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9/6/2007



Rail News: Rail Industry Trends

STB revises small rate-dispute procedures; House transportation committee schedules rail competition hearing



The Surface Transportation Board (STB) has issued a decision it hopes will end a 12-year controversy over what shippers term “vague and expensive” procedures governing small rail-rate disputes.

Yesterday, the board announced it’s establishing new procedures to ensure small- and medium-size rate disputes are resolved in a “simplified, expedited and affordable manner.”

Shippers involved in small rate cases now can obtain an award of up to $1 million within eight months of filing a complaint, and the filing fee for a “simplified three benchmark” case will be $150. The STB also created a separate resolution process for shippers involved in medium-sized rate disputes. Those companies can obtain an award of up to $5 million within 17 months of filing, which will cost $10,600.

In addition, the decision enables shippers to choose a rate dispute resolution process, requires mediation in all rate disputes to minimize litigation, and simplifies and standardizes methodologies used to calculate costs.

“These two new dispute resolution procedures open our doors to the more than 70 percent of rail traffic that, until now, has been effectively blocked from board review due to the complexity and resulting high costs of the previous procedures,” said STB Chairman Charles Nottingham in a prepared statement.

The STB had held hearings in 2003, 2004 and earlier his year to improve the dispute resolution process, which has been in place since 1996.

Speaking of hearings and rate disputes, the House Committee on Transportation and Infrastructure will hold a hearing on rail competition and service Sept. 20 in Washington, D.C.

The hearing will address a number of issues, such as rate disagreements and “captive” shippers. The committee also will examine proposed rail industry “re-regulation” bills, including the Railroad Competition and Service Improvement Act of 2007 (H.R. 2125/S. 953) and Railroad Antitrust Enforcement Acts of 2007 (H.R. 1650/S. 772).

H.R. 2125 and S. 953 propose to amend title 49 of the U.S. code to clarify rail transportation policy, require railroads to provide transportation rates, eliminate competition barriers between Class Is, IIs and IIIs, improve the rate reasonableness standard and arbitration of rail disputes, and authorize the STB to investigate and suspend certain railroad actions. H.R. 1650 and S. 772 propose to amend federal antitrust laws to eliminate certain railroad exemptions.


Contact Progressive Railroading editorial staff.

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