Persistent rail delays lift bill aimed at beefing up US rail regulator

Mark Szakonyi, September 6, 2014,

Persistent U.S. rail delays could give a boost to an annual push by rail critic Sen. Jay Rockefeller, D-W. Va., to strengthen the U.S. Surface Transportation Board, the U.S. rail regulatory agency.


His legislation, known as the Surface Transportation Board Reauthorization Act of 2010, would push the agency to move faster on addressing issues of revenue adequacy standard, a metric used by the agency to rule on pricing challenges; mandatory reciprocal switching; and deciding whether contract bundling hampers shippers from bringing rate cases.


The bill, which will be introduced next week, would also allow the agency to launch its own investigation before a complaint from a shipper or railroad was filed. The bill also aims to speed up the STB’s review of proposed rates, and provide alternative methods of resolution between railroads and shippers.


The STB doesn’t directly impact intermodal rail shippers as its focus is on railcar service. But intermodal and carload services use the same rail network, meaning that freight issues for one type of service can adversely impact other services.


“It is far past time that America had a competitive and efficient rail transportation network. Industries, businesses, consumers, and rail passengers around the country rely on our freight rail system, and when the system or its economic regulatory framework breaks down, so does our economy, Rockefeller, chairman of the Committee on Commerce, Science and Transportation, said in a statement.


Rockefeller won’t run for a sixth term in the mid-term election in November, meaning the soon-to-be-introduced bill will likely be his last attempt to help shippers push back against the pricing power of the major railroads. Sen. John Thune, who has aggressively pushed for better grain rail service in his state of South Dakota, is co-sponsoring the bill. He is the Republican ranking member on the Commerce, Science and Transportation committee.


The Association of American Railroads, the main lobby for the rail industry, said it’s looked forward to reviewing the bill. In the past the AAR has vehemently opposed any legislation that its members views as smacking of re-regulation.


“The paramount concern for policymakers in considering any legislation affecting the (STB) should be how it would affect the ability of railroads to maintain and grow the capacity required to meet the shipping needs of the nation,” AAR President and CEO Ed Hamberger said in a statement.


Past congressional pushes to strengthen the STB have fizzled out, largely due to lack of support, particularly from the Republican-controlled House. But events in the last year suggest this latest attempt may gain more traction:


— Grain shippers are frustrated with long rail delays that jeopardize their ability to get shipments to Asia. At an STB hearing Thursday in Fargo, North Dakota, Canadian Pacific Railway and BNSF said they had made service improvements and more were on the way. That response didn’t satisfy many shippers and officials, however.


— The deterioration in rail service, caused by backlogged cargo from the harsh 2013-2014 winter and a steady rise in demand, has hurt other types of rail shippers, including retailers and coal producers.


— A coalition of shipper groups wants the STB to force railroads to give some shippers with access to only one railroads’s line access to the line of a competitor if it’s within 30 miles of the customer’s present or future loading spot. The National Industrial Transportation League, which filed for the rulemaking, say it will bring a “modicum” of fairness to the industry. The railroads counter that mandatory reciprocal switching would hurt service, reduce availability of funds for capital projects and unfairly aid some shippers at the expense of others. The STB in March held a hearing on the proposal in March, a positive sign for NITL and other shipper groups, as the cautious agency has waded into the issue slowly.


— Amtrak wants the STB to look into whether Canadian National Railway is causing “unacceptable” delays to its passenger service from Chicago to Carbondale, Illinois. Amtrak said it has a statutory right to preference in serving passenger before freight trains on the line.


Rockefeller and Thune will likely delve into the details of the bill when they hold a hearing on Wednesday, titled “Freight Rail Service: Improving the Performance of America’s Rail System.” Hamberger and representatives of grain, chemical and auto shippers are set to testify.


Correction: The story has been amended Saturday night to reflect Amtrak’s statement that it has a statutory right to serve passengers over freight trains on the line between Chicago and Carbondale, Illinois.


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