By TIM ALEXANDER
WASHINGTON, D.C. — The National Grain and Feed Assoc. (NGFA) and Soy Transportation Coalition (STC) are among agricultural organizations in support of the U.S. Surface Transportation Board’s (STB) proposed changes regarding interchange commitments involving the sale and lease of Class I rail lines to other carriers.
“In essence, (the STB’s proposed rulemaking) mandates that railroads provide reciprocal service for providing access from their network onto another rail network,” said Mike Steenhoek, executive director of the Ankeny, Iowa-based STC.
At issue are the restrictions and provisions – also known as “paper barriers” – enacted by Class I railroads that can hamper short lines’ ability to interchange traffic through connections with other, competing Class I carriers. Both NFGA and STC are supportive of STB’s proposal to require all information on interchange commitments be provided to shippers entering into transactions involving the sale or lease of rail lines to other carriers.
The issue is key to agricultural shippers of grains, oilseeds, feed, feed ingredients and other grain-based products, according to an NGFA news release.
“The NGFA concurs with the (STB’s) statement that providing such information up front will allow affected shippers, other interested parties and the (agency) itself to evaluate contracts containing interchange commitments in a more timely manner, without the delay associated with seeking additional information separately,” the NGFA stated.
Requiring interchange information be provided to shippers entering into transactions would facilitate identification of practices “anti-competitive and otherwise harmful to grain shippers” and help fashion “appropriate remedies based upon the relevant facts and circumstances,” according to the NGFA.
The STB announced its recent recommendation “to provide sufficient information to enable shippers, other interested parties and the (STB) itself to determine whether the exemption process is appropriate for a given transaction.”
The proposal requires rail carrier filings provide a list of shippers that currently use or have used an affected rail line within the past two years; the number of carloads those shippers originated or terminated; certification that the railroad has notified affected shippers of the proposed transaction and interchange commitment; and other new requirements.
“The NFGA strongly associates itself with the (STB’s notice of proposed rulemaking) statement that long-term interchange commitments have the potential to control the competitive environment, affecting rates and services for years to come,” the association stated.
Steenhoek said the STC is “in alignment” with the NGFA’s endorsement of the STB proposal and praised NGFA’s promotion of “reasonable adjustments” to the paper barrier issue.
“But we also realize that if (changes in rail interchange regulations) become too onerous to railroads, the railroads have the ultimate prerogative in deciding what climate they wish to do business in,” he said. “You never want to push them into a conclusion, but there are some ways that railroads can provide better agricultural services to their customers, and this is an example of one of them.”