Shippers Push For Rail Rate Rule Change

The chemical industry plans to present federal regulators with new data this week showing that freight rail rates have jumped 76% since 2001, nearly three times the rate of inflation and three times as much as truck rates have increased. The American Chemistry Council and trade groups representing farmers and utilities will explain the data during a hearing held by the Surface Transportation Board (STB). The industry groups want STB to approve new rules aimed at boosting price competition among railroads. After a series of mergers and acquisitions, the freight rail industry shrunk from 26 major carriers in 1980 to just seven in 2001. Four of those firms—CSX, Union Pacific, Norfolk Southern, and BNSF—handle more than 90% of U.S. freight rail traffic today. Shippers say this consolidation has resulted in regional monopolies that have effectively eliminated rail-to-rail competition, leaving many rail customers “captive” to a single railroad.