WASHINGTON --The nation's major railroads and grain shippers have agreed on a new arbitration system as a way to keep disputes out of the courts and federal regulators' hands, industry officials said Wednesday.

At least 10 railroads, including Union Pacific Railroad and Burlington Northern and Santa Fe Railway Co., intend to sign an agreement with the Association of American Railroads and the National Grain and Feed Association, which represents 1,000 grain, feed and processing firms and three dozen state associations.

Shippers and railroads that want access to mandatory, binding arbitration over such issues as rail car delivery or distribution and rental rates on land leased from railroads have until Oct. 1 to sign the pact, which will last two years, through Oct. 1, 2000.

Unlike coal and manufacturing shippers, agricultural interests don't ship large quantities from any one site and can't often justify the expense of litigation or complaints before the industry-regulating Surface Transportation Board, Keith said.

Association of American Railroads president Edward Hamberger called the deal "one of the most important and far-reaching agreements the railroad industry has ever reached with one of its key customer groups."

Some were skeptical, however, in light of the rail gridlock that in 1997 choked shipping along Union Pacific's lines. Producers this year are dealing with record wheat harvests filling grain elevators and a corn harvest just around the corner that is expected to be the second-highest ever.

MINNEAPOLIS – If Northwest Airlines pilots go on strike this weekend, it will be the first time a major airline has been shut down in the age of so-called fortress hubs where big metropolitan airports are dominated by a single carrier.

In the last five years, the major domestic carriers have largely retreated from competition with one another, focusing instead on routing passengers through a handful of hub airports that they all but control.

Continental Airlines dominates Houston and Cleveland, while Delta Air Lines dominates Atlanta and Cincinnati, and United Airlines dominates Denver. But no major carrier has a tighter stranglehold on its hub airports than Northwest.

In Detroit, Minneapolis and Memphis, Northwest controls 75 to 82 percent of all airplane seats, according to a study by Lehman Brothers released this year. That dominance makes Northwest's role so crucial to the regions it serves that the prospect of a strike to many state and local officials is practically unthinkable.

This raises the question of whether the government would permit a lengthy airline strike, or any strike at all.

Both Northwest executives and the Air Line Pilots Association say they hope no one has to find out. Indeed, the chances of a strike seemed to fade slightly Wednesday as one person who was briefed on the negotiations said the two sides had made significant progress, with the key issue of pay remaining unresolved.

But Northwest announced Wednesday that it was canceling 400 flights Friday and Saturday in preparation for a strike if a settlement is not reached by 12:01 a.m. Saturday, the deadline set by the pilots. Northwest also said that it might be forced to lay off some workers temporarily if a strike dragged on.

News of the cancellations came against a backdrop of rumors that Northwest and ALPA had reached a tentative agreement. An Associated Press broadcast report Wednesday morning said a source "very close" to the negotiations said the two sides "already have struck a tentative deal that could avert a strike." The report launched a flurry of media activity, but the AP softened the story later in the day as representatives of both sides contradicted the report.

In the update to the pilots' union late Wednesday, negotiators said they had reached agreements on 24 of 29 contract sections. According to the update, major issues involving compensation and job protections remain unresolved. The two sections on which agreement has been reached since talks resumed Aug. 17 cover guidelines on training and definitions of contract terms. In addition, negotiators told union officials that they have made progress on vacation work rules, another major item in the talks.

Meanwhile, ALPA on Wednesday told leaders of the five other unions at Northwest that they should go to work if there is a strike.

So far, the White House is being coy about its plans in an attempt to force both sides to settle. Administration officials have even told Northwest executives, who they believed were a little too confident that the president would ride to their rescue, not to count on intervention.

Many people believe that it will be difficult for Clinton not to intervene if Northwest stops flying because the economic repercussions, particularly for the upper Midwest, would be as bad or worse than those faced when American, a unit of the AMR Corp., went on strike.

But if the pilots do strike, Clinton may be forced to act. Though Northwest, which is the country's fourth-largest airline, is much smaller than American Airlines, the No. 2 airline, it has a tighter grip on its hubs.

