A tri-county, coalition from both the public and private sectors Tuesday announced efforts to make lower shipping costs part of the purchase of Conrail by Norfolk Southern Corp. and CSX Corp.
The Erie/Niagara/Chautauqua Rail Steering Committee has filed a so-called "request for conditions" for the federal Surface Transportation Board (STB) to consider as part of its review of the proposed merger. The two-inch thick document calls for establishing competitive rail switching fees and creation of a "shared asset area" that would allow competing carriers to use the Norfolk Southern/CSX lines.
Ronald W. Coan, executive director of the Erie County Industrial Development Agency, led off a parade of speakers at a late-morning news conference on the filing.
Conrail's costly practices shouldn't be carried over to the expected new ownership, he said.
"The main culprit has been excessive, monopolistic prices that have been charged over the years which have driven away traffic from the rails, and have made large rail centers, such as Buffalo, non-competitive," Coan said. Reciprocal switch charges on area rail lines average $450, three times the national average of $150, according to the steering committee. If the STB made lower switching charges a condition of approval for the rail buyout, the committee estimates it would save Western New York firms more than $150 million a year, and open the door to an additional $100 million in rail-based shipping business.
State Assemblyman Robin Schimminger, Kenmore, chairman of the Assembly Economic Development Committee, said while other economic issues attract more attention, creating a level playing field for rail shipping should be in the spotlight.
A representative of the Buffalo General Mills plant told the assembled group that it costs more to ship its products by rail from Buffalo to Philadelphia than it does to move the same amount of product from Kansas City to Philadelphia.
A local Grainmillers Union official put those additional costs in human terms, saying he was just informed that ConAgra plans to lay off 45 local workers as of Jan. 1, a move the company blamed on rail transportation costs.
Donald Burdick, executive director of the Chautauqua County Industrial Development Agency, noted the STB allowed Conrail to steadily increase its fees as the struggling company attempted to shore up its bottom line.
"Now the proposed merger is an opportunity to undo the sins of the past," Burdick said.