Sending Turkeys to Texans raises a squawk
Greenberg Smoked Turkeys of Tyler, in east Texas, hoped it would not have to send its turkeys to Louisiana again this year before shipping them to thousands of Texas homes for the holidays. But as in previous years, the state's intrastate shipping law will probably force the turkeys to take a detour.Skip to next paragraph
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Like the turkey farm, many Texas companies for years have sent their goods outside the state and then back in for delivery. Even that route is cheaper, and more convenient, than the regulated intrastate routes.
But the practice is still ``very costly,'' says Charles Goodman, president of Goodies from Goodman, a Dallas gourmet food and fruit basket retailer that ships throughout the continental United States.
For its Texas orders, ``We have to hire a truck and load it out to Shreveport, and then unload it there for UPS [United Parcel Service] to pick it up and bring it back. And the silly thing is, they bring it back to their hub not five miles from our plant.''
Similarly, Mary Kay Cosmetics Inc. of Dallas sends its own trucks out daily to Shreveport, 200 miles away, for UPS pickup and delivery to sales personnel all over Texas.
Texas law does not bar small package handlers like UPS from operating in the state. UPS ships some 300,000 packages into, and 175,000 packages out of, the state daily. And it can pick up and deliver packages inside three commercial metropolitan zones: Houston, San Antonio, and Dallas-Fort Worth.
But no one can ship a package from, say, Houston to San Antonio or Dallas, unless it is on a route regulated by the Texas Railroad Commission.
The situation is only an irritation to the Texan with an occasional small package (under 50 pounds) to send somewhere in the state. But it can work a severe hardship on small businesses whose suppliers or customers are not on a regular route.
Ironically, the Texas Motor Carrier Act of 1931 was adopted to encourage competition. But opponents say that today it operates as a state version of trade protection for carriers in the state which can't offer the point-to-point delivery service epitomized by the brown UPS van.
Shippers in Texas don't deny it. Their literature during a long struggle over the regulation has described UPS as ``a giant, automated out-of-state corporation owned by Easterners'' which would put local carriers out of business by ``skimming the cream from the package-hauling business, the easy-to-handle, high-profit traffic.'' That lucrative trade would automatically go to UPS, the news releases say, ``from big Eastern shippers'' accustomed to doing business with the Connecticut-based company.
Texas is the only state to bar such service. The local carriers have said that this is because the state, with its wide-open spaces, ``is different from Connecticut.'' But UPS has maintained that it operates in all other Western states and offers doorstep pickup and delivery to any address reachable by road.
Texas businesses that can't establish a scheduled motor freight pickup schedule, or are not close to a route, now use the US Postal Service or bus lines and assume responsibility for pickup and delivery. Or they use airfreight. These are governed by the Motor Carrier Act, though, and air carriers must also make a round trip out of state to avoid intrastate rules. Federal Express, the nation's largest air carrier of packages, flies its Texas shipments to its Memphis base and back before delivery.
Those using the regulated motor carriers say the system of local agents, sometimes gasoline stations or feed stores in small towns, for pickup and delivery is not always efficient. At Greenberg Smoked Turkeys there is not criticism of the carriers but only of the system. Says Tootsie Goodman, a Greenberg company official, ``It's just so much trouble to have to ship out to Louisiana and turn around and come back into Texas. It will be a lot nicer when UPS handles it.''
It has been almost 20 years since UPS filed with the Texas Railroad Commission, which administers the Motor Carrier Act, for authority to offer point-to-point service in Texas. For years the commission took the position that it lacked jurisdiction to hear the request. Finally the case reached the state Supreme Court, which ruled that the commission had to hear it. After a 15-month hearing with 600 witnesses, 300 from each side, the commission last year relented, saying United Parcel Service ``has the ab ility to meet the needs of small package shippers in Texas, and no existing regulated transportation service can presently fulfill this public need.''
Texas carriers challenged the commission's decision in court. In September of this year Judge Joseph Dibrell of the 353rd District Court in Austin upheld the ruling. UPS called it ``a great, great victory.'' But the Railroad Commission must conduct a full review of UPS rates and bill-of-lading procedures -- a lengthy process -- and the Texas carriers have vowed to appeal.
Says Timothy Herman, an Austin lawyer representing Tex-Pac, a group of motor freight carriers which is leading the fight, ``UPS is trying to amend the regulations of the Railroad Commission so they will be treated differently than other carriers.'' He said his clients will appeal.
Most of the parties involved expect the case to be resolved within several months.