[Federal Register Volume 59, Number 163 (Wednesday, August 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20842]
[[Page Unknown]]
[Federal Register: August 24, 1994]
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INTERSTATE COMMERCE COMMISSION
49 CFR Parts 1039 and 1145
[Ex Parte No. 346 (Sub-No. 36)]
Rail General Exemption Authority--Exemption of Non-Ferrous
Recyclables and Railroad Rates on Recyclable Commodities
AGENCY: Interstate Commerce Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Commission is considering whether to exempt partially from
regulation the rail transportation of non-ferrous recyclables set forth
in the Appendix. If these commodities are exempted, they will be added
to the list of exempt commodities in the Commission's regulations as
set forth below, and the exemption will be subject to the conditions
and limitations provided therein.
DATES: Comments are due on September 23, 1994.
ADDRESSES: Participants must send an original and 10 copies of their
statement referring to Ex Parte No. 346 (Sub-No. 36) to: Office of the
Secretary, Case Control Branch, Interstate Commerce Commission,
Washington, DC 20423.
FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-5610. [TDD for
hearing impaired: (202) 927-5721.]
SUPPLEMENTARY INFORMATION: The Association of American Railroads (AAR),
numerous member railroads in their individual capacities,1 and the
Institute of Scrap Recycling Industries, Inc. (ISRI) (collectively,
petitioners) have petitioned the Commission to institute a proceeding
to consider the partial exemption from regulation under 49 U.S.C. 10505
of the rail transportation of 28 non-ferrous recyclable
commodities.2 The proposed exemption would be effected by: (a)
Adding the non-ferrous recyclables listed below to the list of exempt
commodities set forth at 49 CFR 1039.11(a), (b) adding conforming
language at the beginning of the list in paragraph (a),3 and (c)
modifying 49 CFR 1039.14(b)(5), as set forth below.4 The proposed
exemption would apply to all rail carriers nationwide, and would
encompass all provisions of Subtitle IV of Title 49 of the United
States Code, subject to the exceptions set forth in 49 CFR 1039.11,
except the provisions of 49 U.S.C. 10731(e) relating to maximum rates.
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\1\These railroads are: Burlington Northern Railroad Co.,
Chicago and North Western Railway Company, Consolidated Rail Corp.,
CSX Transportation, Inc., Norfolk Southern Railway Co., The
Atchison, Topeka and Santa Fe Railway Company, Soo Line, Inc.,
Southern Pacific Transportation Co., and Union Pacific Railroad Co.
\2\Accompanying the proposal are supporting verified statements
from AAR, AAR member railroad Consolidated Rail Corp., and ISRI.
\3\We are not entirely clear on where petitioners intend for
this conforming language to be inserted. Petitioners should clarify
this matter.
\4\The Commission previously determined that exemptions for non-
ferrous recyclables can best be effected by amending 49 CFR 1145.9,
rather than 49 CFR 1039. Exempt. from Regulation--Rail Transp. of
Scrap Paper, 9 I.C.C.2d 957, 964 (1993). Petitioners propose
completely revising 49 CFR part 1145 and instead identifying the
exempted commodities in 49 CFR 1039.
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In addition, on the theory that the existing regulations are not
compatible with a market-driven transportation system, AAR and ISRI
have petitioned the Commission for consideration of substantial
amendments to 49 CFR part 1145, Railroad Rates on Recyclable
Commodities, as set forth below.5 Thus, petitioners seek exemption
from regulation, other than maximum rate regulation (and the
limitations at 49 CFR 1039.11(a)), for the rail transportation of non-
ferrous recyclables, and the substitution of the new maximum rate
regulations they propose for the existing regulations. As discussed
below, although there is some opposition to this proposal, we are
instituting this rulemaking in order to obtain additional information
and public comment.
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\5\Petitioners do not propose amending or deleting the reference
in 49 CFR 1039.11(a) to 49 CFR 1145.9. Such action, if the rules
were adopted, would appear necessary.
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Proponents' Views
Section 10505 requires us to grant an exemption when we find that:
(1) Regulation is not necessary to carry out the national rail
transportation policy of 49 U.S.C. 10101a (NRTP); and (2) either (a)
the transaction or service is of limited scope, or (b) regulation is
not needed to protect shippers from an abuse of market power.
