Appendix — Southern R. Co. v. Seaboard Allied Milling Corp.

Supreme Court brief1979

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APPENDIX | ioiag veer |

In the Supreme Court of the United States

OcTOBER TERM, 1978

No. 78-575

SOUTHERN RAILWAY COMPANY,

Petitioner

SEABOARD ALLIED MILLING CORP., ET AL.

Respondents.

No. 78-597

INTERSTATE COMMERCE COMMISSION,

Petitioner

SEABOARD ALLIED MILLING CORP., ET AL.

Respondents.

No. 78-604

SEABOARD COAST LINE RAILROAD COMPANY,

ET AL.,

Petitioners

SEABOARD ALLIED MILLING CORP., ET AL.

Respondents.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Petitions for Certiorari filed in No. 78-597 and No. 78-604

October 10, 1978

Certiorari Granted January 8, 1979.

a ne hte. 14 atc 2

TABLE OF CONTENTS

Interstate Commerce Commission (ICC)

Certified List of Relevant Documents

as Filed by the ICC with United States

Court of Appeals for the Eighth Circuit

Certified General Docket List -

United States Court of Appeals for

the Eighth Circuit (CC8)

(Docket Nos. 77-1729 and 77-1770)

Document

Reference Document Dated

ICC-1 Southern Freight Associa- Aug. 15, ’77

tion’s Justification State-

ment.

ICC-2 Letter- Notifying Com- Aug. 15, 77

mission of Corrections to

SFA Justification

Statement

ICC - 19 Verified Complaint, Pro- Sept. 6, ’77

test and Petition for Sus-

pension and Investigation

of Southern Poultry &

Egg Association

ICC - 22 Verified Complaint, Pro- Sept. 6, ’77

test and Petition for Sus-

pension of Board of Trade

of the City of Chicago, St.

Louis Grain Corporation,

FS Services, Inc., Illinois

Farm Bureau, Illinois

Grain Corporation

141

Document

Reference Document Dated

Page

ICC - 23 Protest and Petition for Sept. 6, 77

Dixie Portland Flour Mills,

Inc., Seaboard Allied Mill-

ing Corp.

ICC - 24 Petition for Rejection of | Sept. 6, ’77

Tariffs of Archer Daniels

Midland Company,

Conagra, Inc.

Dixie Portland Flour Mills,

Inc., Seaboard Allied Mill-

ing Corp.

ADM Milling Co.

ICC - 28 Southern Freight Associa- Sept. 8, 77

tion’s Reply to Protests

and Petitions for Sus-

pension

ICC - 29 Supplementary Petition Sept. 12, ’77

for Rejection of Tariffs

of Archer Daniels Mid-

land Company

Conagra, Inc.

Dixie Portland Flour

Mills, Inc., Seaboard

Allied Milling Corp.

ADM Milling Co.

ICC - 31 Interstate Commerce Sept. 14, ’77

Commission Order Deny-

ing Petition for Rejection

174

242

249

280

284

Document

Reference Document Dated

Page

ICC - 32 Interstate Commerce Sept. 14, ’77

Commission Order De-

clining Petitions for Sus-

pension and Investigation

ICC - 33 Southern Freight Asso- Sept. 13, ’77

ciation Reply to Supple-

mentary Petition for Re-

jection of Tariffs (ICC-29)

CC8 - 10 Court Order Temporarily Sept. 14, ’77

Staying Interstate Commerce

Commission Order of

September 14, 1977

(ICC-32) and Enjoining

Respondents from Per-

mitting Tariffs from

Becoming Effective.

ICC - 34 ICC Order Reopening Sept. 15, ’77

Proceeding Solely to

Comply with Court Order

CC8 - 40 Court Order Dissolving Sept. 22, ’77.

Temporary Stay

ICC - 37 Interstate Commerce Sept. 23, ’77

Commission Order Allow-

ing Respondents to Cancel

Tariff Supplements Post-

poning Effective Date of

Seasonal Grain Rate In-

creases.

itt

286

292

295

296

298

301

Document

Reference Document

CC868 Judgment-Opinion by the Feb. 16, ’78

Honorable Judge Van

Oosterhout

CC8 - 80 Court Order Denying May 12, ’78

Interstate Commerce

C ‘ssion’s Petiti

for Rehearing

(CC8 - 73)

Orders of the Supreme Jan. 8, ’79

Court of the United States

Granting Petitions for Issu-

ance of a Writ of Certiorari

to the United States Court

of Appeals for the Eighth

Circuit

317

319

Interstate Commerce Commission (ICC)

Certified List of Relevant Documents

as Filed by the ICC with United States

Court of Appeals for the Eighth Circuit

INTERSTATE COMMERCE COMMISSION

Washington, D.C. 20423

Office of the Secretary

I, H. G. HOMME, JR., Acting Secretary of the Interstate

Commerce Commission, do hereby certify that the attached

document-index is a true representation and listing of all

formal filings and Commission issuances in the proceeding

docketed and identified as No. 36663, (DEMAND SENSI-

TIVE RATES ON GRAIN AND SOYBEANS - SOUTH-

ERN FREIGHT ASSOCIATION TERRITORY). Collec-

tively, the documents listed on the attached index represent

the entire formal record in said proceedings, the originals

of which are on file and of record in the Office of the Sec-

retary of this Commission, and are available for review, upon

request.

IN WITNESS WHEREOF, I have

hereunto set my hand and affixed

the Seal of said Commission this

12th day of October, A. D., 1977.

s/s H. G. Homme, Jr.

ACTING SECRETARY OF THE

INTERSTATE COMMERCE

COMMISSION

(SL/L) ®9%-aS

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OFFICE OF THE SECRETARY — FILING INDEXING SHEET PAGE 1 OF 6 PAGES

CASE ON APPEAL SEABOARD ALLIED MILLING CORP., INTERSTATE COMMERCE NO. CIR.

ARCHER DANIELS MIDLAND COMPANY, ADM MILLING CO., COMMISSION and UNITED

CONAGRA, INC., and DIXIE PORTLAND FLOUR MILLS, INC. V. STATES OF AMERICA 77-1729 8th

COMMISSION DOCKET NO. TITLE — DEMAND SENSITIVE RATES ON GRAIN AND SOYBEANS —

PROCEEDING No. 36663 SOUTHERN FREIGHT ASSOCIATION TERRITORY =

VOLUME I

TITLE /SUBSTANCE DATE OF NO. OF

NO. OF DOCUMENT FILING/SERVICE PAGES PARTY /COMMISSION

1. JUSTIFICATION STATEMENT 8/16/77 80 SOUTHERN FREIGHT ASSOCIATION

(by B. B. Bowers)

2. LETTER: Advising of corrections of typo- 8/16/77 2 SEABOARD COAST LINE RAILROAD

graphical errors in item next above. COMPANY (by W. Poynter)

3. PROTEST and PETITION: For suspension. 8/28/77 3 NORTH CAROLINA DEPARTMENT OF

_ AGRICULTURE (by J. A. Graham)

N 4. VERIFIED COMPLAINT, PROTEST and Dated 8/31/77 19 MFC SERVICES (AAL)

PETITION: For suspension. (by H. L. Bass)

5. VERIFIED COMPLAINT, PROTEST and 8/31/77 5 ILLINOIS DEPARTMENT OF

PETITION: For suspension. _ AGRICULTURE (by L. M. Rife)

6. VERIFIED COMPLAINT, PROTEST and PE- 8/31/77 31 THE EARLY AND DANIEL CO., INC.

TITION: For suspension and investigation. (by J. H. Sisson)

7. VERIFIED COMPLAINT, PROTEST and PE- 9/1/77 12 INDIANA COMMISSIONER OF AGRI-

TITION: For suspension and investigation. CULTURE (by R. D. Orr)

8. VERIFIED COMPLAINT, PROTEST and PE- 9/1/77 12 GARVEY, INC. (by J. I. Irlandi)

TITION: For suspension and investigation.

9. VERIFIED COMPLAINT, PROTEST and PE- 9/1/77 2 CARNATION COMPANY

TITION: For suspension and investigation. (by A. P. Davis)

10. VERIFIED COMPLAINT, PROTEST and 9/2/77 26 INDIANA GRAIN AND FEED ASSOCI-

PETITION: For suspension.

ATION, INC.; and GRAIN AND FEED

ASSOCIATION OF ILLINOIS (by R. L.

Cole and H. H. Hoemann)

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OFFICE OF THE SECRETARY — FILING INDEXING CONTINUATION SHEET PAGE 3 OF 6 PAGES

CASE ON APPEAL INTERSTATE COMMERCE COMMISSION NO. CIR.

SEABOARD ALLIED MILLING CORP., ET AL Vv. and UNITED STATES OF AMERICA 77-1729 8th

TITLE /SUBSTANCE DATE OF NO. OF

NO. OF DOCUMENT FILING/SERVICE PAGES PARTY /COMMISSION

21. VERIFIED COMPLAINT, PROTEST and PE- 9/6/77 19 UNITED STATES DEPARTMENT OF

TITION: For suspension and investigation. AGRICULTURE (by C. M. Pearson)

22. VERIFIED COMPLAINT, PROTEST and PE- 9/6/77 34 BOARD OF TRADE OF THE CITY OF

TITION: For suspension and investigation. CHICAGO; ST. LOUIS GRAIN COR-

PORATION; FS SERVICES, INC.;

ILLINOIS FARM BUREAU; and

ILLINOIS GRAIN CORPORATION

(by T. F. McFarland, Jr.)

23. VERIFIED COMPLAINT, PROTEST and PE- 9/6/77 76 ARCHER DANIELS MIDLAND

TITION: For suspension and investigation. COMPANY; ADM MILLING CO,;

CONAGRA, INC.; DIXIE PORTLAND

FLOUR MILLS, INC.; and SEABOARD

~~ ALLIED MILLING CORP.

(by P. A. Greene)

24. PETITION: For rejection of tariffs. 9/6/77 7 ARCHER DANIELS MIDLAND

COMPANY; ADM MILLING CO.;

CONAGRA, INC.; DIXIE PORTLAND

FLOUR MILLS, INC.; and SEABOARD

ALLIED MILLING CORP.

(by P. A. Greene)

25. VERIFIED COMPLAINT, PROTEST and PE- 9/7/77 8 NATIONAL COUNCIL OF FARMER

TITION: For suspension and investigation. COOPERATIVES (by J. S. Krzyminski)

26. PROTEST 9/8/77 2 FLORIDA DEPARTMENT OF AGRI-

‘ CULTURE (by D. Conner)

27. PROTEST 9/8/77 1 KENTUCKY DEPARTMENT OF AGRI-

CULTURE (by T. O. Harris)

28. REPLY: to protests and petitions for 9/8/77 39 SOUTHERN FREIGHT ASSOCIATION

suspensions. (by B. B. Bowers)

29. SUPPLEMENTARY PETITION: For rejection 9/12/77 5 ARCHER DANIELS MIDLAND

of tariffs. COMPANY; CONAGRA, INC.; DIXIE

PORTLAND FLOUR MILLS, INC-.;

SEABOARD ALLIED MILLING

CORP.; and ADM MILLING CO.

(by J. H. Caldwell)

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OFFICE OF THE SECRETARY — FILING INDEXING CONTINUATION SHEET PAGE 5 OF 6 PAGES

CASE ON APPEAL INTERSTATE COMMERCE COMMISSION NO. CIR.

SEABOARD ALLIED MILLING CORP., ET AL Vv. and UNITED STATES OF AMERICA 77-1729 8th

TITLE /SUBSTANCE DATE OF NO. OF

NO. OF DOCUMENT FILING/SERVICE PAGES PARTY /COMMISSION

33. REPLY: To supplementary petition in item #29 9/15/77 5 SOUTHERN FREIGHT ASSOCIATION

above. RAILROADS (by C. N. Marshall)

34. ORDER: That this emges is reopened for the 9/15/77 1 ACTING CHAIRMAN CLAPP

st cumiivinn 27 ths order of The

nited States of A For the

Eighth Circuit; solely in obedience to the

Court’s order as specified, the operation of

until further order.

35. PETITION: To intervene. 9/16/77 6 NORTH CAROLINA DEPARTMENT OF

AGRICULTURE (by R. L. Griffin)

36. LETTER: Addressed to R. L. Edmiston, advising 9/21/77 2 H. G. HOMME, JR., Acting Secretary

that the petition in item next above was re-

ceived at the Commission too late to be con-

sidered. The petition should have reached the

Commission not later than vd bel —,

ingly, your petition is being passed to

without further handling.

37. ORDER: That respondents may cancel on one 9/23/77 2 ACTING CHAIRMAN CLAPP

day’s notice those supplements omy Sorgg

effective date of the specified schedules; that,

consistent with the court’s admonishment,

respondents keep account of all amounts re-

ceived because of these increased rates and

charges. The account shall specify by whom

(CONT’D.)

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Certified General Docket List -

United States Court of Appeals for

the Eighth Circuit (CC8)

(Docket Nos. 77-1729 and 77-1770)

GENERAL DOCKET

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

APPEAL FROM PETITION FOR REVIEW OF

ORDER OF INTERSTATE COMMERCE COMMISSION

CASE NO. 77-1770

Consolidated w/ 77-1729

TITLE OF CASE

Board of Trade of the City of Chicago,

FS Services, Inc.,

Illinois Farm Bureau,

Illinois Grain C Son

and

St. Louis Grain Corporation,

Petitioners,

vs.

Interstate Commerce Commission,

and

United States of America,

Respondents.

Seaboard Coast Line Railroad Company,

Southern Railway Company, Louisville and

Nashville Railroad Company, Illinois

Central Gulf Railroad Company and

St. Louis-San Francisco Railway Company,

Intervenor-Respondents.

ATTORNEYS FOR APPELLANT

Harold E. Spencer

Thomas F. McFarland, Jr.

ATTORNEYS FOR APPELLEE

Robert L. Thompson

Christine N. Kohl (ICC)

Intervenors-Respondents:

Charles N. Marshall

Adrian L. Steel, Jr.

Wandaleen Poynter

DATE ACCOUNT OF APPELLANT Received Disbursed Remarks

1977

Sept. 30 Docketing fee

EH&C 50.00

GENERAL DOCKET

UNITED STATES COURT OF APPEALS

1977

FOR THE EIGHTH CIRCUIT

CASE NO. 77-1770

FILINGS - PROCEEDINGS FILED

Sept. 30 Docketed case

Sept. 30 Petition for Review of Order of Interstate Com-

Oct. 5

Oct. 11

Oct. 12

Oct. 20

Oct. 21

Nov. 8

Nov. 11

Dec. 5

Dec. 9

merce (1)

Appearance petitioners (2)

Appearance respondents (3)

Mo Seaboard Coast Line Rr. Co., Southern Rr.

Company, Louisville and Nashville Rr Co., IC.

Gulf Rr. Co. and St. Louis-San Francisco Rr Co.

for lv to intervene & to consolidate w/1729 (4)

Order: Petitions for review of orders of Interstate

Commerce Commission are consolidated for brief-

ing and submission to court; Seaboard Coast Line

Railroad Company; Southern Railway Company,

Louisville and Nashville Railway Company; Illinois

Central Gulf Railroad Company; and St. Louis-San

Francisco Railway Company may intervene as

parties-respondents w/77-1729

Appearance respondents (5)

Appearance Intervenors-respondents (6)

Appearance Intervenors-respondents (7)

Brief petitioner wiser 0 +3 (Intervening petitioner

in 77-1729)

CERTIFIED LIST OF PROCEEDINGS BE-

FORE ICC (8)

Mo respondent for extension of time to file brief,

with 77-1729

Order: Respondents may have thru December 8

to file briefs w/1729

Brief Respondent w/ser. 10 copies (USA)

Brief appellee wiser. 10 copies (Interstate Com-

merce Commission)

Brief of Railroad Intervenors wiser. 0 +4

Dec. 13

Dec. 15

Dec. 19

Dec. 20

Dec. 23

Jan. 3

Jan. 5

Jan. 12

Jan. 13

Feb. 16

Mo petitioners for extension of time to file reply

briefs, with 77-1729

Mo Intervening Respondent Railroads for lv to file

reply brief, with 77-1729.

Order: Petitioners may have thru January 5 to

serve and file reply briefs; appendix remains due

to be filed by January 6, 1978 w/77-1729

Transferred to January session.

Motion of railroad intervenors for leave to file a

20'/2-page supplemental brief

Order: Motions of intervenor-respondents, Rail-

roads, for leave to file w/1729 reply brief granted;

Railroads may file reply brief not to exceed twenty

typewritten pages w/77-1729 '

Objection of petitioners Chicago Board of Trade,

et al., to reply brief of intervenor-respondent rail-

roads, with 77-1729. (9)

Appendix 10 copies w/77-1729 copies to panel

Reply Brief Petitioners w/ser. 0 +3 (10)

Supp brief of Railroad Intervenors w/ser 0 + 4

w/77-1729

Bnef of respondent, I.C.C. Printed copies w/service

w/1729

Argued and submitted (with 1729) to Judges Gib-

son, Van Oosterhout & Matthes and John Cald-

well for petitioners in 1729; Harold Spencer for

petitioners in 1770; Robert L: Thompson, Dept. of

Justice for U.S.; Charles White for ICC; Charles

Marshall for Southern Ry; Wandaleen Poynter for

Seaboard Coast Line. Rebuttal by Messers. Cald-

well and Spencer. Recorded.

Opinion by Judge Van Oosterhout. (Printed &

Pubiished) w/1729.

Feb. 16 JUDGMENT: Commission’s order terminating

April 28

its investigation of patent illegal charges is vacated

and cases are remanded to Commission for fur-

ther proceedings in accordance with opinion.

w/1729. |

Mo ICC for ext of time to file pet for reh and sugg

for reh en banc, with 1729.

Appearance for respondent ICC. (11)

Order: ICC granted to 4-3-78 to file petition for

Rehearing and Rehearing En Banc (with 1729)

Petition of respondent ICC for rehearing en banc

and rehearing w/ service. w/ 1729

Mo petitioners for addtnl 10 days to respond to

pet for reh and reh en banc. w/1729.

ORDER: On motion of certain petitioners all par-

ties desiring to respond to Commission’s petition

for rehearing, etc., are to have response in the of-

fice of the Clerk of Court in St. Louis, Missouri no

later than 4/28/78 (w/77-1729)

Response of respondent, United States of Ameri-

ca, to Commission’s petition for rehearing en banc

wi/ service. w/ 1729.

Response of petitioners (in 77-1770) Board of Trade

of the City of Chicago; FS Services, Inc., Illinois

Farm Bureau, Illinois Grain Corporation and St.

