Railroads, Shippers Split on New Powers for Freight Regulator

Lawmakers are working on legislation to expand the power of the federal regulator overseeing freight rail, with the measure already dividing shippers and railroads before it is introduced.

US shippers have complained about challenges moving goods, with congestion and service issues slowing freight rail. The supply chain struggles have drawn concern from the administration, and spurred lawmakers to sharpen oversight of railroads.

Shipping and railroad companies are now lobbying for and against a draft measure, obtained by Bloomberg Government, that would increase funding for the Surface Transportation Board, the independent agency that oversees freight rail, while prodding it to take more action to improve service.

“The status quo is not working for agricultural shippers and consumers,” members of the Agricultural Transportation Working Group wrote to House lawmakers Tuesday. The group, which represents a number of industry associations, said it supports the draft House measure to reauthorize the STB that has been circulating among industry groups. The draft measure would “help address insufficient, unreliable freight rail service for the U.S. agricultural value chain,” they wrote.

Shippers are urging lawmakers to introduce the draft, while freight rail companies are mounting their opposition against it.

The draft bill would create financial incentives for improved service by directing STB to revise the amounts it charges in penalties. It would also allow the STB require that railroads have needed equipment, tracks, and personnel when facing freight rail problem. A spokesperson for the House Transportation and Infrastructure Committee said the draft bill isn’t the latest version, and declined to share an updated version.

Freight ‘Crisis’ Spurs Search for Ways to Empower Rail Regulator

Photo: Bing Guan/Bloomberg via Getty Images

Cargo containers onboard a freight train in Niland, Calif., on Dec. 15, 2021.

The Association of American Railroads, a trade group that represents major freight railroads, opposes the legislation. AAR said in a fact sheet that the measure would provide the board with “overreaching authority” and that it “threatens the viability of the nation’s freight rail system” by intervening in private negotiations and more heavily regulating rail.

The STB has been advancing rulemaking to improve service. But lawmakers are also weighing whether it needs additional authority, and held hearings on the issue. The transportation committee said it planned to reauthorize the board in its agenda for the year. The STB was last renewed through 2020.

The Agricultural Transportation Working Group said in its letter that provisions in the draft bill would bring more competition and aid shippers, including by increasing funding to help with the board’s workload and establishing minimum rail service standards.

The National Grain and Feed Association called on lawmakers to introduce and support the legislation in a statement Tuesday. House Transportation and Infrastructure Chair Peter DeFazio (D-Ore.) and Railroads, Pipelines, and Hazardous Materials Subcommittee Chair Donald Payne (D-N.J.) drafted the proposal, it said.

Amtrak has asked lawmakers for more regulation of freight railroads, arguing their actions have delayed passenger trains. The draft measure aims to aid passenger rail by creating an advisory council and mandating that passenger rail service be accommodated in railroad mergers and acquisitions.

To contact the reporter on this story: Lillianna Byington in Washington at lbyington@bloombergindustry.com

To contact the editors responsible for this story: Sarah Babbage at sbabbage@bgov.com; Anna Yukhananov at ayukhananov@bloombergindustry.com