Railroads Call for Halt to all Regulations

Argus Media
November 18, 2016

Washington, 18 November (Argus) РThe Surface Transportation Board (STB) should halt its rulemakings until open positions on the board are filled by president­-elect Donald Trump and the US Senate, railroads said yesterday.

STB should yield to Trump’s call for a temporary moratorium on all federal regulations while the president-elect reviews the regulatory process, the Association of American Railroads (AAR) said.

“Now is not the time for midnight regulations, let alone the enactment of the unfounded proposals currently arising from the STB that will surely fail to meet the rigorous examination promised by future leaders,” AAR president Ed Hamberger said.

AAR opposes a number of STB’s proposed rules, most notably one regarding “reciprocal switching” that would require railroads to shift a shipment to another carrier if a customer requests it. STB has also proposed regulating new sets of commodities and developing rules to allow smaller shippers to more easily challenge rates.
STB said yesterday that it has no comment on AAR’s request.

The board was expanded to five members from three in a reauthorization act passed late last year, but the open spots have yet to be filled. The board is chaired by Democrat Dan Elliott, while Democrat Deb Miller is vice-chair and Republican member Ann Begeman is due to leave at the end of the year, leaving three spots for Trump to fill.

Trump’s appointees will make the board majority-Republican and are likely to share his stated desire to gut federal regulations he says are hindering the global economic competitiveness of the US. This could stop the board’s push to help shippers more easily challenge shipping rates.

But some shippers say Trump is likely to help reduce railroad rates and bolster the profits of major commodity and merchandise shippers. Major groups such as the American Chemistry Council (ACC), National Grain and Feed Association and National Industrial Transportation League say they pay high rates because of few choices in carriers.

A shift toward less government regulation could benefit shippers if it leads to a more streamlined process at STB to challenge rates, Freight Rail Customer Alliance director Ann Warner said on 16 November.

Shippers have long complained that challenging rates at STB takes years and is very costly, making it not worth it in most cases.

‘There are certain areas within the STB that have not worked effectively,” Warner said. “Something has to be fixed and it has to work more effectively and more efficiently.”

She said she was encouraged that Trump and Hillary Clinton, the Democratic nominee for president, both made infrastructure a focus in their campaigns. Warner said that while Trump’s announced plan for a $1 trillion investment in infrastructure may be optimistic, the new president could reverse years of stagnant investment.

She added that she hoped members of Congress will oversee STB during the new administration and make sure it is functioning well. Republicans also control the Senate and House of Representatives, making it easier for Trump to push his policies through.

ACC said the current regulatory regime shields railroads from competition. The group expects Trump to benefit shippers.

“Last week’s election was clear proof that Americans want change, and they expect the federal government to act on reforms that will remove regulatory barriers to growing our economy,” ACC said.