(The following story by John D. Boyd appeared on The Journal of Commerce website on September 15, 2010.)
WASHINGTON, D.C. — The Surface Transportation Board is poised to mount a three-pronged regulatory reform effort that could expand its activism on railroad-shipper disputes and implement some measures that are in the stalled Senate rail competition legislation.
The STB program is contained in testimony prepared for delivery by Board Chairman Daniel R. Elliott at a Sept. 15 hearing by the Senate Commerce, Science and Transportation Committee.
Elliott took office in August 2009, and the STB has held off from taking bold steps in many policy areas while the Commerce panel was trying to get its bill through Congress. But he said in his second year as STB chairman “I do not want to sit still while important issues are within my power to address.”
He said the agency will review its own rules on rail-to-rail competition, also referred to at times as competitive access for shippers to a connecting rail line or an alternative route. Under existing rules, long-distance railroads lock in a cargo that originate on their line or on a connecting short line for its entire route to destination, without giving shippers the option of getting competitive rate quotes from connecting carriers for part of the transit.
For the STB to consider reviewing this issue implies that Elliott has been working with Committee Chairman Jay Rockefeller, D.-W.Va., to prepare such a plan. Rockefeller and other senators on the committee in early 2009 abruptly directed the STB to halt such a review, as the committee was working on a comprehensive rail regulatory overhaul.
Now, however, with time running out for passage before the committee’s bill expires this year, Rockefeller said he wants to achieve the legislative’s goals either through a law or through regulation. Elliott said the STB’s predecessor agency, the Interstate Commerce Commission, adopted the current rail-to-rail rules. So the STB can make some changes on its own.
He also said “it is time to explore the commodity exemption system” under which the agency designates some types of cargoes as business areas in which it does not assert jurisdiction. That means railroads write rate-setting contracts with shippers, who cannot challenge their pricing at the STB. “These exemptions were not cast in stone and can be revoked by a petitioning party,” Elliott said, indicating he will seek to expand the cargoes for which the STB will entertain shipper challenges to freight rates.
And since some shippers continue to say that STB filing fees present a barrier to them pursuing formal challenges to railroad freight rates they consider unreasonable, Elliott said “filing fees should not deter parties from bringing disputes to the board.” The board has already said it will review the level of filing fees, and he told the committee that “I plan to take steps to make the agency more accessible to parties that need to file a complaint because of a violation of the law.”
Until now, Elliott has mainly touted his staff’s success in mediating disputes informally without the shippers having to file formal cases, or in helping the parties settle their disputes behind the scenes rather than spend the money and time on litigation. Some features in the Commerce bill could also encourage rate challenges by shippers, but with the bill’s fate uncertain Elliott indicated the STB can move ahead on this front as well.