Schaffer Transportation Co. v. United States, 355 U.S. 83 (1957)

Schaffer Transportation Co. v. United States

No. 20

Argued November 13, 1957
Decided December 9, 1957
355 U.S. 83

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF SOUTH DAKOTA

Syllabus

The Interstate Commerce Commission denied an application by appellant, a common carrier by motor truck, for authority under § 207 (a) of the Motor Carrier Act of 1935, as amended by the Transportation Act of 1940, to transport granite between various points now served exclusively by rail. Certain shippers, receivers, and an association of manufacturers of finished granite products had testified that the existing rail service was satisfactory for the transportation of carload shipments, but entirely inadequate for less than carload shipments not only from the standpoint of cost, but also and primarily from a service standpoint. The Commission based its denial of the application on the grounds that the rail service was "reasonably adequate," that the main purpose of these witnesses in supporting the application was to obtain lower rates, rather than improved service, and that this was not a proper basis for a grant of authority. It failed to evaluate the "inherent advantages" of the proposed motor service, including whatever benefit might be determined to exist from the standpoint of rates, and its findings as to the adequacy of the rail service were not sufficient to provide a basis for determining whether its decision comported with the National Transportation Policy.

Held: the Commission’s order must be set aside and the case remanded to it for further proceedings in conformity with this opinion. Pp. 84-93

(a) Under the National Transportation Policy, when a motor carrier seeks to offer service where only rail transportation is presently authorized, the "inherent advantages" of the proposed service are a critical factor which the Commission must assess. ’Pp. 88-90.

(b) The record does not disclose the factors which the Commission compared in concluding that existing rail service is "reasonably adequate," and it does not provide this Court with a basis for determining whether the Commission’s decision comports with the National Transportation Policy. Pp. 90, 92.

(c) To reject a motor carrier’ application on the bare conclusion that existing rail service can move the available traffic, without regard to the inherent advantages of the proposed service, would give one mode of transportation unwarranted protection from competition from others. Pp. 90-91.

(d) No carrier is entitled to protection from competition in the continuance of a service that fails to meet a public need, nor should the public be deprived of a new and improved service because it may divert some traffic from other carriers. P. 91.

(e) The ability of one mode of transportation to operate with a rate lower than competing types of transportation is precisely the sort of "inherent advantage" that the National Transportation Policy requires the Commission to recognize. Pp. 91-92.

139 F.Supp. 444 reversed and remanded.