Mark Szakonyi, Associate Editor | Jun 21, 2012 3:34PM EDT
The pricing complaints of captive agriculture shippers, or railroad customers dependent on a single carrier, could gain a wider audience through a recently approved amendment to the Farm bill.
The Senate on Wednesday passed by voice vote an amendment that would require the departments of Agriculture and Transportation to update their study of rural transportation issues, including those relating to railroad pricing. The prospects of captive shippers’ gaining pricing relief have shrunk as re-regulation attempts have stalled in Congress, and the Surface Transportation Board, the industry’s regulatory agency, has deferred decisions on shipper complaints.
“Farmers and rural communities that depend on freight rail for their economic livelihood are too often subject to outrageous pricing and poor service by freight rail companies. That problem needs to be documented and rural America must be represented in the rail policymaking process,” said Glenn English, Chairman of Consumers United for Rail Equity, a coalition of rail shippers. “This amendment will shed some much‐need light on those practices and bring an advocate for rural America to the table in freight rail policy discussions.”
If the amendment, introduced by Sens. Amy Klobuchar, D-Minn. and John Hoeven, R-N.D., is included in the final Farm bill, the departments will provide an update on rural transportation issues within one year and another every three years after. A 2010 study by the Department of Agriculture found “considerable evidence” railroad companies were charging shipper excessive fuel surcharges, and that rail competition has shrunk by nearly 75 percent in agriculture areas between 1992 and 2007, according to CURE.
The amendment would also require the Secretary of Agriculture to participate in STB policy proceedings relating to freight rail policy. The STB is expected to soon to act in balancing shippers’ pricing concerns and the needs for railroads to earn enough so they can maintain and expand their networks.
“This latest action by Congress underscores the need for the STB to use its authority to reform outdated policies that have artificially limited access to competitive freight rail options for many domestic producers,” said English.
Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @szakonyi_joc.