PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON ADMINISTRATIVE LAW JUDGE'S DECISION PROCEDURE

Transcription

1 ENTERED OF WEST VIRGINIA CHARLESTON Entered: February 23, 1989 M.C. CASE NO R S.D.S. EXPRESS, INC., a corporation, Milton, Cabell County. Application to reinstate and resume operations under P.S.C. M.C. Certificate NO. F ADMINISTRATIVE LAW JUDGE'S DECISION PROCEDURE On May 9, 1988, S.D.S. Express, Inc. (S.D.S. or Applicant), a corporation, Milton, Cabell County, filed an application to reinstate and resume operations under P.S.C. M.C. Certificate No. F-6482, authorizing operation as a common carrier by motor vehicle in the transportation of-- 1. General commodities from Mason and Cabell Counties over irregular routes to all points in West Virginia. All shipments to begin or end in Mason or Cabell Counties. 2. General commodities within and between points and places in Putnam and Kanawha Counties on the one hand, and points and places in West Virginia on the other hand. Notice has been given by publication of the filing of this application and protest was received to the granting of the authority applied for herein. Therefore, by order of this Commission entered June 23, 1988, this matter was set for hearing to be held in the Commission's Hearing Room, 201 Brooks Street, Charleston, West Virginia, on Friday, July 8, 1988, at 9:30 a.m., EDST. By letter dated June 30, 1989, Counsel for the Applicant, Thomas N. Hanna, requested a continuance on behalf of his client due to a conflict in scheduling. Based upon this request, a Procedural Order was entered in this matter cancelling the hearing set for Friday, July 8, By further Procedural Order entered July 20, 1988, this matter was reset for hearing to be held in the Commission's Hearing Room, 201 Brooks Street, Charleston, West Virginia, on Monday, August 15, 1988, at 9:30 a.m., EDST. It was ordered that, at said time and place, the Applicant was to appear and prosecute its application. OF WEST VIRGINIA

2 Proper notice of this hearing was given to all parties and the same was convened as scheduled. The Applicant, S.D.S. Express, Inc., appeared by its proper corporate officials and was represented by Counsel, Thomas N. Hanna, Esquire. Appearing as an Intervenor in this proceeding was Quick Delivery Service, Inc., which was represented by Counsel, Samuel F. Hanna, Esquire. Testimony was taken, and evidence introduced, at the close of which, this matter was submitted for an Administrative Law Judge's Decision. DISCUSSION OF THE EVIDENCE The first public witness called on behalf of this application was Jeff Thomas, who is the Branch Manager for Mangum Manufacturing Company (Mangum), South Charleston. Mangum Manufacturing Company manufactures automobile and truck radiators. Mr. Thomas testified that his Company has a need to have these radiators transported by common carriers, virtually everyday and that these shipments are too large to be transported by such carriers as United Parcel Service or Greyhound Bus Lines. Thus, virtually all shipments are made by motor freight and normally by flatbed trucks. (Tr., pp. 9-11). Mr. Thomas testified that, for intrastate deliveries, his Company normally uses Tri-State Air Cargo (Tri-State) and, on occasion, Overnite Transportation Company (Overnite). Deliveries are regularly made to several businesses in Kanawha County and locations in Huntington, Barboursville and Milton, as well as other larger communities such as Beckley, Parkersburg, Clarksburg, Morgantown and Wheeling. (Tr-, PP. 9-17). Mangum is a subsidiary of a larger corporation based in Dallas, Texas. Corporate policies normally require that the common carrier with the lowest rates be used. In many cases, Mr. Thomas has found the rates of Tri-State Air Cargo to be the lowest. However, Mr. Thomas stated that his Company receives complaints from its customers about untimely deliveries made by Tri-State and Overnite. Two or three times per week, one or more of Mangum's employees are called by customers regarding untimely deliveries and those employees must in turn contact the individual carrier to determine the status of the delivery. (Tr., pp ). On a fairly routine basis, Mr. Thomas is requested to have radiators and parts delivered on short notice. On these occasions, Mangum feels obliged to deliver these items by means of its own employee and pickup truck. This is not a suitable arrangement on a permanent basis. When deliveries are not expected within 24 hours, Tri-State's services are normally used. Mr. Thomas testified that use of Quick Delivery Service on a regular basis has been rejected by his Company primarily because of their high rates. According to the guidelines set forth by this Company's headquarters, Quick Delivery Service charges rates that the Company's customers do not wish to incur. (Tr., pp ). Mr. Thomas estimated that only two or three orders per week are classified as rush deliveries. The others are routine deliveries and his Company would like to be able to use the Applicant's service for these OF WEST VIRGINIA -2-

