WASHINGTON, D.C. – Fueled in part by excessive rates it charges through monopoly pricing power as well as billions of dollars in federal stimulus grants being offered to freight rail companies, the stock price for shares of Union Pacific hit a 52-week high yesterday. At the same time, Union Pacific and other Class I railroads have become increasingly vocal in challenging pro-consumer bipartisan reform legislation passed unanimously by the Senate Commerce Committee late last year.
Bob Szabo, Executive Director of Consumers United for Rail Equity (CURE), a coalition of freight rail customers seeking changes in federal law to allow for more competitive railroad pricing and reliable service, issued this statement:
“The UP’s surging stock price is yet another reminder that the railroad monopoly is generating ample profits in part by charging unfair and needlessly expensive rates to thousands of American businesses who have no access to rail competition. According to the Consumer Federation of America, this monopoly pricing power costs American consumers approximately $3 billion a year in higher prices.
“Despite the railroads’ consistent claims that they must rely on private capital for their infrastructure, companies like UP recently received commitments for billions of dollars in federal stimulus money to upgrade their track systems for possible future high speed passenger rail service and for other infrastructure improvements.”
“But while monopoly pricing and federal stimulus money boost corporate returns, these same companies have become increasingly critical of S. 2889, pro-consumer rail reform legislation that passed the Senate Commerce Committee with unanimous bipartisan support in late 2009. These same railroads that now attack the legislation were involved in the negotiations that led to the legislation in the first place.
“While railroads like UP may be doing very well in this economy, working families are struggling. Congress should put America workers first by passing S. 2889, which provides debt-free economic stimulus by restoring fairness to railroad pricing and removing the monopoly protections that railroads have been exploiting.”