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1/24/2003



Rail News: Rail Industry Trends

Chemical industry leader calls on railroads, government and captive shippers to create competitive rail-shipping environment


U.S. freight railroads are exercising "monopoly power" over captive shippers, but a new initiative could create a competitive balance and restore railroads' economic viability, said Basell North America President Chuck Platz during a Jan. 23 speech at the Chemical Week Transportation & Distribution Conference in New Orleans.


"Railroads used to be zealots about getting freight delivered on time and as promised," he said, according to a prepared statement. "Today, monopoly railroads won't even entertain requests for service metrics on transit times — even where customers are actually willing to pay more."


Because Basell North America and several other chemical companies are captive to Union Pacific Railroad in Bayport, Texas, the shippers along with Burlington Northern Santa Fe (doing business as San Jacinto Rail Ltd.) plan to build a 12.8-mile line between Bayport's industrial park and a connection with the former Galveston, Henderson and Houston Railroad line now owned by UP.


Until Jan. 27, Surface Transportation Board will accept written comments on the project's Draft Environmental Impact Statement.


"I'd much rather have Basell invest in new technology or upgrade our plant assets instead of building a rail line in Texas," said Platz.


In July 2002, Sen. John Breaux (D-La.) asked Platz and CSX Corp. Chairman and Chief Executive Officer John Snow to address concerns on behalf of all railroads and captive shippers, said Platz. Because President Bush recently nominated Snow as treasury secretary, BNSF Chairman, President and CEO Matthew Rose recently agreed to take Snow's place.


Chemical industry leaders and captive shipper officials believe a dialogue will lead to solutions, said Platz.


But he believes the government also will need to play a role because "the Staggers Act helped foster the current rail-shipping environment."


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