3 1 deliveries. Mr. Thomas also explained that transportation is normally included as a cost of his Company's expense. However, when special deliveries are requested, this additional fee is then passed on to the purchasing customer. (Tr., pp ). The next public witness to testify on behalf of this application was Wayne Griffith, Traffic Manager for Midwest Corporation (Midwest), which is located in Charleston. Mr. Griffith testified that his Company has two Divisions which need the services of common carriers. One division is referred to as the Steel Division and it supplies various products to the railroad and coal industries. The second is Midwest's CAT Division, which supplies products to cable television companies. Midwest Corporation has locations in Nitro, Putnam County and Point Pleasant, Mason County, from where it ships to virtually any location in the State of West Virginia. (Tr., pp ). Mr. Griffith testified that his Company averages 12 shipments per day, from both locations. The common carriers presently used by Midwest include Overnite Transportation, Pitt-Ohio, Cook Motor Lines, H&W Trucking, Quick Delivery and Allegheny Freight Lines. Mr. Griffith testified that he has not been satisfied with the common carrier service rendered to his Company, when deliveries are in a quantity of less-than-truckload (LTL). In addition, the witness expressed his dissatisfaction with deliveries that must be handled through a carrier's terminal, as well as those instances when items to be delivered require specialized equipment. He defined this situation, as it related to his Company's needs, as one requiring equipment that can handle steel railroad rails which can range from 25 feet to 39 feet in length. Mr. Griffith also testified as to being dissatisfied in instances where the carrier involved, such as Allegheny, charges his Company the same rate for a small load as for a full load of 24,000 pounds. In addition, Mr. Griffith stated that his Company experiences situations where carriers such as Pitt-Ohio, add a premium to their normal rate, when the item exceeds a certain size. (Tr., pp. 47, 48, 55-61, 65-72). Mr. Griffith testified that he calls all carriers to determine the lowest costs. Many of his deliveries must be made on an expedited basis. Therefore, he has called Quick Delivery Service approximately 15 times since February On these occasions, Quick Delivery has only been able to supply the service approximately four times, and two of these occasions were interstate deliveries. The other times they either did not have the necessary equipment or could not supply the required equipment at the appropriate time. Regarding specific examples of problems experienced by Midwest, Mr. Griffith cited an example of a shipment which originated in Nitro and was to be delivered in Pickens, West Virginia. This instance occurred approximately two months prior to the hearing date. Mr. Griffith explained that since Cook Motor Lines ceased operations, many locations in the State of West Virginia cannot be reached without using two separate carriers, which is referred to as a "two-line haul." On this particular occasion, both Overnite Transportation and Richmond Cartage were used and the shipment had to be transferred at a terminal site. In this case, the shipment took six weeks to be delivered to the ultimate customer. Further, the witness testified that his Company is in need of a type of service referred to as "hot shot" service. This designation in the OF WEST VIRGINIA -3-

