The Interstate Commerce Commission, in an unusual move, is considering the possibility of ordering another railroad to take over the Midwest shipping service of strike- and bankruptcy-plagued Rock Island railroad.
Shipments of farm products have been piling up in the Midwest since the Chicago, Rock Island and Pacific Railroad Co., in bankruptcy proceedings since 1975, was struck Aug. 28 by the Brotherhood of Railway and Airline Clerks and on the next day by the United Transportation Union. The strikes have idled service along 7,200 miles of track in 13 states that are served by the Rock Island, one of the nation's major grain haulers.
Although the Rock Island's shaky financial situation and the current strikes are unrelated, the strike could affect the railroad's cash position, the ICC was told yesterday by its staff, thus making a "directed service" order a distinct possibility.
Under the law, the ICC has authority to direct other railroads to operate the services of a railroad that ceases its operations because of a cash shortage or a court order. The substitute railroads are entitled to reimbursement for losses incurred and a 6 percent profit on the operations performed. The authority, designed to provide continued rail service to shippers on an emergency basis while long-term restructuring solutions are developed, allows directed service for up to eight months.
Should the ICC take this course, it will be the second time; directed service was instituted in 1974 on the Lehigh and New England Railroad in Pennsylvania.
Although the ICC made no decisions at yesterday's meeting, it was briefed by its staff on its options should a directed service order appear necessary.
One possibility is the selection of a neutral railroad, one that ordinarily doesn't serve the region, to operate the Rock Island for the first 60 days. ICC staffers have met individually with the Norfolk & Western, the Fam- ily Lines, the Chessie System and the Southern Railway in exploratory talks.
In an effort to develop a longer-term approach as well, about 20 midwestern and western railroads have been contacted to see whether they might be willing to operate any of the Rock Island's lines on a voluntary, non compensated basis. They also were asked which of the lines they might be interested in operating under a directed -- therefore, paying -- order.
Another suggestion the ICC is considering is utilizing a management team drawn from more than one railroad in order to avoid substantially draining the management resources of any one railroad. A directed service order to a terminal railroad company owned jointly by many of the railroads -- such as the 10-railroad Kansas City Terminal Railroad -- also is being considered.Under that option, the terminal company would draw a management team from its owning railroads or any others interested.
As part of the plan for resuming rail service, special legislation and a presidential back-to-work order to striking workers under the National Railway Labor Act also may be needed, sources said. Under directed service, a railroad would use the Rock Island's employes and equipment to resume service. The railroad has 8,000 employes, of which about 3,200 are covered by the two striking unions' contracts.
Another problem in a directed-service situation is the poor condition of the Rock Island's track. No carrier can be ordered to run over track that doesn't meet federal minimum safety standards, allowing a train to run at 10 miles an hour, an ICC spokesman said. A Federal Railroad Administration survey of about half the Rock Island's main-line track found a good bit of it in poor condition. About 58 percent of the nearly 5,000 miles inspected during July was not operable at the posted speeds, he said.
Although the ICC also is exploring a possible directed-service order for the Milwaukee Road, also in bankruptcy proceedings, the Rock Island presents the commission with a more extensive problem. Although long segments of the Milwaukee's 9,000 miles of track have no traffic and thus don't need emergency substitute service, there is traffic on virtually all of the Rock Island's segments, the ICC staff said.