilege of using it more than the fair
cost to the carrier of providing the additional facilities which
are not included in the ventilated rate, with a fair profit."
The report concluded as follows:
"We are of the opinion that the pre-cooling charge of $30 per
car is unreasonable, and that this charge should not exceed $7.50
per car, . . . but the defendants may, as a condition of making
this charge, require that pre-cooled cars be loaded seven tiers
wide and two tiers high, and may provide by their tariffs a proper
minimum to accomplish this result, the amount of which would depend
upon the length of the car."
20 I.C.C. 121, 123.
The carriers, in obedience to this order, put in a tariff of
$7.50 for pre-cooling services, but at once filed another tariff,
effective July, 1911, reciting that
"the privilege heretofore permitted to shippers of citrus fruit
to pre-ice carload shipments is withdrawn, the carriers retaining
and exercising the exclusive right and control of furnishing and
doing all icing and refrigeration of citrus fruit in all cases
where shipper does not specifically request or direct shipments to
move solely under ventilation."
Immediately thereafter, the orange-growers associations filed
proceedings to cancel this withdrawal tariff, and to compel the
carriers to continue to extend to shippers the old privilege of
pre-cooling at the new rate of $7.50. At the hearing, the evidence
and report of the Commission in the former case were stipulated
into the record, and, on April 8, 1912 (23 I.C.C. 267, 271), the
Commission held that the shippers had the right to the
pre-cooling
Page 232 U. S. 204
privilege, and again ruled that $7.50 was a reasonable charge
for the services rendered by the carriers.
The railroad companies then filed a petition in the Commerce
Court attacking the original order of January 14, 1911 (fixing
$7.50 as a reasonable charge on pre-cooled shipments), and the last
order of April 8, 1912 (requiring the roads to permit pre-cooled
shipments at that sum), contending that shippers had no right to
ice the bunkers. They also insisted that the $7.50 rate was
confiscatory, and did not equal the $17.50, which the Commission
itself had found to be the actual cost of services rendered in
connection with pre-cooled shipments. The carriers thereupon prayed
that both orders should be annulled and set aside.
The Commerce Court (204 F. 647) adopted the finding of the
Commission that in pre-cooled shipments the revenue was $54 greater
than in the railroad's method of refrigeration, and concluded by
saying that, in view of that fact, "we do not think that the
petitioners have any valid complaint to make of the charge of $7.50
per car, established by the Commission." It further held that,
under the facts appearing in the record, the shipper had the right
to furnish the ice in pre-cooled shipments, and thereupon it
dismissed the petition. The case was then brought here by
appeal.
Page 232 U. S. 212
MR. JUSTICE LAMAR, after making the foregoing statement of
facts, delivered the opinion of the Court.
There are many cases between shipper and carrier in which each
insists that the other is bound to furnish service or facilities
connected with the transportation of freight. The present record,
however, presents an instance where both parties are contending for
the privilege of supplying an article needed in the proper shipment
of fruit -- the consignor claiming that icing is a necessary part
of the loading, which he is authorized to supply; while the
carriers insist that icing is a part of refrigeration, by statute
made transportation, which they are bound to provide and for which
they are entitled to collect reasonable compensation. The
determination of these conflicting
Page 232 U. S. 213
claims necessitates an examination of the two methods under
which, in warm weather, oranges are shipped from California to the
East.
In what is called standard refrigeration, the boxes, of the
aggregate weight of 27,200 pounds, are so placed as to leave spaces
between them wide enough to admit of a free circulation of air
chilled by ice in the bunkers. Subsequently, the carriers put in a
system of pre-cooling under which, after the cars had been loaded,
they were taken from the point of shipment to refrigerating plants
owned by the carriers, where whole trainloads are pre-cooled at one
time by means of blasts of very cold air driven into the car
through and around the boxes. At the end of three or four hours,
the fruit is sufficiently chilled, the bunkers are then filled with
about 10 tons of ice, furnished by the carrier, and the train is
started on its journey to the East, the bunkers being reiced from
time to time as needed at stations along the route. For this entire
service, the Commission held that the carrier's charge of $62.50
was reasonable.