4 trucking industry refers to the use of light-weight, gasoline-powered trucks with appropriate trailers, that can transport loads up to 22,000 pounds. When the proper equipment is used, these carriers can also handle shipments as long as 48 feet, in this type of expedited service. Mr. Griffith stated that the only companies presently offering this type of service in the area are H&W Trucking and Quick Delivery. He has experienced problems with both of these Companies not having the proper equipment. S.D.S. has represented to Mr. Griffith that it would be offering this type of service. Thus, Mr. Griffith would like to be able to use S.D.S. Express, as one of his regular common carriers. (Tr., pp , 58-60, 63-67, 69-74). The next public witness to testify was Keith Jones, who is a freight consultant located in Barboursville. Mr. Jones testified that he provides a service similar to a traffic manager, for companies that are not large enough to justify a full-time, in-house traffic manager. When one of his clients needs to have a shipment transported, it notifies him and he arranges for all transportation details. During the past six months that he has been in business, Mr. Jones testified that he arranges approximately one shipment per day, on average. The common carriers he normally uses are Pitt-Ohio, Overnite Transportation, Tri-State Air Cargo and Allegheny Freight Lines. Mr. Jones testified that he has also used Quick Delivery in the past. (Tr., pp ). Mr. Jones was questioned as to whether he has encountered any problems with arranging transportation for one of his clients. He testified that in one instance, within the past several weeks, he was requested to arrange for transportation of a shipment to be picked up at Smith Fasteners, in Charleston, which was to be delivered in Huntington the next day. The carrier involved was Tri-State Air Cargo. Tri-State missed the pick-up and Smith Fasteners was forced to leave this shipment outside its building, after its normal business hours, in order that it could be picked up at a later time. The shipment was in fact delivered the next day, although the circumstances surrounding this incident required him to spend a great deal of time conversing with the parties involved, in order to determine the whereabouts of this shipment. Mr. Jones also cited another instance of inadequate service, involving a shipment from Beckley to be delivered the next day in Huntington. Mr. Jones testified that he was not able to get a common carrier to make a delivery. The customer was not willing to pay the extra cost involved for emergency expedited service, such as that provided by Quick Delivery. Therefore, normal delivery channels were utilized and the service did not meet the clients' expectations or needs. Regarding Quick Delivery Service, Mr. Jones testified that he has called that Company approximately fifteen times and used them only three times. On the other occasions when he inquired about service, it was not available, or the rate was not comparable. (Tr., pp , 86, 87, 115 & 116). Mr. Jones also testified that he has spoken with representatives of S.D.S. Express. It was represented to the witness that next-day LTL delivery to most points in West Virginia would be available, as would the capacity to transport shipments on an emergency expedited basis. Most of the transportation needs of Mr. Jones' customers are not on an emergency OF WEST VIRGINIA -4-

5 basis. Thus, the availability of another carrier, with rates comparable to the other traditional carriers, is important to this witness and his clients. (Tr., pp & ). The last witness to testify in this proceeding was Clark Edward Woomer, who is the President and owner of S.D.S. Express, Inc. Mr. Woomer was granted the subject motor carrier certificate by Final Order entered August 28, This Order granted authority to transport general commodities from Mason and Cabell Counties over irregular points to all points in West Virginia, with all shipments ending or beginning in Mason or Cabell Counties. By Final Order entered October 29, 1984, Mr. Woomer's certificate was amended to authorize general commodities operations within and between points and places in Putnam and Kanawha Counties, on the one hand, and points and places in West Virginia on the other hand, in addition to his original authority. By a third Final Order entered January 2, 1985, Mr. Woomer was authorized to transfer P.S.C. M.C. Certificate No. F-6482 to S.D.S. Express, Inc. (Tr., pp , ; Administrative Notice, M.C. Case No C). Mr. Woomer testified that he operated this business during 1985, for approximately one year, before ceasing operation. Operations were suspended due to the poor state of the economy in this area of West Virginia. In addition, large increases in the Company's liability insurance were required and he was only able to operate one flatbed truck at that time. (Tr., pp , ; Administrative Notice, M.C. Case No C). Mr. Woomer testified that he has applied for the reinstatement of this certificate because he believes the economy of West Virginia has improved. He has also continued to communicate with his former customers and now believes there is the need for an additional general commodity carrier in this area. If the certificate is reinstated, Mr. Woomer represents to the Commission that he will operate from a location in Gallipolis Ferry, which is located in Mason County. Initially, he will lease or purchase four or five pieces of equipment. This equipment would include a flatbed truck, trucks with one and two ton capacities, a "straight-back" truck and a tractor with a flatbed trailer. He further stated that he intends to charge the same rates that were in effect when he ceased operations. If the certificate is reinstated, Mr. Woomer and his wife are prepared to invest between $40,000 and $60,000 of their personal assets in the corporation. He has also negotiated with Labor Unlimited, which has agreed to furnish drivers, which will be considered the Applicant's employees. Finally, Mr. Woomer testified that if the certificate is reinstated, he plans to offer next day delivery shipments within his service area. (Tr., pp , ). The sole Protestant in this matter, Quick Delivery Service, did not present any public witnesses to testify on behalf of the protest. In addition, no testimony was presented by any representative of the Protestant/Intervenor. OF WEST VIRGINIA -5-

