A major point of competition occurs when a cooperative competes for ICC regulated freight for its backhaul. However, present laws limit this opportunity to 15 percent. It is a fact that a transportation cooperative can save the consumer money which helps hold down inflation.

A declaration in an act of Congress that regulatory agencies like the ICC should promote competition in pricing and service, in their interpretation of the regulatory statutes, would be in the best interests of the Nation.

This would promote the movement of food to market and consumer as economically as possible. What is more important than hauling food for America? However, more should be done. Specific legislation should give agricultural carriers fully competitive access to all sources of backhaul traffic.

That is the end of my summary.
Senator KENNEDY. Thank you.

If the ICC is granting 96 percent of all applications, why do the members not apply to the ICC for backhaul rights? Have you tried? Mr. CHICHILLA. Several of our cooperatives have tried and have received small grants. What is needed because of the nature of agriculture is broad-range general commodities certificates, general commodity certificates off the east coast. From a practical standpoint, financially you could not afford to try to obtain such a certificate. It would have to be broad range. For example, Washington does not eat one load of lettuce every day, it fluctuates greatly; and the harvest of the product is not consistent and the delivery points are not consistent. You need a broad range of authority.

I believe that at least 96 or 97 percent of authorities granted have been limited to point-to-point specific commodities. Just financially impractical.

My attorneys tell me that they are planning their retirement if we try to get broad-range general commodities authority.

Senator KENNEDY. Do you have an estimate of what it cost your members to comply with existing ICC regulations?

Mr. CHICHILLA. It is very expensive to try to comply with the 15 percent, if you open up that 15 percent to 50 percent backhaul-well, let me say, if we have to send 7 out of every 10 trucks back empty, particularly into California, which is long haul, that gets very expensive, just from the fuel aspect, very expensive.

Senator KENNEDY. I guess the Energy Administration Task Force estimated ICC regulations on trucks were adding $300 million a year to food prices. Do you agree with this estimate?

Mr. CHICHILLA. We have made some preliminary studies on that particular figure. Because of the billion dollars involved in the transportation of food, we think that the estimate is low. However, I do not have anything right now to substantiate. We are still in the process of studying it.

Senator KENNEDY. You will let us know?

Mr. CHICHILLA. I certainly will.

Senator KENNEDY. Mr. Person from Allstates Transcontinental Van Lines.

Mr. PERSON. Mr. Chairman, I want to thank you for inviting me. You have a copy of my testimony, so I will not read it.

I do have some points I would like to bring to your attention that are not covered in my testimony.

In 1953 I was discharged from the Army, and I went to work with my dad, who had started the moving and storage business in 1929. From 1929 until 1953 he had been only able to represent the lesser carriers, the ones with the poor service, and ones that paid badly if they paid at all. I, after having a conversation with my dad, decided that maybe the answer to our problem was that if we could contact a black national carrier, one who had authority nationwide, that they would be able to give our customers the kind of service that we felt that they were entitled to. After traveling from coast to coast and going into all of the major cities and talking to individuals about people that were there in the moving and storage business and the like, I found out, after about 4 years, that there was no such thing as a black national carrier.

The money that I spent making these trips was my own money, and I really do not have any money to spend in this manner. I wrote a letter to the Government Printing Office and asked them to direct me to any black carriers or the like, and I received a letter back that they had no such information, and they referred me to the Interstate Commerce Commission. They told me that they did not categorize their carriers in terms of race.

So, after proceeding to travel all over the country and finding that there were no carriers, black carriers, I proceeded to prepare myself to file for nationwide authority.

I was told at the beginning of this hearing that we would probably have 10 minutes, and a number of the things that I proposed to talk to you about I am going to skip over.

Not having the ability to be signed by the major carriers, such as Allied, Mayflower, and the like, we felt that the growth potential and the like in the interstate commerce business or in the interstate transportation of household goods, was not a viable one for blacks, and the great American dream, as it is spoken of, is really a nightmare for black truckers. I have been in the process now since 1968, of applying or preparing myself to apply for a nationwide authority.

