gabe wrote:Does anyone remember the Souther Railway Big John Hopper car that was the result of a regulatory victory over the ICC? I was thinking about this today as I went out to watch trains. Thinking of the route of the Southern Railway, it seems to be one of the least likely railways to come up with an inovation involving grain commerce. Does anyone know why this inovation came from the Southern Railway as opposed to the IC, CNW, MILW, or some other regular hauler of wheat?Gabe
This is a real head scratcher...I seem to remember that the "Big John" Cars were rated at 100 tons, in a time when the average hopper car was rated considerably less than that, in fact, one Southern ad that appeared in TRAINS, showed a then conventional hopper car in a sling over a "Big John" car, and it appeared that the larger car could completely contain the smaller one. Also, I may be mistaken about this, but the large capacity of the 'Big John' was aimed at the poultry feed industry down in the South, rather than specifically a grain crop hauler. It was the resolution for a tariff involving the transport of animal feed.
Wasn't the whole case over the "interchange" of the cars? Much of the grain industry down south get their grain from the midwest. Interchange tarrifs were charged per car, and a larger car would reduce the amount collected, upsetting midwestern roads collecting grain for the Southern. I don't think ICC cared until Southern started trying to "enforce" other railroads to load Big Johns when routing grain to Southern points.
I dont think the Midwestern roads had the money for a fight with the ICC, Southern, on the other hand, was doing good. And most of them were just getting a handle on the change over from boxcars to hoppers.
Where Michael Sol tonight?
Snagletooth,
The Big John case was NOT about interchange. It was about the right and ability of the railroad industry to respond to the market, and specifically to compete with trucks and barges.
The story is well told in "Brosnan, the Railroad's Messiah". The author of that book believes that the case was the begining of the end of the ICC because it revealed an agency bent on holding railroad rates up to protect modal competitors.
Mac
Gabe
It was the Southern Railway. I don't remember the exact details as to the design and building of the car, but the rates established were designed to capture the movement of grain from the midwest to southern destinations that was moving by barge.
After the ICC disapproved the rates, the Southern took it to the Supreme Court and won there. Perhaps you have access to the decision. It was in the late 1960's.
"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics
BIG JOHN - 100 ton jumbo covered hopper increased net weights by about 1/3. Southern Railway proposed decreased grain rates (lower per-ton charge) that would enable them to capture tonnages moving by barge on the Tennessee and Cumberland River systems.
Naturally, water and motor interests raised hell over the proposal and the case dragged thru the ICC for months. Finally, the ICC ruled in favor of Southern Ry.
The result was lower rates for shippers/receivers and new business opportunities for our railways.
Gentlemen, your information is only partially correct. While it is true that the actions of Southern Railway, initiated by Mr. Brosnan, were actively opposed by both the trucking and inland water carrier interests, some of the strongest opposition came from the railroad industry itself. With the exception of the New York Central, virtually the entire U.S. railroad industry bitterly opposed what Southern was trying to achieve, with some very aggressive opposition from Louisville & Nashville. Brosnan never forgave L&N for this action, which he regarded as treasoness in the extreme, and this is one of the reasons why he attempted to secure the L&N's lease on the Western & Atlantic when it came up for renewal a few years later. During this time period large portions of the railroad industry were more interested in protecting the status quo than in changing the industry to meet the new competition (adapt or die).
jgiblin wrote: Gentlemen, your information is only partially correct. While it is true that the actions of Southern Railway, initiated by Mr. Brosnan, were actively opposed by both the trucking and inland water carrier interests, some of the strongest opposition came from the railroad industry itself. With the exception of the New York Central, virtually the entire U.S. railroad industry bitterly opposed what Southern was trying to achieve, with some very aggressive opposition from Louisville & Nashville. Brosnan never forgave L&N for this action, which he regarded as treasoness in the extreme, and this is one of the reasons why he attempted to secure the L&N's lease on the Western & Atlantic when it came up for renewal a few years later. During this time period large portions of the railroad industry were more interested in protecting the status quo than in changing the industry to meet the new competition (adapt or die).
jgiblin wrote:With all due respect, I'm not sure if the ICC (and their staff) were merely confused or guilty of gross negligence and incompetence. The Transportation Act of 1958 specifically gave the ICC the authority to approved rates like this but the ICC Commissioners and staff saw fit to take the absolute narrowest interpretation of the new law possible, virtually ignoring both the law and the intent of Congress. This was one of the primary reasons we no longer have the ICC, which may have stood for "Incompetent Commerce Commission".
