Eastern Railroad Discussion > Linda Morgan--WC--Industry in General

From a Merrill Lynch research report. Demerits to this analyst for not knowing that it is the Association of American Railroads.


• The following are key topics from Linda Morgan’s presentation to the
American Association of Railroads. Linda Morgan is the Chairperson of
the railroad industry’s regulatory body, the Surface Transportation Board.

1. It remains unclear whether or not WCLX, a Class II railroad, falls
under the current 15-month railroad merger moratorium. As such, we
believe that the current uncertainty in WCLX’s status could adversely
affect the stock price in the short term.

2. We believe that Linda Morgan continued to adopt a shipper and labor
friendly tone, advising the railroad industry to “make some friends”
among the industry’s various constituencies (labor, shortline railroads, policy makers and customers).

3. Linda Morgan offered her characterization of the proposed new merger rules, which is fairly consistent with our take on the situation. She believes that the proposed new rules (1) place more burden on the merger applicants (2) focus on customer service versus a prior focus on rationalization (3) look for greater flexibility and industry competition. We would reiterate our view that the implementation of the new rules is an equally critical component in determining just how much change there will be in railroad mergers.

4. The chairperson identified what she believed were two issues currently challenging the industry: (1) balancing profit maximization and service improvement and (2) the threat of re-regulation of the railroad industry.

Is there anything further on "the threat of re-regulation of the railroad industry."?
Possibility of: Repeal of the Staggers Rail Deregulation Act of 1980.
Depending on what happens tommorrow, this topic may very well surface again.

ExceptedTRAK wrote:
>
> Is there anything further on "the threat of re-regulation of
> the railroad industry."?
> Possibility of: Repeal of the Staggers Rail Deregulation Act
> of 1980.
> Depending on what happens tommorrow, this topic may very well
> surface again.


I copied the entire note. As Ms. Morgan is a Democrat, the overall regulation of the industry is unlikely to take a radical step tomorrow unless there's a born Republican who likes more regulation not less! No, I think the comments are simply a reflection that many shippers discuss the open access concept, which might just be a ploy on their part to keep freight rates down now that they don't have as many railroads to play against each other in bidding for business. I'd rather not start a flame war over open access concepts....too much fighting on TV right now, what with the news on!

BobE

Shippers that know their business, which is to say the shippers that
fully understand the ramifications of railroad operational issues, long ago began soft-pedaling forced-open-access and the re-institution of the Staggers Act. Possibly because they have read recent U. S. History (194X to 198X) which prophetically suggests the outcome of railroad re-regulation in the present.

Doug