ARLINGTON, VIRGINIA, US — The Surface Transportation Board (STB) issued on Dec. 19 its final rule that streamlines the process for challenging freight rail rates.
The STB published final rules for the voluntary Small Case Arbitration Program and the Final Offer Rate Review (FORR) process.
Both sets of rules would apply to rate disputes that involve rates for regulated commodities not subject to a rail transportation contract.
If all Class I rail carriers opt-in for the arbitration program the board will issue a notice to begin the new arbitration program. By agreeing to participate in arbitration, carriers will commit to participate in any arbitration proceedings brought against them under this program for a five-year term. If one or more Class I carriers choose to not opt-in for arbitration, all Class I carriers will be subject to rate challenges under the FORR process.
“The final rules issued by STB today mark an important milestone for agricultural shippers and their ability to operate efficiently in the rail transportation system,” said Mike Seyfert, president and chief executive officer of the National Grain and Feed Association (NGFA). “NGFA-member companies have experienced unreasonably high rail rates with the rapid consolidation of the North American freight rail marketplace and the implementation of new operating models by several Class I railroads. FORR provides an avenue for agricultural shippers to challenge rail rates in a timely and cost-effective manner.”
Seyfert said the NGFA appreciated the incorporation of several of its recommendations in the arbitration program and the FORR process.
“We look forward to continuing to work with the STB on other pending proceedings that would further facilitate more reliable rail service at competitive rates,” Seyfert said.
In 2014, the NGFA developed and submitted to the STB its own version of a simplified rate-challenge methodology intended to be workable for agricultural rail users. Subsequently, a 2015 report by the National Academy of Sciences’ Transportation Research Board also found the STB’s rate-challenge processes to be complex, time-consuming and costly, with only one agricultural shipper having gone through the rate challenge process in more than 40 years.