First, GABE, chicken feed is corn based, not wheat based. Look about you in the Indiana fields. Much of that corn is going to feed chickens, hogs and cattle. But now ethanol is giving the critters competitiion for their food.
A significant problem with economic regulation was that it gave the "non-inovators" a legal and effective way to stop the inovators. If somebody wanted to change something, someone else could send in the lawyers to stop it. It was a terrible system that did a lot of harm to the US economy.
As US broiler chicken (what we eat) production concentrated in the southern states the Southern Railway sought to participate by hauling the chicken feed. To do this they had to find a way to reduce their costs and lower their charges. They came up with this large covered hopper.
Then they had to fight to the Supreme Court to reduce their rates. Think of this. The Federal Government was acting to stop a business from becomming more efficient and passing the savings along to its customers. It was beyond silly. But it was a matter of survival for the railroads.
Why the Southern? They were always serious about railroading. Unlike the L&N which wasn't awake and the IC, which was looking for other businesses to pursue.
Many railroads did not face the facts untill they were shoved against the wall. At the C&NW it came in 1969 and people were forced to move past their comfort zone or see their job die. The Espee never did see the elephant but we were in San Franciso where the concern was the fog burning off in time for your 10AM coffee break at a sidewalk cafe along the Embarcadaro.
The Southern, as personified by the autocratic D W Brosnan, faced facts in the 1940s and dragged itself kicking and screaming into the world of intensive intermodal competition backstopped by a regulatory scheme designed for the early 20th Century. As a BTRO (Big Time Rate Officer) in Houston use to say-"It's a thrill a minute".
The Southern Railway produced this booklet covering their innovative freight cars-
http://southern.railfan.net/images/archive/southern/freight/freight_book/freightbook.html
The Southern under Brosnan was committed to using technology to lower costs. The RR tried a lot of things, some of which were successful and some which weren't. I believe they came up with a contraption to raise the covers, replenish the oil, and lower the covers on friction-bearing journal boxes.
Mr. Brosnan wasn't afraid of a fight. In The Wreck of the Penn Central, Stuart Saunders is described as being livid that Southern opposed several general rate hikes which PRR wanted. I can only surmise that Southern believed it could make money at rates lower than the other RR's wanted.
JOdom wrote:In The Wreck of the Penn Central, Stuart Saunders is described as being livid that Southern opposed several general rate hikes which PRR wanted. I can only surmise that Southern believed it could make money at rates lower than the other RR's wanted.
In The Wreck of the Penn Central, Stuart Saunders is described as being livid that Southern opposed several general rate hikes which PRR wanted. I can only surmise that Southern believed it could make money at rates lower than the other RR's wanted.
In the days of cartel pricing the railroads would meet an decide on what rates the wanted in increase and by how much. Early on things were viewed in a very broad manner with railroads defering to the opinions of the origin lines. As examples, if the PNW railroads wanted to take a 3% increase on lumber then the other railroads would sign on, if the Granger railroads wanted to take a 2% on corn then the other railroads would sign on, etc. Bob Hamilton at the SRS thought this approach was much to broad, espeically on manufactured products moving out of the South East. He would have his staff do detailed studies of specific commodities and come in with very specific recomendations. They way the system worked the lowest increase recomendation would carry the day. The Southern was just as eager to get more money as the next guy but they did not want to see profitable traffic shifted to truck or barge.
Thanks to Chris / CopCarSS for my avatar.
Yes.
