The Interstate Commerce Commission proposed yesterday to remove the last major governmental barrier to railroad ownership of truck companies.
If adopted as proposed, the rule would remove the regulatory hoops through which a railroad has to jump before it can purchase or create a trucking subsidiary. Further, trucking subsidiaries could substantially extend the markets served by the owning railroad, something that is difficult but not impossible for a railroad subsidiary trucker under present rules.
The proposal has long been sought by railroad interests and, the ICC said in its announcement yesterday, would improve so-called "intermodal" freight shipments, which require more than one mode of transportation to reach their destination. The theory is that if one company owns both the trucks and the railroad, costs can be reduced and shipments can be speeded through operating efficiencies.
Today, a railroad must prove that a "special circumstance" exists before it can operate a trucking subsidiary to specific points. The new rule, if adopted, would shift ICC deliberations on proposed rail-owned trucking operations "from a presumptive policy against railroad acquisitions . . . to a balanced case-by-case approach."
The American Trucking Associations, which represents major trucking companies, opposes railroad ownership. Nelson Cooney, ATA's general counsel, said yesterday that "We think the proposal is bad for the industry and bad for the public. We do not think the benefits claimed will accrue . . . The railroads' main interest is to turn freight back to rail regardless of efficiency and the cost of movement."
Frank Wilner, spokesman for the Association of American Railroads, called the ICC proposal "another necessary step towards creating additional competition that can only have a salutory effect on the shipping public." He said he knows of no railroads actively seeking to purchase trucking companies at this time, but said the AAR believes "the regulatory climate" should permit that activity "without bureaucratic interference."
While no trucking acquisitions may currently be planned, the CSX Corp.--which owns the Chessie System and the Seaboard System railroads--has purchased Texas Gas Corp., a subsidiary of which is the American Commercial Barge Lines Co.
The acquisition of the barge company still requires ICC approval and is being fought by waterway interests for many of the same reasons trucking companies oppose acquisition by railroads. The ICC proposal was seen by some observers as an indication of the attitude the commission will take toward the question of railroad ownership of barge companies.
In its proposal, the ICC said that "Given the economic maturity of the motor carrier industry and its ability to compete effectively with other transportation modes, the expansion of railroad-owned motor carrier operations is not likely to lead to rail domination . . . and restraint of trade."
Railroads have owned trucking subsidiaries for years, particularly piggyback operations where truck trailers ride on rail flatcars for the long-haul portion of their journey. But the types of loads railroad-owned truckers could carry and the territories they could serve have been strictly limited.
Comments on the ICC's proposal will be due 45 days after it appears in the Federal Register.