AAR raises concerns about STB reauthorization bill

The proposed Surface Transportation Board Reauthorization Bill (S. 2777) would harm railroads' ability to move freight, deliver the service shippers expect and reinvest capital, Association of American Railroads (AAR) officials said in a press release issued yesterday.

Introduced last week by Sens. John "Jay" Rockefeller (D-W.Va.) and John Thune (R-S.D.), the legislation is scheduled to be marked up today in the Senate Commerce Committee.

The bill proposes to expand the number of Surface Transportation Board (STB) members from three to five; eliminate a holdover limitation and allow limited board meetings without an initial public meeting notice, but with later public disclosure; and require the STB to establish a database of complaints and issue quarterly reports on them.

In addition, S. 2777 would change the case review process by requiring the board to establish timelines for stand-alone rate cases and report on rate-case methodology. It also would direct the STB to prevent railroads from using an approach commonly used by both railroads and shippers in contract negotiations to "bundle" offers, but would allow shippers to continue to do so, according to the AAR.

"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," according to the AAR press release.

The legislation also would give the STB expanded authority to launch investigations of a railroad, even where no complaint against the railroad has been lodged, according to the association.

If it passes in its current form, the bill would prevent railroads from being able to reinvest record amounts of private capital into the freight-rail system, said AAR President and Chief Executive Officer Edward Hamberger.

"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," he said. "This is a perfect example of you simply can't have it both ways."