At a meeting of ALPA's leadership council, pilot representatives adopted a resolution saying all other Northwest union employees continuing their normal duties would best support a pilots strike. ALPA also received support Wednesday from pilots at Continental Airlines. That group adopted a resolution pledging not to perform any flying that normally would be done by Northwest pilots.

In other news, KLM Royal Dutch Airlines said Wednesday that it won a court injunction against its pilots that will ensure continued operation of KLM flights between North America and Amsterdam during a possible Northwest strike.

Amtrak cancels trains threatened by Bonnie

ATLANTIC CITY-- Heavy surf continues to pound the Jersey Shore, kicked up by Hurricane Bonnie and Amtrak has canceled trains between the New York-New Jersey area and Florida for the duration.

NORFOLK, Va. - Norfolk Southern Corp. has expanded its intermodal Equipment Management Program to Minneapolis through an agreement with Canadian Pacific Railway.

The move gives domestic shippers daily, expedited service between Minneapolis and Atlanta, Cincinnati, Jacksonville and Miami. At Minneapolis, the program operates through CP's Shoreham intermodal terminal.

NS has already begun EMP service to New England through Guilford Rail System's newly built terminals at Ayer, Mass., and Waterville, Maine.

EMP is a program that sees NS, Conrail Inc. and Union Pacific Railroad sharing responsibility for providing intermodal containers for long-haul, domestic freight. More than 11,000 high-quality, 48-foot containers are part of the program.

The addition of Minneapolis is the second expansion of EMP since June 1, when Miami and Cincinnati were opened. At Miami, EMP operates through the Florida East Coast Railway's intermodal terminal.

WASHINGTON -- Federal Railroad Administrator Jolene M. Molitoris today participated in the dedication of a new advanced technology gate system at the School Street Crossing in Groton, Connecticut. The demonstration project represents a step forward in the FRA's commitment to

reducing highway-rail crossing collisions and developing high-speed passenger rail service.

"This crossing demonstration will provide the FRA and others an excellent opportunity to test and study how state-of-the-art technology will enable the high-speed trains of the 21st Century to operate efficiently and safely," said Administrator Molitoris.

The demonstration project features a "four quadrant" gate system and an in-cab/at-grade crossing advance warning system which alerts locomotive engineers to slow down, or stop if there is a disabled vehicle or other obstruction on the track.

This grade crossing safety demonstration is an important component of Amtrak's plans to inaugurate high-speed service in Southeastern Connecticut on the Northeast Corridor (NEC). If the demonstration is successful, the technology may be deployed elsewhere in the United States in preparation for high-speed rail service in other designated corridors.

Funding for the demonstration originated under Section 1036 of the Intermodal Surface Transportation Efficiency Act (ISTEA), and funds for improvements will be available under the Transportation Equity Act for the 21st Century (TEA-21). The FRA contributed $800,000 or 80 percent of the cost of the gate installation. The state of Connecticut through the Connecticut Department of Transportation (ConnDOT) provided the remaining $200,000.

Decreasing the risk of highway-rail crossing collisions is a key element of the high-speed rail corridor plan. In keeping with the Department of Transportation's goal of zero tolerance for accidents, injuries or fatalities, the FRA is working with railroads, and state and local governments to eliminate crossings where possible and demonstrate cost-effective and practical technologies to reduce the number of highway-rail crossing casualties nationwide.

EDMONTON -- Canadian National Railway Co. said it has agreed to transfer 271 miles of line northeast of Edmonton to RaiLink Ltd.

Terms of the agreement weren't disclosed.

In a news release, the company said the rail line, which covers the Coronado, Bonnyville and Lac La Biche subdivisions, handles about 11,000 carloads of freight traffic and serves shippers in the grain, forest products and chemical industries. It said the rail line runs north from St. Paul Junction, immediately north of Edmonton, to Boyle and northeast to the community of Grand Centre.

The company said the transfer would result in the loss of 22 Canadian National jobs. It said affected employees have "a number of options" available to them under their collective agreements.

The company said RaiLink's new operation would connect with Canadian National's North American network and benefit from its long-haul efficiencies.