Petitioners assert that their proposal meets these criteria.
Petitioners propose the subject commodities for exemption for the
following reasons:
(1) Continued regulation of these commodities is not necessary to
carry out the NRTP at 49 U.S.C. 10101a. According to petitioners,
although the transportation of this traffic is highly competitive, an
exemption would further increase competition for this traffic and
promote numerous NRTP goals, such as (a) increased competition for the
traffic, (b) safe and efficient transportation, (c) reduced
administrative burdens for both rail carriers and shippers, and (d)
increased ratemaking flexibility and financial stability for rail
carriers (including, by eliminating tariff and contract filing
requirements, the ability to respond more quickly to market changes and
shipper demand for resulting rates and services). Current competition
is reflected in statistics on rates and revenue from rail
transportation of non-ferrous recyclables.6
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\6\AAR reports that, from 1981 to 1991, real revenue per car for
transportation of non-ferrous recyclables declined 42%. AAR adds
that rail market share in 1991 for each non-ferrous recyclable
commodity was 25% or less of the market total.
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(2) The involved rail transportation is limited in scope. The
transportation of non-ferrous recyclables is a small percentage of
total rail transportation, and shippers have access to alternative
transportation modes. Moreover, the proposed exemption would not
relieve carriers of their obligations under 49 U.S.C. 10731(e).
(3) This traffic is generally competitive, subject to intermodal,
intramodal, and geographic competition, making regulation unnecessary
to protect shippers from market power abuse. Moreover, shippers would
continue to have the protection of the mandatory rate cap under 49
U.S.C. 10731(e).
Regarding the proposed amendments to 49 CFR part 1145, petitioners
state that the proposed streamlined procedure is designed ``to assure
that rate adjustments do not exceed applicable aggregate maximum rate
ratios,'' and ``to simplify the implementation of the [rate] cap and to
be compatible with an environment in which carriers must change rates
frequently in response to changing market conditions.'' Petition at 14.
Petitioners further assert that, ``By agreeing not to request the even
greater flexibility of complete deregulation, AAR and ISRI have removed
the need for the Commission to make a finding with respect to whether
continued regulation of maximum rates is necessary for all non-ferrous
recyclable issues.'' Id. at 15 (note omitted).
According to petitioners, the new maximum rate regulations they
propose ``are designed to be self-policing thus permitting the shipper
and railroad to work out adjustments without Commission intervention.''
Id. at 20. Parties may ask the Commission to resolve a dispute only if
the shipper and railroad are unable to agree on the relief to be
provided under the regulations. Id.
Opposition to Petition
Huron Valley Steel Corporation (Huron)7 and Star Recycling,
Inc. (Star) have filed in opposition to petitioners' proposal. They
argue that the Commission should dismiss the petition because the
proposal would preclude the Commission from fulfilling its statutory
mandate with respect to recyclables rate levels, and therefore would
violate 49 U.S.C. 10731(e). We withhold our final determination with
respect to their requests for dismissal, and elect to treat their
pleadings as opposition to AAR and ISRI's petition, and invite comment
on Huron and Star's contentions.
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\7\Huron is a member of ISRI, but previously advised ISRI that
it opposes the petition and that ISRI was not to file the petition
on its behalf.
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Huron and Star reason that the Commission has no statutory
authority to grant petitioners' proposed exemption. They argue that
Congress singled out recyclable or recycled materials other than iron
or steel as a specific exemption from the general deregulatory and
procompetitive purposes of the Staggers Rail Act of 1980,8 and
that the Commission's mandate is not limited or preempted by the
Commission's exemption authority at 49 U.S.C. 10505.
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\8\Pub. L. No. 96-448, 94 Stat. 1905 (1980). Section 204 of the
Act, codified at 49 U.S.C. 10731(e), specifically addressed
recyclables.
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Star contends that the proposal ``would devastate the ability of
shippers of recyclables to obtain adequate and efficient rail
transportation services'' by permitting rail carriers ``to refuse to
provide a level service meeting shippers' needs (or any service at
all), absent the shippers' agreement to transportation contracts that
would then be outside the Commission's rate jurisdiction, and would
therefore render any controls over rate levels illusory.'' Star motion
at 3. Huron asserts that the partial exemption being sought fails to
meet the criteria of 49 U.S.C. 10505.
