STB: Now (Finally) There Are Five

Written by William C. Vantuono, Editor-in-Chief

Robert Primus and Michelle Schultz, whose confirmation as the fourth and fifth members of the U.S. Surface Transportation Board have been on hold for months, were confirmed by the U.S. Senate late on Nov. 18. They are expected to be sworn in shortly, giving the STB its full complement of five members, a number set by the 2015 Surface Transportation Board Reauthorization Act.

STB Chairman Ann Begeman’s term expires Dec. 31, and by statute she may remain up to 12 months in holdover status, until Dec. 31, 2021. However, she must depart upon confirmation of a successor, if that occurs during 2021. Begeman is in her second term, so she may not be renominated, according to Railway Age Capitol Hill Contributing Editor Frank N. Wilner.

Democrat Primus was confirmed to a seat previously held by Democrat Deb Miller. His term expires Dec. 31, 2022. Republican Schultz was confirmed to one of the two new seats created by the 2015 Surface Transportation Board Reauthorization Act not previously filled. Her five-year term will commence the day she is sworn in. Republican Patrick Fuchs’ first term expires Jan. 17, 2024. Democrat Martin Oberman’s first term expires Dec. 31, 2023.

“There are numerous pending rulemakings that have languished—some for many years—that may finally move to fruition in 2021,” Wilner observes. “Among them:

“• The method by which revenue adequacy is determined, including whether historical or replacement costs are to be used in computing a railroad’s investment base, and the method for estimating the equity portion of the railroad industry’s cost of capital.  

“• Whether and how revenue-adequate railroads should be constrained in raising rates. 

“• How to simplify and make less costly the determination of reasonable rates where railroads are market-dominant. This may be solved through agreement with the railroads that would avoid a post-decision judicial challenge. The AAR Board of Directors is considering proposing some manner of non-precedent-setting arbitration to decide all but major rate cases.

“• The criteria for, and means to, providing competitive access at sole-served rail facilities.

“• Whether to eliminate paper barriers in line sale and line lease agreements that restrict short line railroads from interchanging traffic with competitors of the Class I railroad that sold or leased them the trackage. 

“• An appropriate formula for recovery of increased fuel costs.

“• Whether previous regulatory exemptions should be withdrawn, given changed circumstances.”

Rail Industry Comments

“The freight rail industry welcomes Michelle Schultz and Robert Primus to their new roles and looks forward to working with them to meet our shared goal of guaranteeing that railroads can deliver for shippers and the U.S. economy,” said Ian Jefferies, President and CEO of the Association of American Railroads. “We look forward to robust, transparent discussions with them as they step into their new roles. Railroads continue to evolve and nimbly adapt to provide remarkable service to shippers, which will only be possible if the industry can continue to invest for tomorrow. The industry’s resilience is only possible thanks to the balanced regulatory framework that Congress entrusted the Board to maintain. Now more than ever, the wisdom of that decision is crystal clear.”

“We are pleased that Congress has confirmed Robert Primus and Michelle Schultz to the Surface Transportation Board, allowing a full complement of five members,” said Chuck Baker, ASLRRA President. “The Board regularly deals with important issues for short line railroads, and we look forward to working with both new members to maintain and enhance the ability of small-business short line freight railroads to play a key role in a strong and vibrant freight rail system. By all accounts, both Schultz and Primus are well-qualified for this important position, hard-working, and in public service for all of the right reasons. We welcome their addition to the Board.”

Shippers Weigh In

The Rail Customer Coalition, which represents some of the largest customers of freight rail, said it “applauds the Senate’s bipartisan vote and looks forward to continuing to work with the STB to promote competition and streamline overly bureaucratic procedures.” All 14 Coalition members weighed in with individual statements:

“We commend the Senate for its work to confirm Robert Primus and Michelle Schultz to the Surface Transportation Board, a key independent federal agency charged with monitoring the economic health and efficiency of our surface transportation system,” said Chet Thompson, President & CEO, American Fuel and Petrochemical Manufacturers. “These confirmations will bring an even deeper wealth of experience to an already accomplished Board and provide a full complement of board members to implement STB’s mission as it continues to tackle critical surface transportation issues. A healthy and efficient freight rail system benefits all stakeholders, and we look forward to STB’s continued efforts to modernize freight rail policy and fulfill the agency’s Congressional mandate to promote a fair, reliable, and competitive freight rail system.”

“We applaud Majority Leader McConnell, Minority Leader Schumer and the entire Senate for working together to confirm Primus and Schultz to the Surface Transportation Board,” said Chris Jahn, President and CEO, American Chemistry Council. “They bring a wealth of experience to the Board when it comes to tackling complex transportation and policy issues, which will serve them well as the STB looks to modernize the nation’s freight policies. With the addition of Primus and Schultz, the Board is in a strong position to enact much-needed reforms and fulfill its Congressional mandate to promote a competitive and reliable freight rail system.”

“The U.S. Senate confirmation of Michelle Schultz and Robert Primus to the Surface Transportation Board now brings the board to its full complement,” said Heidi Brock, President and CEO, American Forest & Paper Association. “We recommend the board advance long-overdue freight rail policy reforms. The paper and wood products industry is eager to work with the board to revoke the outdated commodity exemption policy and ensure our companies have an avenue to address harmful service and pricing issues. Such reforms support our industry’s ability to move millions of tons of materials to production mills and final markets.”

