The Interstate Commerce Commission struck down a major doctrine blocking railroad ownership of trucking firms yesterday, opening the door wider for transportation companies to use the highways as well as the rails.
In a unanimous decision, the commissioners eliminated the requirement that railroads demonstrate the existence of "special circumstances" before a railroad-owned subsidary can receive unrestricted ICC licensing.
There are some railroad-owned trucking firms, but their authority is limited and many railroads regard meeting the doctrine of special circumstances as difficult and not worth the effort.
The Association of American Railroads immediately hailed the decision as a blow for freedom.
But Edward Kiley, senior vice president of the American Trucking Associations, said he believes the ICC is misreading the law and that the absence of the special-circumstances doctrine will permit railroads to "use their financial leverage" to "freeze out competitors."
"I'm sure we will appeal," Kiley said.
The ruling is another in a series of legislative and deregulatory steps that are easing the way for creation of so-called intermodal transportation companies, which could move goods by truck, rail or barge without having to check first with Washington.
The special-circumstances doctrine required a railroad to demonstrate a "compelling public need for service not being offered by independent motor carriers," according to the ICC.
The aim of the doctrine, which goes back to 1935, was to prevent rail domination of trucking markets. At that time, trucking was regarded as an infant industry in need of protection.
In reaching its decision, the commission pointed to a dramatic shift in cargo from rail to truck in recent decades and to the deregulatory emphasis from Congress in both trucking and railroading.
"Clearly, motor carriers compete successfully with rail carriers, and the commission's regulation . . . must reflect this fact," the ICC said.
The commission cited a recent Fifth Circuit opinion in noting that the doctrine of special circumstances was not immutable, "but one that must change with the changing realities of the economy and the industries regulated by the commission. Those realities have changed, and we are changing our policy to reflect this."
Railroad-owned trucking companies currently operating under restriction will receive expedited consideration of their applications to have the restrictions removed, the ICC said.
The Panama Canal Act specifically prohibits railroads from owning barge lines, "and we want to own barge lines, too," said Frank Wilner, director of issue development for the AAR.