Re: Billboard Reefers

Westerfield <westerfield@...>

The worst problem in my opinion was that the per diem that the railroads had pay to haul long distance shipments in the leased cars was so great that the lessees' lease cost was more than covered by the per diem. In essence they were leasing the cars for free. Only a fool wouldn't take advantage of such a situation. As a result there were twice as many reefers as needed in 1930 and the ones sitting idle belonged to the railroads. This is also covered in the 1934 ICC decision. - Al Westerfield

----- Original Message -----
From: Tim O'Connor
To: STMFC@...
Sent: Sunday, March 25, 2007 1:23 PM
Subject: Re: [STMFC] Billboard Reefers

I agree with you, Tony. :-) I always understood the intention of
the 'ban' was to curb such abuses, whereas advertisement of one's
own products on one's own freight cars (covered hoppers, reefers,
box cars) did not incur so much regulatory wrath. Which may have
something to do with why it's not hard to find photos of freight
cars carrying product advertising in the 1950's and especially
from the 1960's onwards.

If you think about it, once the railroads began to put passenger
train advertising on their freight cars, you had railroads forced
to carry freight cars that advertised competitors' services! Here
the 'injured party' would be a railroad and not a shipper, so maybe
the ICC didn't consider it to be unfair. Or maybe it was just such
a longstanding practice that no one challenged it.

Tim O'Connor

>Kurt Laughlin wrote:
>> Maybe it's the same thing stated another way, but my impression was
>> that it was the small shippers who complained about using cars with
>> their competitor's logos all over them, and argued to the ICC that the
>> free advertising provided by the logos was tantamount to an illegal
>> rebate for the large shippers.
> As I stated back in 2002, this aspect was a very small part of
>the abuses which the ICC stepped in to correct. The free advertising
>was indeed ruled a rebate, but this is summarized briefly in the
>ruling, while there are pages and pages on the remainder of the docket
>issues. (The biggest had to do with mileage-charge abuses by roundabout
>or unnecessary car movements, and with lease contracts in which
>shippers had an incentive to create extra mileage.) It is my impression
>from reading some of the ICC testimony that the assignment of one
>lessee's cars to another shipper was unusual, but the free advertising,
>not offered to smaller shippers, was a really big complaint.
>Tony Thompson

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