Rocky roads ahead.

Author:Richardson, Jeffrey
Position:Alaska's trucking industry - Industry Overview

Listening to truckers talk about developments in their industry over the last few years invites a comparison to basketball. It's a fast-paced game that frequently changes pace. As the competition wears on, a few major players emerge to dominate. Although everyone is governed by the same rules, the drive to win makes for hard play and sometimes hard feelings. You still have your bumps, bruises and bad calls by the referee. Then it's step up to the free throw line, and let's get this ball back into play.

This sporting analogy begins to break down when truckers talk about their competition with the Alaska Railroad Corp (ARR).

Spurred by its own economic imperatives -- which includes avoiding the need for public subsidies -- the state-owned ARR has announced plans that threaten an uneasy truce with the trucking industry. The rail and trucking industries actually do a lot of business together, and truckers collectively are sometimes referred to as ARR's third largest customer, after petroleum and coal shippers.

Now, however, the railroad is assuming all risk and responsibility for Alaska Hydrotrain, the Crowley Maritime rail barge service originating in Seattle. Crowley will continue to run the vessels, but ARR will do all the marketing, management and customer service.

Head-On Battle

According to railroad officials, the new service arrangement will eliminate duplication of marketing, sales and administrative services previously provided by both companies, giving customers a single point of contact. A new ARR division called Alaska Rail-Marine Services will run the 32-year-old service and maintain the same 10-day schedule for the Seattle-Whittier run.

Spokesmen for a number of trucking firms say Crowley was losing money hauling the 3,000 to 4,000 truck trailers that will now have to come up the highway or find space on container ships serving Anchorage. "We're pretty well locked out," says Harry McDonald, president of Carlile Enterprises of Anchorage.

Of greater long-term concern to truckers is whether this move signals an intention by the railroad to compete more directly with truckers. While the volume of business lost through elimination of trailers from the rail barge is not significant in relation to the industry's overall market share, the ARR-Crowley agreement is a consolidation of rail traffic that appears to be having important psychological impacts for everyone concerned.

It comes at a time when the railroad, under attack from other private-sector interests, has agreed not to become an equity partner in ventures seeking to lease or otherwise develop some of the railroad's 36,000-acre real estate portfolio. Like other American railroads, ARR has been counting on a more aggressive and sophisticated land-development program to generate revenues as a hedge against those years when transportation doesn't pay for itself, thereby avoiding the need to seek state transportation subsidies to keep the line running.

However, some Anchorage hoteliers have strongly objected to...

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