Title 49: Transportation
PART 1139—PROCEDURES IN MOTOR CARRIER REVENUE PROCEEDINGS
Browse Next
Subpart A—Common Carriers of General Commodities
Source: 47 FR 49577, Nov. 1, 1982, unless otherwise noted.
§ 1139.1 Application.
(a) Upon the filing by the tariff publishing agencies named hereinafter on behalf of their motor common carrier members, or by such other agencies as the Board may by order otherwise designate, of agency tariff schedules which contain (1) proposed general increases in rates or charges on general freight where such proposal would result in an increase of $1 million or more in the annual operating revenues on the tariff affected by the proposal, or (2) a proposed general adjustment with the objective of restructuring the rates on a wide range of traffic, involving both increases and reductions in rates and charges, where such proposal would result in a net increase of $1 million or more in annual operating revenues, the motor common carriers of general freight on whose behalf such schedules are filed shall, concurrently with the filing of those tariff schedules, file and serve, as provided hereinafter, a verified statement presenting and comprising the entire evidential case which is relied upon to support the proposed general increase or rate restructuring. Carriers thus required to submit their evidence when they file their schedules are hereby notified that special permission to file those schedules shall be conditioned upon the publishing of an effective date at least 45 days later than the date of filing, to enable proper evaluation of the evidence presented. Data to be submitted in accordance with §§1139.2 through 1139.5 of this part represent the minimum data required to be filed and served, and in no way shall be considered as limiting the type of evidence that may be presented at the time of filing of the schedules. If a formal proceeding is instituted, the carriers are not precluded from updating the evidence submitted at the time of filing of the schedules to reflect the contemporary situation.
(b) The motor common carriers of general freight which are subject to the provisions of this section are those which are members of the following tariff publishing agencies:
Central and Southern Motor Freight Tariff Association, Inc.
Central States Motor Freight Bureau, Inc.
The Eastern Central Motor Carriers Association, Inc.
Middle Atlantic Conference
Middlewest Motor Freight Bureau
The New England Motor Rate Bureau, Inc.
Pacific Inland Tariff Bureau, Inc.
Rocky Mountain Motor Tariff Bureau, Inc.
Southern Motor Carriers Rate Conference
(c) Upon the filing of tariff schedules other than those described hereinabove, the carriers or their tariff publishing agencies shall be required to comply with such procedures as the Board may direct in the event an investigation is instituted. In any proceeding involving a proposed rate restructuring which would produce additional net revenue of less than $1 million the carriers will be required to submit only the data sought in §§1139.2 and 1139.3. Nothing stated in this part shall relieve the carriers of their burden of proof imposed under the Interstate Commerce Act.
§ 1139.2 Traffic study.
(a) The respondents shall submit a traffic study for the most current 12-month calendar year available, which shall be referred to as the “base-calendar year—actual.” This year shall be the calendar year that has ended at least 7 months prior to the published effective date of the tariff schedules. If the effective date is less than 7 months following the end of the preceding calendar year, than the second preceding calendar year shall be considered at the “base-calendar year—actual.” The study shall include a probability sampling of the actual traffic handled during identical time periods for each study carrier.
(b) The study carriers shall consist of those carriers subject to the requirements for allocation of expenses between line-haul and pickup and delivery services, as provided in Part 1207 of this chapter, Instructions 27 and 9002, which participate in one of the motor carrier industry's Continuous Traffic Studies, and which derive either $1 million or more in annual operating revenues from this issue traffic or 1 percent or more of the total annual operating revenues of all carriers from the issue traffic. A list of such carriers and the appropriate revenue data shall be submitted to corroborate the selection of the study carriers. “Issue traffic” consists of those shipments on which the freight rates or charges would be affected by the rate proposal.
(c) Respondents shall take a sample of the traffic handled by the study carriers according to acceptable standards of probability sampling principles and practices, and shall explain and evaluate the probability sample from the standpoint of: Purpose, sample design (including explanation of estimation procedure and disclosure of sampling errors for derived characteristics), quality control aspects involved in processing and tabulating data and any statistical analysis performed on the sampled data.4
4 Although not adopted by the Board, attention is called to a staff report, “Guidelines for the Presentation of the Results of Sample Studies,” February 1, 1971, available from the Superintendent of Documents.
(d) For cost and revenue purposes, the “carried” tariff basis shall be used. “Carried” tariff means the issue traffic handled solely by the study carriers, either single-line or interline. Estimates of current revenues applicable to the issue traffic should reflect all rates and charges in effect no later than 45 days prior to the date of tariff filing.
§ 1139.3 Cost study.
(a) The respondents shall submit a cost study. Highway Form B may be used for this purpose. Service unit-costs shall be developed for each individual study carrier, adjusted by size of shipment and length of haul, and shall be applied to respective individual carrier's traffic service units as developed from its traffic study. Operating ratios shall be determined for the issue traffic handled by the study carriers on the “carried” basis by individual weight brackets included within the rate proposal, for: (1) The traffic study year, that is, the “base-calendar year—actual,” as hereinbefore defined, (2) a “present proforma year” reflecting conditions prevailing on a date no later than 45 days prior to the date of the tariff filing, and (3) a “restated proforma year” based on conditions anticipated on the effective date of the proposed rates, with a separation indicating projected operating ratios on two bases, namely, “based on current revenues,” and “based on proposed revenues”. Operating ratios shall also be shown for all other traffic not affected by the rate proposal for the same weight brackets as shown for the issue traffic, but only for the period indicated in paragraph (a)(1) of this section.
(b) In addition to the operating ratios, the cost study shall also be used to develop and provide the revenue-to-cost comparisons required in Appendix I hereto for the same time periods indicated for the operating ratios plus a “restated proforma year” based on constructed revenue need.
(c) For both the operating ratios and the revenue-to-cost comparisons in Appendix I, the “each-to-each” costing method, i.e., the application of each individual study carrier's unit-cost to its traffic service units, applies only to the “base calendar year—actual.” The application of possible labor and nonlabor cost increases for the purpose of updating the “base calendar year—actual” cost data may be accomplished by the use of either individual carrier data for each of the study carriers, or the composite carrier data for those study carriers whose revenue from the issue traffic amount to 50 percent or more of their total system revenues for the “base calendar year—actual.” The sample values for expenses and revenues shall be expanded to full year values without adjustments to known annual report figures of any carrier.
(d) Where cost studies are developed through the use of computer processing techniques, there shall be submitted a manual application of the costing procedures used for one traffic and cost study carrier (study carrier) in order to demonstrate the procedures by which the computer program distributes the annual report statistics, and applies service unit-costs to each shipment. An illustration of the application of service unit-costs to the applicable traffic service units generated by one single-line sample shipment and by one interline sample shipment shall also be submitted. These sample shipments shall be on the “Carried” basis.
§ 1139.4 Revenue need.
Traffic and cost study carrier, i.e., the study carriers, shall submit evidence of the sum of money, in addition to operating expenses, including that needed to attract debt and equity capital, which they require to insure financial stability and the capacity to render service. This evidence shall include data required by Appendix I, parts I and II, and Appendix II.
§ 1139.5 Affiliate data.
Each individual traffic and cost study carrier having transactions with affiliates, subject to the reporting requirements of schedules 9009–A and 9009–B in the annual report for class I motor carriers, shall submit appropriate data and analyses reflecting the effect on the parent carrier's profits of transactions with affiliates. Such data and analyses shall be adequately supported, and there shall be submitted such underlying data as will permit a reconciliation of these data to the data supplied in the appropriate schedules of each carrier's annual report.
[47 FR 49577, Nov. 1, 1982; 47 FR 54082, Dec. 1, 1982]
§ 1139.6 Official notice.
The Board will take official notice of all of the proponent carriers' annual and quarterly reports on file with the Board.
§ 1139.7 Service.
