America Needs Smarter Freight Rail Policies

The Rail Customer Coalition recently sent a letter to the head of President-elect Biden’s Transportation Transition Team to share the coalition’s top policy priorities for 2021 and to urge the new administration to support STB reform.

The country’s transportation network is at a tipping point due to the fact that federal policies have not been able to keep up with major and disruptive changes within the freight rail industry. Massive consolidation and major operational changes have diminished service and driven up the cost to ship by rail.

Small and large businesses across America depend on railroads to connect them with their customers and are calling on policymakers to act on solutions that will get freight rail back on track. That is why the Coalition supports regulatory reforms at the Surface Transportation Board (STB) that will promote a healthy, reliable and affordable freight rail network.

The letter specifically asks President-Elect Biden to move quickly to fill the critical roles of both a Chairman and new member at the STB. It calls for current STB Vice Chairman Martin Oberman to be designated as Chairman upon the start of the Biden Administration. The coalition also requests that the upcoming Board vacancy be filled with an individual who shares the commitment in moving the Board forward, as demonstrated by Vice Chairman Oberman and Member Patrick Fuchs. The nominee needs to be fair-minded, objective and innovative in addressing freight rail issues.

With such strong leadership, and a full complement of Board Members committed to fulfilling the entire mission of the Staggers Rail Act, the STB can establish a more balanced and modern regulatory system that helps ensure that rail remains a vital mode of transportation well into the future.

New Rail Consultant Report Comes Up Short on Solutions

The shortcomings of today’s freight rail policies are not lost on the members of the Surface Transportation Board (STB), who have gone on the record numerous times to say that the Board’s process for handling rate cases are too costly, too time consuming and unnecessarily complex. This growing concern was clearly stated by Commissioner Ann Begeman, when she recently declared that developing a new approach “has to be a top Board priority.”

Unfortunately, this fact was lost on InterVISTAS Consulting Group when they released a flawed and poorly developed report. Unfortunately for all rail stakeholders, the report fails to offer any new ideas for improving how the STB operates and embraces the status quo that has been roundly rejected by Congress, the National Academy of Sciences, and the STB Board Members themselves in their published decisions.

The report was commissioned well before Congress provided a new direction for the STB by unanimously passing the Surface Transportation Reauthorization Act. Moreover, the report was under the control of a consultant who has represented the railroads in the past and did not reflect any outside input from rail customers.

All of these shortcomings stand in stark contrast to the independent study that Congress directed the National Academies Transportation Research Board to conduct. Unlike the InterVISTAS report, the National Academies study was performed by an independent panel of transportation experts and economists with input from a broad range witnesses. The National Academies study concluded that the STB’s current rate review process is “arbitrary and unreliable” and should be replaced with a “more reliable tool that compares disputed rates to those charged in competitive rail markets for comparable shipments.”

The National Academies analysis eliminates any remaining argument that the status quo is working. Tellingly, the InterVISTAS report is embraced only by the rail industry that has a vested interest in maintaining a virtually inaccessible STB.

The STB should not waste any more precious time on a report that fails to provide solutions for the very real and ongoing freight rail issues that are plaguing manufacturers, farmers and energy producers across America.