After that period of time, we have approximately 250 people that have signed up with us. Of that number, we have 60 black companies that have signed to represent us. I have spent approximately $350,000 since 1953, and if you check my income tax records, you will find that I really cannot afford to spend that kind of money.

Even after having spent that kind of money in 24 years of endeavors, trying to find an attorney to represent us, we had problems just getting the kind of attorney that you normally read about in transport topics. The majority of them, or all of them, said that if they represented me, it would be tantamount to cutting their throat economically, because the other companies that they normally represented would be our protestors.

Beekins Van and Storage, who were one of our protestants, they signed up two of our witnesses. After having signed them up, they immediately said they would not be able to testify in our behalf. One of the witnesses, Rudy Williams of Los Angeles, Calif., said he was given $35,000 to sign. Beekins, in their testimony, said that they had admitted giving him from $14,000 to $18,000. Van Lines routinely

We immediately filed for emergency temporary authority, which was granted on January 5. During this time, after this, the same three carriers protested this application. Based on this protest, a single Commissioner revoked the ETA on April 30. We then filed a second application which contained a more condensed territory, and this application was granted on May 16. During this time we were shut down for 2 weeks waiting for this final decision. It was a costly shutdown, loss of revenue as well as several trained drivers that we lost as well. While we were struggling to maintain our service pending the decision of the permanent authority, the administrative law judge issued a decision that he did not feel that it was necessary to question the need for service, but recommended that the Commission find us unfit because of some of the regulations that we did not follow. While under our temporary authority we made steps to correct these changes in our operation.

We are not here to ask the committee to intervene in our case. We hope and believe that the Commission will take a more balanced view in our appeal. We bring these points out here to point out that unless Congress directs agents to favor competition, that some of these agents could possibly construe these in many ways, and possibly suppress competition.

If S. 382 would have this effect for more opportunity for competition, then we support the bill.

Thank you.

Senator KENNEDY. It seems to me that you were found to be unfit because you tried to provide something extra to the shippers; is that part of the testimony?

Mr. LIVINGSTON. Yes, sir. As I indicated, prior to the hearing we felt like we were within the guidance of the regulations. In some cases that were indicated, we had possibly extended some additional loading or unloading times that were not offered in the tariff. We feel like some of these things were blown out of proportion. We feel ike we operated in the interest of the customer. We are there to provide the service, and we try to operate under the guidance of these carriers.

Senator KENNEDY. Do you think that the ICC's fitness criteria. themselves may be anticompetitive? Certainly it would appear that you were trying to provide the kind of additional services which would be respected and would be the usual way of doing business in other industries in order to retain customers and attract shippers. Yet, because you were doing these kinds of things, you were found unfit. It does not seem to me to make a lot of sense.

Mr. LIVINGSTON. This was not a common practice. We did not mean to operate in this manner in order to bring about new customers. We felt like we were fit, due to our being financially able, and able to provide the service to the customer.

Senator KENNEDY. Thank you very much.

Mr. Rappeport, president, General American Shippers.

Mr. RAPPEPORT. Thank you, Mr. Chairman, for your time.

We favor S. 382, but also more broadly for the entire range of initiatives to reform the Interstate Commerce Commission.

In my opinion auto driveaway is a classic example of how anticompetitive practices developed within the last 15 years, mainly because of ICC regulations.

I am president of General American Shippers, Inc., an automobile freight forwarder in New York. The auto driveaway business in integral to our import-export business.

My son, Jeffrey Rappeport, and his partner, Bonnie Weiner, have formed a company called American Auto Shippers, and they received an emergency temporary authority from the Interstate Commerce Commission, being required to extend it every 30 days. We have been familiar with the auto driveaway business since 1954. As an individual citizen, related to my son, of course, and vitally concerned with the operation which he heads, I would like to reflect to you the effects of Interstate Commerce Act regulation of the auto driveaway business, as I have observed it.

Briefly, my position is that most ICC-type regulation has limited service to the public, and led to public abuse which would not exist in an "unregulated" regime. If any regulation is needed, it would be rules requiring sellers to be financially responsible and truthful in dealing with consumers.

