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Rail News: Federal Legislation & Regulation

Sen. Franken calls on Obama to address freight-rail competition; AAR says rail shippers already protected by federal laws

U.S. Sen. Al Franken (D-Minn.) recently wrote a letter to President Barack Obama urging his administration to address problems posed by what he characterizes as freight-rail "monopolies."

Franken called on the president to address what he believes is a lack of freight-rail competition by:

• ensuring the U.S. Department of Transportation's (USDOT) national freight rail plan and a recently established Freight Policy Council are working to eliminate any potential "monopolies;"

• directing the U.S. Commerce Department's Advisory Committee on Logistical Supply Chain Competitiveness to focus on the impact of freight-rail competition on American industries and producers; and

• updating a 2010 report by the USDOT and U.S. Department of Agriculture to provide more reliable and current information on freight-rail competition issues that impact farms and rural businesses.

The senator also urged the president to appoint a senior official to coordinate the administration's efforts to address freight-rail competition and suggest federal policies that could be adopted to ensure a more competitive national freight-rail system.

"Farmers and businesses across Minnesota rely on freight rail to ship out their products, but a lack of competition in the rail industry harms shippers and drives up prices for their consumers," said Franken in a press release.

Rail infrastructure should be available to all prospective users on a competitive basis, but "unfortunately that is not currently happening," he wrote in his letter.

The Association of American Railroads (AAR) argues that U.S. freight railroads already are subject to almost all antitrust laws, including those that prohibit railroads from colluding with each other to set prices, allocate markets or unreasonably restrain trade in some other way.

Like many other industries, railroads have a few limited federal antitrust exemptions, but they only cover areas where the Surface Transportation Board has regulatory authority over railroads, AAR officials state in a document titled, "Maintain Railroad Antitrust Laws," which is posted on the association's website.

"In other words, railroads’ customers — and the public — are being protected. It’s just that oversight is balanced among different government agencies, ensuring that decisions are made by those best equipped to do so," they say in the document.

Contact Progressive Railroading editorial staff.

More News from 2/26/2013