A different method obtains where the icing of the car is done by
the shipper at his own expense. In that class of cases, the oranges
are taken from the grove directly to a cold room having a
temperature of about 33� F. There, the boxes are allowed to
remain for periods of from twenty-four to forty-eight hours, and
until the fruit is chilled to the center. When thus pre-cooled, the
boxes are ready for shipment. A refrigerator car is then placed on
the track opposite the door of the cold room of the warehouse with
which it is connected by a collapsible enclosed passageway, so
arranged as to exclude the outside air, while at the same time
allowing that from the cold room to enter and cool the interior of
the car. Through this passageway the oranges are trucked from the
warehouse to the car, and, as they have been chilled to the center,
the boxes are packed close together, forming a solid mass
weighing
Page 232 U. S. 214
33,000 lbs., with a temperature of about 35 F. The doors and
vents of the car are promptly and tightly closed, the bunkers are
immediately filled with unusually large cakes of ice, in order to
reduce the rate of melting, and the fruit is then forwarded under a
filed tariff which provides that reicing is unnecessary, and that
the shipper will make no claim for damage occasioned by failure to
reice in transit. For their services in connection with such
pre-cooled shipments, the carriers were allowed to charge $7.50,
but the Commission refused to permit them to charge for the ice
needed to keep the fruit cool between warehouse and
destination.
1. This ruling is attacked by the appellants, who contend that
icing is a part of refrigeration, which § 1 of the Hepburn
bill [
Footnote 1] makes a part
of the transportation they are bound to furnish upon reasonable
request. They insist that in order to meet the duty thus imposed by
statute, they have been compelled at great expense to erect immense
plants where trainloads of fruit can be cooled, and where an
enormous quantity of ice is manufactured for refrigeration
purposes. They argue that, being bound to furnish all necessary
icing and reicing, and having at great cost prepared to furnish the
supply, it is not only just, but a right given by statute, that
they should be allowed to provide all needed icing or refrigeration
at a rate to be approved by the Commission.
Whatever transportation service or facility the law requires the
carrier to supply they, have the right to furnish. They can
therefore use their own cars, and cannot be compelled to accept
those tendered by the shipper on
Page 232 U. S. 215
condition that a lower freight rate be charged. So too, they can
furnish all the ice needed in refrigeration, for this is not only a
duty and a right under § 1 of the Hepburn bill, but an
economic necessity, due to the fact that the carriers cannot be
expected to prepare to meet the demand, and then let the use of
their plants depend upon haphazard calls under which refrigeration
can be demanded by all shippers at one time and by only a few at
another.
This contention was sustained by the Commission, which
recognized that
"the shipper has no right to provide refrigeration himself today
and call upon the railroad company for that service tomorrow. To
permit such a course is to demoralize the service of the
defendants, and to prevent them from discharging their duty with
economy and efficiency. . . . It is the duty of the carrier to
furnish refrigeration upon reasonable demand, and insofar as the
furnishing of that refrigeration is a part of the service rendered
by the carrier, the carrier may insist upon its right to furnish
that service exclusively."
2. But, of course, this does not mean, that, because the
carriers have ice on hand, they can compel the shipper to have his
fruit refrigerated when, on account of the state of the weather or
for other cause, he prefers to have it forwarded under ventilation
only. When, however, ice is actually needed and is actually used,
the question arises as to whether icing is a part of preparation
which can be done by the shipper, or a part of refrigeration
(transportation) which, by statute, the carrier has the exclusive
right to furnish.
To this question, no answer can be given that will apply in all
cases. For in the shipment of fruit, as in that of other articles,
it is impossible to lay down a rule which definitely fixed what
loading includes and by whom it must be done. Nor is there any
consistent practice on this subject, since, from reported cases, it
appears that the
Page 232 U. S. 216
claims of the parties are based rather on interest than on some
definite principle. Sometimes the shipper, as here, insists on the
right to load and provide necessary appliances. At other times, he
demands that such service and appliances be furnished by the
railroad company. Conversely, the carriers sometimes claim, as
here, the right to furnish service and facilities, while in other
cases insisting that one or both must be supplied by the consignor.
Cf. National Wholesale Lumber Dealers' Asso. v. Atlantic
Coast Line R. Co. 14 I.C.C. 154; Schultz v. Southern Pacific, 18
I.C.C. 234; In re Allowance for Lining and Heating of Cars, 26
I.C.C. 681, 25 I.C.C. 497.
These inconsistent and conflicting demands serve to emphasize
the fact that, before the haul actually begins, the right or duty
of each party, where not absolutely fixed by statute, must be
decided with reference to the special facts of each case.
As a general rule, the carrier loads all freight tendered in
less than carload lots, while the consignor loads in all cases
where, for his convenience, the car is placed at his warehouse or
on public team tracks. This practice has grown up not only because
the work can be more satisfactorily performed by the owner, but
also because it is impossible for railroad companies economically
to load cars at private warehouses or on those tracks where
vehicles of the consignor or consignee come and go at the direction
of the owner. 25 I.C.C. 490.
