CAR SHORTAGES? Nostalgic for the Interstate Commerce Commission?

Agricultural groups and the state's largest utility complained at a Milwaukee hearing on rail shipping last week that tight capacity and poor service were becoming chronic problems.

The Journal Sentinel's Rick Romell, who covered the hearing, reported that We Energies, the Milwaukee-based utility, had to burn more natural gas, which is costlier than coal, because it couldn't get enough coal by rail.

John Petty, executive director of the Wisconsin Agri-Service Association, said at the hearing that railroads pick and choose which agricultural shipments they want to carry. Petty, whose group represents businesses that handle 80% of Wisconsin corn, wheat and other grains, said producers have waited as long as five days for a train to haul a load.

The editors at the Milwaukee Journal-Sentinel have some proposals.

The federal government should take two steps.

First, reform the board's complaint process so it's a legitimate safe harbor for rail customers. It isn't now.

Second, Congress should take a thorough look at whether antitrust exemptions given to railroads still make sense. Any review should consider the industry's overall economics, of course, because 26 years of deregulation have been good for railroads and shippers alike. We have argued in the past that bills introduced in Congress to eliminate the exemptions go too far. But declining service and rate spikes on routes where there are not good alternatives raise questions about the railroads' monopoly power.

The railroads, which were not represented formally at the hearing, say they've worked to keep rates competitive, Romell reported. They note, correctly, that rates have declined since deregulation and that railroad capital spending is up 21% this year. The railroads claim recent surveys show service is better.

All the more reason the railroads should not oppose streamlining the federal complaint process or a review of their industry.

But suppose the review suggests the current capacity adjustments are exactly what an efficient market would have produced? If so, the car shortages are transient until capacity adjusts to demand. A revised "complaint process" accomplishes exactly what?