The purpose of this hearing is to determine a proper solution that may well, if continued, have adverse effect upon the economic growth of this State. Therefore, we have prepared the following statement and exhibits attached hereto, showing what has transpired with our company for verification of these problems. I In an effort to relate the critical effect of the short boxcar supply of our company, we have attached hereto exhibits 1 and 2, that show the actual carriers' performance starting with October of 1963, through and including March of 1965. Exhibit No. 1 relates the number of empty boxcars we have ordered for each month; the empty boxcars furnished by the carriers; the number of badorder boxcars that were furnished by the carrier, with the usable empties and the varying percentages of carriers' performance. II As an example, in October of 1963 we ordered 638 empty boxcars; the carriers were able to furnish 157 empty boxcars. Of these cars furnished, 43 were classified as bad order or unfit to load grain. Therefore, the carriers furnished only 114 cars which represents 17.8 percent of our need for shipping during the month of October. We have progressed this exhibit through each month to show the percentage relationships of our problem. III The carriers have never been able to furnish 100 percent of our needs in any given month during the period related. To relate the average performance of the carriers, we show 37.3 percent of our need for empty boxcars was furnished in 1963, which covers October, November, and December. For the year 1964, covering a 12-month period, the carriers' performance shows 40.6 percent of our need. For 3 months of 1965, January, February, and March, the carriers' performance shows 24.7 percent of our needs were supplied. IV We are no better than the railroad that serves our industry. If the Burlington Railroad is not supplied with empty boxcars, their own or other carriers, and cannot furnish our company equipment to move our grain to and from our facility, we are out of business. It was determined during September, October, and November of 1964 that the interest on the grain we had purchased in the State of Nebraska, that could not be delivered to our facility, had cost our company $300 per day for a period of 60 days, or a total cost of $18,000. V Our business is to buy, sell, and store grains. Without boxcars to bring grain into our elevators, we are helpless to sell grain without guarantee of equipment. We are completely at the mercy of the carriers serving our facilities, and cannot exist under the present destructive practices. One of the principal problems confronting the State of Nebraska, in addition to the fact of the railroads' depleting boxcar fleet, is that Nebraska is not a consuming area for raw materials, bulk or packaged, requiring boxcar delivery. Most shipments moving from the east to the west coast bypass the State of Nebraska, and this equipment cannot be captured by the rail carriers at an unloading point in another State west of Nebraska, and returned empty to Nebraska for a load of grain eastbound. The reason being that the western demand for equipment prevents empty return. VI In many instances, the rail carriers have tried to comply with shippers' needs for empty boxcars, but are adverse to moving empty cars great distances to satisfy a deficit area. To move a thousand empty cars from Illinois to Nebraska that could be carrying revenue westbound is unheard of by most carriers, but in this day and age to accumulate a thousand cars for any specific movement is almost a physical impossibility. VII Shippers' leased or owned equipment creates preferential treatment to lessee or owner that can destroy competition unable to lease or purchase equipment in the State of Nebraska. Leased cars are, on an average, too large for the branch-line loading. Branch-line shippers have and are suffering increasing losses of business as the owner or lessee of special equipment (jumpo hopper cars) can be selective in their purchasing area and use origins on the main lines of the carriers. Eventually many branch-line grain elevators will be forced to discontinue doing business due to this pressure of shipper and carrier special equipment. The branch-line elevator operator cannot handle carriers' jumpo hopper car equipment and in many cases are not capable of handling equipment larger than a 40-foot 8-inch boxcar. He is helpless and completely at the mercy of the carriers to satisfy his needs. VIII The subcommittee we are appearing before today are seeking solutions to this growing destructive problem of boxcar supply; therefore, the following suggestions have come to my mind and I wish to pass them on to the committee for what they are worth: 1. Of prime importance we suggest the Interstate Commerce Commission have full and immediate authority to act under short notice and to effect distribution orders to prevent buildups of boxcars in any area throughout the United States. This can be accomplished by the creation of an effective agency in Washington, under ICC control, that should keep a continuous surveillance of the transportation picture at all times, and keep the Commission fully advised when to react to prevent tremendous buildups of equipment. 