STB Postpones Ruling on Rail Competition Case
The rail regulatory agency posted a statement on its website late June 30 saying that Chairman Daniel Elliott “intends to issue a decision on this important matter by the end of July.” Earlier this year, Elliott said at an industry meeting that the decision on the proposal submitted in 2011 would be made during June.
The agency was instructed in last year’s reauthorization legislation to accelerate handling of cases in an effort to make the agency more efficient.
STB received the petition about switching rules that would have allowed a second carrier to reach customers now served by a single railroad from The National Industrial Transportation League. Its proposal would have required a railroad with a single-served customer to position another railroad’s freight cars at a shipper’s facility. The geographical area in the original proposal was identified as a “reasonable distance.”
The case known as Ex Parte 711 sparked criticism from the Association of American Railroads, which branded the concept as “misleading.” Supporters argue that introducing a second carrier would improve service and lower freight rates for customers. NITL’s plan would have required a payment by shippers based on operational costs to cover the cost of switching.
The change wouldn’t affect intermodal freight since those rates aren’t regulated. However, railroads’ overall revenue would be cut by $7.8 billion, or about 10%, according to AAR, reducing the industry’s ability to invest in improvements that benefit all freight customers.
By law, railroads operating in Canada are required to make that switching move upon customer request if there is a second railroad within 15 miles of a customer served by just one carrier.
