Senate Approves Bill To Reform Freight Rail Policies

Chemical manufacturers are welcoming recent Senate approval of legislation that would overhaul U.S. freight rail policy.

The bill (S. 808) would reform operations at the Surface Transportation Board (STB), a small federal agency that resolves rate and service disputes between freight railroads and their customers—companies that ship chemicals, grain, coal, and other bulk commodities.

The legislation seeks to make STB more responsive to the needs of shippers, who have long complained that the current process for challenging the fairness of a rate can cost up to $3 million and take three years to complete.

“This bill would enact a series of meaningful reforms, including streamlining STB’s overly burdensome rate review process, providing reasonable arbitration procedures to resolve rate disputes, and allowing STB to be more proactive in resolving freight rail issues,” says Calvin M. Dooley, chief of executive officer of the American Chemistry Council, a chemical trade association.

Congress created STB in 1995 as the successor to the old Interstate Commerce Commission, and its policies and procedures have never been updated.

The measure would give the board new power to initiate investigations into rail service problems, not just respond to complaints. It would also speed up STB’s current dispute resolution process by setting timelines for rate reviews and expands voluntary arbitration procedures to address both rate and service disputes.

No similar rail reform bill has been introduced in the House of Representatives. But Rep. Bill Shuster (R-Pa.), chairman of the Committee on Transportation & Infrastructure, says his panel will consider S. 808.

In addition to multiple shipper organizations, the legislation is also supported by the Association of American Railroads, which represents the freight rail industry.