Editorial: Railroad ‘Captives’ Hope To Shackle The Grinch

Remember the Grinch Who Stole Christmas? Monopoly railroads have been Grinching their way through history, extracting rail rates at about double what they can charge when a competing railroad is standing by to serve.

That the Louisiana Chemical Association (LCA) is working, along with the Consumers United for Rail Equity (CURE), to get legislation passed in Congress to remove some monopoly railroad power comes as no surprise. What is a surprise is that it has taken so long.

For details regarding the actions of LCA and CURE, we invite you to reread the story “La. Chemical Association Fighting ‘Captive’ Rail Rates” (WJ, December 12). The story by Capt. Richard Eberhardt explains how the proposed legislation came about. It also lists the goals of CURE, a group whose membership comprises those industries that joined for the purpose of seeking railroad reform.

Dan S. Borne, LCA president, discussed 2001 figures that show “21.1 percent of the total freight rail revenue to the nation’s major railroads comes from chemical shipments, with 70 percent paying ‘captive’ rates.” Those rates, said Borne, are at least 80 percent above the railroads’ direct cost of service. These figures should not be shocking.

Railroads killed the Erie Canal business in New York back when settlers were moving westward, many by barge. The demise of many a canal can be laid at the feet of the iron horse. Railroads eliminated steamboats from the coal-towing trade in the Upper Ohio region. After the federal government suppressed Indian harassment in the latter half of the 1800s, railroads moved quickly westward and killed off Missouri River steamboating.

Another deceitful act by the railroads was opposing (along with the Sierra Club) the replacement of Locks and Dam 26 on the Upper Mississippi River only a few years after the river and trucking industry had put their support behind the Railroad Revitalization and Recovery Act. The resulting 10-year delay raised the price on the project from $383 million to $1.2 billion and cost shippers an estimated $7.5 billion in extra freight rates.

Borne reminds us that in 1980, passage of the Staggers Rail Act largely deregulated the nation’s railroads. Congress knew that some customers would be served only by one railroad, and they directed the Interstate Commerce Commission, now the Surface Transportation Board, to ensure that railroads did not abuse their market or monopoly power over captive customers. The board failed.

The introduction in Congress last session of legislation aimed at shackling the railroads and giving their captive customers a fair shake reopens a battle that has waged for a long time. In recent years it has simmered beneath the surface.

So now we know. The Grinch never left, but his sneaky ways are now becoming of interest in Congress.

In recent years we have not been privy to mass movements against the railroads, which, by the way are terrible polluters compared with river towboats. What we have heard, however, is a continuous message about water compelled rates—those more-reasonable rail rates that are made that way because towing service offered an alternative to shippers.

It is no secret that water transportation is friendlier to the environment than rail or truck. With that in mind, we are puzzled over growing opposition in Upper Mississippi River communities.

So the battle heats up. Transportation demand continues to grow. Railroads have no where else to build. Truckers can expand only by clogging the highways from coast to coast. Now, we’re told that railroads may be facing a strike. Seems to us that the answer is clear.

Pass the legislation to make rail rates more equitable. Support the Corps more generously so it can maintain and modernize the inland waterways. Then the towing industry can provide unhindered, less-expensive water transportation. Nations worldwide are doing it. Why shouldn’t we?

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