from one farm to another. A substantial amount of farm produce is moved direct from fields to market. This direct movement avoids the costs and delays involved in unloading, handling, and reloading the commodities being shipped.

Exempt haulers are commonly willing and anxious to haul from farms and adapt their time schedule to that of the farmer-shipper. Truck common carriers are not ordinarily interested in loading on farms, nor do their certificates require them to do so. To require farmers to haul their products to the nearest loading facilities of rail or truck common carriers and to reload at such point would involve substantial and unnecessary costs. In some cases a deterioration in quality, in others a delay in the marketing process would prevent a farmer from "hitting the market" at the right time from the standpoint of price and salability.

B. Exempt haulers can reach any market and reach it expeditiously: The exempt truck hauler, because it is not restricted as to routing nor delayed in terminals, can move rapidly from the point of origin to any market in any direction. This flexibility of operation is imperatively necessary to the efficient marketing of agricultural commodities, particularly perishable products. Transportation must fan out from origin in all directions in order that each market may be uniformly supplied and price-depressing gluts avoided.

The fast service of exempt haulers moving in any direction to any market in response to changing prices in each market reasonably assures that each such market will be supplied with the amount of the commodity desired by consumers without oversupplying such

market.

Truck or rail common carriers cannot provide this kind of service in many circumstances. Many markets can be reached from specific origins by common carriers only by circuitous routing, interchange of equipment, and delays in transit. This involves extra cost, deterioration of the product, and uneven distribution.

C. Common carriers do not serve many agricultural communities: In many cases it will be a substantial distance from a farm or even from a local assembly or processing plant to a common carrier rail or truck terminal that is equipped to handle specific farm products. Common carriers, both truck and rail, pass through many rural communities without any intention and without facilities to serve such communities. The exemption insures that an agricultural area, no matter how thin its transportation needs may be, will be served. It further assures that competitive factors will provide an incentive to satisfactory service. Otherwise, in many instances farmers would be dependent upon one railroad or one truckline irrespective of the adequacy or efficiency of their service, or the remoteness of loading facilities suitable for handling their products, or the inability of such carrier to reach markets the farmer wants to reach.

D. Exempt haulers commonly provide a fast, superior and personalized service: Exempt haulers are normally local residents known to the farmer-shipper in whom the farmer-shipper has trust and confidence. We are, of course, aware of the aspersions often cast upon "irresponsible gypsies." While there may be such, they are in the minority and no farmer-shipper is required to deal with them. Most of the exempt haulers are high caliber, responsible individuals, small businessmen, competing vigorously for business by providing service.

Because the farmer-shipper is dealing with an individual who can give the cargo personal attention all the way to the market, he can give him instructions with respect to the manner in which service is to be provided and hold him responsible for such service.

No such personalized service can be assured in many circumstances by a common carrier organization. The shipper's instructions do not necessarily filter down to the person or persons doing the work. This is particularly the case where interchange of equipment or responsibility is involved.

E. Exempt haulers provide a transportation pool: Much agricultural movement is seasonal. Shipments from an area may fluctuate from nothing to many truckloads in a few days. The freedom of entry into exempt haulage means that trucks normally engaged in other occupations or in adjoining areas may be pressed into service to meet seasonal or emergency situations. The freedom from rate regulation means that rates may rise to the extent necessary to attract the needed number of trucks into service.

In many situations, common carriers do not begin to have the standby equipment necessary to meet seasonal peaks, which in the case of fruits and vegetables for fresh market or canning, are often only a week or two.

F. Exempt haulers will load or unload at multiple points: Common carriers do not ordinarily provide this service. This is often an extremely important factor in serving an area or in developing a new area. Exempt haulers in many instances perform a marketing function as well as a transportation function.

G. Exempt haulers are not as subject to featherbedding and makework practices that add costs to rail and truck common carriers: An example of this is the local driver requirement established in a number of cities by an agreement between common carriers and the local Teamsters' Union which provides that an over-the-road truck must be accompanied by a local union man from the common carrier terminal to the ultimate destination. The exempt hauler is not subject to such contractual arrangements and can often avoid the costs incident to such uneconomic practices.

