STATEMENT BY PHILLIP M. CORBY, TRAFFIC MANAGER, EVANS GRAIN Co. This statement is presented on behalf of Evans Grain Co., Salina, Kans., to record our interest in and support of Senate bill 1098 and plea for its prompt passage. As traffic manager, for Evans Grain Co., part of my duties is the securing of rail equipment at the some 100 country elevators located throughout the States of Kansas, Nebraska, Iowa, Colorado, and Wyoming. These elevators are engaged in the business of storing, buying, and selling grain. To successfully carry on this business, it is mandatory that adequate rail transportation be available when and where needed. Each year, during harvest season, it is becoming more and more difficult to carry on this business for lack of rail equipment. To give you a few illustrations of the difficulty of carrying on our business in the country, I would like to use some examples of the sitnation that existed at various country elevators during the fall harvest of 1964 wherein we were handling the milo and corn harvest as well as loading out and shipping Commodity Credit Corporation grain from these stations: At Imperial, Nebr., located on the Burlington Railroad, we received a Commodity Credit loading order on the 14th of September. We ordered 49 empty cars on the 14th. These cars were furnished as follows: 1 car in September, 10 cars in October, no cars in November, and 38 cars in December. The elevator has track space for 11 cars and can load 11 cars a day. The most cars we were furnished on any 1 given day was six cars on the 29th of December. So we went from September through December to fill a 49-car order. At Geneva, Nebr., we ordered 34 cars on September 14. We received 6 empties in September, 4 cars in October, 18 cars in November, and 6 cars in December. This elevator has track space for 12 cars and can load 10 a day; but the most ever received any 1 day was 5 cars. At Arapahoe, Nebr., on the Burlington, we received a Commodity Credit loading order on the 10th of September, and we ordered the cars on the 10th. We received one car in September. No cars were received in October or November. This order was finished in December. At New Cambria, Kans., on the Union Pacific, September 24 we ordered 17 cars; we received 9 cars in October, 4 cars in November, and 4 cars in December. They can spot 30 cars at a time in there; and can load 6 a day. At Wilson, Kans., on the Union Pacific, on September 26, we ordered 32 cars. We were furnished 17 cars in October, 12 cars in November, and 3 cars in December to finish that order. At Rydal, Kans.. on the Rock Island, we ordered 80 cars on September 26. We received 8 cars in October, 15 cars in November, 29 cars in December, 24 cars in January, and 1 car in February to finish the 80-car order. At Riley, Kans., on the Rock Island, September 23 we ordered 27 cars. We got 4 cars in September, 9 cars in October, and 14 cars in November. At Arriba, Colo., on the Rock Island, on August 18 we ordered 49 cars. On September 9 we ordered 42 cars. On October 13 we ordered 61 cars. This was a total of 152 cars on order to fill Commodity Credit loading orders. We received 14 cars in August, 27 cars in September, 7 cars in October, 23 cars in November, 46 cars in December, 32 cars in January of 1965. That elevator has track space for 15 cars per day and can load 15 cars per day. These circumstances cited above were primarily connected with handling Commodity Credit loading orders. These orders cover grain owned by the Government, in storage at these elevators. When they order this grain shipped we must comply as soon as possible. These loading orders came at the same time as the milo and corn harvest. In other words, we were trying to handle new harvest grain and make shipments of old storage grain at the same time. From the previous illustrations it is apparent that we were unable to handle the loading orders for Commodity Credit let alone the current harvest grain. At Arapahoe, Nebr., I gave you our Commodity Credit story. We finished harvest with 15,000 bushels of grain on the ground. That was cash grain. But to stay at only 15,000 bushels on the ground, we trucked over 60,000 bushels away from the elevator. That was grain that could have moved by rail. In order to keep the grain off the ground, it was necessary to sell it by truck. At Franklin, Nebr., at one time we had over 70,000 bushels of grain on the ground. On November 19, we needed 29 cars at that station. On November 25, the following week, we needed 25. December 3, we still needed 20. And on December 10, we still needed 10. You can see we received a few cars each week but not enough. This required trucking 45,000 bushels of grain from Franklin to get off the ground. At Imperial, Nebr., another station I mentioned earlier, we had to do our cash business by truck. We could not get the cars to even handle Commodity Credit Corporation grain. At Saronville, Nebr., we had 