Still the Shippers’ Voice?

Don’t be surprised if one or more railroads drop their membership in the National Industrial Transportation League. At least one Class 1 carrier is considering it, and if it happens, expect the other Class 1 members to follow in short order. Recent League policy positions supporting legislation the railroads consider anti-railroad are driving the internal assessments of the value of membership.

For most of its existence, the NITL proclaimed to be “the shippers’ voice” to identify its role in the transportation firmament. After all, the League represented shippers’ interests in their many disputes with carriers through the era of transportation regulation.

Carriers might grind their teeth at some of the positions the NITL took on public policy that the railroads viewed as antithetical to their interests, but there was nothing they could do about it. The NITL was representing its members’ interests.

Early in this decade, though, the League faced declining membership and shrinking budgets as companies increasingly dropped out. Corporate mergers consolidated traffic departments and deregulation had taken the heat out of transport issues.

Edward M. Emmett, a former commissioner of the Interstate Commerce Commission and the NITL’s president at the time, proposed changing the organization’s charter to allow carriers to become full members. Talk about lambs and lions.

Transportation, Emmett argued, was in a new public policy era in which shipper and carrier interests increasingly were aligned with each other, and that with less economic regulation, there were fewer shipper-carrier disputes. Although some NITL members objected strenuously to the move, it was adopted, and the major railroads promptly joined.

The new mission brought a new NITL slogan: “The voice of the freight transportation industry.”

The relationship never has been as cozy as the slogan suggests or supporters had hoped. Shippers and carriers are not natural allies. As vendors and customers, there is significant tension in their relationship.

A couple of recent actions may have convinced carriers the League only wants their membership dues and that their membership should consist of writing checks and sitting quietly in the corner.

Truck size and weight legislation is one issue about which railroads feel strongly. The mildest railroad position is that if truckers would pay their full allocable share of the cost of building and maintaining the public rights-of-way they use, the railroads would not oppose bigger and heavier trucks. Not all railroads will go even that far.

Shippers, particularly in the current recession, see the size and weight issue as one of the few areas where they can get transportation productivity. In the past, the NITL has endorsed truck size and weight legislation, subject to the caveat that truckers should pay appropriate user fees and fuel taxes.

Last month, however, the NITL said its board, following the recommendation of its Highway Transportation Committee, endorses legislation that would repeal the existing federal ban on larger and heavier trucks.

In a nifty piece of rationalization, the League didn’t repeat its statement that truckers should pay more. That was because the pending legislation doesn’t authorize bigger or heavier trucks; it simply would repeal a ban. So, we’re led to believe the NITL may retain its prior position. Frankly, I’ll believe it when I see it.

At the end of May, the League board wrote to all 99 members of the Senate (Minnesota still has only one senator until the courts sort out the last election) that its board “voted overwhelmingly in favor of supporting passage of S. 146, the Railroad Antitrust Enforcement Act.”

If enacted, the League wrote, “the bill would repeal antitrust exemptions in the rail industry and bring the federal government’s review of railroad mergers and acquisitions under the purview of the Department of Justice and the Federal Trade Commission.”

The NITL said it had been guided by the discussion at its Railroad Transportation Committee meeting, where a motion to support S. 146 was passed.

The organization also urged the Senate to coordinate any changes in antitrust laws with a yet-to-be introduced bill that would reauthorize the Surface Transportation Board and could change the way the STB regulates rail issues.

That may have been the final straw for railroads. The industry already was in an all-out battle to kill the antitrust legislation, which it believed would be punitive and would cause chaos by subjecting railroads to simultaneous regulation by different agencies with different mandates.

Key senators later agreed to pull the antitrust bill from the floor, where it had been scheduled for a debate-ending vote on June 2, and have committed to producing a comprehensive bill that represents the interests of the Judiciary Committee and the Commerce, Science and Transportation Committee.

That doesn’t change the sense of betrayal by an organization in which the railroads are members.

Perhaps the NITL will go back to being the shippers’ voice.

Lawrence H Kaufman, former intermodal editor of The Journal of Commerce, is a Denver-based consultant whose clients include the Association of American Railroads. Contact him at lkauf81509@aol.com.

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