In addition, Star contends that the ``streamlined'' rate procedures
proposed to be substituted at 49 CFR part 1145 also would undermine the
Commission's carefully established balance ``between avoidance of
regulatory burden on the carriers and effective supervision of
recyclables rate levels.'' Star motion at 2. Huron argues that the
proposed rules ``would be both cumbersome and costly''; that they would
constitute ``an impermissible delegation of the ICC's public duties to
private groups''; and that they would contravene the law by permitting
the railroads to charge rates that are 10 percent above the statutory
cap. Huron reply at 33, 41.
We invite comments and data concerning the proposal and its
opposition. Although we believe that the approach suggested by the
railroads and ISRI may have merit, publication of this notice, along
with the rules as proposed by AAR and ISRI, is not intended to suggest
a predisposition regarding the rules at this time. The proposal makes
substantial changes to a set of rules that were recently adopted by the
Commission at the suggestion of a coalition of shipper and carrier
interests by, for example, providing a 10 percent rate cushion and
eliminating the prejustification requirement for above-the-cap rate
groups. Proponents should show how the new system will benefit shippers
and carriers and will otherwise advance the objectives of the NRTP.
Proponents should also explain in some detail how the new rules will
work in practice.9
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\9\For example, proponents may wish to address in depth
operational questions such as how an ``average rate'' is to be
``frozen,'' and how the rules are designed to work with regard to
proportional rates and combinations of local rates.
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The opponents of the proposal have focused largely on our statutory
authority to issue a partial exemption in light of the specific
statutory language regarding recyclables. Although we welcome
additional comments on our statutory authority to adopt the exemption,
commentors objecting to the proposal should, in addition, point out in
practical terms why, in their view, the proposal will be unfair to
them, or otherwise will not achieve its stated objective. Commentors
may also address the appropriateness of the proposed exemption for any
of these commodities on an individual basis.
Environmental and Energy Considerations
We preliminarily conclude that, if an exemption is granted, it will
not significantly affect either the quality of the human environment or
the conservation of energy resources. We invite comments in this area.
Initial Regulatory Flexibility Analysis
Pursuant to 5 U.S.C. 605(b), we preliminarily conclude that an
exemption would not have a significant economic impact on a substantial
number of small entities. No new regulatory requirements would be
imposed, directly or indirectly, on such entities. The impact, if any,
would be to reduce the amount of paperwork, tariff filing, and related
activities. If an exemption were granted, it would be based on a
finding that (a) the transportation at issue is of limited scope, and/
or (b) regulation of this transportation is not necessary to protect
shippers (including small shippers) from abuse of market power. See 49
U.S.C. 10505(a). Such findings, if made, would indicate that a
substantial number of small entities would not be significantly
affected. We invite comments in this area.
List of Subjects
49 CFR Part 1039
Agricultural commodities, Intermodal transportation, Manufactured
commodities, Railroads.
49 CFR part 1145
Railroads, Rates, Recyclable commodities.
Decided: August 16, 1994.
By the Commission, Chairman McDonald, Vice Chairman Phillips,
Commissioner Morgan. Commissioner Simmons dissented in part with a
separate expression.
Vernon A. Williams,
Acting Secretary.
Non-Ferrous Recyclables
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STCC Commodity description
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2051118...... Bakery waste or sweeping: feed.
22941........ Textile waste: garnetted, processed, or recovered.
22973........ Textile fibres, noils, nubs for spinning.
22994........ Packing cloths or rags: processed textile wastes.
24293........ Shaving or sawdust.
30311........ Declaimed rubber.
3229924...... Cullet (broken glass).
33312........ Copper matte, flue dust, or residues: skimmings,
tailings, scale.
33322........ Lead matte, flue dust, slag skimmings, etc.
33332........ Zinc dross, residue, ashes, skimmings.
33342........ Aluminum residue: ashes, skimmings, slag, smelting
residues.
33398........ Misc. non-ferrous residue, inc. solder skimmings, type
metal dross, tin, nickel dross.
40112........ Ashes: fly ash, coal cinders, photo silver ash,
incinerator ash, metal bearing.
40212........ Brass, bronze, copper, or alloy scrap, tailings, or
wastes.
