Trainload Lots

The cheapest freight rate between any two points on the U. S. railroad system used to be on carload lots. To ship three carloads or 100 did not reduce the rate be low that for one. For years the Interstate Commerce Commission has maintained that lower rates on big shipments would be free lunch for big business. On account of that, able John Lansing Beven, president of Illinois Central, was a pioneer last week. Up the I.C. tracks east of the Mississippi one of his locomotives dragged a 40-car lot of blackstrap molasses (sugar refinery residue) for 15-c- a cwt., although the car load rate is 17-c-. I.C.C. had just granted him and other Mississippi Valley rail roaders the right to quote trainload rates on blackstrap.

It took a long time for Mr. Beven to make up his mind that such rates made good economic sense. About three years ago one of I. C.'s big customers, Commercial Solvents Corp., doubled its barge fleet. Scared I. C. chewed its cud, parleyed with Solvents Corp. for two years. In October it went to the I. C. C. with a petition for trainload rates on molasses. Month ago, I. C. C. brought forth its decision, that ". . . certain other forms of transportation which compete with the railroads can law fully, and do, give the shipper of large quantities a decided advantage over the shipper of lesser quantities equivalent to a railroad carload. This is true of pipeline transportation by its very nature, and it is also true of water transportation."

John Beven expected to carry a trainload of blackstrap from New Orleans to Commercial Solvents' plant at Peoria, Ill, every ten days or so this year, for some $200,000. But the ultimate possibilities of the precedent are much bigger. If I. C. C. authorizes a rate that gets blackstrap out of barges, it may also fix similar rates for iron ore, lumber, coal, sugar, cottonseed oil -- and a rate that keeps oil out of pipelines. At I. C. C. hearing Shell Oil Co., Inc. (subsidiary of Shell Union Oil Corp. with millions of dollars invested in pipelines) argued against trainload rates. Biggest squawk may come from roads which fear barge competition less than price-cutting.

Trainload rates are not the first attempt of railroads to get back their onetime share of freight traffic. For some years roads have been combatting truck competition by resuming an old practice of running "redball" (fast) freights, freeing the tracks for them and sending them as much as 500 miles in a night. During 1939: Union Pacific began to run one from Portland, Ore. to Boise, Idaho, another from Los Angeles to Salt Lake City, another from Denver to Kansas City. Southern Pacific started trains running overnight to Yuma and Phoenix, Ariz, from Los Angeles, Atchison, Topeka & Santa Fe scheduled redball freights from Chicago to Texas in 24 hours, Chicago to Kansas City overnight.

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