OTTAWA -- The 2,100 pilots of Air Canada have set a strike deadline of midnight Tuesday, in an atmosphere seething with harsh and bitter language.

An Air Canada strike of all Canada-United States, international and domestic flights would come at a time when the company is proud of making record profits. But the pilots say they are squeezed by a money-cutting mentality that pays them 30% to 50% less than U.S. or European pilots and that reneges on agreements affecting safety.

The company and pilots will resume negotiations today in what Capt. Jean-Marc Belanger of the Air Canada Pilots Association called "one last effort at the bargaining table."

In the six days leading up to the strike deadline, spokesman John Hamilton said Air Canada was confident a settlement would be reached. Capt. Belanger said he hoped so, but added, "we are very far apart . . . still miles apart."

A strike would affect Air Canada's active Canada-U.S., international and domestic passenger traffic. Its 13.75 billion revenue passenger miles the first seven months of this year were up 6.6% over the same period last year.

Forwarders say a strike would cause scarcely a ripple in Canada-U.S. cargo traffic, in either direction. Shippers could move to alternative carriers. An exception would be the important Los Angeles-to-Toronto and San Francisco-to-Toronto routes. Air Canada has three flights daily from them to Toronto and no other major airline does, said Linda Collier, an international freight forwarder.

The federal government Tuesday evening stopped its conciliation process in talks that broke down earlier this month. The pilots at once set the strike deadline at the earliest legal moment. The company and ACPA have been at odds for many months over salaries, working conditions and relief pilots on Canada-Europe flights.

The pilots applied to a judge last week for an injunction to ground regularly scheduled flights from Western Canada to London and Frankfurt unless relief pilots went along. They said the company had stopped using relief pilots in March, breaking the collective agreement that ended April 1.

Letters from management, made public, threatened pilots with "discipline up to and including discharge" if they refused to fly such flights for reasons of safety due to fatigue. The pilots lifted the injunction application Friday, when the company announced it would provide a relief pilot.

Capt. Belanger uses words and phrases such as "we are treated with contempt," "flagrant violations of contractual commitments," and Air Canada's "desire to break ACPA." He said to The Journal of Commerce: "It's becoming a shouting match between professionals and management."

Air Canada earlier this month reported record second-quarter operating income of $148 million Canadian dollars (US$96 million), up 10% over the 1997 quarter. Its earnings were $91 million, up $20 million.

Air Canada's busiest routes for cargo are Toronto-Chicago, Toronto-London, Toronto-Frankfurt and Vancouver-Hong Kong. In the United States, its main cargo gateways are Chicago, Los Angeles and New York. Air Canada runs a trucking operation in Canada and the United States to transport cargo to and from points as far away as Boston and Atlanta to its Toronto hub, for shipment overseas.

ATLANTA -- Atlantic Southeast Airlines, Inc. announced today that ASA pilots have ratified a new four-year contract agreement, according to Sam Watts, vice president - sales and corporate communications of the Atlanta-based airline.

"We are pleased that the new agreement has been ratified and again commend the individuals involved in negotiating the new agreement for their outstanding efforts which resulted in bringing this process to closure," Watts said.

ASA Holdings, Inc. operates Atlantic Southeast Airlines, Inc., Atlanta's largest regional air carrier and offers service to 21 cities from its second hub at Dallas/Fort Worth, Texas.

CSX, NS announce Conrail consent results

RICHMOND and NORFOLK, Va. -- In connection with the implementation of the Surface Transportation Board's (STB) approval of CSX Corporation 's and Norfolk Southern Corporation's control of Consolidated Rail Corporation (Conrail), consents to certain amendments to Conrail's outstanding debt securities, equipment trust certificates and pass through certificates were requested.

CSX and Norfolk Southern announced that the Tabulation Agent, Harris Trust and Savings Bank, has advised Conrail that as of 5 p.m., August 25, 1998, consents had been received from more than 97 percent of the aggregate principal amount of all securities for which consents were being solicited, representing a majority in interest of each series of securities for which consents were being solicited.