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NGFA urges STB to reject attempts to reverse rail users’ protectionsNGFA urges STB to reject attempts to reverse rail users’ protections

NGFA made statements in response to STB request for comments on which rules and practices are burdensome or unnecessary.

July 27, 2017

3 Min Read
NGFA urges STB to reject attempts to reverse rail users’ protections

The National Grain & Feed Assn. (NGFA) urged the Surface Transportation Board's (STB) Regulatory Reform Task Force to reject attempts by monopolistic freight railroads to rescind the few remaining statutory protections afforded to rail users under the Staggers Rail Act.

"The statutory obligation of the board to foster competition and prevent abuse of market power by what essentially are two duopolistic Class I railroads -- two in the West and two in the East -- is needed more sorely now than ever before," NGFA said in both written and oral statements submitted to the STB task force this week. NGFA made the statements in response to STB's request for comments after President Donald Trump issued an executive order asking that agencies identify rules and practices that are burdensome, unnecessary or outdated.

NGFA said it supports several proposals contained in the 90-day status report prepared in May by the STB task force, including those addressing outdated environmental rules, antiquated procedural and filing rules and regulations that may be outmoded, ineffective, insufficient or excessively burdensome.

NGFA also supports the task force's decision to review the suggestions of rail shipper stakeholders on STB's rules governing rate reasonableness, revenue adequacy, reciprocal switching and market dominance. It asked the task force to recommend that STB reform its rules regarding ex parte communications to allow increased dialogue and information exchange between stakeholders and board members and staff, with proper safeguards for transparency.

NGFA urged STB's Regulatory Reform Task Force to recommend that the agency take the following actions to protect the limited safeguards that still remain to protect rail users from the exercise of "unfettered market power" by large railroads:

  • Redouble the agency's efforts to revamp its rate-reasonableness rules to create a cost-effective, workable methodology for agricultural shippers to challenge unreasonable freight rail rates. 

  • Revise outdated rules governing reciprocal switching, which would give rail users, on a case-by-case basis, the right to use lines of competing carriers in exchange for a reasonable switching charge to access customers and markets that cannot be reached using a single railroad. No shipper has attempted to use STB's existing flawed rules for nearly 30 years, NGFA pointed out.

  • Maintain STB's existing regulations that require Class I railroads to report service performance metrics and to file summaries of agricultural transportation contracts. 

  • Review STB rules and policies related to revenue adequacy.

NGFA adamantly opposed recommendations by the Association of American Railroads (AAR) and its freight rail clients to misuse the regulatory reform proceeding to pursue their long-sought goal of rescinding or rendering useless each of these protections granted by the Staggers Rail Act and other federal rail laws.

"The task force must not allow the AAR or its freight rail members to hijack this important regulatory reform initiative in an overt attempt to secure significant policy changes that are inconsistent with existing law and legislative intent, are the subject of ongoing STB proceedings or for which they have been unsuccessful in securing through the agency's open and transparent rule-making process," NGFA concluded.

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