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3/17/2005



Rail News: Rail Industry Trends

STB reschedules hearing on rail rate challenge methodology



The Surface Transportation Board has postponed its hearing on handling rail rate challenges under the stand-alone cost (SAC) methodology from March 24 to April 26.

During the hearing, railroads, shippers and other interested parties will be allowed to express views and offer suggestions regarding the board's consideration of rail-rate reasonableness challenges under the SAC methodology. Board members will not discuss pending rail rate cases at the hearing.

Under a SAC test, a complaining shipper designs a hypothetical railroad specifically tailored to serve their needs. The cost to build and operate the railroad are compared to revenue the road is projected to earn. If the shipper demonstrates the stand-alone railroad would earn more than necessary to cover all its costs (including a reasonable return on investment), the board determines the shipper is entitled to rate relief.


Contact Progressive Railroading editorial staff.

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