The Association of American Railroads (AAR) said Tuesday, Sept. 16, 2014 it is concerned "over the Surface Transportation Board (STB) Reauthorization Bill (S.2777), scheduled to be marked up in the Senate Commerce Committee on Wednesday, Sept. 17.
AAR says if the legislation proceeds without alteration, it "would harm the nation's railroads' ability to move what the economy demands and deliver the service shippers expect. The railroad industry would not be able to continue to reinvest record amounts of private capital into the freight rail system if the STB Reauthorization Bill passes in its current form."
AAR President and CEO Edward R. Hamberger says railroads have several serious concerns with the bill, beginning with the legislation directing the STB to pursue regulations that could cap rates and require railroads to turn over traffic to competitors.
"The rail industry believes this legislation will harm the ability of the nation's railroads to invest in the network and improve service for our shippers," said Hamberger, who noted railroads are moving the most freight in the last seven years and commodities, such as grain, have registered double-digit gains measured against levels of one year ago. "These new restrictive regulations would be imposed on the nation's railroads at a time when investments in capacity, new equipment and new hires are needed," Hamberger said.
AAR also stated:
1. The legislation would direct the STB to prevent railroads from using the approach commonly used by railroads and shippers alike in contract negotiations to "bundle" offers, but would allow shippers to continue to do so. The AAR says the STB has no authority over rail contracts and should not be directed to interfere in agreements that are arms-length transactions freely entered into by both parties.
2. The STB already has broad regulatory oversight over the railroads; however, the legislation would give the STB expanded authority to launch investigations of a railroad even where no complaint against the railroad has been lodged.
"On the one hand, everyone wants to see capacity grow and traffic flow unimpeded, and on the other hand there are those that want to undercut our very ability to get the capital necessary to invest. This is a perfect example of you simply can't have it both ways," asserted Hamberger. "America's rail industry is urging policymakers not to rush this legislation and instead give all stakeholders the opportunity to have a more productive conversation to try to find common ground."