STB
Shippers Seek Rail Regulation Fixes
Shippers have provided federal regulators with a package of steps they say will cut red tape and strengthen access to competition among rail carriers without passing new laws.
Shippers want federal regulators to revamp their oversight of freight railroads. (Photo By: iStockphoto)
By adopting the changes, the Surface Transportation Board can strike a fairer balance between shippers and the railroad industry, according to Arkansas Electric Cooperative Corp. and Consumers United for Rail Equity.
“This current regulatory review provides a clear mandate and opportunity for the board to ensure that regulatory actions and procedures are made viable and effective for their intended purposes,” AECC said.
The Little Rock-based G&T and CURE submitted separate comments to the STB Jan. 10. The three-member board is soliciting feedback on weeding out unnecessary rules or streamlining existing ones, as part of a directive from the Obama administration.
AECC has been very active in challenging the STB in the way it regulates freight carriers, since the G&T depends on several million tons of coal that railroads haul from the Wyoming coalfields. CURE is an umbrella group of rail customers; NRECA CEO Glenn English is chairman of the coalition.
Both said the board’s regulatory review could be a way to help captive shippers, who lack access to competitive service and generally pay much more for transportation than shippers served by two or more railroads.
In particular, AECC said the board needs to rework or repeal its 1996 bottleneck rule. The rule permits a railroad serving an entire long-haul route to refuse to quote freight rates to connect with a competitor on the same route.
“The bottleneck rule is outmoded and produces impacts burdensome to shippers, carriers and the public interest,” AECC said.
The G&T and the shippers group both urged the STB to rework one of its processes that places a cap on the amount of rate relief shippers can receive, even when they prove price gouging by railroads.
A simplified procedure adopted by the board, for instance, has a damages limit of $5 million during a five-year period. That could be less than the cost of litigating the case.
“These remedy caps prevent most shippers from utilizing [the guidelines] to challenge rates, even when the rates are unreasonably high,” the CURE filing said.
Other reforms proposed by AECC and CURE include changing the way the STB calculates whether railroads are making sufficient money or monopolizing a market.
The board did not a set a date for reviewing comments on its regulatory review.
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Tags: Captive Shipper, Obama Administration, Railroad Reform, Surface Transportation Board