The Surface Transportation Board wants to change rules to ensure all captive shippers have a "meaningful way" to challenge railroad rates and says it is still considering a shipper proposal on how to increase rail competition.
The two decisions are apparently the action STB Chairman Daniel Elliot promised in late May when he said the agency was working toward a compromise between shipper pricing concerns and the railroads’ need to earn enough money to maintain their networks. The rail regulatory agency plans to cut the cost and time of captive shippers’ appeals by no longer requiring them to “design a hypothetical railroad to judge a railroad’s real world rates," according to a decision issued Wednesday by the three-member board.
The STB also outlined plans to double the relief available to shippers under the Simplified-Stand Alone Cost model, a method of determining a railroad’s operating cost, and ultimately, whether the shipper is being overcharged. The board also proposed to simplify the Full-Stand Alone Cost analysis process, and to hike the interest rate on reparations railroads found to charge unreasonable rates must pay shippers.
“We continue to explore whether there are policy changes the board could adopt that would promote more rail-to-rail competition and thereby allow competition and the demand for services to establish reasonable rates for transportation by rail, and thus minimize the need for federal regulatory control,” the STB said.
The National Industrial Transportation League in July 2011 filed a petition for more competitive switching rules, only to have the STB announce in November it would defer its decision. Under the proposal by the shipper group, captive shippers with no other feasible transportation alternatives could ship their goods on one rail line to a competing network if the interchange was within 30 miles.
The STB invited information on how the switching proposal would impact shippers and the railroad industry. Opening comments are due by Nov. 23, and replies must be sent by Feb. 21.