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12/16/2008



Rail News: Rail Industry Trends

CURE prioritizes rail reforms for next Administration, reaffirms 're-reg' call


Consumers United for Rail Equity (CURE) officials recently submitted a list of their railroad regulatory reform priorities to President-elect Barack Obama’s transportation transition team.

The freight-rail shipper coalition is calling on the new Administration to:
• reform the rate challenge process to make it “workable and accessible” for captive rail shippers;
• address rail competition issues, such as by removing paper barriers that limit short lines’ access to major rail lines;
• authorize the Surface Transportation Board (STB) to address rail service problems for shippers that move freight by tariff;
• create a more proactive STB; and
• apply federal antitrust laws to railroads and the STB.

“Railroads are the only American industry that is largely exempt from the nation’s antitrust laws,” CURE officials said in a reform priority outline. “Because of this exemption, the STB has been free to make anti-competitive interpretations of law.”

CURE supports the Railroad Antitrust Enforcement Act (H.R. 1650/S. 772), which previously passed the House and Senate judiciary committees. The legislation proposes to eliminate railroads' antitrust exemptions, permit the U.S. Justice Department and Federal Trade Commission to review future railroad mergers under antitrust law and enable shippers to seek legal recourse for "anti-competitive conduct" by railroads.

The act — which is opposed by the rail industry — has a new backer, as well. The American Bar Association (ABA) recently endorsed the legislation, CURE said. In a letter to House and Senate leaders, ABA officials opposed railroads’ industry-specific antitrust law exemptions.

There’s something else that backs the argument for rail “re-regulation,” too, according to CURE. A recent STB-commissioned study “provides solid evidence of the abuse of monopoly power by the freight-rail industry,” the coalition said.

The study shows railroads are “abusing” their antitrust law exemptions by charging shipping rates 500 to 700 percent above cost and “refusing” to provide adequate service to captive shippers, CURE said.

“In ruling after ruling, the STB has denied captive rail shippers their due process for reasonable rates and fair treatment by the railroads, even though that was the charge given the board when Congress created it in 1995,” said CURE Executive Director Bob Szabo in a prepared statement.


Contact Progressive Railroading editorial staff.

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