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5/4/2005



Rail News: Rail Industry Trends

Bill backing rail industry re-regulation re-enters the Senate


A bill aiming to re-regulate the railroad industry is back in the Senate after a two-year hiatus. The Railroad Competition Act of 2005 (S. 919) picks up where the Railroad Competition Act of 2003 left off.

S. 919 proposes to "clarify" national rail policy under the Interstate Commerce Commission (ICC) Termination Act and require the Surface Transportation Board to "ensure effective competition" among railroads at origins and destinations; enforce reasonable rail rates "in the absence of effective competition," and maintain consistent and efficient rail service for shippers, including timely distribution of rail cars.

The legislation also would require the STB to provide "final offer" arbitration of certain rail-rate cases; remove paper barriers in future line sales or leases to regionals and short lines; eliminate an "anti-competitive conduct" test instituted in the mid-1980s for terminal area and switching agreements; place a cap on filing fees in rate cases involving "coal rate guidelines" to federal district court levels; mandate that railroads quote rates to customers between any two points where freight moves originate, terminate or transfer, when requested by a shipper; and declare that all or part of a state is an inadequate area of rail competition if petitioned by a state.

As it has each time re-regulation legislation reaches Capitol Hill, the Association of American Railroads (AAR) strongly opposes S. 919.

“The nation's freight railroads urge Congress to reject S. 919, legislation that would … let the federal government artificially lower freight rates for a limited class of rail shippers,” AAR officials said in a prepared statement. “Since the Staggers Act partially de-regulated railroads, the industry has reinvested hundreds of billions of dollars into equipment and infrastructure. At the same time, rates have dropped substantially, providing U.S. rail-freight shippers with the world's most cost-effective rail service.”


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