dismissing the application and terminating approval of the agreement in force will be entered.

COMMISSIONER HARDIN did not participate.

355 I.C.C.

EX PARTE NO. 284

INVESTIGATION INTO THE NEED FOR DEFINING REASONABLE DISPATCH (PERISHABLE COMMODITIES)

Decided August 18, 1977

On further consideration, finding in the prior report and order, 351 I.C.C. 812, modified. Public interest found to require final adoption of regulations, as modified, establishing performance standards governing the transportation by railroad of defined perishable commodities. Publication of railroad tariffs setting forth operating schedules on perishable commodities between key producing and consuming points throughout the country required. Reporting schedule for implementation of the decision requiring schedules prescribed and proceeding discontinued in all other respects.

Appearances as shown in the prior report and, in addition: Joseph D. Anthofer, Robert B. Batchelder, Raymond Belstner, Lynn Dutton, Ted Keller, Richard M. McCain, Jack Monday, John B. Norton, John C. Palmer, Jr., John MacDonald Smith, Bruce C. Spitzer, Betty S. Walker, W. D. Wiley, and Charles H. Wulff for participating railroads and railroad association.

Gary Dunbar, E. Stephen Heisley, Robert L. James, Patrick McEligot, Keith G. O'Brien, Todd A. Peterman, Roland Rice, and Richard R. Sigmon for participating motor carriers and motor carriers associations.

Darrell Creveling, H. Richard George, Jeffrey Lee Guttero, Ralph P. Hill, Ronald K. Kolins, John T. Korsmo, William J. Morgan, Barry Roberts, Jon R. Roy, Gordon Stedman, Lawrence J. Stern, Roger Stroh, and G. Dwight Weed for participating shippers and shipper associations.

Paul L. Mills and Ronald Vail for the United States Department of Agriculture.

Robert A. Hirsch, Joseph C. Levin, and Robert S. Turkington for Bureau of Investigations and Enforcement, Interstate Commerce Commission (formerly the Bureau of Enforcement).

REPORT OF THE COMMISSION ON FURTHER CONSIDERATION

O'NEAL, Chairman:

This investigatory rulemaking proceeding concerns the many problems associated with the timely transportation of perishable commodities. These problems impede the provision of service with reasonable dispatch, whereas on-time deliveries allow for an intelligent, orderly marketing program for perishable commodities. In the prior report and order (351 I.C.C. 812), we conditionally adopted certain regulations (hereinafter called the performance standards), reproduced in appendix A to this report. These standards were designed to insure reasonably efficient and reliable transportation of perishables. We also found that the rules defining reasonable dispatch proposed in the initiating notice and order in this proceeding (see pages 849-50 of the prior report) should not be adopted; that this Commission should sponsor a carrier-shipper conference looking toward long-term economic solutions to the problems encountered in transporting perishable commodities; and that this proceeding should be dismissed as to all respondents except railroads.

The performance standards were intended to facilitate improvements in certain railroad operations by imposing time limitations upon a number of specific functions that must be performed. All interested persons were given an opportunity to show cause why the performance standards should not be allowed to become effective. Many such comments were received. The parties who submitted comments are included in part 1 of appendix B to this report.

Before discussing the comments, it seems appropriate first to list the more significant distinctions between the performance standards and the regulations proposed in the initiating notice and order. The rules originally proposed would apply to all regulated carriers. As will be seen later, this is what several shippers support. The performance standards would only apply to shipments of perishable commodities transported by railroad, a point with which some shippers and all railroads, albeit for different reasons, disagree. Motor carriers find this approach acceptable for obvious reasons. The proposed rules would govern reasonable dispatch as provided by a carrier over the entire movement of a shipment; the performance standards would concern reasonable dispatch only insofar as it relates to specific segments of an overall movement. Finally, the regulations originally proposed would establish as the measure of reasonable dispatch the period of time published by a carrier in its schedules, or agreed upon by the shipper and the

carrier and shown on the bill of lading. The performance standards would relate only to the period of time involved in each of six designated segments of a rail haul. The latter is based upon the "usual and customary time period" for the performance of each segment, not to exceed 24 hours except in specific situations.

The comments contain little to indicate that the participating parties favor final adoption of the performance standards.

In brief, the shippers indicated that they were concerned not with the time consumed by a particular railroad operation, but with overall transit times. They felt the performance standards would be an obstacle rather than an aid to recovery of loss and damage claims; and they, like the railroads, objected to the failure to apply standards to motor carriers.

The railroads reiterated their contention that the Commission lacks jurisdiction in this matter. They argued that there was little evidence beyond vague allegations of serious difficulties in the transportation of perishables. They indicated that internal railroad improvements could solve any specific problems arising, but that increased perishables traffic would be needed to make the provision of improved service worthwhile.

Many comments also expressed interest in the idea that this Commission serve in a facilitating role at an informal carriershipper conference. It was suggested that a conference be called for the purpose of identifying and focusing attention on specific problems in the transportation of perishable commodities and exploring possible long-term solutions. An order was entered on September 28, 1976, postponing the effective date of the performance standards and indicating that a conference would be convened soon thereafter.

An appropriate notice was given, a conference was held in Washington, D..C., on December 1, 1976. A number of persons representing shippers, receivers, carriers, and governmental agencies attended. Their names are listed in part 1 of appendix B to this report. In the morning session of the conference participants orally presented their views on a number of topics of their own choosing Several parties submitted written summaries of their views. In the afternoon session groups of persons with mutual interests and concerns were given the opportunity to discuss certain topics of general concern. A summary of the conference proceedings appears in part 2 of appendix B to this report.

All interested persons were then given the further opportunity to submit supplemental briefs on the matters taken up at the

conference as well as other matters relating to the overall problems of transporting perishable commodities with reasonable dispatch. The briefs have been reviewed and are considered in our discussion below. The parties who submitted briefs are listed in part 3 of appendix B.

The issues arising during the course of this proceeding include the following whether the performance standards should be made operative and effective in the form in which they were conditionally adopted last May, whether they should be modified before being made effective; whether alternative solutions, including the possible adoption of the regulations set forth in the initiating notice and order, should be pursued; and whether the views expressed in the briefs warrant holding this proceeding in abeyance while various problems are resolved, or whether this proceeding should be terminated.

DISCUSSION AND CONCLUSIONS

A. Preliminary matters.

We note at the outset that the facts and contentions of the parties, and our conclusions thereon, insofar as they pertain generally to our statutory authority to regulate the transportation of perishable commodities and particularly to the rules originally proposed, are set forth in considerable detail in the prior report. The same is true with respect to the central issue of whether there is a public need for a regulatory response by this Commission to the pattern of service inadequacies found to exist in the transportation of perishable commodities by railroad. We, therefore, will not consider these matters further.

We do not accept the argument that the action conditionally taken in the prior report is a departure from the announced purposes of this proceeding The procedure we have followed throughout this proceeding is in keeping with the provisions of the Administrative Procedure Act concerning prescription of rules having future effect and applicability. See 5 U.S.C. 553. The initiating notice and order referred to the transportation problems with which the contemplated regulations were intended to deal. The notice satisfies fully the requirement that it include "a description of the subjects and issues involved." [5 U.S.C. 553 (b)(3).] In any event, the fact that the performance standards were not to become effective until after all interested parties had been given an opportunity for comment effectively renders the issue of departure from the notice moot.