Louis Grain Corp. to Commission’s petition for re-

hearing en banc. w/ service. (77-1729) (12)

Response of petitioners/intervenors respondents,

Seaboard Allied Milling Corp., et al. and interve-

nors Southeastern Poultry and Egg Association,

State of North Carolina and State of Indiana w/

service. w/1729

Mo of Intervening Railroad Respondents for lv to

file memorandum in support of ICC’s pet for reh

eg Oe Ie it ae Oe ge eee eo

Sept. 8

with suggestions for reh en banc, with 1729.

Opposition of petitioners to granting lv to RR in-

venors to file memo in support of ICC’s pet for

reh. (13)

ORDER: Petition for rehearing en banc and re-

hearing filed by respondent, ICC, is denied, w/77- -

1729.

Certified copies of judgment forwarded to counsel

(with 1729)

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-115

granting extension of time to 9/9/78 to file petition

for writ of certiorari, with 77-1729.

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-106

granting extension of time to 9/9/78 to file peti-

tion for writ of certiorari, with 77-1729.

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-165

granting extension of time to 9/9/78 to file petition

for writ of certiorari, with 77-1729.

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-115

granting extension of time to 10/9/78 to file peti-

tion for writ of certiorari, with 77-1729.

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-106

granting extension of time to 10/9/78 to file peti-

tion for writ of certiorari, with 77-1729.

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-165

granting extension of time to 10/9/78 to file peti-

tion for writ of certiorari, with 77-1729.

14 i 15

a GENERAL DOCKET

Oct. 13 Notice of filing petition for writ of certiorari in Su- UNITED STATES COURT OF APPEALS

preme pee: At as Case #78-575 (as of | FOR THE EIGHTH CIRCUIT

10/6/78), with 77-1729. e |

Oct. 16 Notice of filing petition for writ of certiorari in Su- APPEAL FROM

preme Court of U.S. as Case # 78-597 (as of | PETITION FOR REVIEW OF ORDER OF ICC

10/10/78) with 77-1729.

Oct. 31 Notice of filing petition for writ of certiorari in CASE NO. 77-1729

Supreme Court of U.S. as Case #78-604 (as of

10/10/78), with 77-1729. consolidated w/ 77-1770

A true copy. | TITLE OF CASE

Attest: /s/ Robert C. Tucker Seaboard Allied Milling Corp.,

Per A.K. | Archer Daniels Midland Company, ADM

Clerk, U. S. Court of Appeals, 8th Circuit. | ae oo

Petitioners,

VS.

Interstate Commerce Commission and

United States of America,

Respondents.

Seaboard Coast Line Railroad Company,

Southern Railway.Company, Louisville and

Nashville Railroad Company, Illinois

Central Gulf Railroad Company and

St. Le ais-San Francisco Railway Company,

Intervenor-Respondents.

ATTORNEYS FOR APPELLANT

Peter A. Greene

John H. Caldwell

Neal A. Jackson

Arthur J. Cerra

(Harold E. Spencer (Intervenors

(Thomas McFarland StL Grain, etc.

(W. Thomas McGhee)

David C, Todd (Intervenor Miss. Poultry Assn)

William G. Mundy

Michael A. Yuhas

ATTORNEYS FOR APPELLEE

Robert Lewis Thompson

Charles N. Marshall (Intervenor Southern Railway)

Wandaleen Poynter (Intervenor R.R.)

Adrian Steel, Jr. (Intervenor R.R.)

Christine N. Kohl (ICC)

No. below: 36663; 67123

Judge below:

Date of Judgement: Sept. 14, 1977

Notice of appeal filed:

DATE ACCOUNT OF APPELLANT Received Disbursed REMARKS

9/14/77 Docket fee Jackson 50.00

— |

GENERAL DOCKET

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

CASE NO. 77-1729 w/ 77-1770

DATE FILINGS—PROCEEDINGS FILED

1977

Sept. 14 Petition for Review of Order of ICC (1)

Sept. 14 Motion for Stay (2)

Sept. 14 Memorandum in Support of Motion for Stay (3)

Sept. 14 Affidavit of Donald J. Stone. (4)

Sept. 14 Affidavit of John R. Staley (5)

Sept. 14 Affidavit of James R. Woolery (6)

Sept. 14 Appearance for petitioners (7)

Sept. 14 Appearance for petitioners (8)

Sept. 14 Certificate of Service of Petition and Motions (9)

Sept. 14 Order: Order of ICC of September 14, 1977, is

stayed and respondents are enjoined from per-

mitting the subject rate tariffs from becoming ef-

fective until further order of the court; respondents

may have thru September 21 to respond to peti-

tioners’ motion for stay (10)

Sept. 15 Mo of ICC for a hearing to lift order of 9/14 to be

held on P.M. of 9/16/77, or as soon as possible

thereafter. U.S. concurs. (11)

Sept. 16 Reply of petitioners to request of respondents for

hearing. (12)

Sept. 16 Order of ICC concerning rate tariff schedules. (13)

Sept. 16 Affidavit of John E. Harvey. (14)

Sept. 16 Mo Seaboard Coast Line Railroad Company,

Southern Railroad Company, Louisville and Nash-

ville Railroad Co., Illinois Central Gulf Railroad

Co. and St. Louis-San Francisco Railway Co. for

lv to intervene (15)

Sept. 16 Order: Hearing in this case set at 1:30 p.m. Thurs-

day, September 22, 1977; counsei will be heard on

all matter pertaining to the issuance or continuance

of interlocutory injunctive relief in this cause; any

briefs or responsive memorandums are to be filed

with the clerk by 9/21/77 (16)

Sept. 19 Affidavit of John E. Harvey. (Verified) (17)

Sept. 19 Petition of St. Louis Grain Corporation, Board of

Trade of the City of Chicago, FS Services, Inc.,

Illinois Farm Bureau and Illinois Grain Corpora-

tion for leave to intervene. (18)

Sept. 20 Mo Alabama Poultry Industry Association, et al

for lv to intervene. (19)

Sept. 20 Mo Mississippi Poultry Association, et al., for lv

to intervene. (20)

Sept. 20 Memo in further support of motion for stay. (21)

Sept. 20 Verified Statement of Allan Rahn (Exhibit I) (22)

Sept. 20 Affidavit of William Roenigk. (Exhibit I) (23)

Sept. 21 Response of ICC in opposition to continuance of

stay entered without jurisdiction. (24)

Sept. 21 Mo State of Indiana and Robert D. Orr, Lt. Gov.

and Commissioner of Agriculture of the State of

Indiana by Theodore L. Sendak, Atty.Gen. of In-

diana and William G. Mundy, Deputy Atty Gen-

eral for lv to intervene. (25)

Sept. 21 Mo Rufus L. Edmisten, Atty.Gen.of North Caro-

lina for lv to intervene. (26)

Sept. 21 Aff. of James A. Graham, Commnr. of Insurance

for N. Carolina. (27)

Sept. 21 Supplemental memo in support of issuance and

continuance of interlocutory injunctive relief.. (28)

iat A acchsh hs ated

1977

Sept. 21 Received Intervening respondents’ (Seaboard Coast

Line Rr. Co., Southern Rr. Co., Louisviile and

Nashville Rr Co., Ill. Central Gulf Rr Co. and St.

Louis-San Francisco RR Co.) reply in opposition

to mo for stay, pending review.

Sept. 21 LC.C. Ex Parte No. 324 - Decided 1/28/77. = (29)

Sept. 22 Appearance for respondents (30)

Sept. 22 Appearance for petitioner (31)

Sept. 22 Appearance for Intervenor St. Louis Grain, et al (32)

Sept. 22 Appearance for Intervenor Southern Ry (33)

Sept. 22 Appearance for Intervenor Railroads (34)

Sept. 22 Argued and submitted to Judges Matthes, Web-

ster, Henley on motion to set aside Court’s stay

order, injunction, of 9-14-77; Charles H. White, Jr.

for 1.C.C. & United States; Charles Marshall for

Intervenor(respondent) Southern R.R.: Wandaleen

Poynter for Intervenor (respondent) Railroads.

John Caldwell for Petitioners; Harold Spencer for

Intervenor (petitioner) St. Louis Grain, et al. Con-

cluded by Mr. White. Recorded.

Sept. 22 Appearance for Intervenor (petitioner) St. Louis

Grain et al (35)

Sept. 22 Appearance for Intervenor (petitioner) St. Louis

Grain et al (36)

Sept. 22 Appearance for petitioner (37)

Sept. 22 Appearance for Intervenor (Respondent) Rail-

roads (38)

Sept. 22 Appearance for Intervenor (Petitioner) Missis-

sippi Poultry (39)

Sept. 22 Rec’d Motion to Continue Stay by Intervenors

St. Louis Grain Corp et al

Sept. 22 Rec’d Memorandum in Support of Motion to Con-

tinue Stay

Sept. 22 Rec’d Joinder in Motion for Stay from Atty Gen-

eral of Indiana .

Sept. 22 Order: Temporary stay heretofore granted should

be dissolved, etc., all pending motions to intervene

are granted (40)

Sept. 23 Appearance respondent (41)

Sept. 27 Appearance petitioner (42)

Oct.4 BRIEFING SCHEDULE: Appellants’ briefs due

11/7/77, appellees’ briefs due 12/5/77, appellants’

reply briefs due 12/19/77

Oct. 12 Mo Seaboard Coast Line RR Co., et al., for lv to

intervene & to consolidate w/77-1770; filed in 77-

1770

Oct. 13 CERTIFIED LIST OF PROCEEDINGS BE-

FORE ICC. (43)

Oct. 19 Mo for lv to proceed under Rule 30c). (44)

Oct. 19 Order: Counsel may file deferred appendix pur-

suant to rule 30(c) FRAP (45)

Oct. 20 Order: Petitions for review of orders of Interstate

Commerce Commission are consolidated for brief-

ing and submission to court; Seaboard Coast Line

Railroad Co.; Southern Railway Company; Louis-

ville & Nashville Railroad Company; Illinois Cen-

tral Gulf Railroad Company; and St. Louis San

Francisco Railway Company may intervene as

parties-respondents (46)

Nov. 7 Notice of Alabama Poultry Industry Asscn., et al.,

that these intervenors will not file a separate brief.

Adopt brief of petitioners, w/77-1770. (47)

Nov. 8 JIntervening brief petitioner w/ser. (Brief petitioner

in 77-1770) (48)

Nov.9 Bnef petitioners wiser. (Intervenors Southeastern

Poultry & Egg Association and State of North

Carolina (49)

Nov.9 Bnef of Intervening petitioner, State of Indiana Rob-

ert D. Orr, Lieutenant Governor & Commissioner

Of Agriculture Of the State Of Indiana w/ser. 27

copies (50)

Dec.5 Mo respondent for ext of time to file brief, with

77-1770 (51)

Dec.5 Order: Respondents may have thru December 8

to file briefs (52)

Dec.9 Brief appellee wiser. 10 copies (USA) (53)

Dec.9 Bnef appellee wiser (Interstate commerce commis-

sion) (54)

Dec.9 Bnef of Railroad Intervenors wiser. 0 +4 (55)

Dec. 13 Mo petitioners for extension of time to file reply

briefs, with 77-1770 (56)

Dec. 15 Mo Intervening Respondent Railroads for lv to file

reply brief, with 77-1770. (57)

Dec. 15 Order: Petitioners may have thru January 5 to

serve and file reply briefs; appendix remains due

to be filed by January 6, 1978 (58)

Dec. 19 Transferred to January session, w/1770

Dec. 20 Motion of railroad intervenors for leave to file a

20-page supplemental

Dec. 20 Order: Motions of intervenor-respondents, Rail-

roads, for leave to file reply brief granted; Rail-

roads may file reply brief not to exceed twenty

typewritten pages (60)

Dec. 23 Objection of petitioners Chicago Board of Trade,

et al., to reply brief of intervenor-respondent rail-

roads, with 77-1770.

1978 ,

Jan. 3 Appendix 10 copies w/77-1770 copies to panel. Ex-

tra copies in Ex. Rm. (61)

Nov 9/77 Brief Petitioners (printed copies) 10 copies (62)

Jan.5 Reply Bnef (Southeastern Poultry & Egg Associa-

tion & State of N.C.) (63)

Jan.5 Reply bnef (Intervening Petitioner Robert Orr)

wiser 0 +26 (64)

Jan. 5

Jan. 9

Jan. 11

Jan. 12

Jan. 13

Feb. 16

Supp. brief of Railroad Intervenors wiser 0 +4

w/77-1770 (65)

Cert. of ser. for Reply brief of Southeastern

Poultry (66)

Recieved 25 copies of Exhibit A of Reply brief of

Intervening Petitioner Robert D. Orr. Copies to

panel.

Brief of respondent, I.C.C. Printed copies w/service

w/1770 (67)

Argued and submitted to Judges Gibson, Van

Oosterhout & Matthes. John Caldwell for peti-

tioners in 1729; Harold Spencer for petitioners in

1770; Robert Thompson, Dept. of Justice for U.S.;

Charles White for ICC; Charles Marshall for South-

ern Ry; Wandaleen Poynter for Seaboard RR.

Rebuttal by Messrs. Caldwell and Spencer. (with

1770) Recorded.

Opinion by Judge Van Oosterhout. (Printed &

Published) w/1770. (68)

Feb. 16 JUDGMENT: Commission’s order terminating

Mar. 1

Mar. 7

Apr. 3

Apr. 18

its investigation of patent illegal charges is vacated

& cases are remanded to Commission for further

proceedings in accordance with opinion. w/

1770. (69)

Mo ICC for ext of time to file pet for reh and sugg.

reh en banc, with 77-1770. (70)

Appearance for respondent ICC. (71)

Order: ICC granted to 4-3-78 to file petition for

Rehearing and Rehearing En Banc (with 1770) (72)

Petition of Respondent ICC for rehearing en banc

and rehearing w/service. w/1770. (73)

Mo petitioners for addtn! 10 days in which to file

response to pet for reh. and reh. en banc.

w/1770. (74)

Apr. 20

Apr. 26

Apr. 28

May 9

May 12

May 22

Aug. 10

Aug. 11

ORDER: On motion of certain petitioners all par-

ties desiring to respond to Commission’s petition

for rehearing, etc., are to have response in the

office of the Clerk of Court in St. Louis, Missouri,

no later than 4/28/78. (w/77-1770.) (75)

Response of respondent, United States of Ameri-

ca, to Commission’s petition for rehearing en banc

w/ service. w/ 1770. (76)

Response of petitioners (in 77-1770 only) Board of

Trade of the City of Chicago, FS Services, Inc.,

Miinois Farm Bureau, Illinois Grain Corp. and St.

Louis Grain Corp. to Commission’s petition for re-

hearing en banc w/ service (1770)

Response of petitioners/intervenor respondents,

Seaboard Allied Milling Corp., et al. and interve-

nors Southeastern Poultry and Egg Association,

State of North Carolina and State of Indiana w/

service. w/ 1770 (77)

Mo of Intervening Railroad Respondents for lv to

file memorandum in support of ICC’s pet for reh

with suggestion for reh en banc, with 1770. (78)

Opposition of petitioners to granting lv to RR in-

tervenors to file memo in support of ICC’s in sup-

port of ICC’s pet for reh, etc. (79)

ORDER: Petition for rehearing en banc and re-

hearing filed by respondent, ICC, is denied, w/77-

1770. (80)

Certified copies of judgment forwarded to counsel.

(with 1770)

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-115

granting extension of time to 9/9/78 to file petition

for writ of certiorari, with 77-1770. (81)

Letter from Clerk of Supreme Court stating Mr.

Sept. 8

Oct. 13

Oct. 16

Oct. 31

Justice Blackmun signed order in Case No. A-i06

granting extension of time to 9/9/78 to file petition

for writ of certiorari, with 77-1770. (82)

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-165

granting extension of time to 9/9/78 to file petition

for writ of certiorari, with 77-1770. (83)

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-115

granting extension of time to 10/9/78 to file petition

for writ of certiorari, with 77-1770. (84)

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-106

granting extension of time to 10/9/78 to file petition

for writ of certiorari, with 77-1770. (85)

Letter from Clerk of Supreme Court stating Mr.

Justice Blackmun signed order in Case No. A-165

granting extension of time to 10/9/78 to file petition

for writ of certiorari, with 77-1770. (86)

Notice of filing petition for writ of certiorari in Su-

preme Court of U. S. as Case #78-575 (as of

10/6/78), with 77-1770. (87)

Notice of filing petition for writ of certiorari to Su-

preme Court of U.S. as Case #78-597 (as of

10/10/78), with 77-1770. (88)

Notice of filing petition for writ of certiorari to Su-

preme Court of U. S. as Case #78-604 (as of

10/10/78), with 77-1770. (89)

A true copy.

Attest: /s/ Robert C. Tucker

Clerk, U. S. Court of Appeals, 8th Circuit.

Per A. K.

ICC - 1

Southern Freight Associa-

tion’s Justification State-

ment. *

Aug. 15, '77

* Corrections stated in ICC-2 have been made in this copy.

Ne Sy oe ae

ee eee ee ae

a Ee ale Sa A OT et A a se

BEFORE THE

INTERSTATE COMMERCE COMMISSION

JUSTIFICATION STATEMENT PURSUANT TO

49 C.F.R. §1109.10(f)

ON THE PUBLICATION OF TARIFF

SUPPLEMENTS CONTAINING DEMAND-

SENSITIVE RATES WITHIN THE

MEANING OF 49 C.F.R. §1109.10(b)

Effective Date:

Tariff Reference:

Subject:

Within:

Of Counsel:

September 15, 1977 through December

15, 1977

Supplement Nos. 201, 137 and 23 to

SFTB Tariff Nos. 988-A, I.C.C. S-909,

908-B, I.C.C. S-999 and 972-F, I.C.C.

S-1359, Respectively, Joint and Local

All-Rail Rates, Also Distance rates on

Grain, Carloads

Demand-Sensitive Rates on Whole Grain

& Soybeans

Southern Freight Association Territory,

including Certain Official Territory

Points in Indiana and Illinois

Submitted by:

BATES B. BOWERS, CHAIRMAN

Southern Freight Association

151 Ellis Street, N.E.

CHARLES N. MARSHALL

WANDALEEN POYNTER

BEFORE THE

INTERSTATE COMMERCE COMMISSION

JUSTIFICATION STATEMENT PURSUANT TO

49 C.F.R. §1109.10(f) ON THE PUBLICATION OF

TARIFF SUPPLEMENTS CONTAINING DEMAND-

SENSITIVE RATES WITHIN THE MEANING OF

49 C.F.R. §1109.10(b)

May it please the Commission:

Come now the railroads operating within Southern Freight

Association (“SFA”) Territory (“Railroads’’), and, pursuant

to the Commission’s regulations, codified after hearing in

Ex Parte 324 - Standards and Expeditious Procedures for Es-

tablishing Carload Rates Based on Seasonal, Regional or

Peak-Period Demand for Services (““Ex Parte 324’’), at 49

C. F. R. §1109.10, file this statement to justify to the Com-

mission the application of a 20 percent increase on grain

movements effective from September 15 through Decem-

ber 15, 1977. The filing of Supplement Nos. 201, 137 and

23 to SFTB Tariff Nos. 988-A, ICC S-909, 908-B, ICC S-999

and 972-F, ICCS-1359, respectively, are made pursuant to

the authority of Section 15(17) of the Interstate Commerce

Act.

