ICC Redux; Let’s Kill the Railroads

English: DTTX 724681 20050529 IL Rochelle

Image via Wikipedia

I’ve written a few times about the railroads, and how they were absolutely essential in settling this part of America because practically the was the only way one could make a living in the Old Northwest and the Great Plains was to farm. See this article.

I’ve also talked about how we nearly killed the railroad with regulations. See this article.

It seems that the progressives are taking another shot at killing efficient transportation. If you watch the Chessie Transportation ads you already know that a train uses about 1 gallon of diesel to move 1 ton of freight 60 miles. At a guess a semi moves 1 ton maybe 7.5 miles on that gallon of diesel and the taxpayers have to fix the road, which we don’t the railroad.

There is a bill in the Senate sponsored by 8 Senators called the Railroad Antitrust Enforcement Act of 2011 that wants to change some things in the Clayton Act.

I found this at Bill Maps via The Crockett’s Corner Daily and I’m going to quote it:

3/28/2011–Reported to Senate without amendment. (This measure has not been amended since it was introduced. The summary of that version is repeated here.) Railroad Antitrust Enforcement Act of 2011 – Amends the Clayton Act to grant the United States exclusive authority to bring suit for injunctive relief against a common carrier that is not a rail common carrier subject to the jurisdiction of the Surface Transportation Board (STB). Revises provisions prohibiting anticompetitive transactions except for those approved by specified federal agencies acting under certain statutes to eliminate the exemption for certain STB approved transactions. Provides that, in any civil action against a rail common carrier, the U.S. district court shall not be required to defer to the primary jurisdiction of the STB.

Mostly this says that a trucking firm can only be sued by the Government for Antitrust measures. It also says if you are a railroad, the district court can take the suit away from the STB at will.

Empowers the Federal Trade Commission (FTC) to regulate, and engage in antitrust enforcement regarding, collective rate agreements and certain transactions, including railroad mergers and acquisitions. Permits treble damages against railroad common carriers in antitrust suits to parties injured by antitrust violations without regard to whether such railroads have filed rates or whether a complaint challenging rates has been filed.

This effectively, if I’m reading this right turns the Federal Trade Commission into the old Interstate Commerce Commission which nearly killed the railroads in the twentieth century.

Did you also note that it permits treble (that’s four) times damages in antitrust suits without regard to whether this was a filed rate or even whether there was a complaint about the rate. In other words, if they feel like it.

Amends federal transportation law to terminate the exemptions from antitrust laws for collective ratemaking agreements. Requires the STB, when reviewing a proposed agreement, to take into account its impact upon shippers, consumers, and affected communities. Revises STB authority to provide that a rail carrier, corporation, or a person participating in an approved transaction is not exempt from specified antitrust laws. Makes such provision inapplicable to any transaction relating to the pooling of railroad cars approved by the STB or its predecessor agency.

I’ll readily grant that this verbiage is about as clear as mud but, that’s what we’ve come to expect from Congress, isn’t it?

Let’s start with collective ratemaking agreements, I think they mean here things like Schneider trucking making and agreement with the Burlington Northern Santa Fe to haul trainload of containers from Chicago to Los Angeles, which is in effect. Something like 2 trains per day each way. Who would oppose such a thing? How about the teamsters? That’s probably 400 hundred trucks that aren’t making that run.

Let’s try another, there are probably at least twenty trains (my guess is actually multiples of that but I don’t know) that are offloaded on the west coast loaded on container cars and shipped all the way to the east coast (a goodly many are reloaded on ships bound for Europe, it’s more cost effective than the Panama canal. This involves at least two railroads plus shipping companies. Who does this efficient system hurt? Teamsters and longshoremen, two of the most corrupt unions in the United States.

You noted that dread phrase there didn’t you: Affected Communities

The antitrust exemption is a recognition that trains compete with trucks (and ships) nothing else.

Pooling of railroad cars is one of those thing that people that don’t understand the industry have been ranting about (without cause) since about 1875.

This is the kind of nonsense that the old ICC did that damned near killed the railroads, I think know it’s a bad idea to try again.

I’ll grant that the summary looks pretty benign but considering who is sponsoring it, I believe it will hurt American competitiveness, jobs, and the economy.

The sponsors of the legislation are:

  1. Sen. Orrin Hatch [R, UT]
  2. Sen. Jon Tester [D, MT]
  3. Sen. Al Franken [D, MN]
  4. Sen. Herbert Kohl [D, WI]
  5. Sen. Patrick Leahy [D, VT]
  6. Sen. Charles Schumer [D, NY]
  7. Sen. David Vitter [R, LA]

There’s not a friend of the free market in the bunch. I think we can assume it it’s a bad idea to pass this bill and we should say so.

%d bloggers like this: