Volume 87 Issue 11 | p. 34 | Concentrates
Issue Date: March 16, 2009

Senate Panel Targets Rail Antitrust Immunity

Department: Government & Policy

The Senate Judiciary Committee has approved legislation (S. 146) backed by chemical shippers that repeals the freight railroad industry’s exemptions from federal antitrust laws. “Our bill will ensure that railroads play by the same rules as all businesses in our economy and give those injured by anticompetitive conduct strong remedies under antitrust law,” says Sen. Herbert Kohl (D-Wis.), the measure’s chief sponsor. The legislation would empower the Justice Department to regulate railroad mergers, acquisitions, and rate changes. Kohl and other bill supporters say the exemptions have allowed the industry to consolidate to the point where only four large carriers provide 90% of freight rail transportation. Because of the lack of competition, captive shippers, which include the nearly two-thirds of U.S. chemical facilities that depend on rail service, have faced constantly rising rates and poor service, according to the American Chemistry Council, an industry trade group. A companion bill (H.R. 233) is pending in the House Judiciary Committee. The American Association of Railroads, which represents the freight rail industry, says the proposed legislation would “subject railroads to a conflicting regulatory structure that will make it difficult, if not impossible, to meet the nation’s transportation needs.”

 
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