40213........ Lead, zinc, or alloy scrap: lead borings, zinc castings.
40214........ Aluminum scrap: borings, grindings, turnings, foil scrap.
4021960...... Tin scrap: metallic tin, clippings, drippings, shavings,
for remelting.
40221........ Textile waste: waste cotton, rope, rags, nec.
40231........ Wood scrap: woodpulp waste, spent wood, waste bark.
40251........ Chemical or petroleum waste: spent acid, lubricating
grease, waste oil.
40261........ Rubber or plastic scrap, clippings or trimmings.
4029114...... Municipal garbage waste, solid, digested and ground.
4029176...... Auto shredder residue.
4111434...... Bags, old: Burlap, gunny, jute, or nec.
4111580...... Old bags for conversion into bale coverings.
42111........ Non-revenue mvmt. of containers moving in reverse of
loaded direction.
42112........ Non-revenue mvmt. of shipping devices moving in reverse
of loaded direction.
42311........ Revenue mvmt. of containers moving in reverse of loaded
direction.
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For the reasons set forth in the preamble, title 49, chapter X,
parts 1039 and 1145 of the Code of Federal Regulations are proposed to
be amended as follows:
PART 1039--EXEMPTIONS
1. The authority citation for part 1039 would continue to read as
follows:
Authority: 49 U.S.C. 10321 and 10505; and 5 U.S.C. 553.
2. In section 1039.11, paragraph (a) is proposed to be amended by
adding the following sentence at the end of the text preceding the
table and by adding the following entries at the end of the table to
read as follows:
Sec. 1039.11 Miscellaneous commodities exemptions.
(a) * * * The following commodities are exempted from all
regulation except maximum rate regulation pursuant to 49 U.S.C.
10731(e), subject to the exceptions set forth in this section unless
otherwise exempted from maximum rate regulation.
------------------------------------------------------------------------
STCC No. STCC tariff Commodity
------------------------------------------------------------------------
* * * * * * *
2051118......... 6001-V, eff. 1-1-94............. Bakery waste or
sweeping: feed.
22941........... ......do........................ Textile waste:
garnetted,
processed, or
recovered.
22973........... ......do........................ Textile fibres,
noils, nubs for
spinning.
22994........... ......do........................ Packing cloths or
rags: processed
textile wastes.
24293........... ......do........................ Shaving or sawdust.
30311........... ......do........................ Reclaimed rubber.
3229924......... ......do........................ Cullet (broken
glass).
33312........... ......do........................ Copper matte, flue
dust, or residues:
skimmings,
tailings, scale.
33322........... ......do........................ Lead matte, flue
dust, slag
skimmings, etc.
33332........... ......do........................ Zinc dross, residue,
ashes, skimmings.
33342........... ......do........................ Aluminum residue:
ashes, skimmings,
slag, smelting
residues.
33398........... ......do........................ Misc. non-ferrous
residue, inc.
solder skimmings,
type metal dross,
tin, nickel dross.
40112........... ......do........................ Ashes: fly ash, coal
cinders, photo
silver ash,
incinerator ash,
metal bearing.
40212........... ......do........................ Brass, bronze,
copper, or alloy
scrap, tailings, or
wastes.
40213........... ......do........................ Lead, zinc, or alloy
scrap: lead
borings, zinc
castings.
40214........... ......do........................ Aluminum scrap:
borings, grindings,
turnings, foil
scrap.
4021960......... ......do........................ Tin scrap: metallic
tin, clippings,
drippings,
shavings, for
remelting.
40221........... ......do........................ Textile waste: waste
cotton, rope, rags,
nec.
40231........... ......do........................ Wood scrap: woodpulp
waste, spent wood,
waste bark.
40251........... ......do........................ Chemical or
petroleum waste:
spent acid,
lubricating grease,
waste oil.
40261........... ......do........................ Rubber or plastic
scrap, clippings or
trimmings.
4029114......... ......do........................ Municipal garbage
waste, solid,
digested and
ground.
4029176......... ......do........................ Auto shredder
residue.
4111434......... ......do........................ Bags, old: burlap,
gunny, jute, or
nec.
4111580......... ......do........................ Old bags for
conversion into
bale coverings.
