"During the period following the end of the strike, up until the middle of May, the Salina area was from 400 to 700 cars short every day. North of us the situation was even worse and is just now clearing up. I think you are all aware of the fact that in Nebraska, from about the middle of January up until recently, they were from 5,000 to 7,000 cars short. It seems to us that the challenge to the rail carriers is for service and equipment. Reduced rates are fine but without equipment of suitable loading quality and quantity, reduced rates are not worth the paper which they are written on. In this connection we would like to ask why inspection and grading procedures aren't policed more carefully and why, when the car supply is so short, rip track personnel is cut?"

This is the end of the statement made in front of the T-M-K Shippers Board. With this kind of service the Salina Board of Trade believes the need for an additional supply of serviceable grain boxes is obvious. The method of getting a larger supply is not so obvious.

We believe the proposed bill, S. 1098, is a partial answer, providing the ICC would put the rates high enough to make it unprofitable to rent cars instead of building them.

There are many more examples of this kind that could be presented here but would unduly burden the record and add nothing to the fact of a tremendous shortage of serviceable boxcars suitable for grain and grain products loading.

And remember that we are coming into a harvest with an existing car shortage. I hate to think of all the wheat and later on the milo that will be piled on the ground because of lack of equipment.

STATEMENT OF GARVEY, INC., WICHITA, KANS., BEFORE A SENATE SUBCOMMITTEE ON FREIGHT CAR SHORTAGES

HEARING: 1. DENVER, COLO., APRIL 21, 1965; 2. OMAHA, NEBR., APRIL 22, 1965; 3. KANSAS CITY, KANS., APRIL 23, 1965

My name is James J. Irlandi and I am vice president, transportation, for Garvey, Inc. 352 North Broadway, Wichita, Kans.

Garvey, Inc. is a Kansas corporation existing under the laws of the State of Kansas. Its business address is 352 North Broadway, Wichita, Kans.

Garvey, Inc. has as its clients the companies located at the cities and in the States as indicated in exhibit No. 1 attached hereto. Said information is provided in order to acquaint the subcommittee of the following:

1. Name of company.

2. Location of grain elevators.

3. Capacity of said elevators.

Our clients are engaged in the storage, merchandising, and handling of grain. In addition, Garvey Grain. Inc., Chicago, Ill., is pelleting animal feed and utilizes the "transit privileges" applicable thereto. Those clients whose facilities are engaged in the storage of grain are termed "transit houses." "Transit houses" are elevators who have applied for and received permission from the railroads to engaged in storage of grain subject to transit privileges.

A transit privilege permits the stopping of grain at a point intermediate between the producer and consumer without incurring any additional cost on the origin to destination rate. It is important that one considers transit privileges in the subject of equipment shortage.

The shipper of grain requests equipment to be supplied by the railroad that originates the grain or the railroad granting "transit privileges" for the outbound movement. The railroad in question may handle the entire movement from the point of origin to final destination or join in on a through movement with another carrier.

It is at the location where two or more railroads participate in our client's business that additional problems occur because one railroad may have equipment but will not furnish same because the transit billing prohibits utilization of said railroad in the routing.

Another problem occurs when the railroad performing the switching service does not participate in the line haul movement from the transit house.

These problems in many instances have been eliminated by cooperation between

Such is not the case when two deficit supplying railroads service our client's installations.

the railroads involved.

The degree that our clients are injured is dependent upon the location of each client and the cooperation of the railroads serving the client.

Our clients' installations are representative of the following and incur the problems applicable thereto when equipment is of short supply:

1. Country elevator:

(a) Served by one railroad.

(b) Served by two or more railroads.

2. Subterminal elevator:

(a) Served by one railroad.

(b) Served by two or more railroads.

3. Terminal elevator:

(a) Served by one railroad.

(b) Served by two or more railroads.

Our clients storage capacities range from a small country elevator to the world's largest elevator which is located in Wichita, Kans.

Please refer to exhibit No. 1.

Garvey, Inc., has been asked to represent our clients at each hearing place. Our clients merchandise grain and store for shipment to the areas at which the hearings are to be conducted.

STATEMENT READ AT THE DENVER HEARING, APRIL 21, 1965

Our clients who are located in Nebraska and western Kansas have been seriously handicapped in merchandising and storing their grain for shipment to the Denver area because of the equipment shortage.

We stipulate equipment because three of the railroads serving our clients installations and the surrounding area pertaining thereto, have recently reduced rates on coarse grain. These rates apply in jumbo hoppers, shipper furnished as well as carrier furnished. Said rates applying for movement in hopper cars are less than the rates applying in boxcars. These rates were protested by our clients to the Interstate Commerce Commission. Our clients alleged that the rates were promulgated for shippers who could furnish their own hopper cars. They indicated to the Interstate Commerce Commission that a severe shortage of equipment existed. They also indicated that the grain was moving by a competitive mode of transportation because of the equipment shortage.

It is my understanding that presently the grain is moving in shipper-owned equipment and in railroad equipment when available.

Our clients in Nebraska have not been able to obtain hopper cars in sufficient quantity to compete with shippers who furnish their own equipment. They have been handicapped because of lack of hopper car equipment and boxcar equipment.

