WASHINGTON, D.C. — Recently proposed rule changes issued by the U.S. Surface Transportation Board (STB) intended to improve and expedite freight rail reasonableness cases represent the first stage in rolling back the board’s long-held rate review processes, according to a group representing freight shippers that use Class 1 freight railroads to move goods.

 

The proposed rules, which were announced March 31, implement Section 11 of the STB Reauthorization Act of 2015, which required the three-member board to consider how procedures for expediting court proceedings might be applied to rate cases. The proposed rules focus on the key phases of rate reasonableness cases.

 

The STB – which is soon to expand to five members under terms of the reauthorization law – is proposing to establish a 70-day “pre-complaint” period during which a complainant would be required to notify a defendant of the rate and movement it intends to challenge, triggering mandatory mediation.

 

During discovery stage, the proposed rules would require service of the complainant’s and defendant’s initial discovery requests along with submission of the complaint and response.

 

The proposed rules would also establish a requirement that parties meet and confer prior to the filing of a motion to compel, along with other new requirements with respect to evidentiary submissions and discovery processes. The Board indicated the proposed rules are not the final action the agency plans to take to improve rail rate processes, and that a public comment period on the proposed rules has been launched through the STB website at www.stb.org

 

“We’re very encouraged with the notice of proposed rulemaking,” said Ann Warner, executive director of the Washington, D.C.-based Freight Rail Customer Alliance (FRCA), which supports the STB Authorization Act requirement that compels the board to review the three tests members use when evaluating whether a railroad is charging a reasonable shipping rate during a rate

challenge.

 

“It seems (board members) are doing what they can to focus on the process of expediting rate cases. The bigger question for down the road, once the two new board members are (seated), is how to address revenue adequacy and rate reasonableness. I think this is one important step in seeking review and redress for rate concerns.”

 

She said FRCA member companies have expressed concern over the STB proposal requiring complainants to enter into negotiation 70 days before being allowed to file a rate complaint, along with its ancillary requirements.

 

“The overall concern to grain shippers, agricultural shippers, as well as coal shippers, is to the rate standards themselves and how they are applied, rather than the procedures,” Warner said. “Hopefully we can get through this phase and get on with the next proceeding.”

 

The STB has issued a new proceeding EP Docket (No. 736), “An Examination of the STB’s Approach to Freight Rail Rate Regulation and Options for Simplification,” which also may be accessed through the STB website. In other freight rail shipping reform news involving the STB, the board’s proposal to require Class 1 railroads to post and make available common carrier tariff rates and service terms for agricultural products and fertilizer on their websites, issued in February, earned the praise of the National Grain and Feed Assoc.

 

The NGFA “strongly supported” the proposal, which would make such information available to all people, and encourages STB members to “refine” their proposal to prohibit “current impediments to accessing such information that exist on some carriers’ websites.”

 

The NGFA has testified on rail rate reasonableness and other shipping issues in front of the STB and has offered its own suggestions for improving and expediting cases brought before the board by ag and other shippers.

 

An email to NGFA communications director Sarah Gonzalez seeking comment on the STB’s March 31 proposals was not answered by press time.