The U.S. Surface Transportation Board has revised its procedures for gauging the reasonableness of railroad rates, removing limits on relief payments on midsized rail disputes and upping the limit on smaller rail rate disputes to $4 million.
The ruling also makes some changes to the overall process of challenging a rate and sets the U.S. prime rate “as the interest rate on reparations that railroads must pay to shippers for charging unreasonable rates,” according to the STB.
The board isn’t done yet, however. Since this ruling only covers small and midsized railroads, the STB will address cross-over traffic and small agricultural shippers in the future.
"For years, the shipper community has argued that only the largest freight rail shippers can justify the time and expense to bring rate disputes to our agency,” Daniel Elliott, STB chairman, said in a statement. “The board has worked diligently to address that concern and offer captive shippers a simplified, expedited, and practical way to bring smaller rate disputes to the agency. Today we are taking another much-needed step to provide captive shippers with better access to a neutral forum to judge the reasonableness of their freight rates, as Congress intended."
The ruling comes out of the board’s 2011 hearing Competition in the Railroad industry, Ex Parte 715, which has netted a number of changes over the years. On May 13, the board adjusted its mediation and arbitration guidelines for railroad rate disputes.
"The board has taken significant steps in the last several years to make the rate-review process more accessible, and today's decision continues that positive trend,” Francis Mulvey, a board commissioner, said in a statement. “I am particularly pleased that the board has addressed the issue of the award limitations in our simplified rate case procedures and raised the interest rate on reparations. I hope that our decision today will allow more rail shippers to consider the board an open venue if rate negotiations with their railroad partners prove unsuccessful." - Jon Ross