Senators urge STB to take action on rail rate reforms

By Sarah Gonzalez, Director of Communications and Digital Media

Sens. Tammy Baldwin, D-Wis., and John Kennedy, R-La., encouraged the Surface Transportation Board (STB) to move forward with rail rate reform in a July 25 letter to STB commissioners.

“We…encourage the Board to move expeditiously on next steps that support a competitive and reliable rail system for all stakeholders, including freight rail shippers,” they wrote.

Earlier this year, the STB released its Rate Reform Task Force Report, which contained multiple recommendations for how the agency could improve its processes available to shippers to challenge unreasonable freight rates by making them more “affordable, accessible and practical.”  The STB also conducted an oversight hearing on Class I railroads’ demurrage and accessorial practices, with an eye on whether they are commercially fair and provide for reciprocal penalties on railroads if they fail to perform. The lawmakers noted that under the current rate review process, shippers find rate cases too costly to bring before the STB. They asked the STB to take action on the task force’s recommendations for improving the rate review process as well as to address demurrage and accessorial charges to ensure they are “reasonable and commercially fair.”

During its May 22-23 hearing, the STB heard directly from companies and organizations representing rail users, including NGFA, about excessive demurrage and accessorial charges and commercially unfair practices being imposed increasingly by railroads, particularly those implementing the so-called precision scheduled railroad operating model.

“Railroads have defended these revenue-producing policies as necessary for more efficient service, yet the efficiency gains remain unclear to the rail customers that are assessed new fees on top on inconsistent service and high rates,” wrote the senators.

In their letter, Sens. Baldwin and Kennedy urged STB to:

• Make rate reform a top priority by acting on the recommendations provided by its Rate Reform Task Force to develop more affordable, accessible and practical ways to handle both large and small rate disputes.
• Take action to address demurrage and accessorial charges to ensure fees are reasonable and commercially fair, and to discourage similar practices by railroads in the future.
• Provide a timely and decisive process for freight rail rules, including the pending rulemakings that would expand access to rate relief, provide commodity exemptions, and allow for competitive switching.

The NGFA and other agricultural organizations also have asked the STB to follow up on its “informative and illuminating” May public hearing by developing further policies and guidance regarding the “commercial fairness, commercial practicability and reciprocity” of Class I railroads’ demurrage and accessorial practices. “On behalf of our nation’s farmers and the agricultural industries that serve them, we commit to work with you and look forward to the (STB’s) next steps on these important issues,” the organizations wrote in  June 25 letter to STB commissioners.

NGFA has praised STB Chairman Ann Begeman for making reform of the agency’s current “complex, costly and unworkable methodologies” for challenging unreasonable freight rates her top priority.