2. In discussing this subject of boxcar supply with a railroad official we come to the conclusion that new boxcars should be constructed capable of versatile use to avoid grain door installations that tend to damage doorposts and bad order cars long before their time creating boxcar shortages. A versatile car that could possibly haul lumber with a wide door and be used for grain on a reverse move. This type of car would eliminate the use of grain doors, should keep this car in better condition for a longer period of time, and serve a dual purpose to the grain and lumber industries. 3. Senate bill S. 1098 (increased per diem charges) that suggest the amendment to section 1(14) (a) of the Interstate Commerce Act to insure the adequacy of the national railroad freight car supply and distribution. This bill is presently being enacted upon in Washington, and has been before the governmental agencies in one form or another for 6 years. To increase the per car usage of the carriers, should create a prompt return of carriers own equipment to their lines. 4. Boxcars are needed in great numbers. A desire should be created for the securities and investment companies to build boxcars for the railroads with a prompt writeoff, say with a period of 5 to 10 years where they could realize a prompt return on their investment. 5. A very important corrective amendment would be to have the Commodity Credit Corporation, controlled by the Secretary of Agriculture, Orville Freeman, regulate shipments of grains in storage to off-peak shipping periods. We understand legislative action cannot be enacted upon to restrict or liberalize the Secretary of Agriculture's duties. Therefore, can suggestions be made to the Secretary to assist the rail carriers to help resolve their car supply shortages? Harvest periods of grains start in June and terminate in November of each year. Every year Commodity Credit Corporation grains are transferred at the same time as the harvest creating a boxcar shortage, also tremendous buildup of boxcars at the ports. Boxcars stranded at the ports are not available to the shipping public for periods in excess of 30 to 60 days due to the lack of facilities at the ports to unload into storage and load out into vessels. CONCLUSION As I have related, my exhibits 1 and 2 show the picture of Lincoln Grain, Inc.'s inadequate boxcar supply. Our company cannot possibly continue business on the basis of less than 50 percent of operation. We must have 100 percent utilization of our facilities to stay in today's competitive marketing. The buying, selling, and storage of grain is the function of our industry. Therefore, to restrict our ability to buy or sell grain due to cariers lack of boxcars is destroying our business at a fast pace and must be stopped immediately. During the fall of 1964 (September, October, November, and December) we were unable to buy or sell grain for a period of 45 days. Our company is capable of loading and unloading 126 cars a day. We have yet to reach this maximum loading point at any month in the last 16 months. We have never reached 100 percent capacity of operation. Gentlemen, I thank you for the opportunity of appearing before this Senate subcommittee. The shippers of Nebraska feel this committee will present our problems before Congress and enact into law a permanent solution to prevent economic destruction of the grain and grain products industry of our State. Column A EXPLANATION OF EXHIBIT 1 Our study begun in the harvest period of coarse grains (corn and milo) of 1963. Column A states the year and month of our study. Column B We order empty boxcars daily as shown in column B. We have compiled our daily orders for each month to show what our needs were to fulfill our shipping schedules for each month. Column C The carriers furnish a number of empty boxcars daily to fill our request, if possible. We have shown the number of empty boxcars received to be com. pared with the empty boxcars ordered. Column D The rail carriers perform unnecessary transportation by furnishing equipment damaged and unfit for grain loading. A special switch must be performed to pull the bad order cars that never should have reached our facilities. Column D reduces rail carriers performance considerably in supplying of empty box cars. Column E Shows the actual cars we are able to load by subtracting bad-order cars in column D from column C. Column F The percentage figure shown represents the ratio between cars ordered in column B, versus cars received in good condition shown in column E. 1 Jan. 11, port strike became effective through Feb. 27, 1965. Orders from CCC were held until strike termination. 