Our client in western Kansas cannot obtain boxcar equipment in time to satisfy its customers on delivery of grain. Because of the lack of boxcar equipment our client's customers are moving said grain via a competitive mode of transportation. Please refer to exhibit No. 2. The intended movements are typical of a country elevator operation and service pertaining thereto.

STATEMENT READ AT THE OMAHA HEARING, APRIL 22, 1965

Our clients who are located in Nebraska, and have additional facilities in Missouri and Kansas may be classified as engaging in the following:

1. Country elevator:

(a) Served by one railroad.

2. Subterminal elevator:

(a) Served by two or more railroads.

3. Terminal elevator:

(a) Served by one railroad.

Please refer to exhibit No. 1.

The major installations of our clients are served by two railroads who are periodically short of equipment. Said clients have been severely handicapped in their operations because of the inability of these railroads to furnish equipment. The subterminal operation is dependent upon transit privileges to move grain in for storage and subsequent movement of grain outbound.

Additional problems occur when railroad A who brings the grain inbound (when cars are available) cannot furnish equipment for the outbound move. Railroad B might be able to furnish equipment when requested but cannot participate in the road haul beause of transit privileges. Railroad C may have equipment available to turn over to railroad A who switches our client's elevators. The equipment may never reach our client's elevators because railroad A "spirits" them to some other location not withstanding the fact that our client may be the only shipper who can route freight via railroad C.

Our clients will be represented at this hearing to testify and produce additional information pertinent to their operations.

STATEMENT READ AT THE KANSAS CITY HEARING, APRIL 23, 1965

Our clients who are located in the States of Illinois, Texas, Kansas, Missouri, and North Dakota may be classified as engaging in the following:

1. Country elevator:

(a) Served by one railroad.

(b) Served by two or more railroads.

2. Subterminal elevator:

(a) Served by one railroad.

(b) Served by two or more railroads.

3. Terminal elevator:

(a) Served by one railroad.

(b) Served by two or more railroads.

Said clients have been affected by the shortage of boxcars and hopper cars as well as their competition who are engaged in similar operations in the abovementioned States.

Our clients' customers have been injured to the extent that grain could not be loaded because of equipment shortage. An example of how said shortage of equipment has affected one of our clients is as follows:

"Our current requirements are approximately 350 cars. The rate at which the (Y railroad) is furnishing cars is poor.

"From the period March 9 through April 13, we have loaded a total of 344 cars and of this amount 67 were (X railroad) hopper cars which means that 277 cars were furnished by the (Y railroad). This averages out of 26 loading days to a little better than 10 cars per day. We have received more assistance from the (X railroad) than all other connecting lines combined, but unfortunately we have utilized all of the hopper cars possible.

"Requests for cars were placed with the (Z railroad) on March 9 for 83 cars. A supplemental order was placed with the (Z railroad) on March 19 for an additional 65 cars. Total requirements from the (Z railroad) are 148 cars. They have refused to furnish a car to date. We have talked with these people at least once a week since our order was placed with no results. A total of 52 cars have been routed out (Z railroad) since March 9, which means that someone else has been furnishing cars for the (Z railroad) and this, of course, compounds our problem."

Please refer to exhibit No. 3 for additional information concerning statistical data as referred to in the above example.

The above example is indicative of the equipment problem that all of our clients have experienced for several years.

SUMMARY

Our clients are vitally interested in obtaining relief from the shortages of equipment that occurs each year in the producing areas of grain. Said shortages have injured our clients and our clients' customers because they have not been able to load grain per the schedules requested.

We hereby request the subcommittee to take cognizance of the following: 1. The equipment fleets of the railroads have dwindled each year.

2. The service, incident to the line haul movement has been curtailed. 3. The railroads are building a greater number of hopper cars and limiting the number of the all-purpose boxcars. Respectfully submitted.

STATEMENT OF LINCOLN GRAIN, INC., LINCOLN, NEBR., AS PRESENTED BY GORDON E. GANKA, DIRECTOR OF TRANSPORTATION, BEFORE A SPECIAL SENATE SUBCOMMITTEE ON FREIGHT CAR SHORTAGES, APRIL 22, 1965

INTRODUCTION

My name is Gordon E. Ganka and I am the director of transportation of Lincoln Grain, Inc., located in Lincoln, Nebr. We own and operate two grain elevators with a capacity of 22 million bushels. I wish to summarize our statement as follows:

The critical lack of boxcars and covered hopper cars in the State of Nebraska, starting with the month of October 1963 through and including March 1965, has been the worst in the history of the State of Nebraska.

We are unable to fully measure the loss of moneys and business to our company during the above-mentioned period, as the function of an interior terminal elevator capable of handling, storing, and merchandising 22 million bushels of grain has many functions in its daily transaction of business that cannot be tabulated due to our company's inability to deliver or receive grain in daily marketing procedures.

In the loss of business I wish to relate that the Commodity Credit's storage of grain is one of our principal operations, and due to the lack of boxcar supply we have been informed verbally that the Commodity Credit Corporation is bypassing the State of Nebraska for the storage of grain, and shipping this grain to other areas and facilities that do not have similar problems as in our State. The loss of storage, by Commodity Credit Corporation, and the loss of sales in our merchandising operation in themselves, if continued, would be ample reason to destroy our industry. We speak as one facility, but know there are many other country elevators and interior grain markets that have and are suffering irreparable damage.