Ark. Best Freight System v. Mo. Pacific Truck Lines

Citations: 240 Ark. 664; 401 S.W.2d 571; 1966 Ark. LEXIS 1371Docket: 5-3839

Court: Supreme Court of Arkansas; April 18, 1966; Arkansas; State Supreme Court

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Carleton Harris, Chief Justice, reviewed an application filed by Missouri Pacific Truck Lines, Inc. with the Arkansas Commerce Commission for an unrestricted Certificate of Public Convenience and Necessity to operate as a common carrier of general commodities between Little Rock and El Dorado, and from Little Rock to McGehee and back. The application faced opposition from Arkansas-Best Freight System, Inc. (ABF) and Red Line Transfer and Storage Company, Inc., who argued that the proposed service was unnecessary as existing carriers already provided adequate service. ABF holds a certificate for operations between Little Rock and El Dorado, while Red Line is certified for routes to McGehee.

The Commission granted Missouri Pacific's application, leading to an appeal by the protestants to the Pulaski County Circuit Court, which upheld the Commission's decision. This marks Missouri Pacific's third attempt for the El Dorado route, referenced in previous case rulings.

Testimony during the hearing highlighted the need for earlier deliveries and later pickups. M. J. Hrebec, Missouri Pacific's Vice President, outlined proposed service times, indicating a truck would leave Little Rock at 12:30 A.M. and arrive in El Dorado by 6:00 A.M., with deliveries occurring from 7:00 A.M. to 9:00 A.M. Supporting witnesses from both cities expressed that the new service would alleviate inventory burdens and provide more convenient delivery options, as current carriers typically delivered later in the morning. Notably, one witness, Grady Jean, acknowledged a personal business interest in Missouri Pacific's operations, indicating a potential conflict of interest in his support for the application.

L. H. Kerr, a hardware and furniture business owner, indicated a need for late afternoon pickups in Little Rock and early morning deliveries in El Dorado to improve customer relations, particularly for urgent refrigerator and freezer repairs. He recounted a prior issue of a misplaced shipment that took three days to resolve. Other witnesses, including David Hargett and Don Cash from the food distribution sector, affirmed that early morning deliveries would be advantageous, although Cash lacked direct experience with ABF's services. Kenneth Hudspeth from the building materials sector noted that later pickups would be helpful, stating that requests made after 3:00 P.M. did not guarantee service. Joe Copeland of Orgill Brothers echoed this concern, mentioning previous complaints about ABF's late pickups that went unaddressed. Ben Smothernon from Little Rock Furniture Manufacturing preferred late pickups but primarily relied on company trucks for deliveries, using common carriers only for specific large orders. Roy F. Baker, representing Gunn Distributing Company, reported waiting for ABF pickups after 5:00 P.M. but found overall service satisfactory. 

In contrast, Herman L. Reed, a dispatcher for ABF, claimed their trucks were equipped to handle pickups post-3:00 P.M. and had made pickups as late as 7:00 P.M., asserting that the Little Rock terminal operates 24/7 without complaints of late service. William H. Curry, ABF's General Traffic Manager, noted the absence of complaints regarding El Dorado shipments for several months. Wilton E. White, Chairman of the Greater Little Rock Terminal Managers Association, confirmed that both ABF and Red Line conducted late pickups. Data from January to March 1963 showed 164 shippers and 218 consignees using ABF, indicating that complaints about service were minimal relative to the volume of business. Overall, the evidence presented did not significantly differ from previous records in related cases.

The document examines the sufficiency of evidence regarding the necessity and convenience of proposed transportation services by Missouri Pacific and Red Line. It references a previous case where the Commission's order lacked assurances of improved service from Missouri Pacific, a sentiment echoed in the current situation. The burden of proof remains unfulfilled, as no new evidence supports granting the application. 

Testimonies from four public witnesses in McGehee indicate that while the proposed service could improve operations, existing service from Red Line is deemed satisfactory. Mr. Lucky, a local business operator, acknowledges occasional service needs but finds current service adequate. Mr. Warick recognizes potential convenience but is content with Red Line’s performance, suggesting that increased competition might enhance service quality. Mr. Peacock, expressing loyalty to Missouri Pacific, notes that despite payroll cuts, the company has historically been vital to the local economy, although he cites issues with damage claims. Mr. Adcock points out that early morning service is essential for competitiveness, yet none of the witnesses had formally complained to Red Line’s local management.

Testimony from Red Line's management reveals operational hours and delivery efficiency, stating that shipments are delivered by late morning. However, it is argued that adding another truck line may not be profitable due to limited tonnage and low revenue figures from prior months. Overall, the findings indicate a lack of compelling evidence to warrant the approval of the application for new service.

During the three-month period of January to March 1963, the average daily shipment weight from Little Rock to McGehee was 3,339 pounds, while shipments in the opposite direction averaged 439 pounds. Testimony indicated that complaints regarding Red Line service were minimal, with E. R. Adcock, the general manager of The Delivery Service, Inc., confirming that pickups were made as late as 6:30 or 7:00 PM, and he had never refused a pickup regardless of the time. The testimony about inadequate service primarily originated from Little Rock witnesses, while Adcock stated he had not received complaints from the four individuals who testified about service issues. 

The legal standard from the Missouri Pacific Railroad Company case emphasized that a new service certificate cannot be granted if existing service is adequate, unless the current service is deemed inadequate, additional service would benefit the public, or the existing carrier has not had a chance to provide extra service. The evidence presented did not demonstrate that current service was inadequate or that additional service was necessary for the public good. The low volume of shipments suggested that another truck line would not be economically viable. Although a few individuals might benefit from a new certificate, this does not equate to public convenience and necessity. Consequently, the application was denied, and the original order from the Arkansas Commerce Commission was reversed, with instructions to set it aside. Missouri Pacific currently holds authority to transport goods between established routes but lacks permission for direct shipments from Little Rock to McGehee. The hearing occurred in May 1963, during which there was uncertainty regarding Saturday deliveries, and Burks Motor Freight Lines also operates on the same route.