THERE IS A PEAK-PERIOD DEMAND OR SEA-

SONALITY TO THE MOVEMENT OF GRAIN.

Exhibit I, which contains several separate graphic illus-

trations of the yearly movement of grain, standing alone,

proves that grain is a commodity on which a demand-sensi-

tive rate should apply in response to the mandate of Con-

Ses a ee

LOO ED eo BS Sha a eget me Nay tals es

gress set in motion through Section 202(d) of the Railroad

Revitalization and Regulatory Reform Act of 1976 (“4R”).

A fact verbalized by Chairman O’Neal as recently as July

29, 1977, in a speech in which he gave credence to elasticity

studies which indicate that a 35 per cent seasonal rate in-

crease on grain could be effective in “spreading out’’ ship-

ments, (See Exhibit VI).

As a matter of further emphasis, a graphic illustration of

1976 grain carloadings within the Southern Territory,* in-

cluding origin points in Indiana and Illinois, is reduced and

reproduced immediately below.

17600 3 | i : F i i

122004 '

ese +

t t

11000 tt

nese AAR, CS54a 1

ttt at

JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC.

= This graph plots carloading statistics for Seaboard Coastline Rail

ville Railroad Company

As the Verified Statement of Mr. A. C. Jones, Jr., Exhibit

IX, outlines, there is a need both from an operational view-

point and a cost viewpoint to influence the spreading out of

grain carloadings, which equate to movements, over a longer

span of time than the three-month critical peak period which

is repeated annually on all lines moving grain within the

Southern Territory. The concurring Verified Statement of

R. A. Wharton, Exhibit X, points out also the opposite ad-

verse effect, the idling of expensive equipment in off-peak

seasons. It is therefore obvious that the Southern Territory

carriers moving most of the grain which is covered by the

tariff supplements to which this justification statement is

addressed have suffered and continue to suffer increased

costs and operational inefficiencies because of the peak-

period movement.

It would be inconsistent with good business practice for

the railroads to purchase equipment or expand facilities to

meet peak-period demands. This principle is especially true

when the shippers and receivers of the involved commodi-

ties have not made a sufficient attempt to share the burden

of a glutted market. As the Commission noted in its Report

and Order in Grain By Rent-A-Train, IFA Territory To Gulf

Ports, 339 1.C.C. 579 (1971) at page 582:

“Rail carriers have traditionally had to contend

with the problem of grain moving during the rela-

tively short harvest season in such tremendous

volume as to overtax the car supply.”’

The Order went on to express the opinion that an incentive

to shippers to spread their traffic over a substantially ex-

tended period of time and to construct new distribution cen-

ters was a desirable consequence of proposed unit-train

rates.

Ate Cl 2 anno eee ar eed AaB aw

epi teas thinks aise

It is obvious that the basic problems of the grain hauling

railroads and the clear solutions to those problems have long

been recognized and appreciated by the Commission. It is

hoped that the new spirit of cooperation which the Commis-

sion has strongly urged in Ex Parte 324 will prevail and that

the result of these experimental seasonal rates and the ones

to follow will redound to the credit of the grain interests as

well as to the railroads and the general public interest.

Il.

THE INCREASES WHICH ARE PROPOSED WILL

PROVIDE SUFFICIENT INCENTIVE TO SHIP-

PERS TO REDUCE PEAK-PERIOD SHIPMENTS,

THROUGH RESCHEDULING AND ADVANCE

PLANNING.

The Railroads will readily admit, primarily because of in-

experience in the formulation of incentive rates of this na-

ture, that there is a possibility that the 20 per cent increase

which will be applied will not net the results which they

have been published to accomplished. However, serious

consideration, as shown by the Verified Statement of R. E.

Thompson, Exhibit II, which included benefit of shipper

input, was made before the increases were filed. The Com-

mission has recognized and indeed encouraged experimen-

tation with demand-sensitive rates. While the rates can be

classified as experimental, since similar rates have not been

applied on grain in the Southern Territory, there is a con-

fident feeling among the chief traffic officers charged with

the duty of formulating rates that these rates are appropri-

ate and will accomplish the purpose for which they have

been designed. It is apparent that the only way to make a

final determination is to experience the effects of the rates.

To quote from the Exhibit Vi general comments of Chair-

man O’Neal on the 4R Act:

“.. To some degree the effects of this law are not

yet clear, and in most instances legislative changes

do not appear desirable until more experience has

been gained. The full impact of some of the Com-

mission’s regulation’s has yet to be felt... .”

In anticipation of protests which will be made by inter-

ested shipper groups, it is pointed out that the increase will

not be unfair to the shippers who now ship on a year-round

basis. First, because it results in only a five per cent in-

crease when projected to a yearly basis and secondly be-

cause a shipper can refrain from shipping during the demand

period and suffer no increase at all. Further, a five per cent

increase is below the seven per cent increase that the South-

erm Territory railroads could publish under the provisions

of Section 15(8\c) of the Interstate Commerce Act.*

Critical to a justification of a seasonal rate is the conclu-

sion that an incentive is required and that there will be a

desired result. Obviously, the initial result which is desired

is the leveling of the peak movements over additional months

so that net revenue will increase commensurate with the

increase in efficient handling of equipment and use of physi-

cal plant. Also, there should be incentive provided to ship-

pers and receivers of grain to provide adequate storage

facilities to shift to them some of the burden that is created

by the sudden influx of grain during a short period of time.

At the present time, as Exhibit V indicates, the states within

SFA Territory have less storage capacity than any other

grain producing or consuming areas. It is evident, as a mat-

ter of fact, that the Southeastern consumers, primarily poul-

try, egg and dairy producers, have made little effort to in-

crease storage capacity sufficiently to enable them to receive

shipments on a less than frantic demand basis. Also, the

* See Exhibit II - Verified Statement of R. E. Thompson.

Ate:

Official Territory origin areas in Indiana and Illinois have

also been reluctant to expand their storage capacity in an

amount directly proportional to their increased production.

In short, the railroads have been placed in a position of

accepting almost the total burden of seasonal production

and movement. The 4R Act intended to allow railroads to

alleviate this situation by formulating a rate structure that

would create, in essence, an artificial movement schedule.

It is of course, as briefly touched upon above, impossible

to calculate this type of increase with certainty, a fact rec-

ognized by the Commission in their findings in Ex Parte

324, as indicated by the willingness of the Commission to

allow ‘“‘experimental” rates which will be subject to cancel-

lation on 30-days notice with no possibility for a period of

three years after the date of initial publication of suspension

of the cancellation supplement. In the opinion of the rail

carriers party to these SFA proposals, the seasonal rates

are not so excessive ‘as to result in severe economic harm

to shippers not in a position to respond to the incentive as

intended. *

To anticipate another position that may be taken by some

protestants, as indicated by representations in the proceed-

ings in Ex Parte 324 and shipper hearings at the SFA it was

not feasible to lower non-peak season rates in the Southern

Territory. It is a well-recognized fact, specifically recognized

by the Commission, that the rates in Southern Territory are

“depressed.’’** It is a matter of rate history now that the

initiation of the innovative Big John rates in the early 1960’s

actually allowed all Southern railroads to eventually break

* The 35 per cent seasonal rate increase which Chairman O’Neal sug-

~ as appropriate is substantially above the increases that are now

on file.

** Feed Grain To New England, 1.C.C. Docket No. 35786

into the movement of grain. In spite of material reductions

in the coarse grain scale in 1957 and 1959 in the South and

publication of even lower specific commodity rates from

Chattanooga to destinations in Georgia, the Carolinas and

Florida, grain continued to move in very large quantities into

and throughout the South by both barge and truck. The sys-

tem of single-car rates subject to transit privileges was simply

not effective in increasing the movement of grain by rail.

Despite marked growth in grain shipments into the South,

rail grain traffic remained relatively static, evincing that, in

the late 1959’s the railroads were participating in a declin-

ing share of a larger market as shippers of grain and grain

products turned more and more to other modes.

In endeavoring to meet this situation, the Southern Rail-

way sought to improve its equipment and increase its oper-

ating efficiency through the development of extra-large alu-

minum covered hopper cars, popularly termed Big John

cars, capable of handling a revenue load in excess of 100

tons and representing a major breakthrough in the control

of costs and a notable advance in the art of railroading.

In connection with these new cars, the Southern, in 1961,

proposed to establish substantially reduced all-rail rates,

minimum 90 tons per car, 450 tons per shipment, on grain,

but not products of grain, in multiple-car lots from certain

Ohio and Mississippi River crossings to specified points in

Southern Territory. As the capacity of the newly acquired,

extra large aluminum covered hopper cars exceeded the

proposed 90-ton minimum, the intended rate for the 450-

ton shipment would require only five cars. After thorough

inquiry and very careful examination, the Commission

found, as the Southern contended, that the overwhelming

and dominant movement of grain into the South was by

truck, and that unregulated truck transportation of grain,

tl we thn AEF Pain tk, ee Sa ob nee 5 att

oem eee

etntn Olin 38

6 Rt Bi te ok ot 8 ott 1 Dc hin Oe cP AIO

thst did tliat

dcthipmaetel,

which had increasingly depleted the Southern’s prospective

grain revenues, was the most substantial and rapidly grow-

ing competition facing the rail and easily comprised the

dominant competitive force. Upon consideration of the

magnitude and effect of this unregulated movement, it was

concluded that the Southern’s rates were proposed to meet

truck competition, and were necessary if the Southern was

to participate effectively in the movement of grain. The

Commission thus found the Southern free of any predatory

intent to close the rivers to barge transportation of grain,

and concluded that the new rates fell short of a destructive

competitive practice violative of the National Transportation

Policy. It further found that the rates contemplated by other

rail carriers, to apply in relation to conventional equipment,

subject to 50 tons per year, minimum 450 tons per ship-

ment, would not be compensatory, and ordered them can-

celed.*

While some economists express the opinion that freight

rates do indeed affect pricing of grain, there is very little

proof that this statement ‘s true and can be substantiated.

However, freight rates do effect the growth of markets and

the Big John rates, and their progeny, have influenced

greatly the growth of the poultry, egg and dairy industry in

the Southeast.

Exhibit IV, which shows the USDA production figures

from 1953 through 1974 clearly indicates that the expansion

of production of one of those grain-dependent industries in

the Southeast has been phenomenal.

In the same manner, a seasonal adjustment in freight

rates in the sense contemplated by the framers of the 4R

* Grain in Multiple - Car Shipments - River Crossings to the South, 318

1.C.C. 641 (1963), 321 I.C.C. 582 (1963) and 325 I.C.C. 752 (1965).

Act can influence the manner in which industrial consumers

conduct their business. The preplanning and scheduling

which is specified in the Commission’s regulations on sea-

sonal and peak-period rates can be accomplished through

the seasonal increases to become effective September 15.

This Commission has recognized that the implementation

of the Big John rates, or modified Big John rates, and the

purchase of equipment over the last 15 years by Southern

Territory carriers has created a needed market in the South-

east for the product. The movement of grain into the South

has been considered a favorable objective by the Commis-

sion as illustrated by the attitude which surfaced in the order

dealing with the merger of the MONON Railroad into the

L&N.* The Commission observed:

“New traffic in grain shipments will be devel

also as a result of the proposed merger. LaN ea

substantial transporter of grain and grain products

with 109,509 carloads an 5,904,235 tons of such

traffic handled in 1967 yielding revenue of $15,141,-

541. L&N has substantially increased its grain traf-

fic to the South in recent years due to the establish-

ment by L&N and carriers of reduced in-

centive loading rates and the development of the “Bi

Blue” 100-ton covered hopper cars of which

presently has in operation a total of 642 cars.

The Monon has been unable to attract much grain

traffic to its lines. In 1967, it only carried 6.9 percent

of the grain produced in the counties of Indiana served

by it. With one factor incentive loading rates on

grain in effect to southern districts after merger, sub-

stantial reductions would be made in the present

ae i _ gee 9 on grain from and to

in theast, with a resultant generati

of new traffic over the Monon route.” wis

. oe & N.R.Co. - Merger-Monon Railroad, 338 1.C.C. 134 at 213

Ee 6 ce eee ce! ton ames

EP teats

The Southeastern market is no longer the infant it was in

the “‘60’s”. During the last 15 years the Southeastern mar-

ket has grown, become innovative and established and should

now be in a position to accept the responsibility of expand-

ing their storage capacity, not unlike their sister grain deficit

areas.

Ill.

THE DEMAND-SENSITIVE RATES WILL GEN-

ERATE ADDITIONAL REVENUE FOR THE SOUTH-

ERN TERRITORY RAILROADS

It is indeed important that the proposed rates do generate

additional revenue. However, the additional revenue will

not necessarily accrue because of the three month 20 per

cent increase, but from the cost saving which will occur

because of the resultant increased efficiency in operations

and better utilization of equipment. Of course, it cannot be

denied that some additional revenue will be enjoyed by Rail-

roads as a direct result of the 20 per cent increase, but this

should not be considered the only objective of the rates. As

the statement of Francis M. Spuhler, Exhibit III, states, the

Railroads do not consider the demand-sensitive rates as cost-

based rates. They are purely and simply a matter of incen-

tive, the shipper who wishes to pay for the privilege of ship-

ping during a period of time which has been recognized and

factually defined as a high-peak movement period, should

be expected to pay for that privilege.

Also in answer to an anticipated basis of protest, it should

be understood that not all of the “benefit” will run to the

Railroads as a result of these demand-sensitive rates. Some

benefit will run to low volume shippers who are now unable

to acquire a sufficient supply of cars during the peak season

and have no reasonable access to storage facilities or the

ability to construct their own storage. Shippers who have

been in a pos'tion to store grain yet have chosen to ship at

peak periods will now have an incentive to ship earlier or

later in the year, thereby releasing cars into the pool for use

by other shippers.

IV.

THE RATE INCREASES WILL PROVIDE AN IN-

CENTIVE WHICH WILL RESULT IN THE IM.-

PROVEMENT IN THE OVERALL PATTERN OF

GRAIN MOVEMENT

The improvement in the annual utilization of car sup-

ply will be two-pronged. Not only will there be an

improvement in the overall utilization of the grain

car fleet in the Southern Territory, but generally in

the vtilization of power and all other cars. As the state-

wed rei A. C. Jones, Jr. and Mr. R. A. Wharton

its X) indicate, the cost of handling equipment

generally escalates during the peak movement season. Not

only does movement become a problem, but the car supply

generally is affected. In response, normally to the Commis-

sion’s emergency car service orders (See Exhibit VIII), cars

service. This deprives shippers who normally have access

to these nondedicated cars of their supply. It also reduces

the net revenue, because of increased costs, and results in

a lowering of the variable cost ratio. It is interesting to note

that the Commission has determined that application of Big

J ohn Formula Rates can only be compensatory when re-

stricted to the jumbo hopper cars.* With this basic finding

in mind, examination of Exhibit XI alone should satisfy the

most skeptical individual that there is a revenue loss to at

* Grain in Multiple-Car Shipments - River Crossi

752 at 769 (1965). ? Crossings to South, 325 LC.C.

least one Southern Territory railroad during the peak grain

season.

Generally, the proposed rates should indeed improve the

level of employment by railroads. Stability in employment

is a critical and primary factor to the labor market. At pres-

ent, demand periods require excessive overtime for existing

employees but do not permit, under sound managerial dis-

cretion, the employment and training of acditional person-

nel. A more efficient use of facilities would guarantee, as

intended by many provisions in the 4R Act, increased move-

ment and stabilization of movement of commodities. It is

therefore probable that stabilization would increase the total

carloads carried and result in additional employment and

training of personnel.

The primary factor in looking at the stability or instability

of the grain producers and consumers, the market served

by Railroads, is a determination of whether or not their de-

pendence on the railroad is such that any change in practice

or pattern would substantially interfere with normal business

operations. Apparently, because of a general absence of

storage facilities in the South, the market dependence on

the railroads is disproportionately large. There is a need for

a more sophisticated approach to stockpiling and price fore-

casting within the Southern markets and an incentive, such

as this seasonal rate increase, may be the very factor which

will trigger a restructuring of attitudes. As indicated before

in this justification statement, the innovative movement of

grain from Official Territory producing points to the South

actually created the markets which now exist. At least in

great part. It is therefore logical to conclude that another

adjustment in the Railroads’ rates would have a comparable

effect on attitudes of the now established markets.

CONCLUSION

The Commission has recognized and adequately verbal-

ized the intent of Congress in the Ex Parte 324 proceeding

and ultimately in the promulgation of regulations to guar-

antee the proper publication of demand-sensitive rates. The

intent is to aid the railroads in solving a problem of long-

standing that could have been solved in part by shippers

who have shown little or no concern toward taking suffi-

cient steps to coordinate with the railroads in an effort to

improve the overall movement of grain and grain products

in the public interest.

Suffice it to say that the more protests filed with this

Commission the clearer the indication that the rates pro-

posed will accomplish exactly what they are intended to

accomplish. The graphic representations of the peak moving

season cannot be refuted. The comments which have been

received through formal shipper hearings and informal dis-

cussions indicate that there is some inclination on the part

of protestants to take the position that grain movements are

not seasonal. Whether seasonal or just peak-period move-

ments, there is no question that there is a need for demand-

sensitive rates.

The Commission should recognize that there have been

no major adjustments in SFA Territory rates (including the

origin points in Indiana and Illinois) in 15 years. This fact

in itself could account for the strong attitudes which have

been expressed by those affected by this seasonal rate ad-

justment. It is always a difficult task to disrupt patterns

and practices of long standing. In the opinion of the Rail-

roads this is, in fact, the reason that Congress felt it neces-

Re ESO

sare

sary to amend the Interstate Commerce Act to allow the

publication of seasonal rates, 1.¢., demand-sensitive rates.

WHEREFORE, the Southern Territory Railroads repre-

sented by the Southern Freight Association, respectfully

file this statement of justification for publication concurrently

with the filing of the demand-sensitive rates in Supplement

Nos. 201, 137 & 23 to Southern Freight Tariff Bureau

Freight Tariff Nos. 988-A, I.C.C. S-909, 908-B, I.C.C. S-999

& 972-F, I.C.C. S-1359, scheduled to become effective Sep-

tember 15, 1977.