60,000 bushels of grain on the ground. At Hildreth, Nebr., another Burlington station, we had 55,000 bushels of milo on the ground. We trucked it all. On October 29, we called the Omaha office of the Burlington Railroad to tell them the position the elevators were in that morning. We needed 286 Burlington cars. That was not for speculative loading. We do not believe in ordering 10 cars if we need 5. We only order exactly what we need then expect performance by the railroad. On that same day we called the Rock Island Railroad, we needed 318 cars. On December 11, we made a summarization which was, in part, as follows: "During the immediate past fall milo harvest we had to truck approximately 360,000 bushels of grain from our country elevators located on the Burlington Railroad. This grain was trucked because the C.B. & O. was unable to furnish boxcars and we could not afford to leave the grain on the ground until the car shortage ended * * *” This places quite a burden on these individual country elevators in their buying and selling program and of course affects the farmer in marketing his grain. At one time the Interstate Commerce Commission had service order 945 in effect. This order specifically directed that cars of certain railroads be returned to them. Here is an exchange of telegrams I had with the ICC concerning service orders: INTERSTATE COMMERCE COMMISSION, October 8, 1964. Situation desperate for rail equipment to load grain at our Kansas and Nebraska elevators. Please reissue service order 945 or similar new one to cover in particular CBQ CRIP UP and MOP. PHILLIP CORBY, Evans Grain Co., Salina, Kans.: EVANS GRAIN Co., PHILLIP CORBY. October 9, 1964. Reurtel 8th. Commissions order 947 designed accomplish everything order similar to 945 AD MREXXX and more. Order 947 is being policed diligently by our field organization. KENNETH H. TUGGLE, October 12, 1964. KENNETH H. TUGGLE, Commissioner, ICC, Washington, D.C.: Service order 947 may be designed to help but cars getting scarcer and piles getting bigger. We need help at Burlington points in Nebraska. PHILLIP CORBY, Evans Grain Co., Salina, Kans.: EVANS GRAIN Co., October 14, 1964. Retel 12th addressed to Commissioner Tuggle has been referred to me. Heavy releases gulf ports plus strong directive to carriers compliance service order 947 should improve car supply to Burlington. RUPERT L. MURPHY, Commissioner, ICC. November 13, 1964. INTERSTATE COMMERCE COMMISSION, Burlington railroad still not able furnish box cars to meet shippers commitments. Unable to make dent in grain piled on ground. We need all help possible. PHILLIP CORBY, Evans Grain Co., Salina, Kans.: EVANS GRAIN Co., Reurtel Chairman, Commission distribution orders issued to relieve car situation on Burlington. C. W. TAYLOR, DRXX Director, Safety and Service, ICC. About all that ICC service order 947 amounted to was a restating of the Association of American Railroads as service rules. From our viewpoint the AAR rules do no good. There is no practical way to enforce them. Finally, on November 16, as indicated by the last telegram, orders were issued which finally began to help the car situation. It is unfortunate that it took 60 days for the ICC to act. One of the contributing factors to the car shortage is the nature of the grain movement. Vast quantities of grain are exported via the gulf ports, other movements are into eastern territory and from time to time to the west coast. These movements take the cars beyond the rails of the grain originating lines into the hands of destination carriers. These cars are used by these carriers for their own purposes and are returned to the owning lines very slowly. We believe passage of S. 1098 would stimulate the movement of these cars back to the owning carriers and make it more attractive for the deficient car owning lines to build or buy equipment of their own. The 1965 fall harvest is under way at this time. Already a car shortage has developed. We understand the ICC has already issued some service orders requiring cars be sent to certain grain originating carriers. We urge prompt action toward passage of this bill to help remedy this situation. STATEMENT OF GLENN KOHR, TRAFFIC MANAGER, MORRISON GRAIN Co., INC., SALINA, KANS. I am Glenn Kohr, traffic manager for Morrison Grain Co., Inc., of Salina, Kans. I am here today to have our statement entered into this committee's record on behalf of Morrison Grain Co., Inc., and its affiliated companies. We operate grain elevators and storage facilities in the States of Kansas and Oklahoma with a combined storage capacity of over 17 million bushels. These grain-handling and storage facilities have all been erected and operated in such a manner in order to make full use of rail transportation. However, there have been many times in the past, and there will probably be many times in the future, when we have been, or will be, forced to use other modes of