Shippers captive to a single rail- tory authority,” he said. “We think (current said railroads cannot be scrutinized in a road are paying higher trans- procedures) need to be more user friendly.” vacuum, separate from concerns over portation rates since deregulation But that didn’t seem to appease the highways, ports and inland waterways in and the Surface Transportation committee. “Nothing has been done” to an era of lengthy supply chains and grow-Board is ineffective at protecting address service and rate issues since the ing freight volume. those shippers, according to the industry was deregulated in 1980, Burns The National Industrial Transportation U.S. Government Accountability Office. said. “I’m troubled. There’s no excuse that League agreed. “You have to look at the
“A lot more shippers are paying rela- economy as whole,” said NITL President tively less, but our concern is with a very John Ficker. “Virtually every mode is small number that are paying very much capacity constrained.” However, Ficker more,” said JayEtta Hecker, GAO director said with the staggering growth in for Physical Infrastructure Issues, at a imports over the last five years, “railroads Senate Commerce Committee hearing. have been focusing on international traffic
Comparison with variable costs, competitive rates
500%
400%
300%
200%
100%
0%
Variable Cost Competitive Rates Captive Rates
Source: Consumers United for Rail Equity
“None of the protection for shippers and have left work on the domestic side (at the STB) has been effectively imple- for a later date. There’s not enough capac-mented. The relief process is largely inac- ity to move it.”
cessible,” she said. The GAO’s Hecker said public-private Hecker’s testimony accompanied the partnerships to boost capacity investment release of a 26-page GAO preliminary must focus on benefits that are more na-report assessing rates, competition and tional than local. Investment tax credits capacity in the rail industry. It’s a subject sought by the rail industry should generate that has been riling railroads and their this hasn’t been handled already.” the desired investment “as opposed to sub-customers in meetings and hearings “If there’s ever an Olympic event for sidizing investment that would have been around Washington for weeks as rail costs (conducting) studies, the STB would be a undertaken at some point anyway,” she said. grow while rising freight volume com- gold medal winner,” Dorgan said. “We’re Recommendations for regulatory petes with a limited amount of space. cranky. The (STB) has not protected cap- changes, meanwhile, are not likely to come
Trent Lott, R-Miss., warned he was los- tive shippers. Clearly there’s a failure here.” soon. Hecker said with railroads “on the ing patience with inaction from the pri- cusp” of becoming revenue adequate, the vate sector and the government. o the railroads, the GAO report provid- rail industry is at a turning point that may “I will do whatever is necessary to Ted good news for shippers, showing warrant a change in regulatory oversight. make sure there isn’t abuse in the rail that overall rail rates declined over the However, she said, “Any alternative industry,” he said. “For example, if I find last 20 years, with coal rates alone drop- approaches to address competition and out railroads are using fuel surcharges to ping 35 percent. captivity should be carefully considered to make money off shippers, there’s going “I don’t know of many other industries ensure that the approach achieves the to be a real problem. I consider that charging less for their services in 2006 important balance set out in the Staggers cheating and would be highly offended.” than they did in 1985,” said Association of Act of allowing the railroad to earn ade-
Lott, along with Conrad Burns, R-Mont., American Railroads President and CEO quate revenues and invest in its infrastruc-and Byron Dorgan, D-N.D., vented much Ed Hamberger. “Railroads move tens of ture while assuring protection for captive of their frustration at STB Chairman Dou- thousands of rail cars to and from thou- shippers from unreasonable rates.”
glas Buttrey, testifying for the first time sands of origins and destinations every BY JOHN GALLAGHER before the subcommittee as chairman. But- day, at rates that shippers elsewhere in the trey listed steps STB was taking to address world would love to have.” fuel surcharges, rate cases and contracts Hamberger at one point chastised between large and small railroads. chemical shippers for having “the gall and
Buttrey insisted STB does not need more the temerity” to blame railroads for forc-authority to deal with rate and service ing chemical plants to locate their plants issues. “We don’t think we need more statu- overseas due to inconsistent service. He
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