Surface Transportation Board to Examine Freight Rail Competition
On Tuesday, January 11, 2011, the Surface Transportation Board (STB or Board) issued a public notice, instituting a formal administrative proceeding to examine competition in the freight rail industry. The Board’s regulatory action comes in the wake of the failure by Congress to move rail reform and competition bills forward in the last legislative session. The STB’s notice requests comments from stakeholders, including both rail carriers and shippers, and seeks to explore policy and regulatory changes to increase competition. The Board will also hold a public hearing on May 3, 2011, after the close of the comment period.
The STB’s proceeding promises to examine many of the key competitive issues of the last two decades, including: “bottleneck” rates, competitive access / reciprocal switching, paper barriers, and the overall economic health of the railroad industry. Due to the failure of recent legislative initiatives, in particular antitrust and competitive reform bills, this regulatory action may be the best opportunity for rail shippers to push the STB toward meaningful pro-competitive developments. At the same time, proponents of the status-quo are likely to strongly contest what some refer to as “re-regulation” of the rail industry. The impetus for the Board’s action is the stagnation of rail productivity gains and increased rail rates over the past five years.
We are happy to provide further information on this important development. The public notice is available on the Board’s website at www.stb.dot.gov under the “Decisions” tab.