STB to Shippers: Arbitration Rulemaking Proceeding Will Go Forward

Written by Marybeth Luczak, Executive Editor
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The Surface Transportation Board (STB) has denied a shipper group request to pause its proposed rulemaking on a voluntary arbitration program aimed at resolving small rate cases.

On Nov. 15, 2021, STB proposed modifying its existing arbitration rules in response to a joint petition filed in 2020 by five Class I railroads—CN, CSX, Kansas City Southern, Norfolk Southern and Union Pacific. It also invited comment on modifications to the Final Offer Rate Review (FORR) procedure.

On Nov. 24, 2021, the American Chemistry Council, Corn Refiners Association, National Industrial Transportation League, The Chlorine Institute, and The Fertilizer Institute called on the STB to hold the arbitration rulemaking in abeyance until the Class I railroads “state whether they would participate in the proposed program if arbitrators are permitted to consider revenue adequacy, as has been proposed by the Board.”

On Dec. 6, the railroads filed a motion seeking to extend the procedural schedule for the arbitration proceeding.

The STB explained its Dec. 28 decision (download below) that the shippers’ “motion essentially seeks to truncate the rulemaking process by requiring rail carriers to pledge whether they would participate in the proposed arbitration program based solely on the single issue of revenue adequacy before the record has been fully developed. Asking Petitioners [railroads] to make the commitment sought by … Shippers at this stage would be premature, as Petitioners are likely still developing their position on this and other issues.” For this reason, STB said it denied the shippers’ request. STB noted that it expects the railroads to convey their position on the revenue adequacy issue in their comments. 

Comments to both the arbitration rulemaking and the FORR rulemaking continue to be due by Jan. 14, 2022. But the STB’s Dec. 28 decision extends the deadline for reply comments in the arbitration proceeding and adjusts the procedural schedule for consideration of the proposed FORR procedure so that those related rulemaking proceedings remain on the same schedule. The deadline for reply comments is now April 15, 2022. Ex parte communications regarding matters related to both rulemakings are allowed until March 28, 2022.

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