The Interstate Commerce Commission yesterday drastically cut fines it had levied on three railroads for failure to move freight cars that are in critically short supply.
The ICC had fined Southern Pacific Railroad $4.4 million, the Santa Fe $445,000 and Conrail $2.4 million for ignoring commission service orders calling on the railroads not to keep cars standing at loading or unloading points for more than 24 hours.
But the railroads responded by filings suits against the ICC, charging that the service orders were unfair and unreasonable.
In a brief statement yesterday, the commission said it had "recomputed" the fines to be consistent with a commission ruling last week loosening up the requirements of the service orders.
The new fines are: Southern Pacific - $1.2 million, Santa Fe - $90,000, and Conrail - $425,000.
Historically, ICC sources said, companies fined by the ICC have negotiated settlements involving payments somewhat less than the fine levied.
And several shippers as well as railroad officials testified at ICC hearings on the matter that it was impractical to order the railroads to turn around cars so fast. Observance of the service orders, they said, would cost many of the railroads considerable amounts of money.
Several of the nations railroads - including Conrail - are in financial trouble, and can ill afford to pay fines on top of huge losses.
In response to mounting protests, the ICC last week backed off from its earlier service orders, and voted 4-to-3 to revise the orders to give the railroads 60 hours instead of 24 to move freight cars.
The cars are needed predominantly for grain shipments in the midwest. A large need for grain cars developed after demand for grain skyrocketed. But the nation's railroads have been short as many as 60,000 freight cars to handle the booming business, according to industry sources.
Under a new "get-tough" policy the ICC decided to crack down on the railroads one-by-one, levying large fines until they moved cars fast enough to cut the need.
But the railroads said the 24-hour rule imposed by the commission was forcing them to break up their most profitable line of business - unit trains. Unit trains are full trains of cars travelling together over long distances intact.
Usually, unit trains are put together at switching yards, where all the cars going to one location are put together. But often some cars wait until a full train is available. Under the original 24-hour rule, railroads compalined, they would have to move cars from one switching yard to another, merely to follow the rule, but with no beneficial effect.