John D. Boyd | Jan 11, 2011 3:26PM EST
The Surface Transportation Board will hold a May 3 public hearing to start the first review in over a decade of regulations that some shippers say allow major railroads to hold many freight customers captive to a single cross-country carrier.
Those "captive shippers" earlier tried to get Congress to enact a law mandating access to more than one railroad -- at terminals or other connecting points along the shipment route -- saying such a change was the only way to force major railroads to compete in freight rates and bring down high freight rates for captives. But the two-year effort failed amid staunch opposition by railroads, who said requiring them to shed traffic to a connecting rail line could jeopardize their profits and ability to invest in the rail networks.
This will be the second major hearing in which the rail regulatory board will examine one of its key oversight areas, in advance of possible changes to longstanding regulations. The STB earlier set a Feb. 24 hearing on whether to lift some of its cargo exemptions, and exercise regulatory control of more shipment categories including intermodal traffic so those shippers might take rate or service disputes with their railroads to the board.
In setting the May 3 date to begin weighing its competitive access rules, the STB said some options discussed include requiring a shipper's originating long-haul railroad to quote rates where the shipment can hook up with a competitor, or mandating shared use of rail terminals where tracks of multiple carriers connect and requiring reciprocal switching arrangements that are now left to the railroads to negotiate if they wish.
But the board said it will not tackle a related issue of interchange commitments between railroads, contractual clauses built into the sale or lease of short lines or line segments that tie the owner's or tenant's freight traffic to the major railroad that first shed the track.
-- Contact John D. Boyd at jboyd@joc.com.