Bob:As a former "rate man" and a person involved in the General Rate Committee a LTL trucking tariff bureau, I have always been intrigued by the rate systems used by the rails. I never really got to take a look at tariffs ( I have a few rail tariffs, but pretty specific ones). Were the tariffs set up as "class" type tariffs, or specific commondities with specific origins/destinations?
Let me try that again. Lets say the grains...would there be grain tariffs set up for weight and mileage or was it specific moves such as from Des Moines, Iowa to specific cities? My guess is there was a bit of both, as you would have to have a mileage based tariff to handle moves that would pop up from time to time, plus specific rates filed to meet the local markets. The frustration of the specific markets, as I understand it, was the ICC would have to approve it, which by the time they did, the traffic could have gone to another mode such as trucking, barge, etc.
Of course Staggers changed all of that, as did the trucking deregulation. The innovative truckers such as Conway came in with their easy to use zip code based class tariffs that just drove the established carriers nuts.
ed
The railroads had the Uniform Freight Classification that gave a "class" rating to almost everything. The various regional rate bureaus published Class Rate tariffs that collectively had a mileage based index number for every origin-destination pair of railroad stations. That base index was then used in a table of class rates that listed all the rates in cents per hundredweight. These rates represented the maximum levels that would be considered "just and reasonable" by the ICC under the IC Act.
In my time frame of knowledge on the subject-1950's to Staggers-little or no traffic moved at these rates. The IC Act allowed railroads to individually or collectively establish "commodity rates" that would apply to a named commodity or group of somewhat identical commodities. These rates could be made to apply between specific points or groups of points or could be set up to apply based on mileages or an index thereof. Individual carriers had the right to join or "flag out" of these rates, or restrict the rates to apply only to specified routes.
The commodity rates were invariably lower than class rates and almost all frieght moved at such lower rates. In the judgement of the rate managers of the carriers, individually or collectively, these rate represented the best that could be done to move the freight and produce a profit for the railroads. Needless to say "profitability" was debateable, but most carriers would join a rate if it was perceived that freight moving on the rate would produce some contribution over the marginal cost of providing the service.
The IC Act did not require specific approval of every commodity rate published. The railroad rate managers were very aware of the provisions of the Act that required all rates to be "just and reasonable" and the history of the Commission's findings defining "just and reasonable". There were some specific conditions such as the rate would be deemed unreasonable if it exceeded the applicable Class Rate or unjust if a rate was higher for a shorter haul than the rate for a longer haul over the same route, but for the most part the subjective standard of "just and reasonable" was the key.
There was a general rule that there would be a time period of thiry days between the date that the rate was published in a tarriff and the effective date of the rate to apply on traffic. In some circumstances approval could be obtained from the Commission to shorten the time from publication to effective date, but that time span was key to the Commission's control over rates. To say the least "just and reasonable" is a vague standard, and any party that didn't like a given rate could complain to the ICC. The acceptance of a petition by the ICC would initiate an Investigation and Suspension case. The Commision could suspend the rate immediately or could let the rate apply pending the outcome of an investigation and ruling. It is the former process that resulted in the stories of the application of rates being delayed past a time that they would be useful for a potential frieght movement of a short duration or seasonal nature. Suspension and later approval could be a real pain for the railroad.
By the way, a complete collection of "effective" railroad rate tariffs for any given time probably required linear shelf space in the hundreds of feet.
Murphy Siding wrote: If the ICC had denied their rate,would Southern then have had to scrap the cars? Brosnan seems to have been one tough cookie.
The ICC did deny the rate and the SR took it to the Supreme Court and won the case. I don't really know or recall the railroad's argument. I am sure the railroad would have used the cars somewhere, they just wouldn't have gotten the rate they felt necessary to compete with barge lines for the movement.
jeaton:Thanks for the primer on rail tariffs. Pretty similar to the LTL, except that most of the freight moved on LTL class rates, with "discounts" given. These discounts started at 10% off of the LTL rates in about 1980 and were based on multiple pickups...several LTL shipments at one time from one shipper. Then it got completely out of hand and by the time I left the industry by 1990 the discounts were at the 50-60% level. LTL carriers were chapter 11ing in droves and the industry was a mess, but the shippers were happy.
