Let the legislative games begin: Even before federal rail regulators start what is likely to be a long, hard slog to tighten oversight of railroads, all sides are maneuvering to control the debate in Washington.
After failing in their efforts to get rail legislation through the last Congress, senators from both political parties reintroduced legislation to toughen regulations at the Surface Transportation Board and to eliminate a limited antitrust exemption railroads enjoy.
That drew cheers from activist rail shippers, but caution from rail industry sources who consider Congress unlikely to pass a resurrected rail competition bill and hope the antitrust measure will die as well.
A group of top railroad CEOs headed to the White House to discuss their concern over regulations with Austan Goolsbee, who chairs President Obama’s Council of Economic Advisers. The rail chiefs are concerned about potential STB actions and what they see as an “over-reach” by the Federal Railroad Administration in how railroads deploy costly collision avoidance gear under a 2008 law.
Their Jan. 28 visit came after President Obama pushed an ambitious, rail-heavy infrastructure improvement theme in his State of the Union speech. Afterward, the Association of American Railroads said although railroads are well-positioned to help spur economic growth, “we make no secret of the fact that flexible, market-driven policies that foster private capital investments will not only fuel the economic competitiveness the president says is critical to recovery and job growth, but are needed to power the nation’s rail system.”
Sen. Jay Rockefeller, D-W.Va., chairman of the Commerce, Science and Transportation Committee, reintroduced a rail competition bill he worked for two years to get to the Senate floor. Sen. Kay Bailey Hutchison, R-Texas, joined the effort, but staunch railroad opposition has not eased since the bill failed to even get a floor vote last year.
Sens. Herb Kohl, D-Wis., and David Vitter, R-La., also introduced a new attempt to strip railroads of the antitrust protection they enjoy in the STB’s primary jurisdiction over many shipper-carrier disputes that might otherwise go to court.
Without legislation, the STB is undertaking some moves on its own that could toughen rail regulation. The board is slated to hold the first of two key hearings this month that would open up long-standing regulatory policy to change, perhaps making agency rules more friendly to freight shippers in their disputes with railroads over rates and service.
But the House Transportation and Infrastructure Committee’s top officials — Chairman John Mica, R-Fla., and ranking member Nick Rahall, D-W.Va., along with the leaders of its rail subcommittee — told STB Chairman Daniel R. Elliott, “Any policy change made by the STB which restricts the railroads’ abilities to invest, grow their networks and meet the nation’s freight transportation demands will be opposed by the committee.”
In a Feb. 24 hearing, the STB will consider whether to extend STB oversight over cargoes it now exempts, including intermodal shipments, and allow rail customers in that business to take complaints to the board. That became more of a concern after the severe intermodal capacity crunch that hit last spring, although it mainly came in the marine container traffic controlled by ocean ship lines. A scheduled May 3 STB hearing will hear testimony on rules that let railroads lock in a shipper’s cross-country traffic from point of origin to final delivery, without quoting prices to connect along the way to a competing carrier.
Some of these policies pre-date the 1980 deregulation law that helped turn a financially failing railroad industry into a steady and robust profit center. Some shippers say the rules unfairly prop up rail profits at customers’ expense.
Rail officials say they have poured $480 billion into network improvements since 1980, and new regulation could threaten profits and capital spending. The T&I leaders agreed, telling Elliott those investments “could not have been done — and will not be done in the future — unless the STB maintains the current regulatory balance.”
Contact John D. Boyd at email@example.com.