Page 20: of Maritime Reporter Magazine (November 1983)

AWO Perspective

Rail Deregulation, User Taxes

Threaten Barge And Towing Industry

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In the keynote speech before the annual meeting of the Warrior-

Tombigbee Development Associa- tion, Joseph A. Farrell, presi- dent of The American Waterways

Operators, Inc., warned of two ma- jor threats to the future survival of the inland and coastal water transportation industry.

Mr. Farrell stated that recent deregulation of the nation's rail- roads as well as the Reagan

Administration proposals to im- pose new taxes on commercial users of the waterways could pose seri- ous dangers to the barge and tow- ing industry. "These initatives share one thing in common," Mr.

Farrell said. "They threaten the barge industry's viability as an al- ternative to the railroads for ship- ments of bulk freight. They fly in the face of the best interests of the

American taxpayers and con- sumers, who depend on a cheap, competitive transportation system to stabilize the economy."

Mr. Farrell noted that the In- terstate Commerce Commission (ICC), the federal arm which reg- ulates the railroads, has begun re- moving rate restrictions on boxcar shipments and rail shipments of

Joseph Farrell coal bound for export. In addition, the ICC has recently allowed the

CSX railroad, one of the nation's largest, to attempt to acquire a barge line with which it is in di- rect competition. Ownership of a barge line by a railroad has, in the past, been prohibited by law.

According to Mr. Farrell, this trend toward deregulation of the railroads could have serious and long term effects on competition among the various forms of trans- portation, and on the nation's economy as a whole. Deregulation in this instance, Mr. Farrell said, will allow the railroads "to exer- cise ever-increasing monopolistic powers."

Mr. Farrell told the Warrior-

Tombigbee development group that a second threat to the barge indus- try, an Administration proposal to impose additional user fees, was "ominous." Currently, the barge industry pays a fuel tax of 8<2 per gallon for use of the waterways.

Under the new proposal, the

Administration would hope to re- cover 70 percent of federal expen- ditures from the barge industry, a move Mr. Farrell claimed could put the barge lines out of business. "We in the industry agree with the principle that the users of a transportation system should pay their fair share of the costs for that system," Mr. Farrell said. He noted however, that no accurate accounting of the cost allocation among various beneficiaries of the waterways has ever been deter- mined, and that his industry would fight against any new taxes unless and until such a fair allocation of costs is determined.

Mr. Farrell is president of The

American Waterways Operators,

Inc., the largest national trade as- sociation representing the inter- ests of the barge and towing in- dustry and the shipyards that service the industry.

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