The Interstate Commerce Commission will find that several major railroads earned enough money last year to trigger tougher rate review standards at the agency, a railroad industry official predicted.
William Dempsey, president of the Association of American Railroads, said two or three or four railroads would be declared revenue adequate for 1988 when the commission makes its determination this spring.That will send the ICC into a tumble. They won't know what to do with that, he said.
A revenue adequate railroad cannot raise its rates as much - or as easily - as a railroad that fails to meet this test. Generally, a revenue adequate railroad must earn its cost of capital.
No railroad has been found revenue adequate since the standard was created in the 1980 Staggers Act.
The railroad industry has argued that a carrier must earn its cost of capital for several years - not just one year - if it is to be found revenue adequate.
A spokesman for the railroad association said the commission likely will find that the Burlington Northern, Norfolk Southern and the Union Pacific railroads will have earned their cost of capital in 1988.
Mr. Dempsey was one of three industry leaders who presented a 1989 industry forecast at the Transportation Table, a speaker's forum sponsored by The Journal of Commerce.
He was joined by Thomas J. Donohue, president of American Trucking Associations, and James Bartley, executive vice president of the National Industrial Transportation League.
Mr. Dempsey also said the railroad association will renew conversations with labor over disputes surrounding the creation of so-called short-line railroads.
Broadly, he also expects the industry to renew its fight against shippers who are trying to reform the Staggers Act. He said that hazardous materials transportation is a real problem we share with the motor carriers, and that congressional efforts to rewrite clean air legislation also will occupy the association's time.
In the trucking industry, Mr. Donohue said he is worried increasingly by the growing shortage of truck drivers.
We're going to have a real big problem in the out years with drivers, he said, adding that many workers who entered the industry after World War II are retiring.
We'll have a demand curve with more freight to move . . . and a supply curve with fewer people to drive.
He said trucking companies will turn more to women and immigrants to fill the void.
The prospect of higher fuel taxes to reduce the federal deficit is also a major issue for trucking companies.
Mr. Donohue said he does not believe a fuel tax will be considered in the early weeks of the new congressional session.
If gas tax opponents can build a big enough coalition, he added, and if the issue can be delayed until the fall, I feel we'll be able to get enough muscle together to forestall it . . . I think we'll squeak by.
On other issues, Mr. Donohue said the trucking industry will press Congress for uniformity in the collection and administration of state truck taxes. He called the current patchwork of state levies a nightmare for truckers.
Mr. Bartley of the transportation league said shippers will campaign to reduce unnecessary government involvement in transportation that raises the costs of doing business.
He said U.S. companies often have trouble competing globally because inland transportation costs in the United States are too high. Port to port costs, however, are generally on a par with other nations.
Mr. Bartley also said the efficiency of truck transportation is critical to shippers and urged greater highway access for tractor-trailers.
He also predicted that last year's dispute over negotiated truck rates would be taken up again this year in Congress.
In the railroad industry, Mr. Bartley said there is likely to be a break in the Staggers reform debate until the administration makes new appointments to the Interstate Commerce Commission.