Appeal from the District Court of the United States for the Northern District of Illinois. [310 U.S. 344, 345] Messrs. Robert H. Jackson, Atty. Gen., and A. H. Feller, of Washington, D.C., for appellants.
Messrs. John R. Turney and Robert E. Quirk, both of Washington, D.C., for appellees.
Mr. Justice BLACK delivered the opinion of the Court.
Respondents are forty-one interstate common carriers operating motor vehicles subject to the Interstate Commerce Commission under the Federal Motor Carrier Act of 1935.1 Our decision turns upon the validity of an order of the Commission cancelling certain proposed tariffs of these carriers upon the ground that they were unlawfully discriminatory in affording lower rates to 'forwarders' of freight than to other shippers.
Forwarders utilize common carriers by rail and motor truck to transport goods owned by others. They solicit and obtain many small shipments, from various points within an area, and cause them to be carried in less than truck-load or carload lots to a concentration center within the area. There they are assembled by the forwarder for further transportation in truck-load or carload lots. Although the forwarder gives owners of individual small shipments his own contract corresponding in form to through bills of lading and assumes responsibility for safe through carriage, the forwarder customarily arranges for the pickup, assembly and transportation of the shipments by carriers for hire. And the forwarders, not the owners of the goods, select the carriers and [310 U.S. 344, 346] route the shipments. Upon arrival of a truck-load or carload of the assembled small shipments at a distribution center, the bulk shipment is broken up, the forwarder separates and takes possession of the original small shipments and arranges, where necessary, their further carriage to their various final destinations in the area served by the particular distribution point. In this final carriage of the small shipment to its ultimate destination, the forwarder again utilizes carriers for hire to move these less than truck-load or carload lots. Thus, forwarders may use the service of carriers to assemble shipments of less than truck-load or carload lots at their concentration center, to transport the assembled truck-load or carloads to a distribution center and to carry the broken up small shipments beyond their break-bulk distribution center.
The forwarding business has been built upon the expectation that a material part of the transportation which it causes to be provided for small shippers can by consolidation of small shipments be obtained at truck-load or carload rates. For the forwarders' business was originally made profitable because it could operate upon the margin of profit represented by the difference between railroad carload rates paid by the forwarder and the higher rates, approximating less than carload rates, which the forwarder charged the owner of a shipment. 2 But forwarders in using railroads enjoy no special tariff rates and pay the same published carload and less than carload rates that other shippers pay. And the question here is not whether the Commission should have approved as lawful lower rates for truck-loads than for smaller shipments, but whether the court properly set aside the Commission's order which had directed cancellation of re- [310 U.S. 344, 347] spondents' tariffs providing lower rates for certain less than truck-load shipments solely because they had previously been, or were intended subsequently to be, consolidated in truck-loads with other individual shipments.
Upon the Commission's own motion, a hearing was held and the Commission ordered the cancellation of these tariffs. 3 Respondents brought suit in the District Court to set aside and restrain enforcement of the Commission's order. A three judge Court held the order void and perpetually enjoined its enforcement. The case is here on direct appeal by the United States and the Interstate Commerce Commission. 4
Respondents' tariffs would be available to forwarders who arrange assembling, transportation and distribution services in the trade areas surrounding concentration and break-bulk centers in Illinois, Wisconsin and Indiana. And the Commission found that 'In practical effect these rates can be used by few, if any shippers, except the forwarders.' Since in its opinion these tariffs were 'materially lower than respondents' local rates on like traffic between the same points',5 the Commission found that 'the forwarders ... and possibly a few large shippers ... will be afforded transportation at rates lower than the rates ... charged certain other shippers under substantially similar circumstances and conditions, in violation of Section 216(d).'6 In the view we take, it be- [310 U.S. 344, 348] comes unnecessary to consider additional grounds upon which the Commission found the tariffs violated another Section of the Act.