The detailed information called for herein shall be in writing and shall be verified by a person or persons having knowledge thereof. The original and 10 copies of each verified statement for the use of the Board shall be filed with the Secretary, Surface Transportation Board, Washington, DC 20423. One copy of each statement shall be sent by first-class mail to each of the regional offices of the Board in the area affected by the proposed increase, where it will be open to public inspection. A copy of each statement shall be mailed by first-class mail to each party of record in the last formal proceeding concerning a general rate increase in the affected area or territory. However, one copy of each statement shall be sent by express mail to any person undertaking to bear the cost. Written request for this expedited service must be made no less than 5 days before the statement is due to be filed with the Board. Otherwise, the service requirements of 49 CFR 1104.12 should be observed. Information with respect to carrier affiliates may be served on the parties in summary form, if so desired. A copy of each statement shall be furnished to any interested person on request.
[47 FR 49577, Nov. 1, 1982, as amended at 53 FR 19302, May 27, 1988]
§ 1139.8 Availability of underlying data.
All underlying data used in preparation of the material outlined above shall be made available in the office of the party serving such verified matter during usual office hours for inspection by any party of record desiring to do so, and shall be made available to the Board upon request therefor. The underlying data shall be made available also at the hearing, but only if and to the extent specifically requested in writing and required by any party for the purpose of cross-examination. Since appendix I data are to be submitted on a combined carrier basis, any underlying individual carrier data used to complete appendix I should be furnished to the Board for its use as well as for the use of parties opposing the sought increases.
Appendix I to Subpart A of Part 1139—Revenue Need and Allocation to Traffic at Issue
[Cost allocation_see part II, line 13, [squ] Method A, [squ] Method B; check one; provide both]---------------------------------------------------------------------------------------------------------------- Restated proforma year \4\ Base --------------------------------Line calendar Present Based on No. Item Source \1\ year_actual proforma Based on Based on constructed \2\ year \3\ current proposed revenue revenues revenues need \5\---------------------------------------------------------------------------------------------------------------- (1)..................... (2)..................... (3) (4) (5) (6) (7)---------------------------------------------------------------------------------------------------------------- Part I. Revenue Need---------------------------------------------------------------------------------------------------------------- 1 Operating revenue....... A.R. Sch. 2998, L. 3.... $ $ $ $ $ 2 Operating expenses...... A.R. Sch. 2998, L. 10... 3 Lease of distinct A.R. Sch. 2998, Net of operating unit (net). Ls. 12 and 13. 4 Miscellaneous deductions A.R. Sch. 2998 (L. 27 less other income. minus L. 20). 5 Interest included in A.R. Sch. 2998, L. 23... miscellaneous deductions. 6 Income taxes on ordinary A.R. Sch. 2998, L. 29... income \6\. 7 Extraordinary and prior A.R. Sch. 2998, L. 34... period items. 8 Net income or loss \7\.. A.R. Sch. 2998, L. 35... 9 Sum of money above Sum of Ls. 4, 6 and 8... operating expenses. 10 Percent owned and leased A.R. Sch. 100, Col. (c) % % % % % property to net (L. 21+L. 23)÷L. tangible property (3 26. decimals). 11 Sum of money related to (L. 9x_% in L. 10) plus transportation. L. 3. 12 System revenue need L. 2 plus L. 11......... items and projected revenue need.---------------------------------------------------------------------------------------------------------------- Part II. Allocation to Traffic at Issue---------------------------------------------------------------------------------------------------------------- 13 Constant costs and sum See Method A ( ) and of money allocated to Method B ( ), check issue traffic. one; provide both. 14 Variable expenses from From traffic and cost traffic at issue (90% study. variable excluding return on investment)\8\. 15 Operating revenues from From traffic study...... traffic at issue \8\. 16 Constant costs and sum L. 13 plus L. 14........ $ $ $ $ $ of money allocated to issue traffic plus variable expenses. 17 Revenue to cost L. 15÷L. 16........ % % % % % comparison (1 decimal).----------------------------------------------------------------------------------------------------------------See Methods A and B and footnotes on following pages.