Respectfully submitted,

BATES B. BOWERS

Of Counsel:

CHARLES N. MARSHALL

General Attorney

Southern Railway System

Post Office Box 1808

Washington, D. C. 20013

s/s WANDALEEN POYNTER

WANDALEEN POYNTER

Assistant General Attorney

Seaboard Coast Line Railroad Company

500 Water Street

Jacksonville, Florida 32202

Date: August 15, 1977

CERTIFICATE OF SERVICE

I hereby certify that I have served the foregoing docu-

ment upon all known parties of interest* by United States

mail, first-class postage prepaid, this 16th day of August,

1977.

s/s Wandaleen Poynter

Wandaleen Poynter

*See Verified Statement of R. E. Thompson, Exhibit II.

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EXHIBIT II

VERIFIED STATEMENT OF R. E. THOMPSON

My name is R. E. Thompson. I have been employed

by Southern Freight Association (hereinafter referred

to as SFA) for approximately four years as Manager

of Commerce. Prior to that time I was employed for

more than 31 years with The Atlanta and West Point

Railroad-Western Railway of Alabama and Georgia

Railroad. (A&WP-WofA-GA RR) serving in practically

every clerical position in the Freight Traffic Depart-

ment, including five years service on the rate quota-

tion desk and several years as Executive Rate Clerk

and Chief Divisions Clerk. Subsequent positions in an

official capacity with the Traffic Department of those

railroads included three years as Assistant to General

Freight Agent, three years as Assistant General

Freight Agent, four and one-half years as General

Freight Agent and as Traffic Manager from June 1,

1973, to October 15, 1973, at which time I accepted an

appointment with Southern Freight Association as its

Manager of Commerce.

During my employment with the A&WP-WofA-

GA RR, it was my responsibility to supervise the rate

making functions which included all freight rate mat-

ters and any adjustments relating to accessorial serv-

ices. I also served those carriers as their represen-

tative on the Executive Committee and General

Freight Committee of Southern Freight Association,

as well as numerous special committees.

The rail carriers involved in the instant publications

have caused to be published a 20% seasonal increase

in rates on whole grains and soybeans in railroad-

owned cars during the period September 15, 1977

through December 15, 1977, from, to and between

points in Southern territory, including certain points

in Illinois and Indiana; and from Southern territory

origins and certain origins in Illinois and Indiana to

Florida, Gult, South Atlantic and Virginia ports, for

export. Exact details of the publication are outlined to

the Commission in Exhibit A of Assistant Tariff

Publishing Officer Twiggs’ Application For Special

Permission No. S-8472, dated August 1, 1977.

The proposed seasonal rates are in compliance with

the desires of Congress wherein that body granted

railroads authority to establish rates based on

seasonal, regional or peak period demand for services

in Public Law 94-210 or the so-called 4-R Act and

which the Commission has placed in effect its

guidelines in Ex Parte 324, Standards and Ex-

peditious Procedures For Establishing Railroad Rates

Based On Seasonal, Regional, Or Peak-Period De-

mand For Services. Likewise, the Congress and Com-

mission have urged the railroads and shippers to take

advantage of these new rules and to cooperate in

establishing such procedures. This the railroads have

done.

In connection with the efforts the railroads have

made in cooperating with their shipper and receiver

patrons, I think it proper to advise the Commission of

the extensive handling the Southern territory

railroads have given this matter with the shipping

public. In August of 1976, the Southern carriers filed

a proposal (Emergency Proposal 3983) suggesting

seasonal rates on whole grains and soybeans almost

PE I?

identical to those suggested in the instant publica-

tion. This proposa! followed the normal course of ac-

tion in connection with our Section 5(b) Agreement. In

fact, there was not only extensive correspondence be-

tween the shippers, railroads and the Southern

Freight Association but a public hearing held by the

SFA Executive Committee on November 10, 1976.

This proposal was later cancelled as no conclusive ac-

tion had been taken within 120 days as required under

the 4-R Act.

In December of 1976, another proposal (Emergency

Proposal 33) was filed by the Southern carriers again

suggesting almost identical provisions as that in the

instant publication. This proposal was likewise sub-

ject to extensive handling and accorded a public hear-

ing before the SFA Executive Committee on January

12, 1977. There were some 24 representatives at this

hearing, including representatives from Georgia Feed

and Grain Association, Georgia Poultry Federation,

National Broiler Counsel, Southeastern Poultry and

Egg Association, South Carolina Poultry Improve-

ment Association, North Carolina Poultry Federation,

Indiana Farm Bureau Cooperative Association and

Georgia Freight Bureau. This proposal was postponed

after the hearing before the Executive Committee and

later withdrawn.

In June of this year Emergency Proposals Nos. 179

and 180 were filed suggesting the seasonal rates that

are involved in the instant publication. As previously

stated, these rates are very similar to those that were

suggested in 1976, later withdrawn, and on which the

carriers and shippers have had a full opportunity to

exchange and benefit from each other’s views as a

result of correspondence and two public hearings.

Therefore, the according of a shipper hearing in con-

nection with the instant publication (resulting from

Emergency Proposals 179 and 180) would have been

redundancy in view of the prior hearings held

previously on November 10, 1976 and on January 12,

1977. Under the Section 5(b) procedures no shipper

hearings are required in connection with emergency

proposals even though, as a matter of discretion, the

Chief Traffic Officers may schedule a shipper hearing

in those instances where an objection is filed by a

member line to an emergency proposal causing it to be

considered by the Executive Committee. There were

no objections filed by member lines to these pro-

posals.

Complete details of the handling given these pro-

posals are outlined in Exhibit A. Shown in Exhibit C

is a list of all known parties who have expressed in-

terest in SFA Emergency Proposals 179 and 180 —

‘Seasonal Rates On Whole Grains and Soybeans” —.

Exhibit B is a list of shippers who have expressed in-

terest in previous proposals suggesting seasonal rates

on whole grains and soybeans. Further, a copy of this

justification statement is being furnished to all known

parties of interest shown in Exhibit Nos. B and C.

The proposed 20% seasonal increase during the

harvest season will primarily affect those who con-

tribute to the peak demand for transportation. Ship-

pers who purchase grains and soybeans throughout

the year will pay increased rates for only three months

or only on twenty-five percent of their shipments. In

other words, the 20% increase in rates during the

harvest season will only amount to a five percent (5%)

OER Oe

increase throughout the year. Thus, this amounts to a

lesser increase than the 7% carriers could obtain

under the so-called yo-yo provisions of the 4-R Act.

As the Commission is aware the rail carriers are

faced with a serious shortage and delay of cars during

the peak season and of course the proposed seasonal

increase of 20% should help alleviate this problem on

this very costly equipment. For example, on the Fami-

ly Lines (primarily the L&N and SCL) the cost of a

100-ton covered hopper car has increased from

$19,000 in 1973 to $27,900 in 1977, or an increase in a

four-year period of approximately 47%.

As shown in Mr. Sphuler’s Exhibit No. III corn con-

stitutes 79% of the total grain products that will be

subject to the proposed 20% seasonal increase. Shown

in my Exhibit No. D is corn production in the ten (10)

states involved in the instant publication. It will be

noted there has been an increase every year since 1972

with the exception of 1974. Also, when this ten state

production is compared to total U.S. production, there

has been a percentage increase every year since 1972.

Also of interest is Exhibit No. E which shows the

price of corn per bushel for each month of the years

1974 through 1976 and the first seven months of 1977.

While the price of corn fluctuates from month to

month, it can be seen from this Exhibit that, with the

exception of the year 1974, the price of corn per bushel

generally drops during the peak periods or seasonal

months, September 15 through December 15.

Therefore, with publication of the 20% increase in

rates and the reduction in the price of corn per bushel

during these seasonal months there will not likely be

an increase in the total cost to the shipping public.

Therefore, it should be obvious that discouraging

peak period movements will not force shippers to sell

at depressed prices.

VERIFICATION

STATE OF FLORIDA _)

) SS

COUNTY OF DUVAL _)

R. E. Thompson, being duly sworn, deposes and

says that he has read the foregoing statement and

knows the contents thereof, and that the same are

true as stated. a ‘

ye ae rive )6 LA

Signed:

R. E. Thompson

Subscribed and sworn to

before me this

day of August, 1977.

Is/ Notary Public

My Commission expires:

SEAL

EXHIBIT A

Statement Showing Various Proposals that have

been Issued Suggesting Seasonal Rates on Whole

Grains and Soybeans

SFA Emergency Proposal 3983, dated August 27,

1976. Shipper hearing SFA Executive Committee,

under Subject No. 5415, 10:00 A.M., Wednesday,

November 10, 1976.

SFA Emergency Proposal 33, dated December 20,

1976. Shipper hearing SFA Executive Committee,

under Subject No. 32, 10:00 A.M., Wednesday,

January 12, 1977.

SFA Emergency Proposal 179, dated June 20, 1977.

Advertised to Public in Weekly Docket No. 756, dated

June 21, 1977, and Traffic Bulletin, dated June 25,

1977.

Amendment 1 to SFA Emergency Proposal 179,

dated July 1, 1977. Advertised to Public in Weekly

Docket No. 758, dated July 5, 1977, and Traffic

Bulletin, dated July 2, 1977.

Disposition Advice 4789, dated July 29, 1977. Was

issued to cover SFA EmPro. 179. Advertised to

Public in Weekly Docket No. 763, dated August 9,

1977, and Traffic Bulletin, dated August 13, 1977.

SFA Emergency Proposal 180, dated June 20, 1977.

Advertised to Public in Weekly Docket No. 756, dated

June 21, 1977, and Traffic Bulletin, dated June 25,

1977.

Amendment 1 to SFA Emergency Proposal 180,

dated July 1, 1977. Advertised to Public in Weekly

Docket No. 758, dated July 5, 1977, and Traffic

Bulletin, dated July 2, 1977.

Disposition Advice 4790, dated July 29, 1977, was

issued to cover SFA Em.Pro. 180. Advertised to

Public in Weekly Docket No. 763, dated August 9,

1977, and Traffic Bulletin, dated August 13, 1977.

Publication of rates authorized by Disposition Advice

Nos. 4789 and 4790 made in SFTB Tariffs Nos. 988-A,

ICC S-909, 908-B, ICC S-999 and 972-F, ICC S-1359,

scheduled to become effective September 15, 1977.

SS Rn Soe ERTS

EXHIBIT B

LIST OF SHIPPERS WHO HAVE EXPRESSED

INTEREST IN PREVIOUS PROPOSALS

SUGGESTING SEASONAL RATES ON WHOLE

GRAINS AND SOYBEANS BUT NOT >

EMERGENCY PROPOSALS 179 AND 180

Mr. Fred Miles

Interstate Milling Co.

P. O. Box 1165

Charlotte, North Carolina

28231

Mr. John E. Harvey

Archer Daniels Midland Co.

P. O. Box 1470

Decatur, Illinois 62525

Mr. John R. Staley, GTM

Seaboard Allied Milling Corp.

1550 W. 29th Street, Box

19148

Kansas City, Missouri 64141

Mr. R. Kober, VP-Traffic

Continental Grain Co.

277 Park Avenue

New York, N. Y. 10017

Mr. James R. Woolery

ADM Milling Co.

P. O. Box 7007

Shawnee Mission, Kansas

66207

Mr. H. E. Welch, GM

Mobile Transportation Rate

Bureau, Inc.

509 Commerce Building

P. O. Box 223

Mobile, Alabama 36601

Mr. Sid Austin

Traffic Manager

Lapeyrouse Grain Company

P. O. Box 926

Mobile, Alabama

Mr. J. E. Mitchem

L. A. Parish Co.

61 Saint Joseph Street

P. O. Box 231

Mobile, Alabama 36601

Mr. J. R. Venters, TM

Indiana Grain Queen City

Operations

Div. of Indiana Farm Bureau

Cooperative Association,

Inc.

P. O. Box 14668 Annex

Station

Cincinnati, Ohio

Mr. A. T. Walters, AGTM

Allied Mills, Inc.

110 North Wacker Drive

Chicago, Illinois 60606

Mr. Ray F. Swain

Attorney at Law

114 West Raleigh Street

P. O. Box 787

Siler City, North Carolina

27344

Mr. L. M. Commeree

Manager-Railroad

Transportation-Supply

General Mills, Inc.

P. O. Box 1113

Minneapolis, Minnesota 55440

Mr. Bernard F. McCoy

Senior Rate Clerk

The Andersons

P. O. Box 119

Maumee, Ohio 43537

Mr. James W. Gieseler

Manager-Rate Analysis

International Mineral &

Chemical Corp.

Mundelin, Illinois 60060

Mr. N. Ed Shineberger, ATM

Penick & Ford, Limited

P. O. Box 428

Cedar Rapids, Iowa 52406

Mr. Robert P. Post, AVP-T

Cargill, Inc.

Cargill Building

Minneapolis, Minnesota 55402

Mr. Paul Stepner, DT

The Pillsbury Company

608 2nd Avenue

Minneapolis, Minnesota 55402

Mr. Thomas C. Adam, AGTM

Central Soya Co., Inc.

1300 Ft. Wayne National

Bank Building

Ft. Wayne, Indiana 46802

Mr. John C. Chambers

North American Car Corp.

222 S. Riverside Plaza

Chicago, Illinois 60606

Mr. Clarence Alicz, TM

North American Car Corp.

222 S. Riverside Plaza

Chicago, Illinois 60606

Mr. P. J. McLaughlin,

Manager-Mtl.

American Maize Products

Company

113th Street & Indianapolis

Boulevard

Hammond, Indiana 46326

Mr. A. J. Giuchi

Assistant Transportation

Manager

Rail Rate

CPC International Inc.

International Plaza

Inglewood Cliffs, New Jersey

07632

TS FRESE 20d

a a

Mr. R. K. Alexander

Executive Secretary

Alexander & Company

710 North Franklin Street

Tampa, Florida 33602

Mr. Paul L. Mills, Chief

Transportation Services

Branch

United States Department of

Agriculture

Agricultural Marketing

Service

Washington, D. C. 20250

Mr. Henry O’Bryan, President

James C. Ellis Grain

Company

P. O. Box 332

Henderson, Kentucky

Leeco Farm Center, Inc.

Dawson, Georgia 31742

H. B. Arnold Co., Inc.

Dawson, Georgia 31742

Mr. J. R. McGarrh

Assistant Cost Analyst-

Transportation

Cook Industries, Inc.

P. O. Box 16912

Memphis, Tennessee 38116

Mr. J. B. Bell |

P. O. Box 66

Pantego, North Carolina

27860

Carolina Brokerage Company

P. O. Box 3276

Rock Hill, South Carolina

29730

Carolina Dixie Grain Co.

P. O. Box 189

Kinston, North Carolina

28501

Mr. K. S. Crittendon

P. O. Box 15253

Charlotte, North Carolina

28210

E. and B. Grain

P. O. Box 158

Battleboro, North Carolina

27809

Enfield Grain

Enfield, North Carolina 27823

Fox Grain Marketing

Box 2419

Raleigh, North Carolina 27202

Golden Grain and Feed Co.

Box 595

Monroe, North Carolina 28110

Goldsboro Milling Co.

Drawer 7

Goldsboro, North Carolina

27530

Morgan Grain and Fertilizer

P. O. Box 9

Farmville, North Carolina

27821

New Bern Oil and Fertilizer

202 Guion Street

New Bern, North Carolina

28560

Parker Grain Company

P. O. Box 251

Farmville, North Carolina

27821

Tri-County Seed Mills

P. O. Box 427

Bethel, North Carolina 27812

Wayne Grain Company

Goldsboro, North Carolina

27530

Harper & Bowers

Estill, South Carolina 29918

Roanoke Farmers Exchange

P. O. Box 236

Plymouth, North Carolina

27962

Ed E. Smith Company

3166 Maple Drive, N. E.

Atlanta, Georgia 30305

Smith and Wiggins

906 South Finance Building

Augusta, Georgia 30902

A. D. Swindell Farms

P. O. Box 278

Pantego, North Carolina

27860

Harris Grain Incorporated

6230 Fairview Road

Charlotte, North Carolina

28210

Mr. L. N. James

P. O. Box 338

Bethel, Norta Carolina 27812

Lentz Brokerage

620 Archdale Drive

Charlotte, North Carolina

28210

McCanless and Company

P. O. Box 214

Brentwood, Tennessee 37027

Mr. Bill Smith, Partner

Edward E. Smith & Company

3166 Maple Drive, N. E.

Atlanta, Georgia 30305

Mr. T. F. Toohey, EVP

Agricol Georgia, Inc.

15 Dunwoody Park,

Suite 100H

Atlanta, Georgia 30341

Mr. Ray Jones, President

Crystal Farms, Inc.

P. O. Box 101

Chestnut Mountain, Georgia

30502

Oe in OO nes

Mr. John P. Jefferson

Assistant to the Manager

Indiana Grain Division of

Indiana Farm Bureau

Cooperative Association,

Inc.

47 South Pennsylvania Street

Indianapolis, Indiana 46204

Mr. R. E. Newborn

Eastern Traffic Manager

Bunge Corporation

Wayne, Pennsylvania 19087

Mr. Tom Bennett, Traffic

Manager

Archer Daniels Midland Co.

P. O. Box 1470 -

Decatur, Illinois

Ralston Purina Co.

P. O. Box 26987

Raleigh, North Carolina 27611

Mr. Richard Ross

Interstate Milling Co.

620 W. 10th Street

Charlotte, North Carolina

28201

Assistant Chief

Transportation Services

BRT and W Division

U. S. Department of

Agriculture

Washington, D. C. 20250

Ms. Joan Billingsly

The Quaker Oats Co.

345 Merchandise Mart Plaza

Chicago, Illinois 60654

Mr. C. D. McKenzie

Interstate Milling Co.

620 W. 10th Street

Charlotte, North Carolina

28201

Mr. Stan Szczepkowski

Gold Kist, Inc.

P. O. Box 2210

Atlanta, Georgia 30301

Mr. John Harvey

Archer Daniels Midland Co.

Box 1470

Decatur, Illinois 62525

Mr. M. J. Smith

Transportation Manager

Cargill, Inc.

Corn Starch and Syrup Plant

2330 Buoy Street

Memphis, Tennessee 38118

Mr. Gerald P. Corkle

Transportation Cost Analyst

The Pillsbury Co.

608 2nd Avenue

South Minneapolis, Minnesota

55402

Mr. Anthony Wright

Crystal Farms Mills, Inc.

P. O. Box 7277

Chestnut Mountain, Georgia

30568

Ms. Linda Fitzhugh

Regional Promotions

Coordinator

National Egg Co.