Very few commodity rates were in place as most of those were truckload and the union carriers were out of that aspect of the business in a hurry, as the non union and OO carriers took that.
I still remember well the tariffs we had, as I was the "traffic manager". Nothing like rating 450 LTL shipments in one night when the rate clerk called off. This was before the computers rating began.
And who could forget the smoke filled rooms of the tariff bureau meetings where we sat with anti-trust immunity and established collective pricing?
I still have a few tariffs somewhere and also some rail tariffs I picked up in abandoned depots.
Once a rate man, always a rate man.
PNWRMNM,
You were spot on. The initial challenge to the ICC in courts cleared the air (in favor of the Southern Railway). The ICC eventually ended up expounding the theory and belief that it (the ICC) had the responsibility to preserve the intermodal niche of each of the modes. Lest, one mode unfairly competes with another mode. How was that possible?
The late and unlamented ICC argued in essence that the trucking mode didn’t have tracks and locomotives and could not offer effective cross-modal completion to freight rail because of course they solely hauled freight on public roads that they paid for through road use taxes; and, where states were able to set truck and cargo container size and gross vehicle weight limitations, that made it impossible for trucking to even attempt to compete with this change in freight rail.
The ICC also argued that their already ruled constitutional enabling legislation allowed them to do, exactly what they had done; “define” the fairness and degree of unfairness of intermodal competition. It was a similar argument they were prepared to make between intercity bus transportation, and emerging low cost airline carriers (who were of course regulated by the Civil Aeronautics Board).
The Success of the Southern Railway led to a more broader attack on what (by the 1970s) had become, a classical regulatory state view of the role of bureaucratic “experts”, who saw their 1930s era legislation (in the 1970s) as necessary to “protect” the public at large, by protecting not individual market participants, but whole firms and industries.
They also saw their regulatory role as a necessary check on “runaway” technical innovation that would put “end-of-train” devices on freight trains, as opposed to the brightly colored caboose. Or freight train handling software operations, which permitted longer trains, and distributed motive power on freights, remotely radio controlled from a single manned locomotive cab.
To sort of add some details to this discussion; Here is a link to a TRAINS Newswire from 6/5/2015: Re; Donation by NS of 'Big John' Covered Hopper #8744 to the Southern Appalachian RR Museum @ Oak Ridge,Tn.
"NS donates ‘Big John’ hopper car to Tennessee museum" June 2, 2015
And FTA:"... Big John hopper cars are among the most significant freight cars built, since they established the railroads’ ability to establish incentive pricing for large shipments, over the objection of the Interstate Commerce Commission, which attempted to maintain the status quo. The cars were built at the direction of legendary Southern Railway President D. W. Brosnan. Built by Magor Car Co., the first cars arrived in 1960 and were nicknamed “Big John” after a popular country music song of the era. Made of lightweight aluminum with a carrying capacity of 97 tons, the cars featured four compartments so that multiple types of grain could be shipped in the same car. An additional order, with a 100-ton capacity, arrived in 1961-1962. The cars were nearly double the size of the largest covered hoppers in regular use, which allowed the Southern to slash its rates for grain shipments from $10.50 per ton to as little as $3.97. Not only was this much cheaper than their old rail rates, it was also cheaper than truck or barge rates. Competitors soon filed injunctions with the ICC against the Southern’s lower “unfair” rates, and included most other railroads, particularly Southern’s competitors in Southeast markets. The ICC forced Southern to maintain its rates in 1961 while it heard arguments. After nearly two years of deliberation, they allowed only a partial reduction. The Southern took the case to the U.S. Supreme Court twice, ultimately achieving victory in 1963. In 1965, Southern went back to Magor for 500 “Super Big Johns” with an even greater capacity of 130 tons. These cars were 61 feet long, 15 feet tall, and came at a cost of nearly $12 million. These cars also featured a long center-loading trough in the roof of the car. The cars also began the movement of grain away from loading into boxcars equipped with wood or paper grain doors across the door openings and into purpose-built hopper cars..."
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