Method A_Constant Costs and Sum of Money Allocated To Issue Traffic Based on Ton and Ton-Mile Method (See Note A)---------------------------------------------------------------------------------------------------------------- Restated proforma year --------------------------------Line Source for columns 3 and Base Present Based on No. Item 4 calendar proforma Based on Based on constructed year_actual year current proposed revenue revenues revenues need---------------------------------------------------------------------------------------------------------------- (1)..................... (2)..................... (3) (4) (5) (6) (7) (a) System constant costs... L. (b)+L. (c)........... $ $ $ $ $ (b) Not related to distance (See Note B)............ (c) Related to distance.... (See Note B)............ $ $ $ $ $ (d) Percent not related to L. (b)÷L. (a)...... % % % % % distance (3 decimals). (e) Percent related to L. (c)÷L. (a)...... % % % % % distance (3 decimals). (f) System sum of money..... Appendix I, part I, L. $ $ $ $ $ 11. (g) Not related to distance L. (f)xL. (d)........... (h) Related to distance.... L. (f)xL. (e)........... (i) Total system constant L. (a)+L. (f)........... costs plus sum of money. (j) Not related to distance L. (b)+L. (g)........... (k) Related to distance.... L. (c)+L. (h)........... $ $ $ $ $ (l) Tons carried on issue From traffic study (see and nonissue traffic Note C). combined. (m) Ton-miles............... ......do................ (n) Issue traffic tons ......do................ carried. (o) Issue traffic ton-miles. ......do................ (p) Percent of issue traffic L. (n)÷L. (l)...... % % % % % tons to system tons (3 decimals). (q) Percent of issue traffic L. (o)÷L. (m)...... % % % % % ton-miles to system ton- miles (3 decimals).---------------------------------------------------------------------------------------------------------------- Constant Costs and Sum of Money Allocated To Issue Traffic---------------------------------------------------------------------------------------------------------------- (r) Not related to distance L. (p)xL. (j)........... $ $ $ $ $ (s) Related to distance.... L. (q)xL. (k)........... (t) Total (enter amount in L. (r)+L. (s)........... $ $ $ $ $ Appendix I, part II, line 13).----------------------------------------------------------------------------------------------------------------Note A: This procedure allocates constant costs and the sum of money based on the ton and ton-mile method and should be submitted for the information of the Board. How much of the constant and sum of money costs may or should be recovered by any specific segment of traffic rest on (1) considerations including value of service, demand, and ability to pay, and (2) considerations which involve matters relating to regulatory policy.Note B: Separate the amount of constant costs, including unrelated, by using Statement No. 6-68, Highway Form B, Schedule A, Line III. Assign the dollars in columns (6), (7), (8), and (9) times 10 percent to line (b), and the dollars in columns (4) and (5) times 10 percent to line (c).Note C: Show tons and ton-miles on issue and nonissue traffic based on an expansion of the sample to a full year.
Method B_Constant Costs and Sum of Money Allocated To Issue Traffic Based on Dollar (Expense) Method (See Note A)---------------------------------------------------------------------------------------------------------------- Restated proforma year -------------------------------- Line Source for columns 3 Base Present Based on No. Item and 4 calendar proforma Based on Based on constructed year_actual year current proposed revenue revenues revenues need---------------------------------------------------------------------------------------------------------------- (1)..................... (2).................... (3) (4) (5) (6) (7) (a) System constant cost Note B................. $ $ $ $ $ (excluding. (b) System sum of money..... Appendix I, part I, line II. (c) Total system constant Line (a) plus line (b). costs plus sum of money. (d) Variable expenses on From traffic and cost issue traffic. study; Note C-. (e) Variable expenses on From traffic and cost issue and nonissue study; Note D-. traffic combined. (f) Percent relationship (3 Line (d) ÷ line % % % % % decimals). (e). (g) Constant costs and sum Line (c) x line (f).... $ $ $ $ $ of money allocated to issue traffic (enter amount in Appendix I, part II, line 13).----------------------------------------------------------------------------------------------------------------Note A: This procedure allocates constant costs and the sum of money based on the dollar (expense) method and should be submitted for the information of the Board. How much of the constant and sum of money costs may or should be recovered by any specific segment of traffic rests on (1) considerations including value of service, demand, and ability to pay, and (2) consideration which involve matters relating to regulatory policy.Note B: Determine the amount of constant costs, including unrelated, by using Statement No. 6-68, Highway Form B, Schedule A, Line 111, column (3) multiplied by 10 percent; insert this amount on line (a).Note C: Determine the amount of variable costs, including unrelated, by using Statement No. 6-68, Highway Form B, Schedule A, line 111, column (3) multiplied by 90 percent to obtain the variable portion.Note D: Show variable expenses allocated to the issue traffic based on an expansion of a sample to a full year.Footnotes to Appendix I:Explanatory: The Purpose of Appendix