3169 Holcomb Bridge Road

Norcross, Georgia 30071

Ms. Peggy Clark, AM

National Egg Co.

3169 Holcomb Bridge Road

Norcross, Georgia 30071

Mr. G. K. Revier, ATM

Cargill, Inc.

2330 Buoy Street

Memphis, Tennessee 38118

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~ EXHIBIT C

LIST OF SHIPPERS WHO HAVE EXPRESSED

INTEREST IN SFA EMERGENCY PROPOSALS

179 AND 180 — SEASONAL RATES ON WHOLE

GRAINS AND SOYBEANS

Mr. V. R. Sahlin Mr. Nat Welch, EVP

The Early & Daniel Company, Atlanta Freight Bureau

Inc. 2434 National Bank of

525 Carr Street Georgia Building

Cincinnati, Ohio 45203

Mr. R. W. Evans, TM

Bartlett & Company

600 K. C. Board of Trade

Kansas City, Missouri 64112

Mr. Lawrence F. Daspit, AGM

New Orleans Traffic &

Transportation Bureau

International Trade Mart

No. 2 Canal Street

New Orleans, Louisiana 70130

Mr. Thomas L. Melton

Director of Transportation

Gold Kist Inc.

P. O. Box 2210

Atlanta, Georgia 30301

Mr. Donald J. Stone

Director of Transportation

ConAgra Inc.

Kiewit Plaza

Omaha, Nebraska 68131

34 Peachtree Street

Atlanta, Georgia 30303

Mr. Abit Massey

Georgia Poultry Federation

P. O. Box 763

Gainesville, Georgia 30501

Mr. Allan H. Surplus,

VP-Transp.

Bay State Milling Co.

1776 Heritage Drive

North Quincy, Massachusetts

02171

Mr. B. A. Pitt

AGTM

Southern States Cooperative,

Inc.

P. O. Box 1656

Richmond, Virginia 23213

Mr. H. J. Merwin, Traffic

Manager

The White Lily Foods Co.

P. O. Box 871

Knoxville, Tennessee 37901

Mr. C. E. Strombeck,

GTM-Pricing

The Pillsbury Company

608 Second Avenue, South

Minneapolis, Minnesota 55402

Mr. Norman Walker, GTM

Bunge Corp.

300 Southwest Boulevard

Kansas City, Kansas 66103

Mr. Phillip L. Partin

Fred Webb, Inc.

P. O. Drawer 158

Greenville, North Carolina

27834

Mr. Charles W. Moses,

Sou TM

Ralston Purina Co.

Checkerboard Square

835 So. 8th Street

St. Louis, Missouri 63188

Mr. J. W. Kjellberg

Manager-Rate Activity

Planning

The Pillsbury Co.

608 Second Avenue South

Minneapolis, Minnesota 54402

Mr. Barton Ahlstrom

Executive Vice President

Florida Poultry Federation

P. O. Box 18092

Tampa, Florida 33679

Mr. James M. Bell, TM

Dixie Portland Flour Mills,

Inc.

P. O. Box 1259

Chattanooga, Tennessee

37401

Mr. C. G. Buchheit

C. G. Buchheit Inc.

50 Crestwood Executive

Center

St. Louis, Missouri 63126

Mr. Harold E. Ford

Executive Director

Southeastern Poultry & Egg

Assn.

1456 Church Street

Decatur, Georgia 30030

Mr. Howard J. Parker

Strain Poultry Farms, Inc.

Division of Cagle’s Inc.

P. O. Box 58

Dalton, Georgia 30720

Mr. James N. Zarvos, AVP-T

Continental Grain Co.

5100 Oakland Avenue

St. Louis, Missouri 63110

Mr. W. C. Harding

DofT

Louis Dreyfus Corp.

24 Richmond Hill Avenue

Stamford, Connecticut 06902

{

Mr. Edward H. Millard, Jr.

Corp. DofT

Savannah Foods & Industries,

Inc.

P. O. Box 339

Savannah, Georgia 31410

Mr. R. E. Harridge, VP-

Transportation

Agway, Inc.

333 Butternut Drive

DeWitt, New York 13214

Mr. J. C. Harper

J. C. Harper, Inc.

P. O. Box 3332-A

Birmingham, Alabama 35205

Mr. James W. Stamper

Manager-Supply &

Distribution

“The White Lily Foods Co.

P. O. Box 871

Knoxville, Tennessee 37901

Mr. James A. Graham

Commissioner

State of North Carolina

Department of Agriculture

Raleigh, North Carolina

Mr. John A. Green, VP

Locke Farm Center, Inc.

Dawson, Georgia 31742

Mr. T. S. Brockbank,

President

Georgia Feed & Grain

Association, Inc.

1737 Waverland Circle

Macon, Georgia 31201

Mr. Hubert L. Bass, GTM

MFC Services

414 North Street, Box 449

Jackson, Mississippi 39205

Mr. Larry P. Gunter

Cameron Brokerage Company

4801 East Independence

Tower Bldg.

Charlotte, North Carolina

28212

Mr. Ronald K. Kolins

Collier, Shannon, Rill,

Edwards & Scott

Attorneys at Law

1055 Thomas Jefferson Street

Washington, D. C. 20007

Mr. Charles B. Cooper, Jr.,

EVP&GM

National Egg Company

3169 Holcomb Bridge Road,

Suite 117

Norcross, Georgia 30071

Mr. Will L. Kinard

Grain Sales Company

5825 Glenridge Drive, N. E.

Building “1, Suite 211

Atlanta, Georgia 30328

Mr. John Guglielmi, VP

Holly Farms Poultry

Industries, Inc.

P. O. Box 88

Wilkesboro, North Carolina

28697

Mr. A. C. Sheeter

Bunge Corporation

P. O. Box 28500

St. Louis, Missiouri 63141

Mr. Dave L. Henderson

Regional Transportation

Manager

Continental Grain Company

P. O. Box 599, Worthington

Station

Columbus, Ohio 43085

Mr. Wayne Larsen, Manager

Kentucky-Tennessee Grain Co.

P. O. Box 168

Franklin, Kentucky 42134

Mr. A. J. Depiazzo

Rail Transportation

Department

Continental Grain Company

5100 Oakland Avenue

St. Louis, Missouri 631190

Mr. Ian C. Muir

Manager-Domestic

Transportation

Processing Division

Continental Grain Company

277 Park Avenue

New York, New York 10017

Mr. Howard Parker

Georgia Poultry Feed

Mills, Inc.

P. O. Box 38

Dalton, Georgia 30720

Mr. J. E. Shipp, President

Mississippi Poultry

Association, Inc.

P. O. Box 12182

Jackson, Mississippi 39211

Mr. E. H. Fielding

Campbell Soup Company

Campbell Place

Camden, New Jersey 08101

Honorable J. Kenneth Robinson

Congress of the United States

House of Representatives

Washington, D. C. 20515

Mr. Dave Yeakley

Central Soya of Athens, Inc.

P. O. Box 907

Canton, Georgia 30114

Mr. Donald R. Wilburn,

Manager

Harrison Milling Company

Bethlehem, Georgia 30620.

Mr. Jack Ragle

Graham Grain Company

P. O. Box 64

Terre Haute, Indiana 47808

Mr. Jerry M. Behimer,

President

Behimer & Kisener, Inc.

P. O. Box 368

Wayne City, Illinois 62895

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ee ee

Mr. David Ozment

Executive Vice President

Alabama Poultry and Egg

Assoc.

P. O. Box 1010

Cullman, Alabama 35055

Mr. J. P. Davidson

Manager-Grain Transportation

Archer Daniels Midland Co.,

Inc.

P. O. Box 1470

Decatur, Illinois 62525

Mr. T. M. Hamilton

Traffic Manager-Feed

Central Soya Company

1300 Ft. Wayne National

Bank Bldg.

Ft. Wayne, Indiana 46802

Mr. Nat Welch

Executive Vice President

Georgia Freight Bureau, Inc.

34 Peachtree Street

Atlanta, Georgia 30303

Mr. Paul Wimpy, Manager

The Planters Grain, Inc.

P. O. Box 186

Guthrie, Kentucky 42234

Mr. Robert C. Haglett,

General Manager

The Early & Daniel Co., Inc.

2200 North Patterson Street

Valdosta, Georgia 31601

Mr. D. E. Orendorf, RTM-

Eastern Region

Cargill, Inc.

1283 North Conant Street

Maumee, Ohio 43537

Ms. Gale D’Ascenzo

The Quaker Oats Co.

345 Merchandise Mart Plaza

Chicago, Illinois 60654

Mr. C. D. McKenzie

Interstate Milling Co.

P. O. Box 1165

Charlotte, North Carolina

28231

Mr. Thomas Ff. Hoskins, ATM

Louis Dreyfus Corp.

Suite 224

1900 West 47th Place

Shawnee Mission, Kansas

66202

Mr. L. G. Smethers,

Cost Analyst

Cook Industries, Inc.

P. O. Box 16912

Memphis, Tennessee 38116

Mr. D. C. Daup

ConAgra, Inc.

Kiewit Plaza

Omaha, Nebraska 68131

Mr. L. L. Carlock, RTM

Cargill, Inc.

P. O. Box 200

Port Allen, Louisiana 70767

Marell Poultry Co.

Maysville, Georgia 30558

Mr. Gary Buxton

Assistant to General

Traffic Manager

Bunge Corp.

300 Southwest Blvd.

Kansas City, Kansas 66103

Mr. K. R. Smith

Manager Grain Ingredients

& Packaging

General Mills, Inc.

P. O. Box 1113

Minneapolis, Minnesota 55440

Mr. Tim Mehl, Mill Traffic

Manager

Seaboard Allied Milling Corp.

P. O. Box 19148

Kansas City, Missouri 64141

Mr. Mark Serepca

National Broiler Council

155 15th Street, N. W.

Washington, D. C. 20005

Mr. N. L. Thomas, President

Thomas Milling Co., Inc.

Hazelhurst, Georgia 31539

Mr. J. P. Davidson

Manager-Grain Transportation

Archer Daniels Midland Co.,

Inc.

P. O. Box 1470

Decatur, Illinois 62525

Ms. June Varner, AGTM-

Processing Group

Cargill, Inc.

P. O. Box 9300

Minneapolis, Minnesota 55440

Mr. Truett S. Bufkin

Secretary

Mississippi Feed and Grain

~ Association

P. O. Box 9714

Jackson, Mississippi 39206

Mr. Jerry H. Gass, EVP

Virginia Poultry Federation,

Inc.

P. O. Box 1036

Harrisonburg, Virginia 22801

Mr. Brian Holtz

Traffic Manager-Rates

Traffic Department

Joseph Schlitz Brewing Co.

Milwaukee, Wisconsin 53201

Mr. H. R. Wright, President

Baltic Mills

401 Ramsey Road

Vincennes, Indiana 47591

G & B Grain Company

2904 South 3rd Street

Terre Haute, Indiana 47808

Mr. W. P. Hudson

Soybean Processing Division

Gold Kist, Inc.

P. O. Box 2210

Atlanta, Georgia 30301

Se es

PO ere E

Mr. James M. Gaston

Division Manager

Gold Kist, Inc.

Perimeter Center Parkway

Atlanta, Georgia 30346

Mr. E. Douglas Smoot,

President

Virginia State Feed

Association

Box 1036

Harrisonburg, Virginia 22801

Mr. Frank E. Polon

Executive Director of

Transportation

The Chicago Board of Trade

LaSalle at Jackson

Chicago, Illinois 60606

Mr. Dennis Mataya

Sprinkle Elevator

Carlisle, Indiana

Mr. B. M. Hancock, Jr.

President

North Carolina Poultry

Federation

P. O. Box 2431

Raleigh, North Carolina

Mr. R. T. Percy

Seaboard Allied Milling Corp.

P. O. Box 19148

Kansas City, Missouri 64141

Mr. S. Mason Carbough,

Commissioner

Virginia Department of

Agriculture and Commerce

Richmond, Virginia

Mr. David Ozment, EVP

Alabama Poultry and Egg

Association .

P. O. Box 1010

Cullman, Alabama 35055

Mr. Jim Brock, Manager

Feed and Production Division

Crystal Farm Mills, Inc.

P. O. Box 7277

Chestnut Mountain, Georgia

30502

Mr. Donald F. Owens

Manager-Transportation

American Maize Products Co.

Hammond, Indiana 46323

Mr. J. I. Morgan, III

President

Morgan-Carolina Corp.

600 West Pine Street

Farmville, North Carolina

27828

Mr. W. F. Hilliard, Chairman

Mid-South Soybeans

Mayfield, Kentucky 42066

Mr. J. E.Niemczyk, Traffic

Manager

Rahr Malting Co.

567 Grain Exchange

Minneapolis, Minnesota 55415

Mr. Ted Reed

Director of Purchases and

Distribution

Cosby-Hodges Milling Co.

P. O. Box 10767

Birmingham, Alabama 35202

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P. O. Box 1032, Delta Drive

Gainesville, Georgia 30501

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Exhibit D

Page 2 of 3

SOYBEANS

(1,000 Bushels)

States 1972 1973 1974 1975 1976

ALA. 16,000 20,370 23,460 32,095 29,280

FLA. 4,872 6,096 7,533 7,080 6,890

GA. 10,050 19,950 25,755 32,130 22,090

ILL. 259,440 281,295 202,560 295,920 241,920

IND. 108,796 135,135 97,250 121,605 108,240

KY. 24,948 29,070 28,080 32,400 28,355

N.C. 29,125 34,800 30,530 33,370 23,650

oe 19,980 23,750 23,125 30,360 21,420

TENN. 28,556 36,895 31,920 46,250 40,500

VA. 8,050 11,151 10,105 10,825 8,159

TOTALS 509,817 598,512 480,318 642,035 530,504

U.S. TOTAL 1,270,630 1,547,165 1,214,802 1,546,120 1,264,890

Percentage |

of U.S. Total 40.1 38.7 39.5 41.5 41.9

EXHIBIT E.

STATEMENT OF CORN, WHEAT AND SOYBEANS PRICES IN DOLLARS AND CENTS

PER BUSHEL BASED ON CHICAGO, ILL. MARKET ON OR ABOUT THE 15TH OF

EACH MONTH FOR THE TIME PERIOD SHOWN

1974 Jan. Feb. Mar. Apr. May Jun. Jul Aug. Sep. Oct. Nov. Dec.

Corn, 01-132 $2.90 $3.13 $2.99 $2.69 $2.70 $2.93 $3.35 $3.63 $3.55 $3.74 $3.48 $3.47

Wheat, 01-137 630 650 5.59 4.33 348 3.91 440 434 441 5.03 4.86 4.60,

Soybeans, 01-144 617 639 623 5.56 542 547 697 7.55 7.57 833 7.57 7.28

<e)

To Corn, 01-132 319 2.96 2.90 2.96 282 289 295 3.12 2.99 2.74 2.59 2.59

Wheat, 01-137 402 384 3.62 3.63 3.25 3.03 342 382 406 3.84 3.49 3.32

Soybeans, 01-144 633 5.68 5.56 5.76 5.73 5.15 558 597 555 4.97 4.70 4.59

1976

Corn, 01-132 262 2.70 2.68 2.68 2.84 2.96 2.96 287 2.77 249 2.33 2.44

Wheat, 01-137 345 3.78 3.66 3.34 3.30 3.47 337 3.01 2.89 2.72 260 2.66

Soybeans, 01-144 465 4.74 4.66 4.71 5.21 625 664 630 659 623 658 6.86

1977

Corn, 01-132 2.53 2.54 2.52 2.50 2.41 2.27 2.04

Wheat, 01-137 2.73 2.74 2.63 2.53 2.35 2.29 2.20

Soybeans, 01-144 7.08 7.25 833° 9.74 9.50 8.18 6.28

Source: Chicago, Ill. Board of Trade.

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EXHIBIT III

VERIFIED STATEMENT OF

FRANCIS M. SPUHLER

My name is Francis M. Spuhler. I am employed as

Senior Cost Analyst with the Southern Freight

Association located at 1920 L Street, N. W., Wash-

ington, D. C.

I have had over twenty years experience in account-

ing, statistical and cost analysis work in the rail

transportation industry. During the past eleven years

this work has been with the Association of

Southeastern Railroads and the Southern Freight

Association, first as Cost Analyst and then as Senior

Cost Analyst. During this period I have prepared and

presented cost, statistical and financial data before

the Interstate Commerce Commission and all state

regulatory bodies within Southern Territory.

I am a graduate of Benjamin Franklin University in

Washington, D. C., having majored in accounting and

finance. I have also taken additional credit courses in

business and finance from the Wharton School of

Finance, University of Pennsylvania, in Philadelphia.

This statement is made on behalf of Southern Ter-

ritory railroads to comply with requirements of Ex

Parte 324. I am advised by traffic officers of the SFA

railroads that the proposed rate adjustment is not

based upon costs, and the revenue-cost relationships

on grain movements set forth in my Appendix B are

shown solely for the information of the Commission.

Appendix B does provide more current revenue-cost

data than would be shown in the latest (1972) burden

study (Statement No. 153-72).

My Appendix B utilizes 1975 statistics from the 1%

waybill sample prepared by the U. S. Department of

Transportation. To the service units derived from this

1% waybill study (carloads, tons, car miles and ton

miles), I have applied 1975 Southern Region unit

costs. These unit costs result from application of the

computerized Rail costing program to the expenses

and statistics of all Class I railroads in the South for

1975.

Appendix B shows the results for corn and for total

movements of grain. Corn is the predominant grain

commodity, constituting 79% of the total. The ratios

of revenue to variable cost for 1975 indicate that there

are large movements of grain moving at rates which

are barely compensatory. These low rate levels focus

the attention of rail management on the difficulty of

attaining earnings sufficient to justify acquisition of

new equipment for hauling grain.

Appendix A shows the ever-increasing cost of new

equipment. In just 3 years the average cost of a new

covered hopper car has risen an incredible 50%

($27,497 in 1976 vs. $18,000 in 1973). Ex Parte in-

creases have usually been designed to help recoup

past cost escalations (mostly labor and materials), and

they have done little to ease the future cost of replac-

ing existing equipment at inflated prices.

The average daily freight car mileage in 1976

amounted to 56.9 miles per serviceable car on line.

This daily mileage fluctuates with higher or lower

5 a

business levels. At an average freight train speed of

20 miles per hour, including stops, the average freight

car spent 12% of its time in road trains, loaded or emp-

ty. The remainder of the time was spent in loading and

unloading at shippers’ plants, moving within term-

inals, classification and placement into trains or stan-

ding idle during seasonal lulls in car demand. (Source:

Yearbook of Railroad Facts — 1977 Edition.)

