Glenn English, CEO of the National Rural Electric Cooperative Association (NRECA) and chair of Consumers United for Rail Equity (CURE), called for reform of the Surface Transportation Board (STB) today at a hearing of the Subcommittee on Surface Transportation & Merchant Marine.
English faulted the STB for its failure to protect stranded shippers, as required by the Staggers Rail Act, passed in 1980.
“If you’re not going to live up to this provision of the Staggers Act, why don’t you repeal it? Have the nerve to repeal it,” English told the subcommittee. “Don’t give the Surface Transportation Board that fig leaf that somehow they are taking care and looking after those people who are under their protection, namely stranded shippers.”
English urged the senators to support S. 953, which would streamline the STB rate challenge process, reduce filing fees to common sense levels and provide rail customers with a system that fairly addresses their concerns, consistent with the Staggers Act.
Highlights of the written testimony submitted to the sub-committee:
Even in some situations where rail shippers could physically gain access to a competing rail provider, the Surface Transportation Board has interpreted the Staggers Act to artificially prevent such access to competition and deny “captive” rail shippers any competitive relief.
The October 2006 report of the GAO confirms that there is a lack of competition in the rail industry, that the rate challenge process of the STB is “inaccessible” to most captive rail customers, and that rate reductions claimed by the railroads since Staggers’ enactment are to a large extent due to the railroads shifting costs to their customers.
GAO also finds sharp differences between rail freight rates for shippers of identical products depending on availability of competing rail service, and that rate disparity for captive customers continues to widen, yet the STB takes no substantive action to protect the public interest over the railroad interest.
The rate challenge process at STB is extremely limited and it is not working. Even those shippers eligible to seek rate review are denied relief despite some recent showings that the rate is 5 times or more than the cost to the railroad of moving the freight in question.
The STB has not taken action to make meaningful corrections to its failed regulatory processes. Unless Congress mandates that the STB reform its practices in keeping with the intent of the Staggers Rail Act, shippers will continue to suffer from outrageously high rail rates and poor service.