transportation-namely, trucks—in order to keep operating during periods of car shortages. Not too many years ago we were faced with car shortages only about twice a year, which was during the wheat and milo harvests. The situation has deteriorated so we are now almost constantly harassed with car shortages. This situation is costly both to us, the shippers, and to the railroads serving us. In many cases, during peak periods of loading out and unloading cars, we are forced to hire additional employees in order to keep abreast of the workload. They, as well as our full-time employees, must be paid regardless of whether or not we have cars to load. We have lost many thousands of dollars annually in labor costs alone due to the lack of cars. Idle facilities are also costly. Another facet to this situation is that we lose a substantial amount of storage and handling income due to the railroad's inability to furnish empty boxcars to the country elevators. Because of this inability on the part of the railroads, 34-899-6518 they, too, are losing a sizable amount of revenue every year to trucks. When grain leaves a country elevator by truck, the railroads can be certain they will not receive 1 penny's worth of revenue. Nearly all grain trucked direct to Kansas City and other Missouri River markets is forwarded by barge from there. Two or three months from now we will likely open our morning paper only to be confronted with the very familiar picture of thousands of bushels of grain piled high in the center of the street or near a country elevator in some Kansas or Nebraska communities. Gentlemen, there is one and only one reason that a picture of this kind could ever be made and that reason is car shortages. In the April 3, 1965, issue of the Traffic World there is an equipment data report on revenue freight cars which was prepared by the Car Service Division of the Association of American Railroads. The report shows that the total ownership of boxcars by class I railroads declined 16,376 cars in the period from March 1, 1964, to March 1, 1965. During this same period there was an overall loss of all types of cars amounting to 12,735. This trend is certainly not conductive toward relieving the car shortage problem. In the period from October 1, 1964, through December 31, 1964, our terminal elevator at Salina, Kans., received loading orders from Commodity Credit Corporation totaling 877,412.65 bushels. We order cars from the road-haul carriers promptly after receipt of loading orders. Under normal conditions and providing we would be able to obtain cars from the railroads, we would have been able to complete each of the loading orders in 1 or 2 days. However, because of car shortages, it has taken us from 9 to 43 days to complete these loading orders after the date the cars were ordered. On October 7, 1964, we received a loading order from Commodity Credit Corporation for 50,000 bushels of wheat, which, had we been able to get the cars, we could have completed in 1 day, yet this loading order was not completed until November 20, 1964, 43 days after the cars were ordered. The remaining 11 loading orders we received during this period required an average of approximately 21 days to complete after the cars were ordered for loading. During the period January 1, 1965, through March 31, 1965, we received loading orders from Commodity Credit Corporation totaling 594,299.60 bushels. Two of these orders amounting to a total of 41,823 bushels were completed prior to the longshoremen strike. The remainder of the cars were actually ordered 2 or 3 days prior to and in anticipation of the settlement of the dock strike. the present time we are still trying to complete shipment on two of the loading orders. At On the completed loading orders, the average number of days needed to complete them after the cars were ordered was approximately 30 days. The statistics just mentioned are no longer the exception but rather the rule. The exceptional length of time necessary to complete loading orders is not, in some cases, due to the railroad's inability to set cars for loading, but rather due to the railroad's inability to set usable cars for loading. There have been many times that we have had to "bad order" as high as 50 percent of the cars furnished. This rate of 50 percent is on the high side, but we estimate that the average ratio of bad-order cars to actual cars placed for loading at our Salina terminal elevator to be an alarming 33% percent. Another contributing factor, and we believe the most important one, is the fact that the car-deficient eastern railroads prefer to pay per diem charges, which are entirely too low as compared with the present-day cost of owning equipment, rather than to return the cars to their home lines. On January 1, 1964, the railroads on their own initiative agreed to change the per diem rate from the longstanding $2.88 per car, to a graduated schedule ranging from $2.16 to $7.74 depending upon the original cost per car less depreciation. At first glance it would appear that the railroads had actually increased the per diem charges. However, this is not the case. They actually reduced the per diem charge, thereby making car ownership less attractive. True, the per diem charge on some cars such as the new hopper cars or damage-free boxcars was increased, but these cars are in the minority. The per diem charges on most of the standard boxcars (the workhorses of the rail transportation fleet) in use today was in reality reduced from $2.88 to $2.16 because the majority of the boxcars used today fall in that category of per diem group I. Recently there has been a bill introduced in the Senate which would give the Interstate Commerce Commission the power to set per diem charges. We are confident that this is a step in the right direction. We of the Morrison Grain Co., Inc., support and endorse Senate bill 1098 and urge passage of this bill. STATEMENT OF SYLVESTER 0). MOBERLY, TRAFFIC MANAGER, C-G-F GRAIN Co., INC., SALINA, KANS., REPRESENTING SALINA BOARD OF TRADE My name is Sylvester O. Moberly. I am traffic manager of C-G-F Grain Co., Inc., and I am representing the Salina Board of Trade, which is similar to the Kansas Board of Trade, a nonprofit organization of grain interests in Salina. Several of the members of this board of trade own or operate country elevators and subterminal elevators in Kansas and Nebraska, representing well over 100 million bushels of storage space and representing a considerable volume of merchandising business, all jeopardized by the almost constant shortage of equipment that exists and has existed over the past several years. And it threatens to get worse for the future. To start, one of the elevators represented here has records showing an existing shortage as of January 24, 1964, of 287 cars. On that date an additional order for 156 cars was placed, and these are due to Government loading orders. In addition, another 150 cars were ordered between the 24th of January and the 18th of February to handle commercial commitments. This made a total of 533 cars ordered during this period. Had there been no other orders, we would probably have been fairly close to completing this portion of it. But there were other orders, the grain business being such that it cannot be shut down merely because the rail carriers cannot furnish equipment. It was not until February 18 that a Government order scheduled for completion on February 11 could be finished. And this, remember, is over a year ago. This was in January of 1964. Then in March, March 20, an order was placed for 55 cars, and not until March 31 were sufficient cars furnished so the backlog could be loaded and this particular order started. Continuing on that line, there were two events in April. one in May, August, September, and October. These same occurrences happened. Cars were ordered for shipment and delayed anywhere from 5 to 10 to 15 days. This is the experience of this one elevator. Then from another member of the board of trade with an elevator in central Kansas: On September 28, 1964, they ordered 28 cars. They need those by the 5th of October. They received them as follows: On the 6th of October, two cars. On the 9th of October, three cars. On the 19th of October, one car. On the 23d of October, one car. On the 27th of October, three cars. On the 24th of November, four cars. On the 30th of November, four cars. December 2, three cars. December 9, one car. December 14, one car. December 16, three cars. December 18, four cars. December 22, one car. It took 78 days to fill an order for 28 cars. And then for the same owner with a central Nebraska location. There are three of them represented. I will read one of them. They ordered 23 cars on January 4, 1964, and they needed them by the 8th. On the 15th, 11 cars were placed, on the 16th 1 car, on the 20th 6 cars, on the 22d 1 car, on the 28th 4 cars. This made 24 days to furnish 23 cars. Then he has one order for cars that is still open at the present time. This is at location No. 3 where 20 cars were ordered on March 4, 1965, needed by March 16. As of the 13th of April they still needed 10 cars at this location. In June of 1963, we were on record before the Trans-Missouri-Kansas Shippers Board as follows: "As to car supply, in November we ran a car check for 10 days covering 141 cars. Thirty-three were bad order cars unfit for grain loading. This is nearly 25 percent bad order. In addition during this period there were several that had to be transloaded en route because of faulty equipment. During the period after the strike ended, the port strike, our percentage of bad order cars ran as high as 50 to 60 percent. On 2 days we received 18 cars 1 day and had to reject 16. On the following day we received 14 and all 14 were bad order, this group switched in error as some had had bad order tags on the doorways. |