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Policy

Rail Transportation: Update To Freight Rail Competition Policy Is In The Works

by Glenn Hess
January 17, 2011 | APPEARED IN VOLUME 89, ISSUE 3

Sen. Jay D. Rockefeller IV (D-W.Va.), chairman of the Senate Commerce, Science & Transportation Committee, plans to press ahead with legislation to update freight rail competition policy for the first time since Congress deregulated much of the industry in 1980.

Rockefeller introduced legislation (S. 2889) in 2009 to address complaints by “captive shippers”—mainly utilities and industrial plants served by a single railroad—that they pay exorbitant rates and are routinely subject to unreliable service. Nearly two-thirds of U.S. chemical facilities that depend on rail service are limited to one long-haul railroad to carry their goods.

Although the bill was approved by Rockefeller’s committee in December 2009, it did not see action on the Senate floor during the 111th Congress. Railroads opposed the measure, arguing that “reregulation” would undermine their industry’s ability to attract private investment in the nation’s rail network.

At a hearing in September 2010, Rockefeller promised he would continue to push the issue to level the playing field for captive shippers. “Whether we do it this year or next, rail reform is going to happen,” he said.

Calvin M. Dooley, president and chief executive officer of the trade group American Chemistry Council, calls S. 2889 “an important step toward creating a more competitive and viable freight rail system,” but says additional changes are needed, such as ending the railroads’ limited exemption from federal antitrust laws.

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