Business: Railroaders' Profits, Truckers' Problems

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THE PIGGYBACK BOOM

TOP a steep, truck-clogged grade in California's Sierra Nevada moun tains, the Southern Pacific Railroad recently erected a sign: "Take the trucks off the highway. Put the trucks on piggyback." The railroad's sign symbolized a growing problem for the U.S. trucking industry. Piggybacking, which was originally envisioned as a happy marriage between trucks and railroads, has zoomed 180% (to some 210,000 carloadings annually) since 1954, and the outlook is for a $1 billion business by 1965. But so far, railroads have puffed off with most of the profits. Of 39 roads offering some form of piggyback service, only seven do business with common-carrier highway truckers; all the rest have set up their own piggyback truck lines, perform every service themselves.

As a result, though few truckers are being hurt yet, the industry wonders if piggybacking might not eventually do it more harm than good. Says W. Stanhaus, president of Spector Freight System, Inc., which operates some 1,700 tractors and trailers: "Some roads have been prone to discourage cooperation, provide an exclusive service of their own, engage in public relations and power politics campaigns that would indicate that they are primarily interested in the elimination of all forms of competition."

Many railroads are frank to admit that they are out to dominate piggybacking, argue that it is a matter of economic necessity. From 1939 to 1954, the railroads' share of intercity freight slumped from 63% to less than 50%, while the truckers' share jumped from 10% to 19%. Now, with the help of piggybacking, the roads hope to win back lost ground. Last year truck business slipped to 17.7%, while railroads just about held their own. Says Southern Pacific's Assistant General Freight Agent Ray F. Robinson: "Ninetynine percent of our piggyback business is business we never had before—freight that had been moving over the highway." The Pennsylvania Railroad alone is getting $10 million worth of new business annually by piggybacking. The Pennsy's forecast for 1960: $100 million annually. Furthermore, profits from piggybacking are often higher than those from regular freight. The flatcars used by the Pennsy travel better than 300 miles per day and average $40,000 revenue annually, v. only 45 miles and a $5,000 annual revenue from standard freight cars.