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Good News for Rail Shippers: Surface Transportation Board Reauthorization Act of 2015

by Mark DeFabis, CEO, IDS on 2015-04-06 17:01:00

There is good news coming out of Washington (for a change), just before the Easter holiday. The Senate Committee on Commerce, Science and Transportation approved S. 808 “Surface Transportation Board Reauthorization Act of 2015”. Sponsored by Sen. John Thune (R-SD) and Sen. Bill Nelson (D-Fla), the bill will make substantial changes to the STB which should be good news for rail (intermodal) shippers. The STB, which was created in 1995, is the successor to the old Interstate Commerce Commission and has undergone now substantive changes since inception.Indiana_Railroad

Rail shippers who have had to deal with the STB on rate and other issues can attest to the long cumbersome proceeding conducted by the STB on rate challenges. S. 808 makes a number of substantive changes to the STB that should help rail shippers by providing for more transparency as well as move expedite rate cases which often times linger for years without decision.

Here is a synopsis of the major changes:

1) The STB will be expanded from 3 members to 5 members, which will reduce the need to rely heavily on staff. Currently, no two members can meet without staff to discuss matters before the Board. This expansion will allow two members to speak directly to each other without violating Sunshine Laws, reducing the need for communicating between staff.

2) The Bill also establishes the STB as an independent agency, removing it from under the Department of Transportation and putting it on the same level of independence as its predecessor the Interstate Commerce Commission.

3) Rate cases should be expedited under the new bill which will also require reporting that will allow for tracking of compliance with the new rate case deadlines. Current rate cases average three years for the most complex cases.

4) The STB will also have authority to initiate investigations on its own initiative. Currently the STB can only exercise its authority upon a formal complaint which many shippers are reluctant to do.

5) The arbitration procedures will be expanded to apply to rate cases and raises the relief cap for non-rate case arbitration from $200,000 to $2,000,000 and for rate case arbitrations the cap is established at $25,000,000 over five years.

6) The Comptroller General is directed to commence a study of rate bundling which precludes many shippers from challenging just those rates that they deem unreasonable. This is the first step in finding a solution to this very complex problem.

7) The Bill also helps to keep the search for rate case alternatives at the forefront by requiring the STB to report, within one year of the Bill’s passage, on rate case methodologies addressing the sufficiency, complexity and cost effectiveness of the current large case methodology and indicating whether alternative methodologies exist. It also requires the STB to provide quarterly reports describing the progress it has made in all unfinished regulatory proceedings.

With all of the gridlock in Washington, let’s hope that S. 808 moves forward to provide common sense changes to the STB. Rail shippers deserve a regulatory agency that is responsive and transparent.

You can find the full text of S. 808 by following this link

https://www.congress.gov/bill/114th-congress/senate-bill/808/tex

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