Democrats on the U.S. House Transportation and Infrastructure Committee introduced a bill allowing certain shippers to charge demurrage and helping the Surface Transportation Board establish minimum service delivery standards that would guarantee an efficient and fast rail service.
The Rail Freight Fair Market Act would require contracts to detail service standards and remedies, as well as to guide the STB on how to resolve complaints related to compliance with the Common Carrier Obligation, a federal mandate that requires railroads to provide transportation goods on reasonable terms.
The bill would also allow private car owners or lessees, who are often shippers, to impose demurrage or charges for holding cars too long at origin or destination. This includes shippers transporting agricultural products or other goods, according to an invoice summary. The shippers claimed they had been charged with demurrage by a railroad, even though they say it was the railroad that held the car too long.
Other provisions include updating the STB’s emergency powers so it can be more responsive to pressing freight rail service issues, streamlining tariff reviews to speed up the process, and creating a board of 18 members composed of STB board members and freight and passenger rail representatives to discuss related issues. The function of this council would be similar to that which already exists only for rail freight.
The bill contains several proposed studies:
— An update by the STB to study rail freight competition.
— Assessments by national academies of the environmental benefits of rail freight and passenger transport and the data constraints that impede the flow of goods and compound supply chain inefficiencies.
– Government Accountability Office reviews of contractual restrictions between Class I and Class II and III railways on interchange agreements and the ability of the STB to authorize sanctions so that the report can inform a regulation of the STB on civil penalties.
— A report from the STB, the Federal Railroad Administration, and the Department of Homeland Security on the safety and regulatory challenges of freight car GPS and other telemetry systems that would provide the location of cargo.
Representative Donald M. Payne Jr., DN.J., chairman of the Railroads, Pipelines and Hazardous Materials Subcommittee, introduced the bill. He is also supported by Reps. Peter DeFazio, D-Ore., chairman of the House Transportation and Infrastructure Committee; David Scott, D-Ga., chairman of the House Committee on Agriculture; and Jim Costa, D-California, chairman of the Livestock and Foreign Agriculture Subcommittee.
The Railroads and Pipelines Subcommittee had conducted several hearings earlier this year into STB’s relicensing, and this bill builds on testimony heard at those hearings.
“This bill will level the playing field and provide railroad customers – many of whom transport key food and energy products – the service they deserve,” DeFazio said in a statement. “This bill will also provide the tools and guidance the Surface Transportation Board needs to fulfill its mandate and better regulate disputes between Class I railroads and their customers, eliminate unfair practices, and encourage efficient operations. I look forward to putting these policies into action, holding the Board accountable and stimulating competition in the rail freight industry.
Shipper groups such as the National Grain and Feed Association, American Chemistry Council, Freight Rail Customer Alliance and Private Railcar Food and Beverage Association have applauded the bill.
“This important legislation contains many thoughtful solutions that complement and align well with the much-needed reforms being considered by the STB,” ACC President and CEO Chris Jahn said in a statement. “We urge Congress and the STB to work together on meaningful reforms that will incentivize the railroads to provide reliable, competitive service and hold them accountable when they fail to do so.”
Meanwhile, the Association of American Railroads (AAR) said the bill could “further exacerbate current supply chain and service challenges” and threaten the long-term viability of rail freight.
“Today’s STB vigorously exercises its supervisory power. Nearly half of the proposed bill is already the subject of ongoing board proceedings,” AAR President and CEO Ian Jefferies said in a statement on Tuesday. “Congress should learn from the past: more government control does not translate into better railroads.
“Under today’s balanced regulatory framework, America’s freight railroads are, by virtually every measure, the best national freight rail system in the world. Now more than ever, we need this state-of-the-art system, and now is not the time for the railways to be crippled by over-regulation.
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