The two railroads that haul much of the East's coal to port attempted to restrain their delight yesterday at the Interstate Commerce Commission's deregulation of coal shipped by rail for export.
But Carl L. Bagge, president of the National Coal Association, called the ruling "an unmitigated disaster." The association of coal shippers is worried that unfettered railroads will mercilessly jack up the rates.
And Conrail, the federally owned northeastern railroad that sought and won ICC deregulation of rates for boxcar shipments, said that action would help it compete with trucks.
Both the export-coal and boxcar decisions, announced late Thursday without comment or detail, reflect the ICC's continuing trend to remove itself from rate changes in rail as well as truck transportation.
"I just looked at the issues and that's where I came out," said Commissioner Heather J. Gradison, who voted with Commissioners Frederic N. Andre and Malcolm M. B. Sterrett on both decisions.
Gradison said that lengthy rate review no longer should be one of the ICC's major concerns. "One of the important things the ICC can do "is promote electronic tariff rate filing and move into the 20th Century," she said. Rates thus could be changed and posted instantly, without interference.
Dissenting votes on both issues were cast by Commission Chairman Reese H. Taylor Jr. and Commissioner J.J. Simmons. The decisions--which everyone is waiting to read "so we can find out what the ICC really did," as one industry source said--will be published within 60 days. The coal-export ruling will take effect 90 days later; the boxcar ruling, six months later.
The Norfolk Southern, which derives 40 percent of its revenues from hauling coal, said in a statement yesterday that "the ICC's action is something that we have sought and we are gratified by it. The flexibility that the order permits should help to make U.S. coal more competitive in the world market."
Gradison said that as much as 70 percent of export coal moves under contract between shipper and railroad, so was beyond the ICC's ratemaking reach. Coal industry officials said, however, that those contracts are of short duration and apply mostly to service, not price. Defenders of deregualtion have stated that, with the ICC out of the way, long-term contracts could be reached to protect both shipper and railroad.
The National Coal Association's Bagge said the ruling would stir a revolt among coal shippers because "the ICC is a wholly owned subsidiary of the Association of American Railroads." He predicted the decision would assist efforts in the current session of Congress to change the Staggers Rail Act, the 1980 deregulation legislation that pushed the ICC to remove itself from much rate review.
The ICC said yesterday that, in the boxcar case, it exempted all boxcar shipments from rate regulation except recyclable nonferrous metals.
Conrail predicted that the ruling will boost boxcar shipments.