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  April 6th, 2015 | Written by

As Freight-Rail Rates Rise, Overhauls Proposed

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  • Manufacturers, farmers, energy producers form new trade group, Rail Customer Coalition.
  • American Farm Bureau Federation: Review rail policy and adopt improvements for rail carriers, shippers and public.
  • Steel Manufacturers Association: Lack of competitive rail service having serious impact on American businesses.

A large group of national trade associations representing manufacturers, farmers and energy producers have joined together to form a new group—the Rail Customer Coalition (RCC)—in an effort to highlight what they see as the need to overhaul the nation’s freight rail operations and infrastructure.

“Our groups believe it is time to review key aspects of rail policy and adopt common-sense improvements to ensure that the U.S. is on course to meet the needs of rail carriers, shippers and the public,” says Bob Stallman, president of the American Farm Bureau Federation.

Specifically, the Coalition is calling on Congress to pass the Surface Transportation Board Reauthorization Act of 2015. The RCC says it would increase rail-to-rail competition by initiating reform at a time when “rising rail rates are taking a growing toll on American businesses.”

“The reasonable reforms in this bill will make many important changes, such as streamlining the STB’s [Surface Transportation Board] overly burdensome rate-review standards, providing reasonable arbitration procedures to resolve rate disputes, and allowing the STB to be more proactive in resolving freight rail issues,” says Cal Dooley, president and CEO of the American Chemistry Council.

Moreover, he says, “the legislation will allow both railroads and shippers to thrive, while encouraging the growth of the U.S. economy.”

The group is also calling for a “modernization” of the federal government’s STB, which maintains regulatory oversight of the nation’s rail network and is criticized by the new coalition for its “slow and burdensome processes [which] leave many shippers with no competitive options and no feasible way to challenge unreasonable rates.”

“We’ve reached a tipping point where the lack of competitive rail service is having a serious impact on American businesses,” says Philip K. Bell, president of the Steel Manufacturers Association.

“[Congress] has not revisited the nations’ freight rail policies since it created the STB,” according to the RCC. “It’s clear the Board’s current policies have not been able to keep up with the massive changes in the freight-rail industry or achieve the goals that Congress established in 1980 when it passed the Staggers Rail Act.”

The Surface Transportation Board Reauthorization Act of 2015, the RCC adds, “would reauthorize and make substantial changes to the STB, the only government entity responsible for handling commercial freight-rail issues, and would modernize the Board for the first time since its creation. In addition to streamlining how the STB operates, the legislation would help improve how the Board handles rate and service issues.”