1. The railroads have not been able to supply 50 percent of our company needs for boxcars over the last 3 years. 2. Bad-order boxcars represent a destructive portion of the rail carriers boxcar fleet. Grain requirements must have class A boxcars to prevent infestation, leakage, etc. A facilitated rebuild program, plus purchase of new boxcars, is of primary importance. 3. Lincoln Grain, Inc., offers their wholehearted support for passage of Senate bill 1098. Time is of essence and emergency procedures should be exerted for passage of this bill. 4. The Interstate Commerce Commission must have unrestricted authority to exert immediate distribution orders to prevent boxcar shortages from building up to national importance. [Telegram] PORTLAND, OREG., October 6, 1965. Hon. ROBERT B. DUNCAN, The members of the Western Lumber Marketing Association, headquartered at 214 Alderway Building, Portland, Oreg., strongly urge House passage of Senator Magnuson's Senate bill 1098. Our membership ship in excess of 100,000 carloads of forest products annually from all western producing areas to every State in the Nation. The new graduated per diem rates adopted by the railroads January 1, 1964, have not brought about any improvement in other than specialized equipment in the high per diem bracket and much of this is used only by one industry and in one-way movements. Further, railroads were permitted to publish penalty demurrage charges against rail shippers without any full hearing by the Interstate Commerce Commission, effective July 1, 1964, amounting to increases from rates of $4 per day for the first 4 days to $5 per day; and from $8 per day thereafter to new charge of $10 per day for the first 4 days and $15 per day thereafter on all cars regardless of vintage. Certainly if penalties are fair to shippers then railroads should also be subjected to penalty per diem set by the Commission for mishandling or misuse of equipment. The Interstate Commerce Commission can solve this 50-year-old problem by adoption of this legislation which will prod delinquent car-owning railroads during times of serious shortages. Our experience indicates the shortage problems are further aggravated due to misuse of American Association of Railroad Car Services rules in all areas and by irregular movement, long delays in repair shops, mishandling of waybills, unrealistic mileage allowances that discourage leasing of equipment by shippers. Boxcar mileage payments are only 6 mills yet railroads pay 18 cents for loaded mileage on tank cars. Elimination of freight stations and reduction in employees is also contributing to poor handling and policing of present rules. Our membership urges adoption of Senate bill 1098 or similar measure to assist in building a roper car fleet. The car supply problem coupled with the vast distances involved to our markets for west coast forest products along with rate advantages granted other producing areas, restrictive routings, complex loading rules, and inflated accessorial and demurrage charges are causing annual financial chaos to northwest lumber firms. WESTERN LUMBER MARKETING ASSOCIATION, [Telegram] EUGENE, OREG., September 30, 1965. Hon. ROBERT B. DUNCAN, House Office Building, Washington, D.C.: It is hoped that the House committee holding the hearings on the House version Senate bill 1098 gives it favorable consideration. Please convey. EATON-YOUNG LUMBER CO., ROBERT G. GUITTEAU, Vice President. [Telegram] EUGENE, OREG., September 30, 1965. Congressman ROBERT B. DUNCAN, House of Representatives, Washington, D.C.: Understand hearing being held on S. 1098 and similar measures to help relieve boxcar shortages. We heartily agree with anything that may assist in relieving the car shortage. STARR CARTER LUMBER SALES. [Telegram] MEDFORD, OREG., October 1, 1965. Hon. ROBERT DUNCAN, Washington, D.C.: We urgently need relief from our chronic boxcar shortage where it used to be seasonal we could get by, but it is with us constantly now and is slowly strangling us. The railroads do not have a solution so we are turning to you for help. EUGENE F. BURRILL LUMBER CO. [Telegram] TACOMA, WASH., October 1, 1965. Hon. ROBERT DUNCAN, As sales representatives for several mills in Oregon, we urgently request your support of bill S. 1098. Unless there is some relief for the chronic rail car shortage on the west coast the resulting plant closures will inflict terrific financial losses. One of our plants in the Medford area has already lost time due to the lack of ears and another shutdown is imminent. Anything you and your colleagues can do to help expedite passage of this bill will be greatly appreciated. Thank you. H. E. TENZLER, President, Northwest Door & Plywood Sales Inc. |