By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — The Railroad Antitrust Enforcement Act (S.49), which would abolish antitrust exemptions enjoyed by the nation’s Class I freight railroads, was approved  by the U.S. Senate Judiciary Committee March 3. The measure, now in the hands of the full Senate, was introduced Jan. 25 by Sen. Herb Kohl (D-Wis.) and seven cosponsors.

If S.49 is passed by the Senate, the days of freight railroad companies charging “anti-competitive and excessive” rates to rail-dependent customers – many of them in rural communities with access to only one provider – may soon come to an end, according to Glenn English, chair of rail watchdog group Consumers United for Rail Equity (CURE).

“For too long, the market has been blocked from setting fair prices for shipping products via rail, which has hurt shoppers, exporters, farmers and manufacturers. This bipartisan bill says ‘no’ to continuing a huge special interest loophole and says ‘yes’ to fair competition and market rates,” stated English, adding that high prices paid by rail shippers are passed on to consumers through everything from higher electricity rates to grocery bills.

English thanked the Senate Judiciary Committee for its fast action in approving the legislation without amendment, in a CURE news release.

On March 4, CURE reported the findings of a new study by the U.S. Department of Transportation (DOT) showing that farmers and rail utility providers are at high risk for poor freight rail service because railroads are cutting back on service guarantees to their customers.

The report comes on the heels of last year’s joint USDA-DOT study which concluded “considerable evidence” had proven freight rail companies collected excessive fuel surcharges from rail customers to artificially boost profits.
“Because of the railroads’ monopoly power,  they can charge whatever they want and behave however they want, which hurts American jobs, workers and consumers,” English commented after the release of the newest DOT report, which may be read online at  www.oig.dot.gov/sites/dot/files/Rail20Shippers%20Report.pdf
“This report is just the latest proof that the freight railroad monopoly abuses its power, provides inferior rail service and leaves no recourse for shippers,” he added.

English took slight exception to President Obama’s State of the Union plea for increased infrastructure investments, at least as far as rail is concerned. Freight rail companies, English said in a prepared statement, are already enjoying subsidies worth hundreds of millions of taxpayer dollars.

“We don’t need additional rail subsidies to strengthen U.S. companies, we need reforms to increase competition in the freight rail industry,” English told Obama and legislators on Capitol Hill. “We urge the President and Congress to support reforms that foster a strong environment for manufacturers, farmers and consumers to save and create American jobs, by getting the fair and competitive freight rail pricing they need to compete in both domestic markets and in the global marketplace.”

In January, the U.S. Surface Transportation Board (STB) scheduled a hearing for May 3 to examine competition in the freight rail industry and discuss possible policy initiatives that could facilitate increased competition. The American Assoc. of Railroads and the American Short Line and Regional Railroad Assoc. asked the STB to postpone the hearing and increase the public comment window – which expired Feb. 18 – by 90 days.

The railroads’ gesture brought an immediate response from CURE Executive Director and lead counsel Bob Szabo, who said the time to engage a review of rail competition is long past due.

“Every day the (STB) delays addressing the problems with its current regulatory policies, American companies, American consumers and American jobs suffer,” Szabo stated in a letter to the STB.

The STB, however, moved to postpone the hearing until June 22.
A companion bill to S.49, the STB Reauthorization Act of 2011 (S.158), was introduced by Senate Commerce Committee Chair Jay Rockefeller (D-W.Va.) and Ranking Member Sen. Kay Bailey Hutchison (R-Texas) on Jan. 26.

This compromise, developed in consultation with rail customers and the freight rail industry, would reauthorize the STB to increase competition in the freight rail industry and improve access to the board for railroad shippers who bring “unreasonable practices” claims against rail companies.

Soon after the introduction of S.158, the STB voted to recommend filing fees for customers of captive shippers be lowered to $350 from the previous amount of $20,600.