H. The exemption widens the shipper's choice of alternative shipping facilities: The availability of the exempt hauler to serve farmers permits the farmer-shipper to choose the transportation facility best equipped for a specific movement and therefore to market his product to best advantage.

I. In many instances rates of exempt haulers are substantially lower than common carrier rates: The real significance of the exemption is that rates are free to fluctuate depending on relative need and the character of service required. In many instances exempt rates will exceed regulated rates. However, as a general rule exempt rates will be lower than regulated rates.

In "Interstate Trucking of Fresh and Frozen Poultry Under Agricultural Exemption," Marketing Research Report No. 244, the Department of Agriculture points out that truck rates charged by carriers during 1956 and 1957 (after poultry was deregulated by judicial action) were approximately 33 percent below the 1952 rates. This is a high price to pay for regulation.

Furthermore, most shippers reported that service provided by exempt haulers was superior to that provided by common carriers. The reasons advanced for this were: faster service, availability of equipment, willingness to serve out-of-way points, willingness to serve distant markets, direct service to markets, more stopoffs permitted, willingness to adapt service to processor and customer needs, deliveries arrived at markets at designated time, and reliability of the drivers. In another publication issued by the Department of Agriculture in March 1959, titled "Interstate Trucking of Frozen Fruits and Vegetables Under Agricultural Exemption," Marketing Research Report No. 316, appears the following summary:

Since the interstate trucking of frozen fruits and vegetables came under the agricultural exemption in 1956, motor carrier rates have been reduced, and, according to the processors, service has improved.

The report further states that:

Motor carrier freight rates on frozen fruits and vegetables declined 19 percent following the court decisions declaring them to be "exempt commodities" between 1955 and 1957.

J. The elimination of the agricultural exemption would impose an impossible regulatory burden on the Interstate Commerce Commission: The Interstate Commerce Commission is currently regulating about 17,000 truck common and contract carriers, but there are literally tens of thousands, no one knows how many, exempt haulers. It would be a herculean task to bring all of these additional concerns and individuals under economic regulation. How would rates be established? Who would establish them? How can you establish rates from farms to markets or from farm to farm? The complications of ratemaking would be multiplied beyond anything in current experience.

K. Rate regulation of truck transportation of farm products is impractical: Most transportation service for industrial products is standardized as to the character of the service provided. This is not true with respect to much of the carriage of farm products by motor carrier. The character of the service is diverse and therefore not adaptable to fixed rate practices. A few examples will suffice to illustrate this.

In one case the farmer or his employees aid in loading a truck; in another, the trucker does all the loading.

In one case the farmer has loading platforms and loading facilities: in another, he does not.

In one case loading at night may be necessary to reach the market at a specified time; in others, loading at any time may be acceptable. In one case loading is at central point; in another, the product is picked up at various points in one or more fields.

In one case the farm is located on a major highway; another farm may be located off major highways over rough and narrow roads. In one case the cargo may constitute a full load; in another, a partial load.

In one case a full load may be picked up on one farm; in another, the trucker may pick up partial loads on a number of different farms. In one case, unloading labor and facilities are provided at destination; in another case, labor and facilities may not be provided.

In one case fast service and delivery at a specified time may be essential; in the next instance this may not be necessary.

In one case the trucker may be asked to assume a marketing responsibility; in another, this will not be requested.

In one case overnight stops by the trucker may be necessary; in another, the round trip may be completed in 1 day.

These and other variations in the character of the service needed by farmers necessitate rate determination by negotiation rather than by regulation. Regulated rates simply will not fit the varied nature of the transportation service required.

L. The argument that elimination of the exemption would help common carriers is unfounded: We submit that any benefits to common carriers resulting from the elimination of the exemption would be either negligible or illusory.