I is twofold, namely: (1) to obtain, through part 1, Revenue Need, an indication of the past actual, present, and restated system revenue needs of the traffic and cost study carriers, which, along with the financial data required in appendix B, will facilitate an analysis of the financial stability of these carriers, and (2) to allocate a part of these system revenue needs to the traffic at issue as provided for in part II, line 13. It is that portion of constant and sum of money costs resulting from this allocation plus the related variable expenses (line 14) which produces the total costs assigned to the issue traffic (line 16) which is then compared to the issue traffic revenues in the revenue-to-cost comparison shown on line 17. This comparison provides some indication of how much the total issue traffic is contributing to the carriers' overall revenue needs; and serves as a reference point for the consideration of ratemaking factors, other than costs, which may influence the appropriateness of the issue traffic's contribution.Appendix I data should be completed and submitted for all traffic and cost study carriers combined. However, data for the ``base calendar year_actual,'' column (3), should be developed and completed for each traffic and cost study carrier and the results combined for all such carriers. The data in part I, columns (4) through (7), which reflect an updating of revenue need data for the ``base calendar year_actual'' to present and restated levels, should be developed on either an individual carrier basis, or on a composite carrier basis comprised of all traffic and cost study carriers. Data in part II, line 14 columns (4) through (7), which reflect an updating of the cost and traffic study data for the ``base calendar year_actual'' to present and restated levels, should be developed by the use of either individual carrier data for each of the study carriers, or the composite carrier data for those study carriers whose revenues from the issue traffic amount to 50 percent or more of their total system revenues for the ``base calendar year_actual.'' However, for line 14, the method selected should be the same as that used to update the operating ratios to present and restated levels as required in .3 Cost study. As indicated above, appendix I data should be completed and submitted only for all traffic and cost study carriers combined. Since appendix I are to be submitted on a combined carrier basis, any underlying individual carrier data used to complete this appendix should be furnished to the Board for its use as well as for the use of parties opposing the sought increases. Data in columns (4) through (7) must be appropriately explained and supported. Each of the dollar figures called for in these columns shall be accompanied by an explanation of the bases or methods of restatement, including explicit identification of all projected or assumed changes in revenues, in wage rates, in price levels of other expenses and property items, and in productivity, as compared with the preceeding (actual) year results. Note that the time periods referred to in appendix I, that is, ``Base calendar year_actual,'' ``Present proforma year'' and ``Restated proforma year'' are the same time periods indicated in § 1139.3, Cost study.\1\ Sources in this column apply to column (3) ``Base calendar year_actual.'' Data for columns (4) through (7) should rely on column (3) as a base in order to reflect data for the ``Present proforma year'' and the ``Restated proforma year.'' Annual report sources apply to class I motor carriers for class II carriers use comparable sources.\2\ The data in column (3) should reflect the revenue need data (part 1), and the traffic and cost study data (part II), for the traffic study year. That is, the ``Base calendar year_actual,'' which should coincide with the ``Base calendar year_actual'' referred to in the Cost study (§ 1139.3). Parts I and II should be completed for each individual study carrier_the purpose being to allocate a portion of each carrier's system revenue need to the traffic at issue as provided for in part II. The results for all study carriers should then be aggregated and submitted on a combined carrier basis.\3\ The data in column (4) should be based on present wage, price and productivity levels and reflect conditions prevailing on a date no later than the 45 days prior to the date of the tariff filing.\4\ The data in columns (5), (6), and (7) should be based on wage, price, and productivity levels anticipated on the effective date of the proposed rates.\5\ The purpose of this column is to obtain data on what system revenue needs of the study carriers should be at a giving time. Part I should consider the sum of money in addition to operating expenses (including that needed to attract debt and equity capital) which the carriers feel they require to insure financial stability and the capacity to render service.\6\ In columns (4) through (7), show income taxes based on estimated taxable income reduced by the taxes applicable to other income such as, for example, capital gains transactions.\7\ In columns (4) through (7), determine the net income based on data shown for lines 1 though 7. In column (7), the estimate of the net income needed should be supported by evidence that it is a just and reasonable amount.\8\ Show expenses and revenues allocated to the total issue traffic based on an expansion of the sample to a full year. The amount shown on line 14 for variable expenses should agree with that shown in Method B, line (d).
