Subscribe to our free, weekly email newsletter!


STB reauthorization legislation is back on the table

By Jeff Berman, Group News Editor
February 02, 2011

Legislation calling to increase competition in the railroad industry was recently introduced by Senators Jay Rockefeller (D-WV) and Kay Bailey Hutchison (R-TX).

This bill, S. 158 the Surface Transportation Board Reauthorization Act of 2011, is nearly identical to a version rolled out in the previous Congress. It focused on addressing the concerns of rail shippers, regarding rates and service, as well as making the railroad industry more competitive.

If the bill were to be enacted into law, it could have a profound effect on how “business as usual” is currently viewed in the railroad sector. Among the bill’s goals are:
-raising the number of STB board members from three to five;
-establishing the STB as an independent agency and giving the STB investigative authority;
-creating a strong rail customer service advocate to help resolve shippers’ concerns;
-protecting rail shippers and maintaining reasonable rates in non-competitive situations;
-preventing two or more rail carriers from collaborating on interline rates;
-requiring major railroads to quote “bottleneck rates”; and
-improving access to shipper relief.

Rockefeller, whom also serves as chair of the Senate Commerce Committee, said that America is long overdue for a competitive, efficient, and balanced transportation network.

“It is crucial to the health of our economy and the future of our rural communities,” he said in a statement. “That is why I have reintroduced the Surface Transportation Board Reauthorization Act.  During this critical period for our economy, it is essential that we act now to effectively meet our country’s transportation needs for the 21st century.  I look forward to working with my colleagues to tackle these reforms. The Surface Transportation Board Reauthorization Act of 2011 would comprehensively update and improve the economic oversight of the railroad industry and address longstanding, competitive imbalances for shippers by increasing rail competition, strengthening federal oversight, and improving shippers’ access to regulatory relief.”

On May 3, the STB is holding a hearing to explore the current state of competition in the railroad industry and possible policy initiatives to promote more rail-to-rail competition.

As LM has previously reported, this bill has not been well-received by Class I railroad executives, whom maintain this bill is decidedly pro-shipper, coupled with the potential for railroads to lose a significant amount of pricing power.

At Norfolk Southern’s Annual Meeting of Shareholders in 2010, CEO Wick Moorman said re-regulatory efforts “are attempting to alter the economic regulatory regime which governs us so as to lower their rates, and at the same time seriously damage our ability to earn adequate returns…and invest in the future.” Moorman also said that at the end of the day a bill that is bad for the industry cannot be passed.

And railroad executives have repeatedly stated that that the existing regulatory railroad environment for has produced—for North American railroad shippers—a freight railroad system that is the best in the world. And if the railroad industry lost the ability to earn its cost of capital it could have a negative effect on capital investments to support traffic growth and reverse the strides made post-Staggers Act in the areas of rail safety and service reliability.

From the perspective of rail shippers, many feel this bill is long overdue. Reasons for this range from the multiple barriers to competitive access for captive shippers to improving the rate challenge process at the STB, and get relief from what view as monopoly pricing power held by the railroads.

For more articles on railroad shipping, please click here.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Getting items ordered online to your home on a same-day basis is as important or relevant as it needs to be, and it depends on things like the type of products being ordered and its relative urgency as well. This was put into better perspective for me during a recent conversation I had with Dr. Victor Allis, CEO of Quintiq, a supply chain vendor specializing in a single optimization and planning platform.

Diesel prices dropped for the third straight week, with the average price per gallon seeing a 2.5 percent decline to $3.869 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

Seasonally-adjusted (SA) for-hire truck tonnage in June dropped 0.8 percent on the heels of a revised 0.9 percent (from 1.0 percent) increase in May and was up 2.3 percent annually.

Even as Congress was putting the finishing touches on a 10-month short-term funding extension to the federal aid highway bill that temporarily averts a funding crisis, Transportation Secretary Anthony Foxx was ripping the measure as a short-term “gimmick” that once again fails to adequately fund U.S. infrastructure needs in the long run.

ISI is comprised of Integrated Services, ISI Logistics and ISI Logistics South and is focused on the warehousing and transportation needs of automotive shippers. RRTS said that in 2013, Integrated Services generated revenues of approximately $21 million adding that Integrated Services is expected to be accretive to Roadrunner’s earnings in 2014.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA