STB Issues Small Rate Dispute Rules

The U.S Surface Transportation Board adopted this week two rules pertaining to rate reasonableness rate case procedures.

The agency said the rules are designed to provide two streamlined approaches for shippers and railroads to resolve smaller rate disputes.

One procedure is a voluntary arbitration program while the other is a new process for rate challenges known as “final offer rate review.”

The STB said both rules are designed to “substantially improve shippers’ access to rate reasonableness reviews for smaller rate disputes.”

Through the new rate reasonableness procedures, the voluntary arbitration program will take effect only if all seven Class Is commit to participating in the program for five years and do so within 50 days of the date of publication of the final rule in the Federal Register.

The STB said if all carriers do so, they will be exempt from the FORR procedure.

When the rulemaking process began in 2019, five Class I carriers filed a joint petition urging the board to exempt them from the FORR procedure.

In return, the Class Is agreed to resolve rate challenges through binding arbitration, a methodology in which the carriers had previously refused to participate for many years.

In November 2021, the board advanced rulemakings in both FORR and the establishment of a voluntary arbitration program. The most recent decision is the culmination of those actions.

Both review mechanisms are limited to rate disputes worth up to $4 million in relief over two years. Under the new FORR procedure, if the board finds a rate to be unreasonable, it will decide the rate by selecting either the complainant’s or the defendant’s final offer, subject to an expedited procedural schedule that adheres to firm deadlines.

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