Opinion ID: 421082
Heading Depth: 3
Heading Rank: 2

Heading: Guilford's Actual Incentives

Text: 126 We do not think that the Commission gave Guilford's possible incentives to downgrade interchange service the scrutiny they deserve. As we understand its terse explanation, the Commission's conclusion that Guilford has no incentive to downgrade rests on two premises, the first explicit, the second implicit. First, Guilford will continue to transfer substantial amounts of traffic to Canadian National at Danville and Yarmouth Junctions. Second, if Guilford downgrades interchange service, it will earn less profit on nondivertible traffic. 127 The first premise is undisputed in the record, though Guilford and Canadian National disagree on how much traffic will be diverted. 49 There is no record evidence regarding the second premise. The premise is plausible, if only because reduced service will lead some shippers to switch to trucks or produce fewer goods. But the magnitude of this effect is uncertain and may well be small. Little traffic will be lost to trucks because, for most of the Maine Central's shippers, trucks are not a feasible alternative to rail. And the record is silent on how much business Maine producers will lose to competitors elsewhere in the country if they lose fast service to the midwest. 50 128 The Commission not only failed to quantify Guilford's costs from downgrading interchange service at Danville and Yarmouth Junctions, it also ignored the benefits to [229 U.S.App.D.C. 42] Guilford from increased diversion. The Commission does not dispute that some additional diversion will occur. We can only speculate as to the amount of diversion and how profitable the diverted traffic will be to Guilford. 129 Without quantifying the costs or even discussing the benefits to Guilford from downgrading interchange service, the ICC could not rationally conclude that Guilford will not have an incentive to downgrade. On remand, the Commission must ascertain more carefully where Guilford's incentives actually lie. 130 We do not suggest that the Commission will be able to predict Guilford's future behavior with absolute accuracy. Rather, Guilford's incentives or disincentives to downgrade will be primarily a question of probabilities, and thus peculiarly subject to the expert experience, discretion, and judgment of the Commission. Missouri-Kansas-Texas Railroad v. ICC, 632 F.2d 392, 406 (5th Cir.1980), cert. denied, 451 U.S. 1017, 101 S.Ct. 3004, 69 L.Ed.2d 388 (1981). But our deference to its ultimate choice does not relieve the Commission of the duty to explain, based on substantial evidence in the record, whether Guilford will or will not have an incentive to downgrade interchange service.