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7/2/2001



Rail News: Rail Industry Trends

Rockefeller's 'Railroad Competition Act' to reignite railroad-shipper war of words


Let the word games begin. On June 26, Sen. Jay Rockefeller, a West Virginia Democrat, introduced the Railroad Competition Act of 2001 (s. 1103), which Rockefeller says would encourage competition by requiring railroads and Surface Transportation Board to work together to improve rail operations and service.

If passed, the bill would amend title 49 of the United States Code, requiring STB to accord greater weight to the need for rail-to-rail competition, as well as "consistent and efficient" rail service, in its decision-making. The bill would eliminate what the bill’s writers term "unreasonable" barriers to competition among railroads serving the same geographic area, and ensure reasonable rates for captive rail shippers by amending STB’s rate-reasonableness procedures.

Senators Byron Dorgan, a North Dakota Democrat, and Conrad Burns, a Montana Republican, co-sponsored the bill.

"The Railroad Competition Act of 2001 will address the need for increased rail-to-rail competition so that shippers will no longer be captive to one railroad and one pay rate," said Rockefeller in a prepared statement.

Association of American Railroads opposes the bill, which the Senate has referred to the Commerce, Science and Transportation committee.

"We think it would substantially increase the regulation of railroads, and we know how that has worked in the past — it’s been a failure," said AAR spokesman Tom White.

Rail shipper groups likely will support the bill. In June 28 testimony before the U.S. Senate Surface Transportation and Merchant Marine subcommittee, Dow Chemical Co.’s Manager of Rail Services William Gebo, speaking on American Chemistry Council’s behalf, urged Congress to pass it.

But Gebo also told the subcommittee STB should’ve made rail-to-rail competition the centerpiece of its new merger rules, issued June 11. As a result, STB’s authority should be "explicitly clarified" to require examination of marketing alliances and other cooperative agreements between railroads.

Gebo also said Congress should adopt legislation that would increase U.S. Department of Justice’s involvement in rail mergers.

"There is a risk that rail mergers could occur without any meaningful federal scrutiny," he said.

STB’s new rules already call for plenty of meaningful scrutiny — so much so that Class Is may steer clear of mergers for another five years, CSX Corp. Chairman and Chief Executive Officer John Snow told the Senate Surface Transportation and Merchant Marine subcommittee.

"There is little or no sentiment for additional major mergers among the rails themselves, from our customers or from our investors," he said.


Contact Progressive Railroading editorial staff.

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