42111........... ......do........................ Non-revenue mvmt. of
containers moving
in reverse of
loaded direction.
42112........... ......do........................ Non-revenue mvmt. of
shipping devices
moving in reverse
of loaded
direction.
42311........... ......do........................ Revenue mvmt. of
containers moving
in reverse of
loaded direction.
* * * * * * *
------------------------------------------------------------------------
Sec. 1039.14 [Amended]
3. Section 1039.14, paragraph (b)(5) is proposed to be amended by
adding parentheses around the words ``other than iron and steel'',
removing the period and adding the following words to the end of the
sentence: ``to the extent not otherwise exempted from regulation.''
4. Part 1145 is proposed to be revised to read as follows:
PART 1145--RAILROAD RATES ON RECYCLABLE COMMODITIES
Sec.
1145.1 Purpose.
1145.2 Definitions.
1145.3 Announcement of statutory cap levels.
1145.4 Initial challenge to individual movements.
1145.5 Treatment of contract rates.
1145.6 Regulation of recyclable rates.
1145.7 Commission review.
1145.8 Interest.
1145.9 Jurisdiction.
Authority: 5 U.S.C. 553; 49 U.S.C. 10321, 10505, 10731, and
10707a.
Sec. 1145.1 Purpose.
This part establishes procedures to encourage shippers and carriers
to negotiate directly with one another to secure mutually-satisfactory
rates on recyclable commodities or, if such agreement cannot be
reached, procedures to regulate rates on recyclable commodities in
compliance with 49 U.S.C. 10731(e), and to afford relief, including
liquidated damages, rate freezes, rate reductions, reparations and/or
such other relief as may be deemed appropriate. The Commission will:
(a) Determine annually the statutory cap levels to apply for the
ensuing calendar year for individual Class I carriers, regions, and the
nation;
(b) Determine, in response to requests from either shippers or
carriers for dispute resolution the applicable individual carrier ratio
(in a single line move), or weighted average ratio (in a joint line
move);
(c) Adjudicate disputes over whether challenged rates comply with
this part and whether any relief is warranted; and
(d) Issue orders directing rate freezes, reductions, payments of
reparations, and/or such other relief as may be deemed necessary to
comply with this part.
Sec. 1145.2 Definitions.
(a) Above-cap rate means a rate that produces a revenue/variable
cost ratio above the Pertinent Statutory Cap Level, on an annual
weighted average basis, using all movements of a particular recyclable
commodity for a particular shipper between a specific origin and
destination over a specified route in a full calendar year.
(b) Annual Rate-Variable Cost Ratio means the ratio of the Weighted
Average Rate to the Weighted Average Variable Cost.
(c) Base Year means the calendar year before the year in which the
movements that are the subject of a shipper challenge actually
occurred.
(d) Below-cap rate means a rate that produces a revenue/variable
cost ratio equal to or below the Pertinent Statutory Cap Level, on an
annual weighted average basis, using all movements of a particular
recyclable commodity for a particular shipper between a specific origin
and destination over a specified route in a full calendar year.
(e) Challenge Year means the calendar year in which a shipper files
a complaint with a carrier(s).
(f) Complaint Year means the calendar year in which the movements
that are the subject of a shipper challenge actually occurred.
(g) Freeze Rate means:
(1) A Transition Rate that has been found to be above the Pertinent
Statutory Cap Level;
(2) A non-Transition Rate that has been frozen at a level above the
Pertinent Statutory Cap Level, but equal to or below 10 percentage
points above the Pertinent Statutory Cap Level; or
(3) A non-Transition Rate found to be more than 10 percentage
points above the Pertinent Statutory Cap Level, reduced to 10
percentage points above the Pertinent Statutory Cap Level, and frozen
at that level.
(h) Pertinent Statutory Cap Level means the cap ratio level that is
computed for each individual carrier (if a single-line rate) or
weighted average of the individual carrier ratios of participating
carriers (if a through rate) for the Base Year.
(i) Recyclable commodities, for purposes of this part, means
recyclable material defined at 49 U.S.C. 10731(a)(1), other than
recyclable or recycled iron or steel.
