Rail Customers Highlight Progress On Freight Rail Reform Following One Year Anniversary Of Landmark Legislation

December 21, 2016

WASHINGTON (Dec. 21, 2016) – One year after the passage of landmark freight rail reform legislation, the Surface Transportation Board (STB) is making headway toward implementing long overdue policy improvements. That’s according to a new progress report released today by the Rail Customer Coalition (RCC), a large collection of trade associations representing a broad cross section of manufacturing, agricultural, and energy industries with operations and employees throughout the United States.

“Thanks to the leadership of Chairman Thune and his colleagues from both Houses of Congress, the Surface Transportation Board is now improving the way it manages freight rail issues, as the ‘STB Reauthorization Act of 2015’ directed,” said Cal Dooley, President and CEO of the American Chemistry Council. “The Board has already demonstrated greater transparency and efficiency in its processes, and we are hopeful that the Board will finish the job by implementing reforms that will promote a more competitive and reliable freight rail system.”

When it was signed into law last December, the “STB Reauthorization Act of 2015” made much needed updates to how the Board operates for the first time since it was created 20 years ago, including changes to make STB procedures more responsive and accessible to all stakeholders.

Initial Progress

Following direction from Congress, the Board adopted a voluntary arbitration program for railroads and their customers to resolve rate and service disputes, and new procedures for the Board to initiate its own investigations on pressing rail issues. The Board also proposed expanding access to its rate review process by ending outdated exemptions that the railroads currently enjoy for certain commodities, such as iron and steel products.

“The Board is off to a good start on regulatory reforms that will help address ongoing issues that are important to manufacturers who depend on freight rail,” said Philip K. Bell, President of the Steel Manufacturers Association. “The preservation of a strong rail industry is extremely important to our member companies across the country, and we appreciate the commitment that Congress has demonstrated in making sure the STB continues to move forward on updating its policies.”

Concerns Remain

The report points out that the Board is making progress in some key areas to address long standing problems but not all reforms are on track for implementation. For example, it is widely recognized the STB’s costly and bureaucratic rate review processes needs to be reformed. And while the STB has taken small steps to streamline its Stand-Alone Cost (SAC) methodology, the Board must develop a viable new rate review process, starting with recommendations from the National Academy of Sciences’ Transportation Research Board.

“The U.S. freight rail industry is an indispensable partner and key to our competitiveness in the global economy,” said Chris Jahn, President of the Fertilizer Institute. “We are committed to working Congress and the STB to enact practical reforms to modernize the Surface Transportation Board so that it works better for both the railroads and their customers, which can help farmers and the fertilizer industry – up and down the supply chain – be more competitive in the marketplace.”

A large group of executives recently sent a letter to Vice President-elect Pence stressing the importance of resolving freight rail issues to support economic growth and inviting the Trump administration to work them on STB reform.

The full progress report can be found on the RCC website.