The US Surface Transportation Board (STB) is expected within the next two weeks to begin a process for rethinking how it determines whether rail transportation rates are reasonable, agency vice chairman Patrick Fuchs said yesterday.
Updating those rules is the agency’s top priority, Fuchs said yesterday at the National Coal Transportation Association’s annual meeting in Baltimore, Maryland.
STB told the US Senate earlier this year it expected to begin formal action in the summer. Fuchs noted that summer does not end until 23 September. Work will follow up on a 29 April report by the STB’s Rate Reform Task Force, which detailed a number of ideas for updating the rate review process.
Not every recommendation will be advanced, Fuchs said. But changes are needed. The existing methodology that uses hypothetical railroad models “requires parties and the board to spend vast amounts of time litigating [details] down to hypothetical bathrooms. That is something that took a lot of time in the last case.”
STB is also closely monitoring major railroads’ implementation of the precision scheduled railroading operating model, he said.
“This is another area where we are hard at work, and you should expect the board to act in the next several weeks,” he said.
STB already speaks regularly to the three railroads implementing the plan and is collecting additional metrics data.
“There has been some improvement in operating metrics,” in terms of velocity and terminal dwell time, Fuchs said.
But STB has also heard “an elevated level of concern” from shippers about demurrage and accessorial fees. The agency has required carriers to report quarterly revenue from the charges and held a two-day listening session in May that allowed shippers to air their criticisms.
“The concerns have continued to mount,” he said. There are different levels of concern about the railroads. STB, for example, has heard a lot less about Kansas City Southern’s transition to the new model, he said.
Demurrage does serve a useful purpose, so look for STB to take a balanced action, Fuchs said.
Demurrage is a charge shippers pay for holding on to a railroad-owned car too long, often from loading or unloading delays, or when a shipper-owned car overstays its welcome on railroad property. Accessorial charges are fees for items beyond normal handling, such as diverting a train in transit, ordering a car but returning it empty, weighing a railcar or providing incomplete or incorrect shipping instructions.
Fuchs joined STB in January for a three-year term. He previously served as the senior staff member working on surface transportation and maritime issues for the US Senate’s Committee on Commerce, Science, and Transportation under chairman John Thune (R-South Dakota).
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- On September 11, 2019