(j) Statutory cap levels means the railroad revenue to variable
cost ratio level referred to in 49 U.S.C. 10731(3), determined:
(1) As a national ratio;
(2) As regional ratios for the Eastern and Western regions;
(3) As individual carrier ratios for each Class I railroad; and
(4) As the weighted average of the individual carrier ratios for
each carrier participating in a through movement over a specified
through route, weighted by the proportion of the variable cost of the
through movement accounted for by each participating carrier.
(k) Ten percentage points above the statutory ratio means a rate
that produces a revenue-variable cost ratio ten percentage points above
the Pertinent Statutory Cap Level. For example, if the Pertinent
Statutory Cap Level is 150 percent of variable cost, ten percentage
points above the cap is 160 percent of variable cost.
(l) Transition Rate means a Weighted Average Rate that has not been
increased by more than the increase in the Rail Cost Adjustment Factor
(Adjusted) since the Base Year.
(m) Weighted Average Rate means the total paid for all movements of
a particular recyclable commodity by a particular shipper between a
specific origin and destination over a specified route in a full
calendar year, divided by the total number of movements or units of
shipment of that commodity for that shipper between the specific origin
and destination over the specified route in that year, to produce an
average charge per car, hundred weight, or other rate unit and an
average weight per car.
(n) Weighted Average Rate-Cost Ratio Cap means the Rate-Variable
Cost Ratio Cap of each carrier participating in a through movement,
multiplied by that carrier's percentage of the through movement
Weighted Average Variable Cost, and summed for all carriers
participating in the through movement.
(o) Weighted Average Variable Cost means the sum of the variable
cost of each movement of a particular recyclable commodity for a
particular shipper between a specific origin and destination over a
specified route in a full calendar year divided by the total number of
movement units of that commodity for that shipper between the specific
origin and destination over the specified route in that year.
Sec. 1145.3 Announcement of statutory cap levels.
Each calendar year, as soon as the Commission can do so, and based
on the latest cost and revenue data available, the Commission will
state the statutory cap levels required to apply for the Complaint
Year. These cap levels will be stated:
(a) As a national ratio;
(b) As regional ratios for the Eastern and Western regions; and
(c) As individual carrier ratios for each Class I railroad (each
non-Class I railroad will apply the regional ratio for the region in
which its operations predominate).
Sec. 1145.4 Initial challenge to individual movements.
(a) Shipper complaint to carrier. A shipper may institute a
complaint if it asserts, with supporting evidence, that the rate-
variable cost ratio of a Weighted Average Rate charged for movements of
a particular recyclable commodity from a specific origin to a specific
destination over a specified single line or through route exceeded the
Pertinent Statutory Cap Level.
(1) Complaints to a carrier(s) shall be accompanied by sworn
testimony, including cost evidence, either adjusted or unadjusted,
using the Commission's personal computer-based Phase III URCS Costing
Model (or a successor model), and evidence of a particular recyclable
commodity shipments made or received within the Complaint Year over a
specified route between a specific origin and destination.
(2) Complaints to a carrier(s) must show that the Weighted Average
Rate-Variable Cost Ratio exceeded the Pertinent Statutory Cap Level. In
making the showing, a complaint shall use costs from the Base year,
indexed to the Complaint Year. The statutory cap ratios shall be those
computed by the Commission based on the data from the Base Year. Any
rates charged pursuant to a written contract entered into pursuant to
49 CFR 1145.5 shall not be included in the weighted average for
purposes of calculating the Weighted Average Rate. The shipper must
state with specificity the relief sought and the reasons and evidence
supporting the shipper's claim for relief. The claim shall be served on
each carrier participating in the moves not later than February 28th of
the Challenge Year, by first class mail or express delivery, or by any
other means agreed upon by shipper and carrier(s).
(b) Carrier(s) reply to shipper's complaint. (1) If the carrier(s)
agrees with the shipper's evidence, the carrier(s) shall reply to the
complaining shipper in writing, stating its intention to enter into a
settlement agreement for relief, as appropriate. The carrier(s) shall
serve its reply on the shipper not later than April 30th of the
Challenge Year by first class mail, express delivery, or by any other
means agreed upon by shipper and carrier(s).
