(The Associated Press circulated the following article by Mary Clare Jalonick on June 22.)
WASHINGTON — Senators blasted the chairman of the Surface Transportation Board Wednesday, saying more needs to be done to strengthen railroad competition and lower fuel surcharges on the rails.
W. Douglas Buttrey said at a subcommittee hearing on Capitol Hill that the board is attempting to improve its oversight of commercial activities on railroads. But Sens. Byron Dorgan, D-N.D., and Conrad Burns, R-Mont., said the regulators have been inactive for too long.
“If there’s ever an Olympic event for studying (an issue), clearly the Surface Transportation Board is a gold medal winner here,” said Dorgan. “Clearly there is a failure.”
At issue is the lack of railroad competition in several states, including Wyoming, 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.
A preliminary report issued by the Government Accountability Office on Wednesday came to a similar conclusion, saying some shippers are “paying significantly higher rates than others.”
The GAO, which is expected to issue a final report on the issue later this year, said there is little data showing the state of railroad competition around the country.
“Significant increases in freight traffic over the next 15 to 25 years are forecasted, and the railroad industry’s ability to meet future demand is largely uncertain,” the GAO wrote.
Dorgan and Burns said the board, which was created a decade ago to review railroad restructuring and resolve rate and service disputes, has fallen down on the job. While the regulators have listened to and reviewed shipper complaints, they have done little to give them relief, the senators said.
“There is no excuse,” said Burns, who has introduced legislation that would encourage more competition on the rails.
Buttrey, who assumed his post in January, said the transportation board is taking several steps to make it easier for shippers to present their complaints.
“I hope it is clear that the board is listening and sensitive” to the shippers’ concerns, Buttrey told the senators.
Dale Schuler, a Montana wheat farmer who is president of the National Association of Wheat Growers, said the cost of transporting grain can equal as much as one-third of the overall price a producer receives for his or her grain.
“In light of the horrific situation U.S. grain producers are facing with major railroads unable to meet common carrier obligations all over the nation, it is time that public policy in this area needs to be re-examined,” he said.
Edward R. Hamberger, president and CEO of the Association of American Railroads, said carriers will attempt to improve capacity but could be harmed by increased regulation.
“Not all (rail customers) seem to recognize if they want added rail capacity, they must be willing to pay for it,” he said.