3. But loading may involve more than the mere placing of the
freight on the car, since the character of the shipment may be such
as to require the furnishing and placing of stakes, racks, blocks,
and binders needed to make the transportation safe; or, the freight
may be such as to require special covering, packing, icing, or
heating, in order to preserve the merchandise in condition fit for
use at the end of the journey. Who is to furnish these needed
facilities may be quite as uncertain as who is to place the
Page 232 U. S. 217
freight on the car, and can only be determined by considering
the character of the shipment, the place where the loading begins,
and who can most economically perform the service required.
Neither party has a right to insist upon a wasteful or expensive
service for which the consumer must ultimately pay. The interest of
the public is to be considered, as well as that of shippers and
carriers -- their rights, in turn, having been adjusted by a
reduction in the rate if the loading is done in whole or in part by
the shipper, and by an increase in the rate where the loading is
done in whole or in part by the carrier. But, by whomsoever done,
the loading must be such as to fit the freight for shipment, and
when -- by statutory requirement, by valid order of the Commission,
or by the carriers' voluntary act -- the car is placed at the
consignor's warehouse to be loaded by the shipper, he may not only
put the freight on the car, but may do all other acts required to
fit the freight for its proper shipment, at least until, under a
tariff regularly filed, the carrier offers to do what is necessary
to secure or preserve what has thus been placed on its car for
transportation. The refrigeration and pre-cooling offered by the
carrier to shippers of pre-cooled fruit were found not to be the
equivalent of the method adopted by the shipper.
4. In the present case, the carriers concede that in pre-cooling
shipments the consignor had the right to take all of the steps for
preparation except the last. They concede that he had the right to
pre-cool the fruit, to pre-cool the car, to place the boxes on
board the car, to stop the vents, and seal the doors. But they deny
that he could ice the bunkers, even though that was necessary to
the complete preparation, or loading, needed in that particular
class of shipments, and without which the fruit would be damaged by
the rise in temperature occurring during the time the car is being
hauled from the warehouse of the shipper to the icing station of
the carrier. Such delay in
Page 232 U. S. 218
filling bunkers would nullify most of the advantage of the
expensive chilling of fruit and car necessary in the pre-cooling
shipments -- permitted, if not originally encouraged, by the
carrier. The privilege was withdrawn not because the railroad
companies were in position to furnish the ice at the proper time
and place, but solely because the Commission had reduced the
carriers' charge on pre-cooled oranges from $30 to $7.50 per
car.
The icing may have been so related to refrigeration as to
authorize the carriers to render that service. But manifestly they
could not be expected to build refrigerating plants near each
warehouse; and, the carrier not being in a position to do such
icing, the consignor had the same right to provide the necessary
supply that he would have had to ice a shipment of fish, to furnish
and place standards to secure lumber on an open car, or to fasten
to the floor articles which otherwise might be damaged by the jerks
and jolts of a moving train. In the absence, therefore, of the
carriers' offer, under a filed tariff, to furnish ice at the time
and place needed in pre-cooled shipments, or to substitute a
service of equal value at practically the same cost, they had no
right to prevent the consignor from filling the bunkers so as to
fit the freight for proper transportation.
5. The tariffs, withdrawing the pre-cooling privilege after
July, 1911, would have changed the practice, recognized by the
carriers themselves and actually approved by the Commission's order
fixing $7.50 for the carrier's services in connection with such
practice. As the withdrawal "affected a practice and a rate," the
Commission had power to cancel that tariff and to require the
carriers to conform to the order establishing the $7.50 charge in
pre-cooled shipments. Such an order was justified by the provisions
of the Hepburn Act (34 Stat. 589), which authorizes the Commission,
after a hearing, to determine whether rates, or practices affecting
rates, are unreasonable, to determine what practice in respect to
transportation
Page 232 U. S. 219
is just, and to require the carrier to conform to those
prescribed by the Commission. [
Footnote 2]
6. The appellants insist, however, that, even if the shippers
are entitled to furnish the ice, the carriers are entitled to pay
for hauling it. They claim that the charge of $7.50 is confiscatory
because it does not cover what the Commission found to be the
actual cost of the carriers' pre-cooling service. They point to the
fact that the rate of $1.15 per cwt. on oranges was found to be
reasonable without regard to the character of the shipment, and
whether the fruit moved under ventilation, standard refrigeration,
or pre-cooling shipment -- additional sums being allowed for
furnishing or hauling ice needed in transportation of the fruit.