6 DISCUSSION OF APPLICABLE LAW AND COMMENTS I_ In this case, S.D.S. Express, Inc., has applied to the Commission for a reinstatement of P.S.C. M.C. Certificate No. E'-6482 and for authority to resume operations thereunder. Because of economic conditions, the Applicant voluntarily ceased operations and has remained inactive since It will be presumed that other carriers have stepped into the void left by the Applicant, to meet the public's need for this service. Inactivity was the result of a voluntary business decision, not imposed by this Commission or other outside source. The only logical standard to be applied to this application is that to be applied to a new application for a motor carrier certificate. BURDEN OF PROOF It is well established in this State that one applying for a common carrier certificate (or reinstatement of a certificate) over a defined territory must establish to the satisfaction of the Commission that public convenience and necessity require the proposed service. Weirton Ice and Coal Supply Company v. Public Service Commission, 240 S.E.2d. 686 (1977), and West Virginia Code 524-A-2-5. The Commission has interpreted this requirement to mean that the applicant must demonstrate that he or she has the financial ability, experience and fitness to provide a needed, useful and responsive public service, as well as that the public convenience and necessity require the proposed service. Ford Brothers, Inc., M.C. Case No , April 9, The applicant must produce public witnesses who are able to testify that the proposed service is needed in the area of application. Harless Excavating Company, Inc., M.C. Case No., 21256, April 23, If the evidence of record in the case reveals that there is some kind of need in the proposed area of application, the applicant has established a prima facie case that the public convenience and necessity require the proposed service and that the service furnished by existing transportation facilities is not reasonably efficient and adequate. Ford Brothers, supra. The applicant is not required to demonstrate by positive proof that the service furnished by existing facilities is not reasonably adequate and efficient. Additionally, along with the testimony of public witnesses, factors such as desirability of additional competition and enhancement of a company's ability to provide prompt and efficient public service may warrant a finding that the additional service is required by the public convenience and necessity. Mac ' s Wrecker Service, Inc., M.C. Case No. 3358, December 13, Once the applicant has presented satisfactory evidence that public convenience and necessity require the proposed service, the burden of proof then shifts to those persons who are protesting the application. The protestant must then demonstrate by a preponderance of the evidence that the service furnished by the existing transportation facilities is reasonably efficient and adequate and that such entry into the field by the applicant would adversely affect or be detrimental to the public (because, for example, additional competition would be ruinous to the existing common carrier) and that all reasonable needs in the area of OF WEST VIRGINIA -6-

7 ' ~ their ' application are being met. Harless, supra, at page 3. The protestants must establish that the granting of the requested authority would affect the operations of the existing common carriers to an extent contrary to the public interest and this evidence must be demonstrated by other than self-serving statements of the protestants as to the adequacy and efficiency of their concerns in meeting demand. (u.). Thus, in order to meet their burden of proof as to an application for a certificate of convenience and necessity, the protestants must present witnesses other than themselves before the Commission will deny an application based upon presentation., B. SCOPE OF AUTHORITY By a recent decision, the Commission has held that, to establish a prima facie case for all the authority being sought, the Applicant must only establish that there be some kind of need in the community, not in every point within the requested authority. Boudman Enterprises, Inc., M.C. Case No C (1986). DISCUSSION Applying the evidence in this case to the aforesaid law, the Administrative Law Judge is of the opinion that the Applicant has presented sufficient evidence to show some kind of need or the reinstated service and has, thereby, established a prima facie case that public convenience and necessity require the reinstated service. The prima facie case has not been rebutted by the protestant. In particular, the Applicant presented the testimony of three disinterested public witnesses who each recited instances of inadequate service by one or more of the existing carriers. The inadequate service consisted of late pick-up, late deliveries, no equipment or equipment not available when needed. Further, it should be noted that the sole protestant in this case, Quick Delivery Service, provides basically an emergency type of delivery service. Aside from the above, the ALJ finds that the Applicant has also demonstrated its financial ability and experience to carry on the proposed, reinstated operation. No evidence was presented which could support a finding that the Applicant is not a fit and proper entity to hold authority from this Commission. In fact, the record clearly supports a finding that the Applicant is fit and proper. Finally, the Applicant proposes to adopt the currently approved rates for its certificate. Those rates were previously found to be just and reasonable and no evidence was shown to warrant disturbing that finding. FINDINGS OF FACT 1. On May 9, 1988, S.D.S. Express, Inc., a corporation, Milton, Cabell County, filed an application to reinstate and resume operations under P.S.C. M.C. Certificate No. F-6482, authorizing operation as a common carrier by motor vehicle in the transportation of-- OF WEST VIRGINIA -7-

