Shippers Oppose New Rail Rate Rules

Chemical manufacturers and other freight railroad customers contend that changes proposed by federal regulators to the current process for challenging "excessive" rail rates would make an ineffective system even more burdensome. Thomas E. Schick, senior director of distribution for the American Chemistry Council, says the current process for challenging rates for small shipments "is far from ideal," but new rules proposed by the Surface Transportation Board "would make an untenable situation even worse for shippers seeking relief from monopolistic rail practices." The proposal, he asserts, "sets unrealistic eligibility standards while making an already difficult process even more time-consuming and costly." In 1995, Congress directed STB to develop "simplified guidelines" for contesting freight rates in cases involving small shipments. But shippers have long complained that the process subsequently put in place is too complex to provide any relief for rail customers. At a Jan. 31 hearing, shippers told STB officials that the proposed changes would create more barriers and further discourage new cases from being filed. Railroads, however, testified that the new rules would clarify the existing procedures for resolving rate disputes involving small shipments.