August 28, 1970 CONGRESSIONAL RECORD- SENATE 814485
THE EASTERN AND WESTERN RAILROADS
REQUEST FREIGHT RATE
Mr. MANSFIELD: Mr. President, the
news that the eastern and western railroads
are seeking a 15-percent freight
rate increase is depressing, saddening,
and could be disastrous to the grain.producers
and growers in Montana as well
as to the lumber industry as a whole.
After taking a 5-percent· rail freight increase
only 2 months a.go that hiked the
per-car cost of shipping by some $60,
western lumbermen-! am speaking especially
of the lumbermen of Montanamay
be at loggerheads soon with a 15-
percent increase which they contendand
I agree with them-will further reduce
the ability to compete in eastern
United States markets.
It appears to me that something must
be done. To that end, together with other
members of the Montana Congressional
Delegation, I have dispatched a letter to
the President of the United States asking
hipl to look into this matter, so that the
ICC will not give its usual pro forma
consideration to this request granting it
I have directed a letter as well to the
chairman of the Committee on ComIJlerae,
as~ing that his committee look
into this particular proposal. I am hope-
:ful that something will be done to help
the freight rate structure as it exists in
Montana., rather to make it more and
more dilllcult by granting these rate increases
Mr. President, I have said more than
enough on this matter up to this time. I
have introduced a blll which would seek
to pl-ace a demurrage rate o:f $100 a day
on freight cars held by railroads not
owning them beyond the usual 48-hour
limit. I have gotten nowhere with that
The message apparently was not getting
through. So I have made the suggestion
that if the ICC cannot deal with
the situation, it should be abolished and
its activities transferred, in whole or in
part, to the Department of Transportation.
There, under the Secretaryship of
John H. Volpe, I am quite sure that some
consideration would be given to this situation
which has become a perennial
I am hopeful that this latest increase
request coming within less than 2 months
after a 5-percent increase, which followed
on the heels of a 6-percent increase,
will be denied and that the economy
of the wheatgrower, and the lumber
industry will be preserved and given the
kind of protection it needs within this
Mr. HANSEN. Mr. President, will the
Mr. MANSFIELD. I am delighted to
Mr. HANSEN. Mr. President, I compliment
the distinguished majority leader
for his usual perception in noting turns in
events which can pose real economic
hardship on our part of the Rocky Mountain
I have joined with the distinguished
Senator in appealing to the Interstate
Commerce Commission for relief from a
practice long engaged in by eastern railroads
whereby they gobble up the boxcars
and the freight cars belonging to western
lines and pay only a pittance of what it
is costing those lines to have those cars
rolling on the tracks, and thereby make
it more difficult for our western lines to
haul as cheaply as would otherwise be
possible these products that are so important
and essential to the economy of the
States of Montana and Wyoming and all
that great livestock, lumber, and grain
producing area of the Northwest.
I . have not had an opportunity to
study-as I assure the distinguished Senator
I will be doing-the facets of this
most recent order; but I certainly want
to join him in saying that I know full well
that the increased difficulty that he cites
as following in the wake of this increase
in rates will be visited upon the lumber
industry in my State of Wyoming, also.
It will affect our grain growers. In the
fall, when we start harvesting sugar
beets. I suspect that we will find a recurrence
of the kind of beet-car shortage
that we have experienced for the last several
I assure the distinguished Senator that
I will be happy to do anything I can to
help allevi~te some of these problems and
thereby nfa.ke unnecessary further increases
in freight rates.
Mr. MANSFIELD. Mr. President, I am
Mike Mansfield Papers, Series 21, Box 46 , Folder 56, Mansfield Library, University of Montana.
814486 CONGRESSIONAL RECORD-SENATE Augnst 28, 1970
delighted that the distinguished Senator
from Wyoming has entered this dlscusslon.
As I have said many times, he baa
been a leader in protecting the interests
of our part of the country. What he baa
said today Is very true.
He mentioned the grain producers, the
grain growers. the rumber industry, and
the sugar beet industry. Sugar beets will
be coming to harvest within the next
month or so, depending on the weather.
This matter will affect that industry
quite dramatically. The Senator has
also mentioned its effect on the cattle
industry as well.
In other words, our part of the country
happens to be an orphan so far as freight
rate consideration. is concerned. We are
always on the receiving end of these increases
plowed one on top of the other.
The process has upset tremendously our
economic development. It has imposed
an unfair burden upon the people of
our part of the Nation. making It more
difficult to survive because of the increased
costs which follow Increased
Mr. President, I ask unanimous consent
to have printed at this point in
the RECORD a news story published
in the Great Falls, Mont., Tribune of
August 24, 1970, entitled "Freight Rate
Hike Would Cut Lumbermen's Ability To
There being no objection. the article
was ordered to be printed In the RECORD,
A 15-P!:RCENT lNCIUCASE ON WESTERN RAlLIIOAD
SHIPPING: Fu:rGHT RATE. Hilts WouLD CuT
LtJMBERJoaH'S ABILITY To COMPETE
(By Ralph Pomnlchowskl)
After taklng a 5 per cent ran freight Increase
only two months ago that hiked the
per car oost of shipping by some •60. western
lumbermen may be at loggerhee.da soon
with a 15 per cent lncree.se they contend will
further reduce the a.blllty to compete In
eastern U.S. markets.
It was announced last week In Chicago that
eastern and western rallroe.da have agreed to
move ahead with a 15 per cent acrose-theboard
freight Increase petition to be tiled
with the Interstate Commerce Commlaslon
about Sept. 1.