8 ~~~ ~~ ~~ ~~ ~ ~~ ~~ General commodities from Mason and Cabell Counties over irregular routes to all points in West Virginia. All shipments to begin or end in Mason or Cabell Counties. General commodities within and between points and places in Putnam and Kanawha Counties on the one hand and points and places in West Virginia on the other hand. (Application filed May 9, 1988). 2. In support of its application, the Applicant presented the testimony of three (3) public witnesses and also the testimony of its president. (Transcript Generally). 3. Jeff Thomas, Branch Manager for Mangum Manufacturing in South Charleston, testified concerning complaints from customers, which he receives almost daily, about late deliveries by common carriers. (Tr., pp. 9-45). 4. Wayne Griffith, Traffic Manager for Midwest Corporation in Charleston, testified concerning problems with common carries not having equipment needed to make hauls for his Company or not having the equipment available when needed. He also cited an instance when it took six weeks for a shipment from Nitro to Pickens, West Virginia. (Tr., pp ). 5. Keith Jones, a Freight Consultant in Barboursville, testified concerning a late pick-up of a shipment from Charleston to Huntington, and also an instance when he was unable to get proper "next day" delivery of a shipment from Beckley to Huntington. He further testified concerning an existing carrier not having equipment available. (Tr., pp ). 6. Each witness stated they would like to use the Applicant's service. (Tr., pp. 15, 52, 53, 87-89). 7. The Protestant, Quick Delivery Service, Inc., is the holder of P.S.C. M.C. certificate No. F-6286, which authorizes transportation as a common carrier by motor vehicle of unpackaged and packaged commodities over irregular routes on a 24-hour basis between points and places inside the State of West Virginia from a base of operation located in Kanawha County. Said transportation to be provided in radio-controlled and equipped motor vehicles offering expedited, specialized, emergency-type courier service in the pick-up, transportation and delivery of the above-stated commodities. (Administrative Notice P.S.C. M.C. Certificate No. F-6286), as amended by Administrative Law Judge's Decision entered August 8, 1988). 8. The Protestant, Quick Delivery Service, presented no public witnesses nor did any representatives of the Company testify. (Tr., pp. 152, 153). CONCLUSIONS OF LAW The Administrative Law Judge is of the opinion, finds and concludes that: OF WEST VIRGINIA -8-

9 1. The Applicant, S.D.S. Express, Inc., has established a prima facie case that public convenience and necessity require the reinstated service. 2. In accordance with the previously discussed burden of proof required in a certificate case, the Protestant has failed to overcome the Applicant's prima facie case by demonstrating that the services furnished by the existing transportation facilities are reasonably efficient and adequate. Further, it was not shown that reinstatement of the authority sought by the Applicant will adversely affect or be detrimental to the public and that all reasonable needs of the public in said area are being met. 3. The Applicant, S.D.S. Express, Inc., has shown itself to possess the experience, financial resources and ability to resume its operations under P.S.C. M.C. Certificate No. F The Applicant has agreed to adopt the use of the rates and charges previously approved for its operations, which have been found to be just and reasonable. 5. P.S.C. M.C. Certificate No. F-6482, issued unto S.D.S.Express, Inc., should be reinstated, and resumption of operations should commence within sixty (60) days from the date that this Order becomes final. IT IS, THEREFORE, ORDERED that: ORDER 1. P.S.C. M.C. Certificate No. F-6482, issued to the Applicant, S.D.S. Express, Inc., be, and hereby is, reinstated. 2. The Applicant, S.D.S. Express, Inc., shall resume operations under this certificate within sixty (60) days from the date that this Order becomes final. 3. The Applicant, S.D.S. Express, Inc., shall utilize the rates and charges previously authorized for its use, and it shall confirm that those rates are on file with the Commission, prior to the date that operations commence. The Executive Secretary is hereby ordered to serve a copy of this order upon the Commission by hand delivery, and upon all parties of record by United States Certified Mail, return receipt requested. Leave is hereby granted to the parties to file written exceptions supported by a brief with the Executive Secretary of the Commission within fifteen (15) days of the date this order is mailed. If exceptions are filed, the parties filing exceptions shall certify to the Executive Secretary that all parties of record have been served said exceptions. OF WEST VIRGINIA -9-

10 If no exceptions are so filed this order shall become the order of the Commission, without further action or order, five (5) days following the expiration of the aforesaid fifteen (15) day time period, unless it is ordered stayed or postponed by the Commission. Any party may request waiver of the right to file exceptions to an Administrative Law Judge's Order by filing an appropriate petition in writing with the Secretary. No such waiver will be effective until approved by order of the Commission, nor shall any such waiver operate to make any Administrative Law Judge's Order or Decision the order of the Commission sooner than five (5) days after approval of such waiver by the Commission. MTA j as Administrative Law Judge OF WEST VIRGINIA -10-