|
[47 FR 49579, Nov. 1, 1982; 47 FR 54081, Dec. 1, 1982] Appendix II to Subpart A of Part 1139—Financial Ratios (Traffic and Cost Study Carrier _____)
|
[Complete appendix II for each traffic and cost study carrier and for all such carriers combined]---------------------------------------------------------------------------------------------------------------- First Third Second precedingLine preceding preceding calendar No. Item Source \1\ calendar calendar year year year (actual or (actual) (actual) estimated)---------------------------------------------------------------------------------------------------------------- (1).............................. (2)............................. (3) (4) (5)---------------------------------------------------------------------------------------------------------------- 1 Current assets \2\............... A.R. Sch. 100, L. 18............ $ $ $ 2 Net carrier operating property A.R. Sch. 100, L. 21............ (owned)\2\. 3 Net carrier operating property A.R. Sch. 100, L. 21+L. 23...... (owned plus leased to others) \2\. 4 Net tangible property \2\........ A.R. Sch. 100, L. 26............ 5 Intangibles \2\.................. A.R. Sch. 100, L. 32............ 6 Current liabilities \2\.......... A.R. Sch. 101, L. 13............ 7 Long-term debt \2\............... A.R. Sch. 101, L. 15+L. 25...... 8 Shareholders' equity \2\......... A.R. Sch. 101, L. 55............ 9 Operating revenues............... A.R. Sch. 2998, L. 3............ 10 Depreciation plus or minus A.R. Sch. 2998, L. 6+ or-L. 7... depreciation adjustment. 11 Operating expenses............... A.R. Sch. 2998, L. 10........... 12 Net carrier operating income..... A.R. Sch. 2998, L. 14........... 13 Ordinary income before income A.R. Sch. 2998, L. 28........... taxes. 14 Net income or loss............... A.R. Sch. 2998, L. 35........... 15 Net income or loss plus or minus L. 10 Plus L. 14................ $ $ $ depreciation \3\. 16 Percent owned and leased property L. 3÷L. 4.................. % % % to net tangible property (3 decimals). 17 Investment in owned and leased ................................ $ $ $ property plus working capital \4\. 18 Shareholders' equity less L. 8-L. 5....................... $ $ $ intangibles. 19 Long-term debt plus shareholders' L. 7+L. 18...................... $ $ $ equity less intangibles. 20 Operating ratio (2 decimals)..... L. 11÷L. 9................. % % % 21 Current ratio (2 decimals)....... L. 1÷L. 6.................. 22 Ratio net income or loss to L. 14÷L. 9................. % % % operating revenue (2 decimals). 23 Rate of return on owned and L. 12÷L. 17................ % % % leased operating property plus working capital (2 decimals). 24 Rate of return on shareholders' L. 14÷L. 18................ % % % equity less intangibles (2 decimals). 25 Capital structure ratio (2 L. 7÷L. 19................. % % % decimals). 26 Throwoff to debt ratio (2 L. 15÷L. 7................. % % % decimals). 27 Ratio long-term debt to L. 7÷L. 18................. % % % shareholders' equity less intangibles (2 decimals).----------------------------------------------------------------------------------------------------------------\1\ Annual report sources refer to 1970 Motor Carrier Annual Report Form A for Class I Motor Carriers of Property. For class II carriers use the comparable sources. For years prior to 1970 use the comparable annual report sources.\2\ Show average of beginning and end of year figures.\3\ If carrier shows a net income, the amount shown for depreciation should be added to it; if a net loss, then the net loss and the amount for depreciation should be netted and the appropriate figure shown.\4\ Multiply the percent on line 16 by the difference between line 1 and line 6. Add the resulting amount to line 3.
|
[47 FR 49580, Nov. 1, 1982; 47 FR 54081, Dec. 1, 1982]
Browse Next
|
