[Congressional Record Volume 143, Number 140 (Thursday, October 9, 1997)]
[House]
[Page H8810]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  MERGERS AND LOGJAMS ON THE RAILROADS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from West Virginia [Mr. Wise] is recognized for 5 minutes.
  Mr. WISE. Mr. Speaker, as ranking member of the Subcommittee on 
Railroads, I want to talk a little about the problems that I believe 
many Members, particularly western Members, are going to be hearing 
about, if they have not already, and those are the increasing tie-ups 
in the Union Pacific lines dealing from the recent merger of Union 
Pacific and Southern Pacific.
  In some ways it is estimated, if continued under the present 
direction, this could end up causing as many problems to our economy as 
the UPS strike. There are many reasons for this. The purpose of my talk 
is not to point fingers but mainly to look at what are the causes and, 
more importantly, what can be done about them.
  Mr. Speaker, there are many reasons, but basically it stems from the 
takeover of Southern Pacific by Union Pacific, two large railroads now 
having to merge their operations, and the logistics have proved to be 
overwhelming in some cases.
  The Wall Street Journal yesterday estimated that there are 10,000 
railroad cars a day stuck in limbo; 300,000 cars normally operating 
under UP and SP have now grown to 340,000, further increasing the 
congestion.
  What has compounded the problems, the slowdowns in deliveries, in 
some cases the nondeliveries for many days, if not weeks, what has 
compounded the problem has been the oncoming Christmas season as many 
manufacturers try to get their products to market.
  Also, the predicted good harvests in the Midwest, the fact that the 
chemical industry has had a good year, particularly along the Gulf 
Coast, as well as the plastics industry, all of this has overloaded a 
system that was going through significant transition.
  Union Pacific reports some good news, that on September 1, where 
there were 145 trains a day caught on sidings, that number has been 
reduced to over 90. However, the speed at which trains have been able 
to move now has been significantly reduced. That, in turn, means they 
have to use more locomotives, more crews, to get trains to where they 
are supposed to go. All of this has resulted in significant economic 
hardship and could result in more.
  Mr. Speaker, the Surface Transportation Board will hold oversight 
hearings. This has implications for my State of West Virginia because, 
of course, while we are not a Union Pacific service area, we do have a 
merger under consideration, an acquisition, as Norfolk Southern and CSX 
have applied to the STB to take over Conrail.
  There are obviously significant differences. Here we are not having 
one system completely take over another, but at the same time this 
should be a warning to the Surface Transportation Board and to those 
who will be involved in that process, the shippers, the consumer 
groups, and others, to look carefully at this.
  Members should be aware that there are significant issues at stake 
here. What is it exactly that the Federal Government could be doing 
today, if anything, to improve the situation? How do we deal with this 
logistical snafu? Also, the adequacy of the Surface Transportation 
Board.
  This body will be renewing and reauthorizing the Surface 
Transportation Board next year. Is the staffing adequate to do a number 
of different functions, to review a merger that is presently before the 
board such as the Conrail-Norfolk Southern-CSX acquisition or merger, 
and also to review past mergers such as the Union Pacific-Southern 
Pacific merger in which there is a 5-year ongoing review period? Is 
there adequate staffing and resources to review pricing issues and also 
abandonment issues?
  This Congress is going to get firsthand a laboratory experiment that 
it can view in terms of how UP, SP, and the Surface Transportation 
Board all work their way through this.
  As I say, it becomes important because now the Surface Transportation 
Board has in front of it another significant merger, this one in the 
East, unlike the one in the West with Norfolk Southern, Conrail, and 
CSX. There are some similarities, and yet there are also some great 
differences.
  I do urge all shippers and consumer groups and others who might be 
involved to look closely, since it is presently in the public comment 
period, about what role they want to play, because what we are learning 
today is that once this merger is done, we cannot put the genie back in 
the bottle and we cannot undo it.
  It is important that all parties in this situation of Union Pacific, 
Southern Pacific, Burlington Northern, Kansas City, and the others, be 
involved in helping resolve the short-term economic problem that is 
being caused, logistical problems that are being caused, and then look 
to see how they can be avoided in the future.
  It is very likely that when the Congress comes back in another week, 
Mr. Speaker, there are going to be significant rail issues before it. 
Amtrak reauthorization will be one, perhaps the Amtrak PEB, but 
certainly we need to be paying attention to this as well.

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