Increased freight shipments, higher rates and a respite from severe weather all contributed to record revenues and profits for the Norfolk & Western Railway and Southern Railway Co.-two firms now talking merger-during the first quarter.
Seaboard Coast Line Industries, a rail holding company involved in a separate merger proposal with Chessie System, to which N&W and the Southern object, also reported yesterday a sharp recovery in first-quarter operations.
Separately, on Capital Hill, the railroad industry began an offensive on nearly 100 years of federal regulation yesterday. As a House subcommittee opened hearings on proposals to deregulate the rail industry, Association of American Railroads President William Dempsey said that his industry "desperately" needs a new set of rules if it is to survive in the private sector.
N&W and Southern, for many years among the nation's most profitable railroad firms, apparently need no lesson in survival.
Roanoke-based N&W said yesterday that its first-quarter profits were $46.2 million ($1.48 a share) compared with a loss in the 1978 period of $12.7 million that was caused by bad weather and a coal industry strike, which reduced freight volume dramatically. Revenues rose 45 percent to $328 million.
Southern, based in Washington, reported first-quarter profits of $35.8 million ($2.33 a share), up 24 percent from $28.8 million ($1.89) last year. Revenues rose 21 precent to $338 million.
N&W President John Fishwick said export coal traffic through the companys's pier facilities at Norfolk was unusually high in the recent quarter. He also cited "relatively good" merchanise shipment volume.
Stanley Crane, Southern's president, said his firm is experiencing continued strength in carloadings during the current quarter but warned of the impact of soaring prices. Diesel fuel costs rose 25 percent in the last six months, ballast rose 20 percent, freight car wheels rose 12 percent and car axles by 10 percent, he said.
In Richmond, Seaboard reported firstquarter earnings of $20 million ($1.37 a share) compared with $1 million (7 cents) in the 1978 period. Revenues jumped to $510 million from $435 million, and Chairman Prime Osborn told the annual meeting that revenues were higher for each of the 10 leading commodities transported by the firm's railroads-Seaboard Coast Line and Louisville & Nashville.
Dempsey, in his House testimony noted that the rail industry as a whole had an average return on net worth of less than one percent a year compared with 18 percent for trucking and 16 percent in manufacturing. While generally endorsing Carter administration proposals to sharply curtail Interstate Commerce Commission oversight of railroads, Dempsey took issue with a provision that would abolish rate-setting cartels (regional rate bureaus) in two years.