Thursday, July 26, 2012

STB seeks to “protect captive shippers”

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The Surface Transportation Board Wednesday announced "two initiatives to explore ways to further protect captive shippers from unreasonable rail rates."

STB said it proposes to reform its rules on how it resolves rate disputes "to ensure that all captive shippers have a meaningful way to challenge rates." STB also will be "taking steps to consider a proposal submitted by The National Industrial Transportation League (NITL) to increase rail-to-rail competition."

"The centerpiece of the Board's rate rules proposal removes the limitation on relief for cases brought under the Simplified-Stand Alone Cost alternative," STB said.

"Our goal is to encourage shippers to use a simplified alternative to a Full-[Stand Alone Cost] analysis that is economically sound, yet provides a less complicated and less expensive way to challenge freight rates by discarding the requirement that shippers design a hypothetical railroad to judge a railroad's real world rates," the Board wrote in its decision, Rate Regulation Reforms, EP 715.

The Board also proposes to double the relief available to shippers under its other simplified approach, the Three-Benchmark method; to make technical changes to the Full-SAC and simplified rate procedures; and to raise the interest rate that railroads must pay on reparations to shippers if the railroads are found to have charged unreasonable rates.

In addition to these immediate proposals, the Board is beginning a proceeding in Petition for Rulemaking to Adopt Revised Competitive Switching Rules, EP 711, to explore a competitive-access proposal submitted by NITL, STB said.

Said STB in a statement, "We continue to explore whether there are policy changes the Board could adopt that would promote more rail-to-rail competition and thereby allow competition and the demand for services to establish reasonable rates for transportation by rail, and thus minimize the need for Federal regulatory control." Under NITL's proposal, certain shippers located in terminal areas that lack effective transportation alternatives would be granted access to a competing railroad, if there is a working interchange within 30 miles."

STB also said it continues to evaluate other competitive issues, including what actions to take in connection with commodity exemptions, the subject of a separate hearingand how to improve its rules in transactions involving interchange commitments.

The Board's decisions are available on the Board's website at

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