The Justice Department, raising questions about possible antitrust problems, yesterday urged the Interstate Commerce Commission to hold hearings on the proposed merger of Norfolk and Western Railway Co. and Southern Railway Co.
In comments filed with the ICC, the department said it had not taken a position yet on the merits of the merger, which requires ICC approval.
"We are concerned, however, about its potential anticompetitive effects, and, as a result, may determine in the future either to oppose the application in its entirety or to advocate that it be conditioned in such a way as to eliminate anticompetitive features," Justice said.
The department raised several specific concerns about the merger proposal:
Both railroads may compete for traffic moving between Virginia, North Carolina and points west.
Since both railroads are major coal carriers in the central and southern Appalachian coal fields, the degree to which the two compete for delivery of this coal should be examined.
Since both have acess to important ports along the Atlantic and Gulf Coasts, both may compete for rail shipment exports.
The merger could eliminate competition between N&W and Southern on three disctinct areas of roughly parallel track.
Conrail claims a merged carrier would divert traffic from it and weaken it as a competitor.