(2) If the carrier(s) disagrees with the shipper's evidence, the
carrier(s) shall file a reply, accompanied by sworn testimony,
including cost evidence, either adjusted or unadjusted, using the
Commission's personal computer-based Phase III URCS Costing Model (or a
successor model), pointing out any errors in the data and calculations
submitted to it by the shipper. The carrier(s) shall serve its reply on
the shipper not later than April 30th of the Challenge Year by first
class mail, express delivery, or by any other means agreed upon by
shipper and carrier(s).
(c) Shipper rebuttal. The shipper may file a rebuttal not later
than May 30th of the Challenge Year by first class mail, express
delivery, or by any other means agreed upon by shipper and carrier(s).
(d) Settlement negotiations. Shipper and carrier(s) shall negotiate
in good faith to reach a voluntary settlement of the issues in any
complaint brought under this part.
(1) Any settlement reached under this part shall be in writing and
signed by a representative of both the shipper and the carrier(s)
within 60 days of the last filing.
(2) If shipper and carrier(s) do not reach a settlement within 60
days of the last filing, then the shipper shall serve notice on the
carrier(s) if it intends to submit the matter to the Interstate
Commerce Commission for resolution, not later than August 10th of the
Challenge Year, and both shipper and carrier(s) shall make a joint
filing to the Commission of all written evidentiary material previously
provided to the other party, with separate transmittal letters (not to
exceed four pages) from the shipper and carrier(s) which shall state
the relief requested but shall not include any new evidence, not later
than August 31st of the Challenge Year.
(e) The Commission shall determine whether the challenged rate
exceeds the Pertinent Statutory Cap Level, and, if so, determine the
appropriate remedy under this part.
(f) Filings made under this part shall be prepared in a manner
consistent with the rules of practice at 49 CFR parts 1100 through 1102
and 1104.
Sec. 1145.5 Treatment of contract rates.
Rates charged on movements pursuant to a rate contract executed in
writing between a shipper and a carrier will not be included in
calculating the annual Rate-Variable Cost Ratio of any shipper
complaint about a recyclable rate. Movements made pursuant to ``rate
quotations,'' ``exempt tariff circulars,'' or similar types of rate
publications normally used for exempt traffic in lieu of published
common carrier tariffs filed with the Commission pursuant to 49 U.S.C.
10762, incorporating the terms of the Uniform Straight Bill of Lading,
and used without other writing or agreement between the shipper and
carrier for line haul service, shall not come within the definition of
a contract under this section.
Sec. 1145.6 Regulation of recyclable rates.
(a) Determination of whether a rate is a transition rate. (1) A
shipper complaining to a carrier will compute the percentage increase
in the RCAF between the third quarter of the year of the Complaint Year
and the third quarter of the Base Year. If there has been a decline in
the RCAF between two years, then the percentage increase shall be
deemed to be zero.
(2) A shipper complaining to a carrier will compute the percentage
increase in the Weighted Average Rate between the Base Year and the
Complaint Year. If there has been a decline or no change, then the rate
of change shall be deemed to be zero.
(3) If the percentage increase in the Weighted Average Rate in the
Complaint Year over the Base Year is either zero or is less than or
equal to the percentage increase in the RCAF, the rate in question is a
Transition Rate. If the percentage increase is greater than the
increase in the RCAF, the rate is not a Transition Rate.
(4) For purposes of comparing rates in the Base Year with rates in
the Complaint Year, the Weighted Average Rate per hundred weight or ton
shall be used.
(b) Shipper protection against increases in Transition Rates. (1)
Upon shipper complaint showing that the Annual Rate-Variable Cost Ratio
of a Weighted Average Rate that is a Transition Rate was above the
Pertinent Statutory Cap Level, a Transition Rate will be frozen for the
Challenge Year and that Freeze Rate will not be further increased via
RCAF increases or otherwise.
(2) Upon the shipper's complaint to the carrier in the next year,
demonstrating that [the] Weighted Average Rate charged per hundred
weight or ton exceeded the Freeze Rate and the Pertinent Statutory Cap,
the shipper will be entitled to liquidated damages equal to the amount
by which the Weighted Average Rate for the previous year exceeded the
Freeze Rate for that year, multiplied by the quantity actually shipped.
