SANTA FE EASES UP ON DRAYAGE DEMANDS

SANTA FE EASES UP ON DRAYAGE DEMANDS

Atchison, Topeka and Santa Fe Railway Co. appeared Thursday to be backing off its earlier decision to require drayage operators to post $10,000 letters of credit and obtain $250,000 in cargo insurance.

The Schaumburg, Ill.-based railroad triggered a wave of protest when it notified 1,500 drayage contractors by certified letter earlier this month that it unilaterally was changing their intermodal equipment interchange agreements, effective May 4.Stephen G. Branscum, Santa Fe's general manager of intermodal equipment, putting the railroad spin to the latest developments, said he expects to make new changes in the interchange agreements next week.

"I have received a tremendous amount of positive feedback," said Mr. Branscum, who is on vacation this week, but who spoke with The Journal of Commerce by telephone. "We've received some good recommendations how we can modify the agreement."

While emphasizing that no decision has been made, Mr. Branscum said he probably would change both the letter-of-credit terms and the insurance requirement.

"There was concern about the open-endedness of the letter of credit, and we'll probably get more specific on when we can invoke it," he said.

Longtime drayage companies that have a good credit record with Santa Fe probably will be grandfathered and won't be required to post the letter of credit, he added.

Joanne Casey, executive director of the American Trucking Associations' Intermodal Council, said her biggest concern was that "we had a good working relationship with Santa Fe, yet these changes were put in without ever talking to the motor carriers."

"If other railroads decided they needed this kind of guarantee, drayage companies could be forced to put aside $20,000, $30,000 or $40,000 of scarce working capital," she added.

Despite concern the Santa Fe move might spread, it received little support

from other railroads.

A spokesman for Consolidated Rail Corp. in Philadelphia said the big Eastern carrier was sticking with the terms of the Uniform Intermodal Interchange Agreement, administered by the Intermodal Association of North America.

"Conrail signed and backs the uniformity in it. We have no plans to change our requirements for drayage contractors," he said. Conrail is the largest intermodal rail carrier in the East.