The St. Regis Forest Products Division In
Libby, as well as other western Montana torest
products manufacturers, would be atreoted
by a rate hike, said Fred Shinkle. Tacoma,
assistant regional transportation manager.
Shinkle pointed out that any Increases by
rail carriers eventually will be charged to the
consumer. Moreover, he said, an lncreue will
put western lumbermen at a further disadvantage
of competition with southern U.S.
lumber producers, who now pay a lower rats
than Ml.elr western counterparts.
"As a matter of principle, of course, we're
agalnst anything that would lncree.se coeta.''
Shlnkle said, adding that the entire western
tndustry Is united In opposition to the percentage
Percentage Increases place an un1alr burden
on western lumbermen because any ln·
crease means a larger dollar charge to them
than to' the southern producers, Shinkle
said. "Por Instance," •he said, "It their rate
to New York Is •1 and ours Is •:a. then we
Increase 12 cents on a 6 per cent Increase,
wh!le they Increase only 6 centlf per hundredweight."
rb costa the same to ship lumber to the
eastern railroad sector from Tacoma as It
does from Libby, Shlnkle noted. The seatx>r
area Is from Indiana east ana generally noi'Ul
ot the Ohio River, he said.
The last lncrease of 5 per cent, he said,
boosted the per-hundredweight rate from
•1.60 to •1.68. Since the average car loading
Is about 75,000 pounds, the lncreue amounted
to $60 per car.
The Libby plant, he said, shlpa 20- 25 rail
cars of lumber per day In addition to 8-10
cars of wood chips bought by the HoernerWaldort
plant In Missoula.
As general practice, he said, lumber shipments
are sent collect, but the freight cost
Is reflected In the total cost of the product.
Some St. Regis product= are shipped by
truck, he said, but truck rates are slightly
higher than rail charges and have generally
kept pace with rall hlkea. ·
Rail rates are lower In Canada, he pointed
out, but not very much has been shipped In
that manner by St. Regis.
Southern mills enjoy a basic lower rail rate
to the eastern and midwest markets, he sall1,
and within the southern states, western
trade lnftuence Is nil.
Another facet of the problem, he said, Is
that competitive matilrlala such as steel,
plastic and cement will make turther lnroacla
Into building preference for wood If the retail
price continues to climb tor lumber e.a
the result of ran freight price Increases.
Freight ratee to the mldweet and southeast,
he said, a.re lowet' than (or the eastern sector.
He pointed out, the rail rate has Increased
27 cents per hundredweight over the past
three years. In 1967, the per-ear eoet of traMporte.
tlon at 75,000 pounds would have been
about •1.057. It now Is about 81.250 and could
grow to almost •1,500 1t another tnereMe does
amount to 15 per cent.
The most recent Increase, Bob Barnes,
Libby, tra.tl\e manager se.ld, dll1 not Increase
lumber prices ln Montana appreciably, The
company's shipments or wood chips to the
Missoula area plant, he noted, come under a
slightly differen-t rate schedule because the
ears go to MissoUla via Sandpoint, Idaho,
crossing a state line. More lumbec and st.uda
are shipped out of eta.te than plywood, he
Na.tlonwlde, Barnes, aa.ld, the lumber market
has been Slower than usual, )XU'tlally
because ot the "tight money" situation that
makes It somewha.t more dllfteult f<»" persona
to secure new home loe.na.
The Western Wood Products Association,
Pol'tland, which counts St. Regia among Its
members, Issued a letter last May commentIng
on the differences between consideration
shown by Oe.nadlan and U.S. rail carriers to
the m&.rketlng needs of their lumber customers.
WWPA's transportation manager, James 0.
Manning, said that, "Agreemelllt was reached
between representatives of the British Columbia
and Alberta forest products Industry
and the Oe.nadlan railroads to publish a new
level of rail ratee on toreet products from all
British Oolumbla and Alberta shipping points
to destinations 1n eastern Canada.
"The published rate ... from Vancouver,
B.C., to W!ndsor, Ontario, Is •1.38 per hundredweight.
The oomJ>41rable U.S. nte from
Portl&nd to Detrott ..• Is 81.60 per hundredweight
on the blanket rate. OUr Initial
reaction to this development of n.ts reductions
In Canada Is that lt appears the Canadian
rallroe.da are more receptive to the
needs of their lumbel' shippers than are
the u.s. llnee.
"Another tea.ture to be considered In the
use of these border (n>ts) comblna.tlona Is
the Oanadlan-U.S. currency exchange factor.
A shipment bllled from British Columbia to
Wl.ndsor ... and then re-bUled beyond can
have the Canadian portion of the freight pald
In Ce.nadlan funds. The currency rate of exchange
then of 7* per cen.t Will pro:ctuoe
another 10.69 cente per hundredweight savIng
tor the Ce.n.adlan product.
"The example ot rats d.l.spadtJ outlined
above," Manning wrote, "1lluatr-atee what
happens when the U.S. lines oont!nue to seek
perecntage freight rate Increases without any
regard to the competitive effect on their
shippers. Even more alarming Is what Is apparently
In store for our m11ls. It Is our understanding
(last May) that the Canadian
lines are very near to approving a new level
of rates n.pplylng to eastern Cano.da that wll\
further drasllca.lly reduce the present level.
"It will be a Ea.d commentary on U.S. railroad
rate-llU\klng when the day arrives that
lumber producers In the State of Washington,
!or example, and able to barge or truck
shipment to western Canada to obtain a bettel'
freight rate to eastern U.S. points than
they would have by shipping the entire distance
by U .S. IJnes."
Mike Mansfield Papers, Series 21, Box 46 , Folder 56, Mansfield Library, University of Montana.
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