Opinion: Intersection of Interests

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When ATA President Walter B. McCormick Jr. spoke of seeking talks with the Association of American Railroads and its members, I was reminded of a story that has circulated around our two industries for decades.

Old-timers will recognize it immediately — even though it could well be apocryphal. It concerns yak fat.

Back in the days of rate regulation and rate bureaus, some unknown trucking representative proposed to the Interstate Commerce Commission a special rate for the hauling of yak fat.

With lightning speed, railroad representatives opposed the rate on grounds of unfair competition, citing data to prove that the rate could not possibly be compensatory, according to data purportedly based on railroad experience in the yak fat market.

The thing is, the proposed rate was a joke. Nobody carried yak fat. The trucker that proposed the rate was trying to show that railroad opposition to any trucking proposal was “knee-jerk” in nature and not really related to legitimate competitive interests.

It’s the kind of story that, if it isn’t true ought to be true, because it shows just how long railroad interests and trucking interests have been at odds.

These days, with something like two-thirds of rail traffic seen as “truck competitive,” there are legitimate issues between the railroads and trucking. One is competitive access, and trucking’s interest is clear and valid.

As McCormick said, truckers are railroad customers and have a right to push for an economical, dependable intermodal service. Even though the ICC and the rate bureaus are long gone, practices like cross-subsidization are still frowned upon, and competitors have a right to align themselves with those seeking an end to such practices.

The relevant question is: If railroads did not have the profit generated from charging captive shippers as much as the traffic will bear, could they afford to compete with highway carriers to the extent they do?

And just as there may be nothing wrong with railroads charging what the traffic will bear, there is also nothing wrong with trucking seeking to participate in discussions of these issues.

Truck productivity should be on the agenda along with competitive access. But I would be surprised if either the AAR or its members accept anything that would involve dropping opposition to increased truck productivity. They are more likely to suggest a compromise on competitive access.

While there may be a similar potential for compromising on the truck size and weight issue, I don’t know what it would be.

Certainly a plan to “aggressively work to protect the highway trust fund from being accessed by the railroads to meet their infrastructure demands,” as McCormick said, will not strike fear into any hearts at 50 F Street NW.

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