NGFA seeks 'workable' rail rate challenge procedure

by Ron Sterk
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STB urged to refocus its efforts.
 
WASHINGTON, D.C., U.S. — The National Grain and Feed Association (NGFA) along with more than 30 other interested parties urged the federal Surface Transportation Board (STB) to refocus its efforts on creating a workable procedure that grain shippers may use to challenge freight rail rates in its Expanding Access to Rate Relief advance notice of proposed rulemaking (ANPR).

“We commend the Board (STB) for continuing to examine ways to make its rate rules more accessible to agricultural shippers,” the NGFA said in its comments to the STB. “We urge the board to refocus on developing rate rules and procedures that are appropriate, workable and accessible for grain and other agricultural shippers for all railroad rate disputes.”

The NGFA said the STB had erred by suggesting potential changes would address only a small subset of rate disputes “despite the overwhelming body of evidence that none of the current methodologies … are workable for agricultural shippers.” In addition, the organization said the STB had erred by expanding the issue to non-agricultural commodities that were not warranted “given both the unique characteristics of rail movements of grains, oilseeds and grain products” and because non-agricultural shippers have not been involved in seeking alternative rate methodologies.

Joining to support the NGFA in its comments were the National Association of State Departments of Agriculture, 14 other national farm, commodity and agribusiness associations, including the American Bakers Association, the National Pasta Association, the North American Millers’ Association, the Corn Refiners Association and the National Oilseed Processors Association, and 16 state and regional associations affiliated with the NGFA.

In its comments, the NGFA reiterated its original extensive documentation and rationale for why rail movements of agricultural commodities and products differ from non-agricultural commodities, noting that grain was the largest commodity grouping with common-carrier service and that grain shippers typically to not enter into rail transportation contracts because of the nature of their business, which require greater flexibility than usually is allowed for in contracted shipments.

The NGFA said real rail rates for grain rose 40% from 2002 to 2013 while real rates for most other commodities increased between 15% and 25%.

“Despite these developments, no shipper of agriculture commodities has filed a rate case under any of the board’s existing rules in more than 30 years,” the NGFA said. “Consequently, it is critical that the STB modify its current rate review rules to make them more accessible to, and workable for, shippers of agricultural commodities with rate disputes of all sizes.”

The NGFA and other interested parties said the scope of the ANPR is “far too narrow” because it was in part limited to undefined “very small disputes.” Further, it said the “preliminary screen” criterial were not workable or correct, and that two default parameters of the Comparison Group Approach were flawed.

The NGFA said it was pleased that the STB was considering adopting the Revenue Adequacy Adjustment Factor as part of the agricultural commodity maximum rate methodology proposed by the NGFA. Also, the NGFA commended the STB on its efforts to make its procedures applicable to rail rate cases more streamlined and less costly and complicated.

“We further urge the board, after considering the comments submitted by the NGFA and other parties, to move expeditiously to develop and propose rate-challenge methodology rules appropriate for grain and agricultural shippers,” the NGFA said in concluding comments.
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