Commerce Committee to Mark-up Rail Reform Bill on June 8

June 3, 2011 Bookmark and Share

A pending railroad reform bill is set to be considered by the Senate Commerce Committee on Wednesday, June 8, at 10 a.m., though rail shippers have concerns that amendments to it could dilute its impact when enacted.

S. 158, or the Surface Transportation Board Reauthorization Act of 2011, would make a number of changes with regards to the structure and activities of the Surface Transportation Board (STB), which is the government agency charged with oversight of railroads, including ensuring competition in the rail industry and reasonable prices for so-called “captive” shippers.

It is a bipartisan compromise originally developed in the 111th Congress as S. 2889 after 10 months of negotiations between and among the Democratic and Republican leadership of the Senate Commerce Committee. These negotiations were carried out in consultation with freight railroad companies, shippers’ representatives and the STB.

As reintroduced in the 112th Congress, the bill would leave in place the basic judgments of Congress contained in the Staggers Act of 1980 while addressing the problems of captive rail customers by directing and empowering the STB to be more responsive to them. The bill would expand the STB’s membership from three to five and clarify the power of the Board to protect captive rail customers.

Among other things, the bill would require a Class I rail carrier to, upon customer request, establish reasonable bottleneck and terminal switching rates for a bottleneck rail segment in which the carrier has market dominance.

It would also revise criteria under which the STB requires a rail carrier to make its terminal available to another rail carrier and require the STB to establish a binding arbitration process to resolve rail rate, practice and common carrier service disputes.

It would also:

  • make the STB an independent agency, rather than under the auspices of the Department of Transportation;
  • explicitly make protection of rail shippers an objective of U.S. policy;
  • require the STB to appoint a rail customer advocate;
  • authorize the STB to investigate issues on its own initiative as well as after a complaint;
  • require the STB to establish a database of rail service complaints it has received and post a quarterly report of such complaints on its website; and
  • require a number of studies on important rail competition issues.

Opponents of the bill claim it would “re-regulate” American railroads, so NAWG is working with coalition partners to formulate a letter to all Members of Congress outlining both shipper concerns with any efforts to dilute the changes included in S. 158 and expressing shipper support for the legislation.

Over the last thirty years, since the deregulation of competitive railroad transportation, the number of major freight railroads in the U.S. has declined to seven, with four dominating the freight rail system. Particularly over the past decade, as the financial health of the remaining major railroads has soared, rail customers’ access to rail-to-rail competition has declined significantly. Meanwhile, since 2003, rail rates have risen sharply.

To address these realities, NAWG and others support S. 158, which would bolster the STB’s power to investigate shipper concerns; S. 49, the Railroad Antitrust Enforcement Act of 2011; and recent actions taken by the current STB to address shipper concerns. NAWG also works with railroad companies on an individual basis to discuss and resolve local concerns.

For more about NAWG’s rail transportation work, please visit www.wheatworld.org/transportation.