They admit that more revenue is derived from a carload of
pre-cooled fruit, weighing 33,000 lbs., than from a car where the
load weighs 27,200, but insist that the greater revenue is because
of a greater service rendered and a greater weight hauled. On the
authority of
Interstate Commerce Commission v. Stickney,
215 U. S. 98,
215 U. S. 105,
they contend that the receipt of a fair return for carrying 33,000
lbs. of fruit affords no reason for compelling them to haul 5,000
lbs. of ice 2,000 miles for nothing when, as found by the
Commission, the actual cost of the haul is $12.50.
The order does not show the items going to make up the $7.50
charge. In the brief for the Commission, it was
Page 232 U. S. 220
said to include $5 for damage to the bunkers and $2.50 for
profit. And since the report shows that the carriers were also
entitled to $12.50 for hauling the ice, a charge of only $7.50 for
a $20 service would at first blush appear to be not only
unreasonable, but confiscatory. But the order is to be read in
connection with the report of which it forms a part. When so read,
it is evident that the Commission did not intend to require the
carriers to haul 5,000 1bs. of ice without reasonable compensation,
but considered that the haul of the ice was so much a part of the
haul of the pre-cooled freight that the expense could properly be
treated as included or absorbed in the rate on the fruit itself.
Cf. Farrar Co. v. N.C. & St.L., 25 I.C.C. 25; Swift
& Co. v. M. P. Ry. Co., 22 I.C.C. 385.
The cost of such haul was $12.50 -- equivalent to 3.8 on the
33,000 lbs. of oranges in a pre-cooled shipment, and, as a mere
matter of figures, it was immaterial to the carriers whether they
were permitted to charge $1.11.2 on the fruit and $12.50 for the
ice, or $1.15 on the fruit alone, without any distinct charge for
transporting the ice. In either event, the revenue received was
more than that derived from a car of standard refrigeration,
without corresponding increase of cost.
7. The claim that the order modifies the established rate of
$1.15, and reduces it to $1.11.2 in pre-cooled shipments, thereby
discriminating against the small fruit grower and those who forward
under ventilation, or under the carriers' method of refrigeration,
is not an issue presented by any assignment of error in this
record, even if the carriers were in position to make such a
contention.
Int. Com. Comm. v. Chicago, Rock Island & Pac.
Ry., 218 U. S. 88,
218 U. S. 109.
There is no claim in this case that such rate, thus distributed, is
unreasonable.
8. What is a proper rate on fruit in pre-cooling shipments, or a
fair charge for hauling necessary ice or rendering other
transportation services, are all ratemaking
Page 232 U. S. 221
matters committed to the Commission. It may determine what shall
be the difference in rate between carload and less than carload
lots; it may decide whether the difference in revenue, due to a
difference in method of loading, warrants a difference in the rate
on carload shipments of the same article. It may prescribe the form
in which schedules shall be prepared and arranged (§ 6), and
may approve tariffs stating that the single rate includes both the
line haul and accessorial services absorbed in the rate.
Conversely, it may prescribe a tariff fixing a through rate which
includes not only the haul of the fruit, but the haul of the ice
necessary to keep the fruit in condition. All these are matters
committed to the decision of the administrative body, which, in
each instance, is required to fix reasonable rates and establish
reasonable practices. The courts have not been vested with any such
power. They cannot make rates. They cannot interfere with rates
fixed or practices established by the Commission unless it is made
plainly to appear that those ordered are void.
Int. Com. Comm.
v. Union Pacific R. Co., 222 U. S. 547.
No such showing is made in this case. The decree must therefore
be
Affirmed.
[
Footnote 1]
". . . The term 'transportation' shall include . . . all
services in connection with the receipt, delivery, . . .
ventilation, refrigeration, or icing . . . of property transported,
and it shall be the duty of every carrier . . . to provide and
furnish such transportation upon reasonable request therefor."
34 Stat. 584, c. 3591.
[
Footnote 2]
"Sec. 15. The Commission is authorized . . . whenever, after
full hearing . . . it shall be of the opinion that any of the rates
or charges . . . for the transportation of persons or property . .
. or that any regulations or practices . . . affecting such rates
are unjust or unreasonable . . . to determine and prescribe what
will be the just and reasonable rate . . . and what regulation or
practice in respect to such transportation is just, fair, and
reasonable to be thereafter followed, and to make an order that the
carrier shall cease and desist from such violation, . . . and shall
conform to the regulation or practice so prescribed."
