By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — The U.S. Surface Transportation Board (STB) announced on Jan. 11 it will conduct a public hearing on May 3 to explore the state of competition in the freight rail industry and determine possible “policy initiatives” to promote more competition within the industry.

“I said last year it was time for the Board to revisit the current rail regulatory framework and that is what we are doing,” trumpeted STB chairman Daniel Elliott III, in a prepared statement. “We need to strike a balance between providing access to competitive rail transportation for shippers while maintaining the rail industry’s impressive economic renaissance.”

Rail shippers who have fought for years to restore some balance to what some call a monopoly enjoyed by the U.S.’ largest Class 1 rail freight transportation providers called the STB’s announcement a positive step in lowering shipping costs for rural customers including farmers, municipalities and small businesses. “This is a very positive development for rail customers,” said Glenn English, chairman of Consumers for Rail Equity (CURE), a D.C.-based coalition of rail freight customers who have fought for change in the rail freight industry.
“We are pleased to see the Board being proactive on the level of competition and other issues concerning the national freight rail system. We will participate fully and are encouraging all rail customers to engage in this opportunity to educate the Board regarding the problems being confronted by rail customers around the nation,” added English.

The STB said it would accept written comments through Feb. 18, and those wishing to speak at the hearing must file a notice of intent by April 4. The developments follow a flurry of recent activity surrounding freight rail re-regulation that started last year in the 110th Congress, where both the House and Senate Judiciary Committees passed legislation that would end freight railroads’ special exemptions from antitrust law.

In April of 2010, a joint USDA- U.S. Department of Transportation report disclosed “considerable evidence” that freight rail companies were collecting excessive fuel surcharges from rail customers to artificially boost profits, hitting U.S. farmers in their wallets. In September, Senate Commerce Committee Chairman Rockefeller accused railroads of not being forthcoming about the degree of their financial success when questioned by the U.S. government, while the Commerce Committee held an oversight hearing on developing freight rail policy.

On Dec. 21, the Senate Commerce, Science and Transportation Committee filed the STB Reauthorization Act of 2009 (S.2889) with the full Senate. The bill calls for a more “pro-competitive implementation of the current law governing the relationship between railroads and their customers,” according to CURE.

Last fall, the National Grain & Feed Assoc. (NGFA) urged the STB to consider key features of their own, ten year-old rail arbitration system used for resolving disputes between railroads and shippers. The system would provide the STB with simplicity, balance and fairness, cost-effectiveness and transparency, the NGFA said in a statement submitted to the STB. Based on the NGFA report and public comments, the STB may propose new rules or revisions to existing rules— including changes that would permit the STB to mediate rail disputes without the need for plaintiffs to file formal (and expensive) complaints.

Under the NGFA’s arbitration system, all Class 1 U.S. and Canadian rail carriers along with numerous short-line carriers and the NGFA-member companies that utilize the systems have access to the association’s arbitration system. NGFA refers to its rail arbitration system as “a collaborative effort between railroads and rail users.”

The STB’s announcement regarding the May 3 public hearing was issued in a proceeding entitled “Competition in the Railroad Industry, Docket No. EP 705,” which will be published in the Federal Register. The proceeding is also available for viewing at the agency’s website, www.stb.dot.gov where a live video of the May 3 public hearing will be streamed.