If S. 382 were enacted, and if its reasoning were followed through throughly by the Commission, in the spirit intended, the Commission could do little harm. The Commission would have little left to do other than prevent consumer abuse. But I fear that the Commission would not understand clearly what a competitive market requires. Probably Congress must just tell the ICC not to impose barriers to entry into interstate transportation other than fitness tests, and not to allow carriers price fixing.

In my opinion, ICC regulation has been a curse on the auto driveaway business. I know most people at the Commission never have intended that. When the auto driveaway business was unregulated, there were many people spread all over the country, working with each other for interstate moves when necessary. When ICC regulation came into effect, a few people got national authority, a few more got limited interstate authority, and most of the remainder became subservient to the principal firms. Though I cannot prove it, I believe find fear that there may have been collusion on the part of the few licensed companies concerning their prices to the public and their priorities as to "agents." With entry at the national level limited, the licensed companies squeezed more and more out of the local companies which do most of the work involved in moving cars, leaving those companies barely enough to survive. The insurance claims policies of at least one company came to be of serious concern. If the people at the Commission-and there are good people at the Commission-had had a different set of directives, this need not have happened.

Let me tell you about the auto driveaway business. The local auto driveaway company matches the people who want to go somewhere without paying common carrier fare with a carowner who wants the car moved but does not want to drive it. The local auto driveaway businesses are usually small, locally owned businesses of a "mom and pop" sort. Such a local business could, but for ICC regulation, just move cars from its city to various distant points. But there are advantages to the various local companies working together. One can call on another to pick up a car owned by a customer located in a distant city. This is especially useful in dealing with corporate cus

tomers-auto dealerships, car leasing companies, companies with salesmen needing cars, and so forth.

There is no trucking involved in the auto driveaway business. It could hardly have been in the mind of Congress when the 1935 Motor Carrier Act was passed. For over 20 years, it was not regulated by the ICC. Then, in the sixties the ICC decided it wanted to regulate auto driveaway services. Appeals to the courts did not work. Regulation descended.

Every local company had to get an ICC certificate or become an "agent" for someone who had a certificate. Well, you can imagine that very few of these local "mon and pop" companies could take on the burden of showing a public need for their service over a large area. They could provide the service, but launching a Federal case to prove it was just beyond their means.

A few people did get certificates. The number with certificates narrowed down to three. After a few people got entrenched, trying to get a certificate became not just a logistical exercise, but a war. Any new application was greeted by an all-out attack by those who sat astride the business. Funds milked from over a hundred local driveaway businesses around the country were turned against the one or two which wanted to venture into the interstate field.

The Commission had made some effort to protect consumers. It requires that certain disclosures be made, that a business to keep a car tied up indefinitely, and that insurance or some substitute therefor be carried.

But, overall, the deck has been stacked against the buyer. There really is no effective control over what kinds of drivers are used. We could leave this to competitive prices, if those forces were not suppressed. But they are. With only three national companies, there was little or no price competition. That has to hurt the consumer.

If a local driveaway business ran afoul of one licensed company, it just might not be accepted by another. A pending antitrust suit filed by one local company, one of American Auto Shippers' affiliates, alleges that the three certificated companies conspired to limit the ability of local companies to move between the certificated companies. This would, of course, limit the local companies' ability to seek a better Ideal for their customers.

The limited certificate system may have turned this market on its head. Instead of the interstate company being a servant of the local companies and their customers, they have tended to become masters, and hard ones.

Even though we believe there is a major need for a new, fourth national carrier, and maybe for other national firms as well, American Auto Shippers would not be in existence today but for an historical fluke.

A company called the Sober Co. started to operate a nationwide driveaway service in 1977, thus making a fourth company. Many local driveaway companies, dissatisfied with the other three companies affiliated with the new company, U.S. Driveaway. They relied on the Sober Co.'s assurance that it had ICC authority, and attorneys' reports that an apparently valid authority existed. These local coinpanies had a significant business operating under the U.S. Driveaway

name.