It is obvious from the above facts that very expen-

sive equipment is lying idle a great portion of the time

and that it is imperative that rail management reduce

this tremendous economic waste.

a" ls “Yh,

~ynttntte 2

Francis puhler

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Box cars “‘Flaters ae Hopper cars All All

Rack Gondola Refrig Tank freight- Caboose freight

Year General Special General Special cars cars Open Covered erator cars carrying cars train

service servicea service service top cars cars d cars

1964 $13,083 $17,534 $15,462 6 $12,000 $12,504 $10,380 $14,673 $21,914 $19,339 $14,061 $17,759 $14,085

1965 14,610 19,821 15,682 $17,371 13,311 12,451 11,085 14,582 22,359 18,150 15,448 19,752 15,466

1966 12,167 18,129 14,725 17,593 13,564 12,853 11.794 15,487 23,358 34,041 15,320 18,650 15,338

1967 11,955 17,877 16,524 19,262 12,632 13,028 10,424 15,074 25,313 27,423 14,591 21,727 14,608

1968 10,061 19,398 13,956 15,534 11,746 11,447 14,728 28,307 13,471 21,168 13,553

1969 11,733 18,007 13,759 18,107 13,754 12,558 15201 29,957 - 15,607 17,415 15,625

1970 13,355 20,912 15,534 22,275 14,203 12,726 16,221 31,592 - 17,163 19,390 17,199

1971 14,219 18,640 10,495 19,068 15,749 13,197 15,930 32,167 - 16,293 24,874 16,352

1972 19,258 23,533 _ 17,666 15,111 15,580 18,079 32,427 - 18,051 25,640 18,219

15,600 16,000 18,000 30,000 20,000 18,800 29,000 18,900

21,500 18,800 20,000 - 21,700 21,800 31,000 21,900

27,076 25,834 26,480 42,553 22,300 27,777 41,023 27,921

26,856 25,495 27,497 - - 27,983 41,648 28,099

1973 18,000 22,000 _ 18,000

1974 22,900 34,000 28,000 20,000

1975p 31,168 37,005 32,815 40.201

1976p 30,923 35,644 27.040 45,695

SATA MATAR

- Reported as “automobile” prior to 1948 and included with general service box cars for years 1949 through 1954.

- Included with general service flat cars.

- Included with open top hopper cars.

- Includes all other freight-train cars not separately shown.

- Reflects installation of two experimental 38,000-gallon tank cars at a unit cost of $76,765.

- Included with special service flat cars.

- Prelimi

- The variations in the average cost of freight cars from year to year can relate, in part, to changes in the mix of car sub-types

within each category and to differences in the capacities of cars installed.

Source: Interstate Commerce Commission, TRANSPORT STATISTICS IN THE UNITED STATES; Year 1975 and 1976

from Annual Reports of Railroads.

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EXHIBIT IV

Pounds of Broilers Produced in the Northeast and Southeast,

1957-1972

Year Northeast! Southeast?

1957 595,143 2,159,528

1958 642,543 2,621,541

1959 609,270 2,974,660

1960 561,635 3,223,816

1961 571,122 3,861,864

1962 543,279 3,990,327

1963 539,525 5,298,030

1964 536,945 4,500,278

1965 547,062 4,963,174

1966 555,960 5,637,463

1967 558,693 5,818,331

1968 558,580 5,979,465

1969 558,076 6,392,501

1970 588,756 6,920,095

1971 586,313 8,540,633

1972 575,372 7,578,704

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1/ Northeast includes New England, New York, New Jersey and Penn-

sylvania.

2/ Southeast includes the states of North Carolina, South Carolina,

Georgia, Florida, Alabama, Mississippi, Louisiana, and Arkansas.

Source: Chickens, Eggs and Broilers: Production, Disposition, Cash

Receipts and Gross Income, (Statistical Reporting Service, U.S.D.A.,

(various yearly issues)).

at ae halt et ot at eh al

76 77

EXHIBIT V EXHIBIT V

Page 1 of 2 Page 2 of 2

STATE | i STATE

STORAGE CAPACITY BY BUSHELS STORAGE CAPACITY BY BUSHELS

. Revised

Jan. 1 rie Changes Jan. 1, Jan.1, Changes

State a eee State 1976 1975 + or -

76 75 1,000 bu. 1,000 bu. 1,000 bu. 76 75 1,000 bu. 1,000 bu. 1,000 bu.

a 28. Georgia 29 37,900 36,400 + 1,500

eee ee aeeooe pon 29. Maryland 28 36,490 36,790 - 300

Texas 2 752,020 719,040 + 32,980

inoi ‘ 30. Alabama 34 32,400 25,900 + 6,500

Illinois 3 664,600 627,800 + 36,800 ; 1670

Iowa 4 557,000 524,000 + 33,000 31. Arizona 30 30,580 28,910 + 1,

; 32. S. Carolina SL . geal |. 44,400 .+ 550

Nebraska 5 453,560 452,660 + 900 Paarvic

: a | 33. Virginia 33 27,600 26,500 + 1,100

Minnesota 6 352,130 357,270 5,140 i 590

Ohio 7 208,000 193,000 + 15,000 ‘ 34, Pennsylvania 32 25,740 26,030 -

i . 35. New Mexico 35 17,360 16,870 = + 490

Indiana 10. 201,050 186,410 + 14,640 ‘

. ' 36. Delaware 37 17,240 16,640 + 600

Missouri 8 193,270 192,730 + 546

a 37. Utah 36 =. 16,960 16,750 + 210

Oklahoma 9 190,200 191,790 1,590 | $50 «BOAO 610

. Washington 11 165,850 164,090 + 1,760 38. Wyoming 39 6, : +

39. Florida 38 5,560 5,420 + 140

. Arkansas 12 162,880 155,480 + 7,400

= 40. New England 40 3,800 3,560 + 240

. N. Dakota 13. 141,200 = 144,550 3,350 0 9370 90

. California 15 119,790 103,680 + 16,110 41. New Jersey 41 2,35 A «+ >i eae

. Wisconsin 14 118,900 118,060 + 840 42. W. Virginia 43 39 <6

. Colorado 17 85,600 81,100 + 4,500 43. Nevada 42 300 aS

. S. Dakota 16 83,280 83,440 - 160

. Louisiana 18 78,200 76,870 + 1,330 U. S. Total 6,102,880 5,918,230

. New York 19 68,030 67,510 - 520 pine ; ;

. Michigan 20 67,250 65,640 + 1,610 Source: Agri-Business Buyers’ Reference

. Mississippi 22 66,320 62,580 + 3,740

. Oregon 21 60,330 58,700 + 1,630

. Idaho 24 55,170 51,860 + 3,310

. N. Carolina 23 94,990 52,730 + 2,260

. Montana 25 49,260 47,920 + 1,340

. Tennessee 26 42,750 42,390 + 360

. Kentucky 27 40,440 38,230 + 2,210

EXHIBIT VI

Excerpt from

STATEMENT OF

A. DANIEL O’NEAL,

CHAIRMAN,

INTERSTATE COMMERCE COMMISSION

BEFORE THE SUBCOMMITTEE ON SURFACE

TRANSPORTATION OF THE SENATE

COMMITTEE ON COMMERCE, SCIENCE AND

TRANSPORTATION ON THE

IMPLEMENTATION OF AND NEED FOR

AMENDMENTS TO THE RAILROAD

REVITALIZATION AND REGULATORY

REFORM ACT OF 1976

July 29, 1977

Mr. Chairman, Members of the Subcommittee:

Good morning. I want to thank the Chairman and

members of the Surface Transportation Subcommit-

tee for giving the Commission this opportunity to pre-

sent its views on the implementation of and need for

amendments to the Railroad Revitalization and

Regulatory Reform Act of 1976 (‘‘4-R Act”’). I par-

ticularly want to thank the Subcommittee for permit-

ting me to address both the Title VIII State Rail

Assistance programs and broader aspects of the 4-R

Act. I realize that this required adjustment in the

Subcommittee’s scheduling, and I appreciate the con-

sideration you have shown the Commission in this

matter.

~ eet el

Ce a ee

a ee ee

ee ee!

The 4-R Act also requires the establishment of ex-

peditious procedures for Commission review of

seasonal, peak or regional rates. These procedures are

to replace the conventional procedures and are de-

signed to provide incentive to shippers to reduce peak

period shipments by rescheduling; generate additional

revenue for railroads; and improve utilization of cars,

movements, level of employment, and financial

stability of markets served by railroads.

The Commission’s implementation of this section is

contained in its new rules adopted in Ex Parte No.

324. The rule, like the law, is primarily procedural;

however, it does contain major new substantive

features.

First, shippers are protected from cancellation

where they have made substantial investments to

take advantage of the demand-sensitive rates, and,

second, a railroad can cancel an unsuccessful rate on

30-days’ notice.

Moreover, a particularly important feature of the

new rules is a provision that the Commission will not

suspend a cancellation of such a rate for three years

under most circumstances. The reason this is impor-

tant is that railroads have frequently objected to in-

stituting special rates out of fear that would have dif-

ficulty getting rid of ones that do not succeed.

Our preliminary statistical data review shows that

from 25 to 30 percent of all rail traffic is peak or

seasonal in nature, and that this traffic is largely con-

centrated in the Midwest and West. Agricultural pro-

ducts (grain, fresh produce, and miscellaneous field

crops) are almost entirely seasonal, fertilizer materials

substantially seasonal, metallic ores 80-percent

seasonal, stone and gravel 40-percent seasonal, and

assembled automobiles 50-percent seasonal.

Elasticity studies indicate that a premium peak rate

of 35 percent above off-peak rates could be effective in

spreading out grain shipments. Comparable figures

would be 10 to 20 percent on iron ore and 10 percent

on gravel. Any increase would likely result in loss of

fresh produce traffic.

These types of rates, while not unprecedented, hold

new potential for railroads. Widespread establishmer:t

of the rates will probably be slow. Individual railroads

are faced with different seasonal patterns and many of

the rates will have to be joint rates. Railroads must

make careful studies of the seasonal characteristics of

traffic and demand elasticities before they can pro-

pose a rate rationally. If it is a joint rate, other car-

riers must concur and this could be difficult. In addi-

tion, it appears that marketing influences may exert

greater influence than the incentives offered under

this provision. World grain prices, for example, may

be more influential to grain movement than seasonal

rate incentives and almost no seasonal rate change ap-

plied to new automobiles would likely influence move-

ment of autos.

There are also some potential procedural dif-

ficulties. Proposed increased rates are likely to be pro-

tested. If an investigation is instituted, carriers must

submit justification statements. The data are quite

different than normally required and this poses new

challenges to carriers in meeting evidentiary tests.

Probably the most important factor restraining the

implementation of these rates is that it represents a

substantial change in the ways railroads have tradi-

tionally priced traffic. Such changes will require con-

siderable time for the carriers to adjust to a new

system.

Another change brought about by Title II of the 4-R

Act is reform of railroad rate bureaus, including such

new features as a prohibition against bureau protest

of carriers’ independently filed rate proposals,' and a

prohibition against bureau participation in

agreements with respect to single-line rates estab-

lished by any carrier. The Commission has com-

menced, and in some cases completed the record and

issued decisions in a number of proceedings relating

to new bureau agreements under the revised stan-

dards of the new statute. As envisioned by the

statute, both the Department of Justice and the

Federal Trade Commission have participated in these

proceedings.

One technical problem has emerged with respect to

the new railroad rate bureau statute. The 4-R Act

created a new section 5b limited to agreements among

railroads. Section 5a, which now governs rate bureaus

of other modes, was amended by deleting railroads

from the definition of Part I carriers. The drafters,

however, did not delete railroads from the classes of

carriers which might propose an intermodal rate

bureau agreement under section 5a(4).

1/ Bureau protests of member carriers’ independent action pro-

posals were prohibited in Ex Parte No. 297, Rate Bureau In-

vestigation, 349 I.C.C. 811, 351 I.C.C. 437, recently sustained

by the United States Court of Appeals for the Fourth Circuit

in Motor Carriers Traffic Assn., et al. v. United States, et al,

No. 76-1329 (decided July 21, 1977).

EXHIBIT VII

AVERAGE DAILY SHORTAGE

GRAIN CARS ON L&N

Week Ending Grain Covered Hoppers

Dec. 20 75 610

Dec. 27 75 62

Jan. 3 76 98

Jan. 10 76 177

Jan. 17 76 206

Jan. 24 76 177

Jan. 31 76 148

Feb. 7 76 174

Feb. 14 76 187

Feb. 21 76 197

Feb. 28 76 126

Mar. 6 76 119

Mar 13 76 201

Mar. 20 76 339

Mar. 27 76 253

Apr. 3 76 160

Apr. 10 76 136

Apr. 17 76 180

Apr. 24 76 94

May 1 76 99

May 8 76 160

May 15 76 199

May 22 76 145

May 29 76 170

June 5 76 105

June 12 76 113

June 19 76 141

June 26 76 197

July 3 76 125

July 10 76 117

July 17 76 115

July 24 76 163

July 31 76 116

Aug. 7 76 20

Aug. 14 76 0

Aug. 21 76 0

Aug. 28 76 7

Sept. 4 76 12

Sept. 1l 76 37

Sept. 18 76 89

Sept. 25 76 353

Oct. 2 76 277

Oct. 9 76 185

Oct. 16 76 269

Oct. 23 76 219

Oct. 30 76 173

Nov. 6 76 181

Nov. 13 76 216

Nov. 20 76 174

Nov. 27 76 79

Dec. 4 76 49

Dec. 1l 76 63

a ee se a

z eT oe

EXHIBIT VIII

EMBARGOES

CSD Embargo No. 7639 — Effective October 8,

1976

Cancelled October 11, 1976

Against Public Grain Elevator, Mobile, Ala.

CSD Embargo No. 7643 — Effective October 20,

1976

Cancelled November 2, 1976

Against South Carolina Farm Bureau

Marketing Association Grain Elevator,

Charleston, S. C.

CSD Embargo No. 7644 — Effective October 20,

1976

Cancelled November 2, 1976

Against Cargill at Gainesville, Ga.

CSD Embargo No. 7647 — Effective October 26,

1976

Cancelled November 18, 1976

Against Public Grain Elevator, Mobile, Ala.

CSD Embargo No. 7648 — Effective November

11, 1976

Cancelled November 16, 1976

Against Cargill Corn Syrup & Starch, Memphis,

Tenn.

CSD Embargo No. 7651 — Effective November

16, 1976

Cancelled December 2, 1976

Against Central Soya & Co., Inc. — Chatta-

nooga, Tenn.

CSD Embargo No. 7653 — Effective November

18, 1976

Cancelled December 2, 1976

Against Cargill, Inc. — Port of Mobile — Mobile,

Ala.

SCL Embargo No. 5-76 — Effective October 11,

1976

Cancelled October 26, 1976

Against Continental Grain Co. — WNorfolk-

Portsmouth, Va.

SCL Embargo No. 6-76 Effective October 28,

1976

Cancelled November 1, 1976

Against Cargill, Inc. — Norfolk-Portsmouth, Va.

N&PBL Embargo No. 2-76 — Effective Decem-

ber 10, 1976

Cancelled December 15, 1976

Against Continental Grain — Norfolk, Va.

N&PBL Embargo No. 2-76 — Effective

December 10, 1976

Cancelled December 20, 1976

Against Cargill, Inc., Cheseapeake, Va.

Po. 00 er Die me ete

FT ae eel ee Wh Rok cts ee

EXHIBIT IX

VERIFIED STATEMENT OF A. C. JONES, JR.

My name is A. C. Jones, Jr. My address is 908 West

Broadway, Louisville, Kentucky. I now hold the posi-

tion of General Manager-Transportation of the

Louisville and Nashvilie Railroad Company (“L&N’’),

being appointed April 1, 1977. In this position I have

general supervision over and responsibility for train

operations on the entire L&N system. Prior to my ap-

pointment, I held the position of Division Superinten-

dent at Evansville, Indiana. I began my service with

the Seaboard Airline Railroad on June 12, 1951, subse-

quent to that having held various positions with the

Georgia Railroad-A&WP, until the time of my appoint-

ment as Superintendent at Evansville, Indiana.

Through the use of records maintained in my office

and my general knowledge of railroad operations, it is

my opinion that the cost of handling grain cars in-

creases during times of peak loading. This condition is

attributable to a number of reasons, some of which I

will elaborate on later. First, let me explain, grain

moves from the fields to a relatively large number of

grain elevators by truck. From there, it is transported

by rail cars to a relatively few number of unloading

points. These include processors, storage warehouses

and to ports for export.

Inefficiencies occur in equitably distributing empty

cars to a large number of users after which the loads

must be marshalled into a relatively few number of

train yards which are not designed to handle the

volume of cars produced during peak loading seasons.

From these train yards they move to unloading points

where they are subject to lengthy delay brought on by

the inability of consignees to accept the volume being

received. This deficiency at the unloading point is

caused by limited storage capacity, limited track

facilities, limited switching capabilities and, in the case

of export, a shortage of cargo ships and berthing

capabilities.

I am citing below inefficiencies peak grain loading

periods have on the orderly operation of our railroad

and the resultant adverse effect on our grain fleet:

1. Line of road operations suffer as a result of grain

cars, both loaded and empty, placed on side tracks and

passing tracks. The movement of cars into and out of

these tracks curtail through freight trains causing a

secondary effect on locals switching cars in and out of

grain elevators. Thus, there is a general slow-down of

trains and car movements.

2. Tracks into and on the property of elevators are

generally incapable of handling the number of rail cars

necessary to keep their operation fluid, resulting in ad-

ditional switching oftentimes adversely affecting

main line operations.

3. As grain cars move into and out of terminals, con-

gestion is created not only by the large volume of such

shipments, but the inability of trains to move with

consistency over the road due to the necessity to

employ the main line for switching elevators.

4. The relatively high density of grain cars limits the

number of such cars which can be placed on trains. As

= .

a result, more trains with fewer cars must be

employed to move this traffic. The obvious result is

main line congestion.

5. The number of train crews employed by the L&N

coincides with normal traffic flows in scheduling train

movements. During peak grain loading periods a

shortage of train and switching crews occurs. Often

shipments are delayed for no other reason than the

unavailability of train crews. This problem is further

compounded by the necessity to pay premium wages

to crews for overtime work.

6. Delays in locomotive movements during the peak

grain season not only result in inability efficiently to

supply power in the grain producing areas, but also

reduces the railroad’s ability to supply power

demands for the system as a whole. The peak period

movements generally create an adverse operating

situation.

7. The delay of grain cars at unloading points during

peak grain seasons is most prevalent. It is not uncom-

mon for such facilties to delay cars as long as 30 days.

This is particularly true at port facilities where em-

bargos preventing the movement of grain to such

facilities are commonplace. The result of this action is

obvious.