(3) If in any following year, the Weighted Average Rate produces a
ratio that exceeds the pertinent Statutory Cap Level, but the rate is
below an existing Freeze Rate, the existing Freeze Rate will remain in
place for that year; however, if the Weighted Average Rate produces a
ratio below the Pertinent Statutory Cap Level, or no showing is made
that the rate produces a ratio above the Pertinent Statutory Cap Level,
the rate is unfrozen.
(c) Relief with respect to rates other than Transition Rates. (1)
Upon a shipper's complaint to a carrier showing that the Weighted
Average Rate has been increased above the Pertinent Statutory Cap
Level, to a level less than or equal to ten percentage points above the
Pertinent Statutory Cap Level in the previous year, the shipper shall
be entitled to a Freeze Rate on the movement at that level for the year
in which the challenge was filed with the carrier.
(2) Upon a shipper complaint to a carrier showing that a Weighted
Average Rate in the Complaint Year produced a ratio that was more than
10 percentage points above the Pertinent Statutory Cap Level, the
shipper shall receive as liquidated damages an amount equal to the
difference between the Weighted Average Rate actually charged and the
Weighted Average Rate that would have applied if the Rate had been at a
level producing a ratio equal to 10 percentage points above the
Pertinent Statutory Cap Level, multiplied by the quantity actually
shipped, and a Freeze Rate for the next year will be set at that level
equal to 10 percentage point above the Pertinent Statutory Cap.
(3) Upon a shipper complaint to a carrier demonstrating that a
Weighted Average Rate exceeded a Freeze Rate in the next Complaint
Year, that shipper shall receive liquidated damages equal to the
difference between the Weighted Average Rate and the Freeze Rate, and
the Freeze Rate will remain in place for another year.
(4) Upon shipper complaint to the carrier in a subsequent year
showing that the Weighted Average Rate produced a ratio exceeding the
Pertinent Statutory Cap Level, but was below an existing Freeze Rate,
the existing Freeze Rate will remain in place for another year. If the
Weighted Average Rate was below the Pertinent Statutory Cap Level, or
no showing is made that it is above the Pertinent Statutory Cap Level,
then the rate is unfrozen.
(d) Treatment of through rates. (1) Once liquidated damages are
determined to be owed, whether by agreement of shipper and carrier or
by the Commission, the collecting carrier shall pay liquidated damages
to the shipper for carriers for whom the carrier collected charges.
(2) If the challenged rate is a combination of local or
proportional rates or is a multiple independent factor through rate
(MIFTR rate), no carrier whose local or proportional rate or MIFTR rate
factor divided by the individual carrier's variable cost produces a
rate-variable cost ratio below the individual carrier Pertinent
Statutory Cap Level will owe liquidated damages, nor will that
carrier's local or proportional rate or MIFTR rate factor be frozen. No
carrier participating in a through movement will contribute a greater
amount per hundred weight or ton shipped than the amount by which its
Weighted Average Rate (or factor) exceeded the Weighted Average Rate
set at the carrier's individual Pertinent Statutory Cap Level except
that the carriers participating in the through rate will be jointly and
severally liable to the shipper for the full amount of the damages
suffered by the shipper.
(e) In the event shipper and carrier(s) do not agree on whether a
rate is a Transition Rate, the Pertinent Statutory Cap Level, the
Weighted Average Rate, Weighted Average Variable Cost, or any other
matter arising under these regulations, the shipper or carrier(s) may
submit the dispute to the Commission for resolution pursuant to the
regulations of this part.
Sec. 1145.7 Commission review.
Four years after the regulations of this part are implemented, the
Commission will institute a proceeding and invite comments from all
interested parties on the operation of the regulations of this part,
and whether the regulations of this part should be further revised. The
Commission will review the record developed in the proceeding and take
whatever action it deems to be required.
Sec. 1145.8 Interest.
Interest on liquidated damages or on reparations ordered by the
Commission pursuant to this part will be calculated in accordance with
the Commission's regulations on interest, 49 CFR part 1141.
Sec. 1145.9 Jurisdiction.
The Commission has regulatory jurisdiction over all rates on
recyclable commodities subject to this part, and no showing of railroad
market dominance is required. The provisions of this part shall not
apply, however, to any non-ferrous recyclable commodity to the extent
the Commission exempts it from maximum rate regulation.
[FR Doc. 94-20842 Filed 8-23-94; 8:45 am]
BILLING CODE 7035-01-P
