WASHINGTON — The types of questions posed by Surface Transportation Board commissioners to railroads and shippers in late March could give some indication on how the board views a controversial competitive switching proposal.
The STB said it will hold a hearing on March 25-26 to “explore issues” relating to a petition to force carriers to give shippers with access to only one line access to another railroad’s line if it’s within 30 miles of the customer’s present or future loading spot. The National Industrial Transportation League, the nation’s largest shipper association, argues its proposal will make the railroads more competitive and save shippers with access to only one line, which refer to themselves as “captive shippers,” about $900 million annually.
The rail industry counters that that a rule change would reduce how much they can invest in their networks and hurt overall service. The rule change would benefit a small group of shippers and hurt the larger customer base, according to the Association of American Railroads.
Should the nomination of Deb Miller be confirmed before the hearing, shippers and railroads will be listening closely to what tack she takes. A Senate commitee voted her presidentially appointed nomination out last month. Her nomination still needs to be voted on by the full Senate. If confirmed, Miller, a Democrat, would succeed Francis Mulvey and join Chairman Daniel Elliott, a Democrat, and Vice Chairman Ann Begeman, a Republican, on the board.
It’s too soon, however, to discern how Miller views the reciprocal switching proposal, one of the few vehicles available to railcar shippers looking to push back against railroads’ pricing power. The former secretary of the Kansas Department of Transportation doesn’t have a record on rail issues to analyze, and, unsurprisingly, she shied away from taking a stance on the larger fight between railroads and some shippers over cost during her Senate hearing in November.
Miller did say during the hearing that she had spoken to agriculture shippers about their pricing concerns and the hurdles they face in challenging rates with the STB. She also said it “wasn’t unreasonable” to reconsider how the rail regulatory agency calculates whether a carrier is “revenue adequate,” a contentious metric used by the STB to determine pricing challenges by shippers.