(The Associated Press circulated the following article by Mary Clare Jalonick on October 30.)
WASHINGTON — The investigative arm of Congress has recommended that the government analyze the state of railroad competition nationwide, saying shipping rates may be too high in some areas.
A preliminary report on the issue was made in June, with a final report earlier this month.
At issue is the lack of railroad competition in several states, including Montana and North Dakota. Shippers trying to send coal, grain and other products to other states have complained they are “captive” to higher prices and equipment shortages, and argue that they are forced to pay inflated fuel surcharges.
The Government Accountability Office, based in Washington, D.C., said there is little data showing the state of railroad competition around the country but speculated that some shippers might be paying too much.
“Ultimately, our analysis suggests a reasonable possibility that shippers in selected markets may be paying excessive rates, and an assessment of competition would determine if this situation reflects reasonable economic practices by the railroads in an environment of excess demand or an abuse of market power,” the investigators wrote.
The GAO recommended that the federal Surface Transportation Board conduct a “rigorous analysis” of nationwide railroad competition and consider possible actions to curb potential rate abuse by railroads.
As an example of the problem, the report cites a grain route from Portland, Ore., through Minot, N.D., which is served by only one major railroad. Shippers along that route would pay twice as much as on a similar route through Sioux Falls, S.D., which is served by two major railroads.
“This new report provides the hard evidence that we’re getting soaked with extremely high rail rates,” said Sen. Byron Dorgan, D-N.D.