Rumors are swirling in the rail industry that the long delayed Surface Transportation Board (STB) Re-authorization bill will be released by the end of the year by Senator Jay Rockefeller, with an impact on rail carriers or shippers that remains a tight secret.
Earlier this year, Rockefeller, along with Senator Herb Kohl of Wisconsin, jointly agreed to postpone bills each of them were sponsoring, with Rockefeller working on the STB bill and Kohl separately working on new rail anti-trust legislation.
In a shipper-friendly letter to majority leader Henry Reid pulling the vote on the bill, the Senators in June said, “The Commerce and Judiciary committees intend to work together on comprehensive rail competition legislation.”
Now, there are rumors that the STB bill will soon see the light of day, though the direction of the bill has been kept a well-guarded secret to date, with almost no information shared with the media or industry groups. Some see that as a sign that the bill will be tough on the rail carriers, while others are less sure.
“Lacking much concrete information, there has been a lot of speculation about what an STB Reauthorization bill might include,” says John Larkin, an industry analyst for investment firm Stifel Nicolaus. “For example, it has been speculated that an STB Reauthorization bill may increase the size of the STB from 3 board members to 5 board members, which would add $2 million or more to the STB's budget. Some have even speculated that the STB might be expanded from its current size of around 150 total employees to 1,500.”
In theory, the sharp rise in employees, if directionally accurate, would be to handle a surge of rate cases brought to the STB by shippers given new rights versus the rails in the new legislation. Regardless, it would probably take several years for the STB to ramp up staff by several times current levels.
Kohl’s Rail Anti-trust bill that was temporarily withdrawn in June included the following provisions:
- Eliminated the provision against court injunctions against the railroads: This may enable rail shippers to sue in federal courts to test various rail carrier policies, such as so-called “bottleneck pricing,” and perhaps get a court to force the carrier to quote separately each leg of a multi-leg route.
- Eliminated the "rate file" doctrine: Currently, shippers cannot sue for damages for excessive rates due to perceived "rail cartel" pricing if the rail carrier has filed those rates with the Surface Transportation Board. The bill would eliminate this precedent.
(Transportation Management Article - Continued Below)