In conclusion, the peak grain loading periods have a

marked adverse effect on the car costs, terminal

operations and over-the-road movement of trains.

VERIFICATION

STATE OF FLORIDA )

) SS

COUNTY OFDUVAL )

A. C. Jones, Jr., being duly sworn, deposes and says

that he has read the foregoing statement and knows

the contents thereof, and that the same are true as

stated. Ps

)

Signed:__.

A.C. Jones, Jr. s

Subscribed and sworn to

before me this 11th day of

August, 1977.

het bo Coicad

Notary Public

My Commission expires:

SEAL

ees os ~~

aii

pene pan enews le cet ecm

EXHIBIT X

VERIFIED STATEMENT OF R. A. WHARTON

My name is R. A. Wharton. I am Assistant Vice

President Transportation of Southern Railway Com-

pany and affiliates with offices in Atlanta, Ga. I have

had experience in all facets of operations with

Southern Railway Company for the past 27 years. My

present responsibilities include supervision of the con-

trol center in Atlanta from which Southern

distributes cars throughout its system.

I understand that Southern and other carriers in the

South propose to publish increased rates on grain to

be effective during the peak shipping season. I am ad-

vised that one of the purposes of this increase is to

help discourage movement during the peak season

and encourage shippers to defer their movements un-

til the off-peak period after the increased rate expires.

Any rate proposal which will encourage shippers to

even the flow of their traffic throughout the year is

something which I support wholeheartedly.

One of the projects with which I have been involved

for many years is a national project sponsored jointly

by the Association of American Railroads, Federal

Railroad Administration, shippers, and railway labor,

to seek ways to improve car utilization. At the same

time, Southern has been deeply involved in an effort,

involving studies by MIT, to improve service reliabili-

ty for all shippers. These two programs are closely

related and have revealed that good service is the

keystone of good car utilization. As a result of these

two studies, Southern has begun to develop a finely

tuned operating plan which involves control of the

performance of many different units of production,

such as train arrivals and yard performance.

What we have found is that balance is very impor-

tant to the performance of the system as a whole.

Surges of traffic cause performance of the whole

railroad to deteriorate. And our greatest surge comes

in grain.

To show how the seasonal peak affects our supply of

cars, I am attaching two tables. The first (Table I)

shows surplus grain cars daily for a two year period.

Note that there is no surplus shown for the fall

months, months when a car shortage develops. Table

II shows surpluses and shortages of LO covered hop-

per cars. Again, fall is the peak season. The difference

between the two tables is that Table I shows only the

high-cube covered hoppers regularly used for grain

movements. Table II shows all LO covered hoppers

and includes lower-cube cars which are normally used

for non-grain commodities (though they too may be

pressed into grain service during the peak season).

In other words, peak season movements of grain

have a serious adverse effect upon shipers of all traf-

fic, not just the grain shippers. Our ability to furnish

equipment for grain loading is strained, but at the

same time the utilization of our entire fleet goes down

and car shortages may develop for the handling of

other commodities. Peak loadings cause congestion in

our yards and on the line of road. A sort of domino ef-

fect results.

Just as peak transportation demand is not confined

to one commodity, it also is not confined to one

ee Oe ee ee eee ee wth. _ - .:

geographic area. Grain on Southern tends to peak in a

few states at a time. The harvest begins in the South

and gradually moves northward. However, distant

parts of the railroad are adversely affected by surges

as cars, locomotives, and cabooses must be diverted

from many areas to meet the demand. This can cause

service deterioration throughout the system.

Another problem caused by peak demand is the

destabilizing effect upon railroad employment. Extra

crews for peak demand periods are difficult to hire.

The work involved requires expensive and lengthy

training, so we cannot hire casual labor for seasonal

work. Yet it is unduly expensive to maintain forces in

off-peak seasons which will be adequate to meet the

peaks that occur in season. Thus any rate change

which serves to level demand for rail service will also

help stabilize rail employment.

Cars, locomotives, and cabooses can be looked at in

the same way. Rolling equipment is expensive, and it

cannot sit idle a good part of the year only to be used

in a peak season.

Likewise supervision is taxed during peak move-

ment seasons. We can’t hire part-time supervisors.

The customer, too, suffers in peak shipping seasons.

The inevitable result of heavy seasonal movements is

bunching of cars. This causes problems for consignees

in unloading the cars rapidly, and the productivity of

the car fleet deteriorates.

In summary, Southern finds it difficult to effective-

ly plan and efficiently control the operation of its

system where that system is affected by seasonal

surges of traffic. Grain is the commodity with the

greatest surges. To the extent that shippers can be en-

couraged to level their shipments throughout the

year, the operation of the railroad system will become

more efficient, for the benefit of all shippers. I am

strongly in fayor of any rate change which will en-

courage such a year-round leveling of grain traffic.

R. A. Wharton

VERIFICATION

COUNTY OF FULTON:

ss.

CITY OF ATLANTA:

R. A. Wharton, being duly sworn, deposes and says

that he has read the foregoing statement, knows the

contents thereof, and that the same are true as stated.

_ ‘

| seca”

/ f °

a fae lh Y Ler wee,

-~! P —

Subscribed and sworn to

before me this 12th day of

August 1977.

? /

. — ‘ / — yo * ¥

ff Jit¢caee Tut eto ‘9 Pee AS or od

Notary Public,

My commission expires

——

“ * Py a= =

( A hA SD. Oe ee

Date

8-11-75

TABLE I

Daily Surplus Grain Cars

Southern Railway

Surplus Date Surplus

585 9-17-75 267

683 18 221

628 19 221

697 22 202

615 23 209

703 24 233

640 25 239

468 26 252

457 29 244

385 30 91

387 11-24-75 105

385 25 168

373 26 134

356 28 155

382 12- 1-75 170

474 2 247

411 3 235

421 4 217

326 5 258

326 8 508

546 9 434

578 10 479

430 11 397

493 12 408

252 15 403

250 16 474

267 17 414

186 3-11-76 345

143 12 363

157 15 262

Date

12-18-75

Surplus

409

286

275

267

215

213

563

464

519

464

279

324

258

167

180

227

293

257

111

Date

2-2-76

Surplus

298

289

389

310

258

Date

8-6-76

Surplus

284

212

228

389

320

314

256

260

254

212

192

224

195

187

324

254

188

172

Date

Surplus

440

423

384

380

393

375

431

361

250

218

193

208

216

231

240

191

130

194

187

153

163

166

170

175

Date

7-1-76

Surplus

Date

1-3-77

Surplus

Date

Surplus

220

225

147

Railroad-Owned LO Covered Hoppers

TABLE II

Average Daily Supply '

Southern Railway System

(From CS-44 Reports)

Week Carsin Unfilled Week Carsin Unfilled

Ending Excessof Orders Ending Excess of Orders

Orders Orders

7-30-77 12-25-76 636

23 14 18 652

16 11 645

9 11-27-76

2 15 20 31

6-25-77 20 13 205

18 22 6 215

11 16 10-30-76 216

4 10 23 385

5-21-77 14 16 408

14 9 400

7 16 2 363

4-30-77 9-25-76 380

23 19 18 233

16 19 11 184

9 17 4 188

2 22 8-28-76 98

3-26-77 19 21

19 139 43 14 201

12 139 49 7 416

5 118 126 7-31-76 471

2-26-77 120 188 24

19 226 157 16 630

12 310 245 10 853

5 414 125 3 908

1-29-77 526 6-26-76 625

22 461 19 601

15 439 5 657

8 569 5-29-76 406

1 605 22 394

EXHIBIT XI

NUMBER OF CARLOADS

9 BOX, SMALL COVERED HOPPER, AND }UMBO COVERED CARS LOADED WITH WHOLE GRAINS

6(a) (INCLUDING SOYBEANS) AND HANDLED BY L&N AND SCL RAILROADS DURING 1976

Source: Daily Carload Reports EXHIBIT XI

—

+ 4

+—+~++—4

4700

tilt

Bakes

+++

4600 Box Cars

4500 LiL

Small Hopper Cars — under 4000 cu. ft.

CLL Loe eee

4300 Jumbo Hopper Cars — 4000 cu. ft. and over

4200

4100

4400

4000

3900

3800

3700

3600

3500

3400

3300

3200 +

3100 = Bs

3000

2900

2800

2700

2600

2500

2400

2300

2200

2100

2000

1900

1800

1700

1600

1500

1400

1300

1200

1100

1000

900

800

700

600

500

400

300

200

100 “4

0 b 4 4 a

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

MONTHS

EEE STE cee she one

ICC - 2

Letter - Notifying Com-

mission of Corrections to

SFA Justification

Statement

Aug. 15, '77

a ee ee ee

SO ee Oe

SEABOARD COAST LINE RAILROAD COMPANY

(Letterhead)

August 15, 1977

Mr. H. J. Homme, Jr.

Acting Secretary

Interstate Commerce Commission

Washington, D. C. 20423

Corrections to Justification Statement Filed

Concurrently with Supplement Nos. 201, 137 and

23 to SFTB Tariff Nos. 988-8, ICC S-909, 908-B,

ICC $-999 and 972-F, ICC S-1359, Respectively,

Joint and Local All-Rail Rates, Also Distance

Rates on Grain, Carloads.

Dear Mr. Homme:

There is submitted with the tariff supplements above-

captioned and the justification statement pursuant to 49 CFR

Sec. 1109.10(F) a transmittal letter from the Southern

Freight Tariff Bureau. This communication is submitted

solely as a vehicle to point out to the Commission several

typographical errors that were not corrected. The changes

which will be made in the statement as a result of the cor-

rections do not change substantially the content of the sub-

mission and are submitted only in the interest of a clear

record.

The corrections to be made are as follows:

Page & Line No. As Is As Corrected

Page 14, Line 7 “Be considered “Be considered the

the objective of only objective of

the rates.” rates.”

Page 15, Line 18 Exhibit VII Exhibit VIII

Page 16, Line 2 ‘“Restructured” “Restricted”

Page 19, Line 3-4 “Prepresented”’ “Represented”

A copy of this correction page has been included in each

of the packets sent to shipper representatives who attended

hearings on seasonal rate proposals on grain at the Southern

Freight Association Building in Atlanta, Georgia. These are

the same individuals who are specified in the Certificate of

Service attached to the primary filing.

Very truly yours,

/s/ Wandaleen Poynter

Wandaleen Poynter

ee oie a 5 «

a ees oa

ICC - 19

Verified Complaint, Pro-

test and Petition for Sus-

pension and Investigation

of Southern Poultry &

Egy Association

Sept. 6, °77

i OD NS Ba

ait tt ee ee ee. Se eee

BEFORE THE

INTERSTATE COMMERCE COMMISSION

PROTEST,

PETITION FOR SUSPENSION,

AND COMPLAINT

EFFECTIVE DATE:

TARIFF

REFERENCE:

SUBJECT:

WITHIN:

PROTESTANTS:

September 15, 1977

Supplement 137 to SFTB 908-B

(I.C.C. S-999)

Supplement 23 to SFTB 972-F

(I.C.C. S-1359)

Supplement 201 to SFTB 988-A

(I.C.C. S-909)

Demand-Sensitive rate pur-

suant to 49 C.F.R. §1109.10,

consisting of a 20 percent

increase in rates on grain

in railroad-owned cars

September 15, 1977, through

December 15, 1977

Southern Freight Association

Territory and certain points

in Indiana and Illinois

Alabama Poultry Industry

Association

P.O. Box 1010

Cullman, Alabama 35055

PROTESTANTS

(cont'd):

100

Florida State Poultry

Federation

5415 Mariner Street,

Suite 105

Tampa, Florida 33609

Georgia Freight Bureau

34 Peachtree Street, Suite 2434

Atlanta, Georgia 30303

Georgia Poultry Federation, Inc.

P.O. Box 763

Gainesville, Georgia 30501

National Egg Company

3169 Holcomb Bridge Road

Bridge 117

Norcross, Georgia 30071

North Carolina Poultry

Federation

P.O. Box 2431

Raleigh, North Carolina 27600

Poultry and Egg Institute

of America

521 East 63rd Street

Kansas City, Missouri 64110

PROTESTANTS

(cont'd):

ATTORNEYS FOR

PROTESTANTS:

DUE DATE:

FILED:

101

Southern Poultry and Egg

Association

1456 Church Street

Decatur, Georgia 30030

Virginia Poultry Federation

P.O. Box 1036

Harrisonburg, Virginia 22801

David C. Todd

Michael A. Floyd

PATTON, BOGGS & BLOW

1200 17th Street, N.W.

Washington, D.C. 20036

Telephone: (202) 223-4040

September 6, 1977

102

PROTEST, PETITION FOR SUSPENSION, AND

COMPLAINT OF

THE ALABAMA POULTRY INDUSTRY

ASSOCIATION, THE FLORIDA STATE

POULTRY FEDERATION, THE GEORGIA

FREIGHT BUREAU, THE GEORGIA POULTRY

FEDERATION, INC., THE NATIONAL EGG

COMPANY, THE NORTH CAROLINA POULTRY

FEDERATION, THE POULTRY AND EGG

INSTITUTE OF AMERICA, THE SOUTH-

EASTERN POULTRY AND EGG ASSOCIATION,

THE VIRGINIA POULTRY FEDERATION

The above-named organizations (the

‘“‘Protestants”’), pursuant to the Commission’s

regulations, codified as 49 C.F.R. § 1109.10 after

hearing in Ex Parte 324, file this protest, complaint,

and petition for suspension of the tariff supplements

of the Southern Freight Tariff Bureau (the ‘‘Bureau’’)

containing a 20 percent increase on grain movements

from September 15, 1977, through December 15, 1977.

More specifically, the tariffs protested are those

contained in Supplement Nos. 201, 137, and 23 to

SFTB Tariff Nos. 988-A (ICC S-909), 908-B (ICC

S-999), and 972-F (ICC S-1359), respectively.

Except as mentioned below, the Protestants are

associations of broiler, egg, and turkey producers

whose feed costs will be increased substantially by the

20 percent rate increase. They are made up of

thousands of members and together represent

virtually the entire poultry industry of the Southern

Territory. The Southern Territory accounts for

approximately 70 percent of the nation’s broiler

production and approximately 50 percent of the

nation’s egg production.

al te Sets oe OR

DER ie Bt AB de Siete Bisel en 5 2 tse

Tan sea

ee ee Oe ee ee ee Od

103

The Poultry and Egg Institute of America

represents the poultry industry nationwide. It joins in

this protest on behalf of its members in the Southern

Territory and on behalf of all its members in opposing

any Commission action on demand-sensitive rates

which would be detrimental to the interests of the

poultry industry as year-round, level shippers. The

Georgia Freight Bureau is an organization composed

of 342 shippers and receivers, several of whom have a

substantial interest in grain shipments.

A description of the remaining Protestant

organizations is found in Exhibit I.

I. Introduction

The Bureau has filed for a 20 percent increase in the

rail rates for whole grain and soybeans within the

Southern Territory, Indiana and Illinois, for the

period of September 15 through December 15, 1977.

The rate increases purport to be in accordance with

the standards found at 49 C.F.R. § 1109.10 governing

the establishment of peak-period demand rates. The

justification statement filed by the Southern Freight

Association (‘‘SFA’’) has, however, failed to

demonstrate in any way that such standards have

been met. Rather, the SFA has contented itself with a

presentation which shows only that a peak shipping

pattern does exist. The existence of a peak, however,

standing alone, is not enough. At the very least, the

proponent of a peak demand rate must show that the

tariff proposed will or is likely to be effective in

alleviating the peak. This, the SFA fails to do.

As discussed more fully below, the facts show that

104

the tariff increase fails to meet any of the

Commission’s standards.

In summary:

1. The poultry industry is not responsible for the

peak, but rather is an ideal, year-round, level-demand

shipper;

2. The poultry industry is incapable of responding

to the proposed rate increase;

3. The rate increase would result in a severe loss to

the poultry industry;

4. The SFA has neither identified those shippers

who are responsible for the peak nor attempted to

show that such shippers have the ability ‘‘to react

positively’’ to the proposed rates;

5. The rate increase would not be an effective

‘“‘demand-sensitive”’ rate for the poultry industry, but

would only act as a punitive rate to the unfair,

financial disadvantage of the industry and the unfair,

financial advantage of the railroads. The increased

revenues from the poultry industry would be nothing

more than an unjust windfall for the railroads;

6. The SFA has failed to even attempt to determine

a coherent strategy to attempt to deal with the peak,

but has instead chosen to simply attempt what can

only be described as an unjust revenue grab;

7. Any demand-sensitive rates must be structured

so that they do not penalize those shippers who are

not responsible for the peak, e.g., by providing for

offsetting rate reductions during the nonpeak periods.

in st la eer

105

II. Without suspension, poultry producers

will suffer substantial injury.

As is evident, a rate increase of 20 percent

represents substantial increased costs for shippers —

costs that will be borne by the poultry industry. As

stated in the verified statement (attached hereto as

Exhibit II) of Dr. Allan Rahn, Assistant Professor at

the University of Georgia College of Agriculture, the

Georgia poultry industry alone is expected to ship in

excess of nine million bushels of corn from outside the

state during the September 15 - December 15 three-

month period. Thus, as a result of the increases, the

Georgia poultry industry would suffer an increase in

costs in excess of $360,000.00 for the three months for

only the transportation costs of corn. Although the ef-

fect on the cost of the corn is the most significant, the

proposed increases would result in increased soy meal

costs, which is an important feed product for the

poultry industry.*

Inasmuch as the impac. of the 20 percent rate in-

crease upon only the Georgia poultry industry’s cost

of corn exceeds $360,000.00, it becomes apparent that

the proposed 20 percent increase will have an adverse

impact upon the ability of poultry producers in the

Southern Territory to compete with those in the rest

of the nation. The cost of the increase to the entire in-

dustry in the Southern Territory will be many hun-

dreds of thousands of dollars.

*/ Obviously, higher rates for soybeans will result in higher soy

prices.

106

III. Protestants are likely to prevail on the merits.

As hereinafter demonstrated, the protested increase

will not further the objectives enumerated by Con-

gress in Sections 101 and 202(d) of the Railroad

Revitalization and Regulatory Reform Act

(hereinafter ‘‘4-R Act’’)* and does not meet the stan-

dards specified by the Commission in Ex Parte 324

and codified as 49 C.F.R. § 1109.10(e). Protestants will

demonstrate that the proposed rates are not lawful

and may not be imposed.

