Conrail, the federally owned railroad that serves much of the Northeast, said yesterday it has asked the Interstate Commerce Commission to prevent the Chessie System from artificially mandating high rail freight prices for Conrail shipments that require switching help from Chessie.
And Chessie immediately responded with a statement that it was Conrail, not Chessie, that had created an anticompetitive situation. "Chessie's action," its spokesman, Milt Dolinger, said, "is directed to restore competition between the two railroads . Our response is an effort to prevent Conrail from limiting shippers to a single carrier."
Railroads typically agree that only one line need run to a given plant, then they pay the owner for the use of that line if it is needed for access to their cargo. Such agreements are called reciprocal switching tariffs.
Chessie has filed with the ICC a new tariff to take effect Jan. 21. According to Conrail, it would prevent Conrail from offering new low charges on Conrail shipments that require the use of Chessie track and switch facilites at either the plant or the point of delivery.
Richard H. Steiner, Conrail's vice president for marketing, said that, as an example, "We have pending a number of rate reductions for shipping auto parts, some in the neighborhood of 25 percent. Those rates are primarily geared to meet truck competition, but if the Chessie tariff" takes effect, "the shipper would not have the right to use the rates."
Steiner said the Chessie action is a violation of the railroad deregulation act. "Chessie would not let Conrail cut rates unless Chessie first agrees--a clear restraint of trade."
Chessie, a subsidiary of CSX Corp., said in its statement that "Conrail is attempting to use its massive coverage of Eastern territory to eliminate . . . competition for traffic moving between points in this territory."