roundstick3@gmail.com Railroads are supposed to have a antitrust exception. I could see that when they were the only mode in 1890 but they have trucks,barges and pipelines to contend with these days so why is that needed?
Railroads are supposed to have a antitrust exception. I could see that when they were the only mode in 1890 but they have trucks,barges and pipelines to contend with these days so why is that needed?
A typical company in a typical industry is mostly unregulated when it comes to matters like prices, entering or exiting new markets, mergers and acquisitions, joint ventures with other companies, etc. Antitrust laws prohibit certain kinds of behaviors in order to promote competition, but it's up to each company to follow the law. If they don't, the remedy is for someone (either the government or the injured party) to sue the company. For instance, if Joe's House of Pancakes wants to buy Bob's Pancake House, Joe just goes to Bob and offers him a bunch of money; if this would result in Joe cornering the pancake market, it's up to someone else to sue to stop the acqusition.
Railroads, on the other hand, are much more regulated. For many things, especially for mergers and exiting / entering markets, they have to get approval from the Surface Transportation Board. The STB is supposed to determine whether the proposed action is in the public interest, including the question of whether it promotes or inhibits competition. So, if railroad A wants to buy railroad B, they first have to get permission from the STB. If the STB reviews the transaction and says yes, this is good for the country, then people are not permitted to sue in federal court to stop the merger. So in this case, the railroads technically have a limited "anti-trust exemption" in that you can't sue to stop a railroad merger like you could some other kind of merger. But really the same checks and balances against anti-competetive behavior are there, they are just enforced by STB administrative actions rather than through antitrust lawsuits.
Things are a little bit more complicated when it comes to setting rates. In some cases, railroads are allowed to work with their competitors in setting rates under the supervision of the STB. Generally speaking, though, the railroads must still follow many of the normal antitrust laws when it comes to price collusion, bid-rigging, market division, etc., and can be sued for damages if they are found in violation. One set of cases has been working its way through the courts for years now, in which a number of shippers allege that railroads colluded to impose fuel surcharges. And shippers can also appeal rates to the STB when the railroad is dominant in a given market, even if there is no anticompetitive behavior involved - something that is not true in most other "competitive" sectors of the economy.
Dan
NS never owned Mayflower Van Lines. Mayflower is now a division of United Van Lines. NS owned North American Van Lines.
Still exists, now codified under the ICC Termination Act of 1995.
I do not believe there is an anti trust exemption any longer. It may have ended with the 4R act. When I worked for a major railroad we were schooled in the need to avoid anything that might look like anti trust. When in AAR committee meetings with other railroads, we were warned to stick to technical issues and never talk about the commercial side of the business. At times an attorney would sit in on meetings to be sure that anti trust laws were not violated.
CSSHEGEWISCHOf course they're separate legal entities, that's no big deal. The separate entities were still wholly owned subsidiaries of the parent firm.
In the mid-1980's CSX Corporation - the holding company for the railroad properties that comprised CSX Transportation bought Texas Gas Resources - a holding company that owned the Texas Gas Pipelines, they also bought SeaLand Container Shipping and US Commercial Barge Lines. Over the following decade+ CSX sold off those at a profit to CSX Corporation.
Texas Gas Transmission Lines was sold off in 1988. The Barge line was sold off in 1998 and the profit was used to fund the ConRail acquisition in 1999. CSX Corporation sold SeaLand's container lines and ships to Maersk in 1999. CSX retained SeaLand's port operations at that time and later sold them to Dubai Ports in 2004.
The 1980's was the era of conglomerate holding companies. CSX Corporation was such a conglomerate in that era.
Never too old to have a happy childhood!
Of course they're separate legal entities, that's no big deal. The separate entities were still wholly owned subsidiaries of the parent firm.
Railroads are supposed to have a antitrust exception. I could see that when they were the only mode in 1890 but they have trucks,barges and pipelines to contend with these days so why is that needed? As far as I understand it Congress cried foul when a railroad bought a barge company or a pipeline or a ship company and forced them to run it as seperate buisneses. Steel Mills could not own the railroad serving them directly US steel and Bethelham Steel had to charter the mill railroads as seperate buisneses. See BethModal and Bessemer and Lake Erie and Union Railroads as a exp. (US Steel). CSX ran a barge company for a while and Norfolk Southern used to own Mayflower Van lines at one time.
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