The Russian grain embargo is threatening to have a devastating effect on the nation's railroad and barge industries.
Spokesmen say the railroad industry could lose up to $65 million in grain traffic this year as a result of the embargo. It could be particularly harmed since two midwest lines, the Rock Island and the Milwaukee Road, already are in dire financial shape.
Futhermore, barge industry spokesmen say their problems are acute because they are unlikely to haul any of the grain that the federal government plans to repurchase from the exporters.
At the present time, both rail cars and barges are starting to back up near the nation's major grain ports along the Gulf Coast. And government experts say the situation will become more severe by late next week.
Interstate Commerce Commission officials point out that if the rail cars lay idle alongside docking sites, shippers can be expected to seek cuts in demurrage rates -- the cost of renting a freight car.
More significantly, some officials are privately concerned about transportation companies looking to the federal government for compensation since they have received government encouragement to expand their grain hauling capacities in light of what had been an expanding grain export program. h
D. J. Verona, president of American Barge Co. in Greenville, Miss., said yesterday the immediate impact of the embargo on his industry could be more than $40 million.
"We're concerned that the government 10 years ago suggested we produce more, and increase our transportation capaciity," Verona said. "Now all of a sudden after that growth and because of that attitude something like this happens and we wonder where we are."
The full impact of the embargo and the longshoremen's refusal to load ships bound for the Soviet Union could result in as much as $65 million in losses for the rail industry, according to a spokesman for the association of American Railroads.
At issue in the transportation industry is the 17 million tons of grain that has been slated for export to the Soviet Union.
That figure breaks down to 500 million bushels of corn and 150 million bushels of wheat. About 60 percent of the corn was to travel by barge and about 75 percent of the wheat would have been hauled by rail.
Although the estimates are still sketchy, Department of Agriculture spokesmen say those cuts will hypothetically result in a 10 percent shortfall in terms of carloadings, assuming government purchases do not directly involve rail cars.
Yet, rail industry spokesmen point out that they have not been able to meet the demand this year for the large rail hauling cars.
Burlington Northern Inc., which hauls more grain in the Midwest than any other railroad, says the demand for grain hauling services has "exceeded the company's ability to provide those services."
Although a Burlington Northern official and spokesmen for other mid-west railroads say it is too soon to assess the long-term impact of the embargo, already rail firms servicing the grain belt report some cancellations. e
An ICC official said there have been a number of reports of rail cars sitting idle near grain unloading centers, whose storage capacity has already been taxed by the delays at the ports.
Barge lines, which haul roughly 40 percent of the nation's grain, compared with slightly more than 50 percent by the railroads, appear to face particularly serious problems.