As set forth at 49 C.F.R. § 1109.10(e), the relevant

standards by which the Commission is to be guided in

considering proposed seasonal peak-period tariffs are:

(1) The need to encourage the establish-

ment of demand-sensitive rates and incen-

tives to the shippers;

(2) The need to encourage ratemaking in-

novation by railroad management;

— es - e- “

(4) The need to assist the railroads in at-

taining adequate revenue levels;

(5) The need to improve (i) the utilization

of the national supply of freight cars, (ii)

the movement of queda by rail, (iii) levels of

employment by railroads, and (iv) the

financial stability of markets served by the

railroads;

(6) The ability of the affected industry

within a specific area to react positively to

the proposed demand-sensitive rate con-

sistent with statutory goals[.]

*/ Public Law 94-210, February 5, 1976.

ee Se + ae sere

ee eee

Been pee tg em

107

The proponent has failed to show that any of these

goals or standards, except for the generation of addi-

tional, and unneeded, revenues for the railroads, will

be served by the proposed peak-period tariff.

IV. The proposed tariff is not likely to

achieve the desired goals and may

prove counter-productive.

The SFA’s graphic presentation of data does in-

dicate a peak-period of grain carloadings.* The

demonstration of the phenomenon of peaking,

however, is merely a preliminary step to the construc-

tion of a seasonal or peak-period rate to achieve the

goals of Section 202(d) of the 4-R Act to 49 C.F.R. §

1109.10. As the Commission summarized in its deci-

sion in Ex Parte 324,

... The lowa Department of Transporta-

tion (Iowa) contends that in no case should

greater demand for yy per con during

one iod in and of itself automatically

ge traffic for demand-sensitive rates.

t best, it is argued, such data merely

demonstrates what occurred: not

necessarily what will occur, nor what

caused the fluctuation. Iowa urges that

these factors be given no more weight than

as an indication of a possible candidate for

demand-sensitive rates.

Decision in Ex Parte 324, at 15.

*/ We note, however, that the itude of the peak as com-

pared to the “‘valley’”’ is dis by the form of the presenta-

tion in several instances. This is caused by the use of a

baseline substantially in excess of zero carloadings in the

graphs appearing at page 3 of the SFA Justification State-

ment and as Exhibits I(A), I(C), and I(D) thereto.

108

The SFA has utterly failed to ascertain which ship-

pers or classes of shippers are responsible for the

peaking. Moreover, the SFA has failed to show that

the proposed tariff will modify the peaking

phenomenon. Finally, those deficiencies in the propo-

nent’s methodology have resulted in a proposal which

will result solely in an unfairly punitive effect upon

year-round shippers who, in fact, already provide the

ideal traffic patterns which the railroads ostensibly

wish to promote with this proposal.

V. The SFA has not shown that the

proposed rate is a ‘‘demand-

sensitive’’ rate.

The phrase ‘‘demand-sensitive rate’’ is defined, at

49 C.F.R. § 1109.10(b), as ‘‘a rate or charge that is pro-

posed for the purpose of influencing seasonal, ... or

peak period demands for rail services.’’ A peak-period

surcharge which would not have the effect of influenc-

ing peak demand but which, instead, would merely

produce a windfall profit for the carrier would not be a

demand-sensitive rate. This definition, therefore, im-

plies that in order for a proposal to be considered one

for a demand-sensitive rate, its proponent must not

only allege that to be its purpose, but demonstrate a

reasonable basis for concluding that it will influence

demand for rail services. Not only has the SFA failed

to so demonstrate in the justification statement sub-

mitted in support of the proposal, but there are

several reasons why the proposal will not achieve that

purpose.

The Commission’s decision in Ex Parte 324 clearly

indicated that, although the filing of a justification

oline. ee

109

statement concurrently with the proposed tariff is op-

tional pursuant to 49 C.F.R. § 1109.10(f), “‘if the rail

carriers foresee that the reception of a proposal will be

less than favorable, it would be appropriate to include

total justification with their tariff proposal.’’ Decision

in Ex Parte 324, at 27 (emphasis added). Despite that

admonition and the SFA’s clear anticipation of pro-

tests, the SFA’s justification statement contains none

of the data called for by 49 C.F.R. § 1109.10(j). In fact,

the justification statement, for all of its bulk, contains

little more than a demonstration that a peak period

exists.

The proposal is for a peak rate lasting for three

months, promulgated immediately prior to the begin-

ning of the surcharge period. Thus, those feed opera-

tions which require a steady flow of feed grains, as is

the case with the poultry industry, have no opportuni-

ty for advance planning and advance stockpiling.

Neither can they merely postpone shipments since

they have continuing feed requirements.

The majority of feed grain operations with limited

storage capacity have virtually no incentive to expand

their storage capacities. The estimated average cost

to, for example, Georgia poultry producers of the 20

percent surcharge is four cents per bushel of corn,

while the construction cost for storage facilties varies

from $1.00 to $2.50 per bushel of capacity, depending

on the size and type of facility. Thus, it is unrealistic

to expect the proposed peak rate to result in construc-

tion of substantial new storage capacity.

Moreover, demand-sensitive rates cannot be in-

stituted in violation of the fundamental requirement

110

that rates be ‘“‘just and reasonable.”’ 49 U.S.C. § 1(5).

As the Commission observed, ‘‘Our policy announce-

ment that we wish to encourage such rates does not

and cannot, of course, nullify the Interstate Com-

merce Act.’’ Decision in Ex Parte 324, at 50. Rates

which penalize shippers who are not responsible for

the peak which is sought to be corrected are manifest-

ly not just and reasonable and cannot, therefore, be

allowed. If the SFA seeks to gain the assistance of

those shippers not responsible for the peak in never-

theless reducing the peak they could certainly provide

advantageous rates during the nonpeak season. If

assurances were given that such rates would be main-

tained over the long term, such shippers would be in

the position of alleviating the peak even though not

responsible for it. Surely, however, it is outrageous to

impose a punitive rate increase upon innocent ship-

pers which will, in any event, utterly fail to reduce

peak demand.

VI. The Georgia poultry industry is not

able to react positively to the

proposed demand-sensitive rate.

Under the regulations promulgated in Ex Parte 324,

the Commission, in considering proposed demand-

sensitive tariffs, is to be guided, inter alia, by:

The ability of the affected industry within a

specific area to react positively to the proposed

demand-sensitive rate consistent with

statutory goals[.]

49 C.F.R. § 1109.10(e) (6).

stu dl in ii iia aaa

eae atten ee aT og cin

111

The most simple and immediate positive response

would be to alter the timing of shipments. However,

as demonstrated by the results of Dr. Rahn’s survey,

the weighted average* storage capacity of the

Georgia poultry industry is 12.45 days. Storage

capacity in the remainder of Southern Territory is

generally the same or smaller. Although such capacity

is adequate to meet the operational needs of this level

demand industry, it does not permit more than very

minor alterations in the timing of shipments.

When a peak-period rate is proposed, the short-term

ability of shippers to reschedule is of paramount im-

portance. The Commission’s decision in Ex Parte 324

recognized this:

However, we stress that the expeditious pro-

cedures proposed herein provide for ned po

tection by allowing members of the affected in-

dustry to protest the publication of a rate under

§ 15(17). An important consideration in decidin

whether or not to investigate and/or suspen

the proposal will be the arguments and data

relating to the ability of the shippers to adjust

their shipment patterns in response to the rate

differential.

Decision in Ex Parte 324, at 23 (emphasis added).

When, as in the instant case, a significant class of

shippers is incapable of responding, the tariff should

be suspended unless the proponent has made an over-

whelming showing that the other goals set forth in 49

C.F.R. § 1109.10(e) will be achieved. The SFA has pro-

*/ The weighted average results from a computation which

weights each producer’s storage capacity by the size of his de-

mand. Thus, the weighted average reflects the industry’s

total storage capacity compared to its overall demand.

112

duced no evidence that the proposed tariff is justified,

other than the bald assertion that a rate increase dur-

ing the peak period ought to shift some traffic. The

Justification Statement is entirely devoid of any

price-elasticity study or other substantiated analysis

indicating that a shift would result.*

A second form of positive response, although over a

longer period of time, would be the construction of ad-

ditional storage capacity. As discussed above,

however, the cost of constructing additional capacity

is such that only a long-term guarantee of differential

shipping rates would justify the investment.

The most important positive response consistent

with statutory goals, however, is the achievement of

even, year-round shipment patterns. But, the Georgia

poultry industry has already achieved this goal. In

fact, data compiled by Professor Rahn indicate that:

1) Rail shipments by Georgia poultry producers were

relatively evenly spread during 1976; and 2) Insofar as

there were month-to-month variations, the fall

harvest months of August to November (peak periods

for the railroads) were among the lowest shipment

*/ The SFA asserts, in its Justification Statement, ‘‘that the

more protests filed with this Commission the clearer the in-

dication that the rates proposed will accomplish exactly what

eg hey intended to ewes «all From this, we can infer on-

ly that the SFA, being unable to support its assertion that a

peak-period rate increase would force the rescheduling of

shipments to off-peak periods, hopes to rely in some way on

protests by parties who will be harmed by the surcharge to

establish that scheduling shifts will occur. That, of course, is

not the case. As demonstrated herein, the poultry industry

will be subjected to an unjust and unreasonable increase for

the very reason that it cannot shift its shipments, the pattern

of which already is that which the SFA’s proposal seeks to

encourage.

i al a Oe ee

A ate en em Nn Cte ah le cama Se hth let wy Ria om a a Rk > ee Se

Fe a ae me

ct Pat AD a

113

months for producers. The graph set forth below is

based upon the data compiled by Professor Rahn.

1976 Rail Shipments of Corn by Georgia Poultry Producers

Tons

200,000

175,000

150,000

125,000

100,000

75,000

50,000

25,000

Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Month

Sources: Survey conducted by Dr. Allan Rahn (Exhibit II)

114

As demonstrated by the graph, the poultry industry

not only is a stabilizing influence on grain shipment

patterns in the Southern Territory by virtue of its

relatively level shipment patterns, but also such

minor peaks as do occur in its shipment volumes

generally occur during months which are off-peak

periods for the railroads. Thus, the poultry industry

tends to level the peaks experienced by the railroads.

The Georgia poultry industry, therefore, would ap-

pear to be an ideal customer for the railroads: it

already is doing what the railroads hope to encourage

by the proposed rates. The effect, however, of the pro-

posed rates on these ‘‘ideal customers’’ is extremely

adverse, and would unfairly disadvantage them in

their ability to compete with poultry producers in

other areas of the country.

Despite the beneficial effect of the poultry

industry’s shipment patterns, the SFA has refused to

acknowledge this choosing instead to characterize it

as an industry unable ‘‘to receive shipments on a less

than frantic demand basis.” Justification Statement,

at 8. Such an allegation is entirely unwarranted and

unfair in light of the fact that the poultry industry’s

—— patterns are, in actuality, a stabilizing in-

uence.

VII. The SFA has made no effort to

identify the causes of peaking.

As demonstrated above, the poultry industry is a

stabilizing factor in rail grain shipments. Surprisingly

enough, however, the poultry industry was among

those singled out for criticism by the railroads. (See

Southern Freight Association Justification State-

el a A ee

=» 2

115

ment, at 7.) This anomaly suggests that the railroads

have failed to undertake investigations adequate to

determine the factors causing peaking and the

categories of peak-period shippers.

As discussed above, the shipping patterns of the

poultry industry do not match the carloading patterns

demonstrated by the railroads. This is because during

the harvest months, when local feed grain is plentiful,

rail shipments for feeding operations are somewhat

lower than during other months.

Protestants, therefore, suggest that the railroads

analyze the data available to determine who the peak-

period shippers are. If such shippers are found to be

those using a specialized tariff, e.g., the Export Grain

Tariff, it would be appropriate to limit the peak-period

surcharge to the tariff or tariffs under which the peak-

ing actually occurs. In any event, it is incumbent upon

the SFA to propose peak-period rates that do not

unlawfully penalize those shippers who are not

responsible for the peak.

VIII. A peak-period surcharge is unfair

to year-round shippers.

One of the major themes developed in Ex Parte 324

was the danger that seasonal or peak rates would be

used to subject year-round shippers to increased

rates. (See, e.g., Decision in Ex Parte 324, at 24, 48.)

In its decision in Ex Parte 324, the Commission em-

phasized that this would not necessarily be so, since a

decrease in off-peak period rates is also possible. (Deci-

sion in Ex Parte 324, at 48.)

116

The instant case is a good example of the concerns

raised in Ex Parte 324. The Protestants and,

presumably, other major segments of the grain ship-

ping interests in the Southern Territory have even,

year-round shipment patterns, yet they would be sub-

ject to a general increase under the guise of a peak-

period tariff surcharge.

The SFA, in fact, concedes this to be true but argues

that it amounts to a mere five percent increase on an

annualized basis. (Justification Statement, pp. 6-7.)

The SFA then seeks to justify such an increase as be-

ing less than the seven percent which would be al-

lowed without suspension under Section 15(8)(c) of the

Interstate Commerce Act. (See Southern Freight

Association Justification Statement, p. 7.) But such

an interpretation finds no support in Section 15(8)(c),

which provides that, under certain circumstances, a

rate increase (or an aggregate of rate increases) not ex-

ceeding seven percent of the rate in effect on January

1, 1977, may not be suspended on the grounds that it

exceeds a just and reasonable level. The average over

the period of a year of the effect of a peak-period rate*

is not the same as an aggregate of a series of increases,

and Section 202(e\2) of the 4-R Act [which added Sec-

tion 15(8)(c)] lends no support to such an interpreta-

tion.

The current situation appears to be one in which a

reduction in the off-peak period would be appropriate,

as suggested by the Commission in Ex Parte 324.

*/ The 20 percent peak-period rate averages to a 5 percent in-

crease only for year-round level shippers; it may avera

substanti ces | more than 7 percent for those shippers who ship

proportionally more during the peak period.

;

‘

ie |

;

117

(Decision in Ex Parte 324, at 48.) The SFA anticipates

this suggestion and counters it only with the general

assertion that rates in the Southern Territory are

‘“‘depressed.”’ In fact, railroads in the Southern Ter-

ritory enjoy a healthy position as indicated by their

expenses to revenues ratios during 1976 and, thus far,

1977, as set forth in the table on the following page.

Il.

II.

Source: I.C.C. Form RE&I, Code 57.

EXPENSES TO REVENUES RATIOS

118

Railroad 1976

I. Southern Railway System

(Consolidated quarterly report as of 1977)

Alabama-Great Southern 73.37

Central Georgia 73.51

Cincinatti - New Orleans & 59.43

Texas Pacific

Georgia Southern & Florida 65.59

Norfolk - Southern 74.25

Southern Railway Co. 74.69

Family Line Railroads

Louisville & Nashville 76.78

Seaboard Coast Line 75.38

Georgia 77.97

Other Major Railroads

Florida East Coast 78.93

Illinois Central Gulf 79.70

Ist qtr.’77 2nd qtr. ’77

69.3

78.8

72.5

80.0

73.0

79.9

67.9 _

77.6

73.7

73.1

68.0

79.0

at sa nino,

— ae

119

To the same effect, are the glowing press releases

announcing second quarter 1977 profits by Southern

Railways System and Seaboard Coast Line In-

dustries, Inc., attached hereto as Exhibits III and IV.

The Southern Railway Company trumpeted a net con-

solidated income which was ‘‘the highest of any

quarter in its history’’. Likewise, its railway operating

revenues for the second quarter and the first half of

1977 ‘‘both were records for any quarter or six-month

period.’”’ Exhibit III, at 1. In the face of such earning

reports it would be unconscionable to approve of the

imposition of peak rates which are not cost-based in

the absence of any reason to believe that such rates

would serve to alleviate the peak. By definition, such

rates would not be just and reasonable.

IX. Summary

The SFA’s justification statement has

demonstrated that there is a peak period in the rail

shipment of grain, but it does little more than that.

Based upon that alone, the Bureau has filed for 20 per-

cent increases in the rates for grain shipments during

the September 15 through December 15, 1977, period.

Such an increase will substantially harm the poultry

industry in the Southern Territory and have a severe

adverse impact on its competitive position compared

to poultry producers in other areas of the nation.

The SFA has failed to ascertain which class or

classes of shippers are responsible for the peak in

grain shipments or that the proposed 20 percent in-

crease will alleviate the peak.

120

The poultry industry is incapable of responding to

the proposed peak-period tariff by rescheduling

shipments. Although the industry has storage

capacities sufficient for its operational needs, the

capital investment required for the additional massive

storage capacities required for substantial reschedul-

ing of shipments could not be justified.

The present pattern of grain shipment by the

poultry industry is characterized by year-round level

volumes. Thus, the poultry industry already is an

“ideal shipper’ from the standpoint of the railroads.

The poultry industry, in fact, is already doing exactly

what the railroads are seeking to encourage with the

proposed peak-period rates.

Under these circumstances, the effect on the

poultry industry of the proposed peak-period rates

would be solely punitive and would result in a windfall

profit to the railroads.

The intent of the 4-R Act was to level out peaks and

valleys in the demand for rail services. This pro-

ceeding demonstrates the necessity of careful plan-

ning (absent in this instance) in the construction of

demand-sensitive rates in order that they have the

desired effect without harming year-round shippers,

i.e., those whose shipment patterns the rates are

ostensibly intended to encourage.

Protestants therefore request that the effectiveness

of the aforementioned supplements be suspended and

an investigation into the iawfulness thereof be in-

stituted.

ee ee

Dated:

September 6, 1977

121

Respectfully submitted,

David C. Todd

badd Big

Michael A. Floyd

PATTON, BOGGS &

BLOW

1200 17th Street, N. W.

Washington, D. C. 20036

Telephone: (202) 223-4040

Attorneys for Protestants:

Alabama Poultry Industry

Association

Florida State Poultry

Federation

Georgia Freight Bureau

Georgia Poultry

Federation, Inc.

National Egg Company

North Carolina Poultry

Federation

Poultry and Egg Institute

of America

Southeastern Poultry and

Egg Association

Virginia Poultry

Federation

122

EXHIBIT I

Additional Organizations Participating in this Protest

The Alabama Poultry Industry Association is a

trade association composed of approximately 2,500

members who, in the aggregate, account for more than

90 percent of the state’s broiler production and 80 per-

cent of the state’s egg production. The state produces

annually approximately 400 million broilers. Poultry

production accounts for approximately 37 percent of

Alabama’s farm income, an amount equal to approx-

imately $528 million.

The Florida State Poultry Federation is a trade

association composed of approximately 350 members,

representing approximately 90 percent of the state’s

poultry industry. The state’s 12.3 million laying hens

and production of 60 million broilers produce approx-

imately $180 million in annual farm income.

The Georgia Poultry Federation is a trade associa-

tion composed of several thousand members who, in

the aggregate, account for virtually all of the poultry

production in the State of Georgia. The state’s

average daily production is 5,100,000 pounds of

chicken, 13,850,000 egg

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