Issue Date: January 19, 2009
Chemical Shippers Back Railroad Antitrust Bills
Industry-supported legislation has been reintroduced in the House and Senate that sponsors say would increase market competition and restore fairness to the freight rail industry. "Freight railroads have the luxury of being protected from the competition that other industries face," says Sen. Herb Kohl (D-Wis.), chairman of the Senate Judiciary Committee's Antitrust Subcommittee. The Railroad Antitrust Enforcement Act would repeal the railroads' long-standing exemptions from federal antitrust law, under which the Justice Department reviews mergers and acquisitions. Under current law, U.S. freight railroads have consolidated into four regional lines carrying 90% of the nation's freight rail traffic. Two-thirds of U.S. chemical plants that depend on rail are served by only one railroad. The American Chemistry Council (ACC), a trade association of chemical manufacturers, says these facilities are routinely subject to exorbitant prices and unreliable service. "We need to have greater certainty in terms of our products being shipped in a timely fashion at a competitive price," ACC President Calvin M. Dooley says. Railroads argue that they are already subject to extensive regulation by the Surface Transportation Board, which has jurisdiction over rail mergers and a range of service- and rate-related issues.
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