Freight-rail shipping law proposed to resolve service problems

Members of U.S. House of Representatives transportation and agriculture subcommittees yesterday introduced the "Freight Rail Shipping Fair Market Act" that would reauthorize the Surface Transportation Board to regulate freight-rail service.

The bill was introduced to help address the inconsistent and unreliable freight-rail service that shippers and labor unions have reported this year to the STB, lawmakers said in a press release.

Specifically, the bill would:

• strengthen the STB's authority to address rail-service emergencies;

• require rail contracts to include service delivery standards and remedies, while leaving details to be privately negotiated between parties;

• provide the STB with clear direction to resolve common carrier-obligation complaints;

• create financial incentives for railroads and their customers to efficiently move rail cars;

• support freight railroad efforts to identify where freight is located on their systems while in transit; and

• adequately fund the STB to allow for quicker dispute resolution when petitioned.

The bill was introduced by U.S. Rep. Donald Payne Jr. (D-N.J.), chair of the Subcommittee on Railroads, Pipelines and Hazardous Materials; U.S. Rep. Peter DeFazio (D-Ore.), chair of the Committee on Transportation and Infrastructure; U.S. Rep. David Scott (D-Ga.), chair of the Committee on Agriculture; and U.S. Rep. Jim Costa (D-Calif.), chair of the Committee on Livestock and Foreign Agriculture.

"The freight rail companies have focused on profits instead of performance and it has led to delays and problems in how we transport commodities to farms, factories and stores across the country," said Payne, adding that the legislation would give the STB "the power to prohibit rail rate increases during a rail emergency and resolve rail emergencies when they occur."

"This bill will improve the speed and reliability of rail service and guarantee that freight-rail shipping continues to improve in the future without unnecessary regulations," Payne said.

The Association of American Railroads opposes the bill. AAR leaders said in a prepared statement that the proposed law would "undo the balanced regulatory environment put in place by the Staggers Act and would provide the STB with overreaching authority to place unnecessary regulations on freight railroads."

But a trade association representing shippers of chemicals announced its support for the bill.

"The legislation comes at a critical time when the Surface Transportation Board is trying to resolve serious freight-rail service problems that are disrupting the economy and contributing to the supply chain crisis," American Chemistry Council (ACC) officials said in a press release.

A recent survey of ACC members found that nearly 40% of companies reported rail-shipping problems are worse this year compared with third-quarter 2021. The survey also found that 75% of companies have switched cargo from rail to truck because of rate and service issues, ACC officials said.

"Poor rail service and missed deliveries meant lost production for chemical manufacturers and the other economic sectors they support — from farms to factories," they added.