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Rail Customer Legislation

Rail legislation

Due to dramatic consolidation, only four major Class 1 railroads carry 90 percent of our nation’s freight, often providing unreliable service at exorbitant fees. Two bills in Congress would place the rail industry under the same antitrust laws that apply to other industries, including telecommunications, energy, trucking, and aviation. Another bill would strengthen and expand the Surface Transportation Board.

Surface Transportation Board Reauthorization Act of 2009

 S. 2889: Bill text and co-sponsors

This legislation would be the first reauthorization of the Surface Transportation Board (STB) since its creation in 1995. The STB is the agency charged with regulating rail shipping rates. Because the current freight rail system lacks competition and effective oversight under the current STB, consumers suffer the consequences of excessive rail rates.

Railroad Antitrust Enforcement Act of 2009

S. 146: Bill text and co-sponsors
H.R. 233: Bill text and co-sponsors

The bills will permit the Justice Department and Federal Trade Commission to review railroad mergers under antitrust law and it will eliminate antitrust exemptions for mergers, acquisitions, collective ratemaking and coordination among railroads. The bill also will allow state Attorneys General and other private parties to sue for treble damages and to sue to halt anticompetitive conduct, both of which are not currently allowed under federal law.

The nation’s railroad system was designed to transport goods and products from rural areas and cities to distribution points across the nation. In 1980, the railroad industry found itself in poor financial health, overbuilt and failing. Seeking a remedy, Congress removed much of the regulatory oversight over the industry and merger authority was placed under the industry’s sole regulator – the Surface Transportation Board (STB). Unfortunately, in 1980, Congress did not remove the antitrust exemptions that the industry had accumulated through various acts of Congress during the 1900s.

Free from government oversight by the Department Of Justice or Federal Trade Commission, the rail industry has undergone dramatic consolidation, to levels never envisioned by Congress in 1980. And, over the years, while railroads have profited tremendously, the effect on shippers with little or no access to transportation competition along their route has been damaging and largely ignored by the STB.

Watch for the latest:

Points of interest

• Alliance for Rail Competition (external Web site)
  - The Alliance for Rail Competition (ARC) is a diverse group of shippers and industry trade associations formed in response to growing concerns over deteriorating rail service.
• Consumers United for Rail Equity (external Web site)
  - Consumers United for Rail Equity (C.U.R.E.) is a coalition of captive rail customers focused on congressional and administrative policies that affect the development of competition in the freight rail industry.

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