“The American Malting Barley Association would like to express its appreciation to the U.S. Senate for confirming Michelle Schultz and Robert Primus to the Surface Transportation Board,” said Scott Heisel, Vice President and Technical Director. “The barley supply chain depends on safe, efficient, and reliable freight rail system. A fully staffed STB, and the experience these individuals bring, will enhance the reform and modernization efforts envisioned when Congress passed the STB Reauthorization Act of 2015.” (Editor’s Note: Perhaps these folks are marking the occasion with a beer or two?)

“Farmers and ranchers rely upon freight rail to move American-grown products from all regions of the country to markets at home and abroad, as well as to provide critical farm supplies to help plant, tend and harvest crops,” said Zippy Duvall, President, American Farm Bureau Federation. “Ensuring we have a functioning and fully staffed STB is critical for the agency to carry out its charge to protect the interests of farmers, rural businesses and railroads. We applaud the Senate for their action to confirm Robert Primus and Michelle Schultz.”

“The American Petroleum Institute applauds the Senate’s bipartisan vote to fill the two vacancies on the Surface Transportation Board, and we congratulate Primus and Schultz on their appointments,” said Robin Rorick, Vice President of Midstream and Industry Operations. “Rail transportation is integral to providing American families and businesses with the reliable, affordable and cleaner energy they use every day, and we’re hopeful the fully-staffed STB will be able to enact needed reforms on our country’s rail system to enhance its performance and the relationships with the communities it serves.”

“The Consumer Brands Association and its members congratulate Robert Primus and Michelle Schultz on their confirmation to the Surface Transportation Board,” said Tom Madrecki, Vice President of Supply Chain and Logistics. “The Senate’s action to fill the last remaining STB vacancies are an important step in enhancing intermodal transportation and freight rail performance during a time of unprecedented supply chain demand across the consumer packaged goods industry.”

“The Corn Refiners Association (CRA) and its members congratulate Robert Primus and Michelle Schultz for their confirmation by the Senate as members of the Surface Transportation Board,” said John Bode, President and CEO. “We also thank the Administration, as well as Majority Leader McConnell, Minority Leader Schumer, and the Senate for their work to fill these positions. CRA members are highly dependent upon reliable and economic rail transportation for their products, and we look forward to working with Primus and Schultz, along with the rest of the STB, on the reforms needed to ensure a reliable and efficient rail system.”

“The Freight Rail Customer Alliance (FRCA) congratulates Michelle Schultz and Robert Primus on being confirmed by the U.S. Senate to serve as Members of the Surface Transportation Board,” said Shelley Sahling-Zart, President. “We sincerely thank the White House, Senate Commerce Committee and the full Senate for seeing these two nominations through the process. As allowed for in the STB Reauthorization Act of 2015, the Board will have five Members, resulting in enhanced efficiency and transparency for the Board benefiting all stakeholders—including shippers and rail carriers, and the communities we both serve.”

“The International Warehouse Logistics Association thanks the Senate for confirming Michelle Schultz and Robert Primus to the Surface Transportation Board,” said Steve DeHaan, President and CEO. “With the Board now at full strength, we look forward to resolution of many of the challenges facing rail shippers. The U.S. economy is dependent on a strong rail freight network, but it’s time to get the pendulum to swing back and give the shippers a break from unreasonable demurrage charges and rates.”

“Having a fully staffed U.S. Surface Transportation Board is of paramount importance for chemical distributors,” said Eric Byer, President and CEO, National Association of Chemical Distributors. “The STB makes critical decisions for rail customers that impact their daily operations and their bottom lines. The confirmation of Robert Primus and Michelle Schultz will go a long way in reaffirming the STB as the authority on rail issues, particularly as it relates to demurrage charges and rail service matters important to the chemical industry. We thank the Senate for confirming Primus and Schultz and look forward to working with them to ensure the Board can more effectively carry out its charge to protect the interests of rail customers and railroads.”

“The National Industrial Transportation League (NITL) and its members congratulate Michelle Schultz and Robert Primus on their confirmation to the Surface Transportation Board,” said Jennifer Hedrick, Executive Director. “Having a fully staffed STB is long overdue, and their addition will allow the Board to increase its focus on issues that affect freight rail users, including access to reliable and competitive rail service.”

“The Private Railcar Food and Beverage Association and its member companies strongly support the Senate’s vote to confirm Robert Primus and Michelle Schultz to become members of the Surface Transportation Board,” said Dan Elliott, Legal Counsel. “As a former member of the Board and now counsel to PRFBA, I sincerely believe these individuals will be an exceptional addition to the STB.”

“The Steel Manufacturers Association is pleased to see the U.S. Senate confirm Primus and Schulz to the Surface Transportation Board,” said Philip K. Bell, President. “These appointments will complete the staffing of the Board, and allow for its continuing efforts to implement good transportation policies for the American railroad system. Our members look forward to a more reliable and competitive freight rail system through the leadership of this Agency.”

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