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(Source: House Transportation and Infrastructure Committee press release, August 2, 2022)

Today, Chair of the Subcommittee on Railroads, Pipelines, and Hazardous Materials Donald M. Payne, Jr. (D-NJ), Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), Chair of the House Committee on Agriculture David Scott (D-GA), and Chair of the Subcommittee on Livestock and Foreign Agriculture Jim Costa (D-CA) introduced the Freight Rail Shipping Fair Market Act. This legislation will reauthorize the Surface Transportation Board (Board), the federal agency charged with the economic regulation of freight rail, and create a fair marketplace for the Class I freight railroads and their captured customers.

Specifically, the bill:

  • Strengthens the Board’s authority to address rail service emergencies;
  • Requires rail contracts to include service delivery standards and remedies, while leaving details to be privately negotiated between parties;
  • Provides the Board with clear direction to resolve common carrier obligation complaints;
  • Creates financial incentives for both railroads and their customers to efficiently move railcars;
  • Supports freight railroad efforts to identify where freight is located on their systems while in transit; and
  • Adequately funds the Board to allow for quicker dispute resolution when petitioned.

“I am proud to introduce the Freight Rail Shipping Fair Market Act with Chair DeFazio, Chair Scott, and Chair Costa to improve rail shipping nationwide,” Chair Donald M. Payne, Jr. said. “The freight rail companies have focused on profits instead of performance and it has led to delays and problems in how we transport commodities to farms, factories, and stores across the country. My bill gives the Surface Transportation Board the power to prohibit rail rate increases during a rail emergency and resolve rail emergencies when they occur. This bill will improve the speed and reliability of rail service and guarantee that freight rail shipping continues to improve in the future without unnecessary regulations.”

“I am pleased to join Chair Payne on the Freight Rail Shipping Fair Market Act, which will hold the freight rail industry accountable for their appalling service to shippers and ultimately help American families burdened by the increased price of goods,” Chair Peter DeFazio said. “It is imperative that our rail network is reliable, and yet consolidation and Wall Street pressures on railroads to cut costs and increase profits have made that near impossible. This bill will level the playing field and provide railroad customers—many of which are transporting key food and energy products—the service they deserve. This bill will also provide the tools and guidance the Surface Transportation Board needs to fulfill its mandate and better regulate disputes among Class I railroads and their customers, weed out unfair practices, and incentivize efficient operations. I look forward to putting these policies into action, empowering the Board, and boosting competition in the freight rail industry.”

“Whether carrying inputs to our farmers or moving their products to market, rail is a vital tool in the American agriculture industry. This fact has become increasingly apparent as rail service issues have created challenges for our farmers, grain elevators, and ethanol producers and resulted in increased costs for producers and consumers alike,” Chair David Scott said. “I want to thank Chair DeFazio and Chair Payne for their work on this legislation, particularly their work with the agriculture community to address their concerns. I am proud to join as an original cosponsor of the Freight Rail Shipping Fair Market Act.”

“The pandemic has wreaked havoc on every segment of our economy. It has disrupted our supply chain, both in terms of imports and exports and has put our agricultural community at great risk. The time is now to sit down with rail carriers to fix this broken supply chain system. I support this legislation to improve freight rail service, reduce inflation, and ensure our shippers and suppliers are confident in the ability of our nation’s rail system to efficiently move goods and services. This is the only way to give consumers confidence in fair pricing and consistent access to products in grocery stores and on shelves,” Chair Jim Costa said.

Background

Rail customers have increasingly expressed concern with inconsistent and unreliable rail service. The impacts of erratic rail service have been particularly acute in the agricultural and energy sectors. To better understand why rail service delivery problems persist, the Railroad Subcommittee held two hearings, one in March 2022 and one in May 2022, and the Surface Transportation Board held a hearing on urgent issues in freight rail service in late April 2022. All three hearings documented serious problems in the freight rail industry stemming from years of Wall Street focus on increasing railroad operating profits to allow for stock buy backs and dividends, rather than investing those profits in expanding critical freight rail service to more places and serving more industries. Despite these hearings and actions undertaken by the Surface Transportation Board, severe service issues continue to hamstring rail shipments across the country. This bill seeks to stem that tide.

Full story: House T&I Committee website