In the first place Congress has never extended economic regulation in the field of transportation to an unregulated area without affirming the right of those presently engaged in the business to continue to be so engaged. Presumably if the exemption were eliminated or substantially curtailed, the Congress would protect those now in the business by providing "grandfather rights." Thus, the present exempt carriers would become regulated carriers authorized to perform the same service they are now performing. How would this benefit present common carriers?

In the second place, most of the traffic now handled by exempt carriers has such special requirements, best described by the term "flexibility," that even if the exemption were eliminated, we believe this would not resut in a restoration of most such traffic to railroads. A substantial increase in the amount of such commodities shipped by private and cooperative carriers would follow the elimination of the exemption.

That the extension of rate regulation to commodities now exempt from such regulation would not have a major effect upon railroad carriage of such commodities is illustrated by the situation with respect to poultry. The railroads lost most of the traffic in dressed poultry before dressed poultry rates were deregulated by judicial action. There is no reason to suppose they would regain such traffic if rate regulation of transportation of dressed poultry were to be restored.

In the Transportation Act of 1958, rate regulation was extended to cover truck transportation of bananas, coffee, and frozen fruits and vegetables. The elimination of the agricultural exemption for these products has not resulted in any expansion in tonnage of such products shipped by rail despite the increased tonnage of such commodities. This is reflected in the following figures:

This table shows the total rail tonnage of bananas, coffee, fresh frozen fruits and berries and fresh frozen vegetables as reported in Freight Commodity Statistics-ICC.

You will note that the extension of regulation to the transportation of these products by truck did not increase the tonnage handled by railroads.

The agricultural exemption does not constitute any special privilege for agriculture. It was provided because of the nature of farm product transportation. It insures the fast, efficient, and flexible service imperatively necessary for effective marketing of farm products. Farmers would be drastically and adversely affected by any elimination or substantial narrowing of the exemption.

The Commission has now come up with a new and unique proposal, that the exemption should be limited to trucks with two or three axles.

Statistical data concerning the percentage of farm products shipped on trucks with three or less axles compared with trucks with more than three axles is not, to our knowledge, available.

The Commission bases its recommendation

upon the idea that in all movements of substantial distances, or substantial weight, the economies of the situation will dictate the use of vehicles having more than three axles and thus the exemption would be lost.

The Commission's "idea" would crucially impair efficiency of agricultural transportation with respect to such major traffic movements as the shipment of livestock from farm to slaughtering establishments or to other farms, the shipment of hay from hay farms to dairy or livestock farms, the shipment of grain from grain dryer to mill, the shipment of cotton from cotton gins to warehouses or compresses, the shipment of milk and dairy products to market, the shipment of fruits and vegetables from farms to canneries, the shipment of fresh fruits. and vegetables from farm or packing shed to market, and the movement of dressed poultry from dressing plant to market. In all of these movements 4- and 5-axle vehicles are commonly used. If the Commission's proposal were enacted, some of the carriers involved could shift to 3-axle units. Where 3-axle units could not do the job effectively, we believe that a substantial percentage of the abovedescribed traffic would move to private and cooperative carriage rather than to common carriage.

The Commission's proposal would disadvantage small farmers as compared with large farmers, since the latter can more effectively utilize private carriage.

If 4- and 5-axle units could not be called into farm product hauling service during seasonal movements, the pool of transportation equipment available to handle such peak traffic would be substantially reduced.

This effort to limit the agricultural exemption by prohibiting the exempt hauler from using the kind of equipment which may be most suitable to his needs imposes an undesirable limitation upon efficiency of operations.

The Commission's long-existing policy, which they refer to in their statement, that the exemption should be limited to carriage to local markets, would not only raise an impossible interpretative and enforcement problem as to what is a local market and artificially alter marketing patterns, but would destroy the significance of the exemption to farm product transportation for all of the reasons set forth in paragraphs A to Labove.

We appreciate the opportunity of presenting our views relative to this issue to the committee.

Mr. WILLIAMS. Thank you, Mr. Triggs.