Posts Tagged ‘STB rules’

Groups Private Car Rules Revised

July 29, 2021

Four groups that represent private freight car owners want the U.S. Surface Transportation Board to launch a rule making process to work toward updating the demurrage and accessorial rules governing the railroads’ use and handling of their equipment.

The petition to the STB asks regulators “to promulgate regulations governing the use by the nation’s Class I railroads of freight rail cars supplied to them by rail car owners, shippers, and other non-railroad entities. [A]n update to the rules governing the railroads’ use of private rail cars is long overdue because the railroad industry has evolved to the point that approximately 73 percent of the rail cars in service today nationwide – approximately 1.2 million rail cars—are no longer owned by railroads, but are . . . purchased, or leased, and maintained, by non-railroad entities at little or no cost to the railroads that use them.”

The groups involved are the North America Freight Car Association, the National Grain and Feed Association, the Chorine Institute and the National Oilseed Processors Association.

They say that current STB rules failed to adequately protect the enormous investment private rail car owners have made in their property because the rules fail to provide sufficient incentives for the Class I railroads to use private rail cars efficiently.

The petition said Class 1 railroads are using private cars in irregular service and holding on to them for too long.

STB Adopts Demurrage Rule

April 8, 2021

The U.S. Surface Transportation Board said this week it has adopted a final rail to establish certain minimum information requirements for demurrage bills from Class I railroads.

The  rule regulates billing cycle, shipment, car replacement and credit and debit information.

The minimum-information requirement represents what regulators determined will have the greatest effect on the ability of rail users to review and verify the accuracy of demurrage charges and help to resolve disputes between railroads and their customers.

In a news release the STB said  the rule establishes a machine-readable data requirement to ensure that rail users have the option to access machine-readable data containing the minimum information.

In its decision, the STB reiterated its expectation that all carriers take reasonable action to ensure the accuracy of their invoicing processes and that their demurrage charges are warranted.

The rule will become effective on Oct. 6.

STB Finds 5 Class 1s Revenue Adequate

October 5, 2020

Five Class 1 railroads operating in the United States were revenue adequate in 2019 the U.S. Surface Transportation Board has determined.

The railroads included Norfolk Southern, CSX, BNSF, Canadian Pacific’s Soo Line Corporation and Union Pacific.

To be deemed revenue adequate a railroad must achieve a rate of return on net investment equal to at least the current cost of capital for the railroad industry in a given year.

The STB said that in 2019 the rate of return figure was 9.34 percent. It said all five Class 1 railroads it identified exceeded the agency’s calculation of the industry’s cost of capital.

In another development, the STB said it is seeking public comment on a proposed approach developed by its Office of Economics for use in considering class exemption and revocation issues.

The proposed approach would be used to help the STB evaluate market conditions using a variety of metrics related to rail competition.

In a news release, the agency said the proposal would serve as a way to evaluate market conditions governing a commodity, including changes in conditions over time.

 However, the STB said it would not serve as a mechanical test for determining whether the commodity exemptions at issue should be revoked or whether a new exemption should be issued.

Public comment is due by Dec. 4 and replies to initial comments are due by Jan. 4, 2021.

STB Issues Final Rule Regarding Rate Cases

August 5, 2020

The U.S. Surface Transportation Board this week adopted a rule designed to streamline its approach to cases in which one or more parties is arguing market dominance led to an unreasonable rate.

In a news release, the STB said that market dominance cases can be costly and time-consuming, especially in smaller cases.

The rule adopted this week, which becomes effective Sept. 5, was initially proposed in September 2019 and lays out the factors

that could establish a prima facie showing of market dominance. Those include:

  • The movement has a revenue-to-variable cost ratio of 180 percent or greater;
    • The movement would exceed 500 highway miles between origin and destination;
    • There is no intramodal competition from other railroads;
    • There is no barge competition;
    • There is no pipeline competition;
    • The complainant has used trucks for 10 percent or less of its volume (by tonnage) subject to the rate at issue over a five-year period; and
    • The complainant has no practice buildout alternative (regardless of transportation mode) due to physical, regulatory, financial or other issues.

The STB said complainants who provide evidence of one or more of these

would have the option to use the non-streamlined market dominance approach to prove market dominance.

Under either approach, defendant railroads would continue to have the opportunity to rebut a complainant’s evidence, they added.

The STB also announced that it would soon initiate a proceeding to further explore the adoption of various commodity-specific thresholds, including for chlorine and agricultural products.

STB Change Reporting Rules for Chemicals, Plastics

May 22, 2020

The Surface Transportation Board has decided to change its railroad performance data reporting rules to include chemical and plastics traffic as a distinct reporting category to the Class I railroads’ weekly reporting for the “cars-held” metric.

In a news release, the STB said the cars-held metric tracks the average number of loaded and empty railcars that have not moved for 48 hours or longer.

Class I railroads already report service performance metrics for a range of commodities on a weekly, semi-annual, and occasional basis.

The STB said the additional data will allow it to be better positioned to monitor chemicals and plastics traffic and detect and mitigate service issues affecting these commodities.

The new reporting rule takes effect on July 20.

STB Proposes Changes in Waybill Sampling Procedure

December 4, 2019

The U.S. Surface Transportation Board is seeking public comment about a proposed revision to the waybill samples that railroads submit to the agency.

In a news release, the STB said the proposed changes are part of its revisions to rate review procedures.

The STB uses waybill data for such things as exemption decisions, stratification reports, traffic volume and rate studies, and certain rate cases.

Currently the agency uses waybill sampling based on the number of carloads on a railroad’s waybill.

It is proposing to simplify the sampling rates for non-intermodal carload shipments and to specify separate sampling strata and rates for intermodal shipments.

In a statement, STB officials said the changes would create a more robust waybill sample in order to help the agency with its decision-making and analyses as well as other users of the data, without creating an undue burden on railroads.

Comments are due by Jan. 28, 2020.

AAR Rips Proposed STB Rate Review Rule

November 14, 2019

The Association of American Railroads has characters a proposed rate review rule being advanced by the U.S. Surface Transportation Board as unlawful.

The AAR wants the agency to withdraw the rule because it said it exceeds STB’s authority in determining rate reasonableness.

In a statement, AAR President and Chief Executive Officer Ian Jefferies said the rule “abdicates the agency’s statutory responsibility to judge the reasonableness of rail rates and abandons careful deliberation vital to a balanced regulatory structure.”

AAR contends that the rule would establish a new rate review procedure that would deny shippers and railroads alike their right to a full hearing as required by law and represents a radical departure from the market-based, economic principles that have traditionally guided the Board’s maximum rate determinations.

STB Changing Rules in Certain Cases

December 1, 2017

New procedures announced by the U.S. Surface Transportation Board this week are designed to streamline the process of settling disputes between shippers and carriers in stand-alone rate cases, the agency said.

Among the changes is the implementation of a new “pre-complaint period” to allow parties to mediate their disagreement without litigation and preparation for litigation.

The STB also made changes in discovery and the submission of evidence processes.

The agency cited the Surface Transportation Board Reauthorization Act as authority for revamping its rules.

Rules are also expected to be changed for proceedings that affect a larger number of cases.

STB Wants to Modify its Rules

October 2, 2017

The U.S. Surface Transportation Board said last week it is initiating a rules making process designed to modify its longstanding rules on ex parte communications during informal rule-making proceedings.

Such communication has been prohibited in the past.

In its notice, the STB said it is looking to allow ex parte communications, subject to disclosure requirements, and “to make other clarifications as to when and how interested persons may communicate with the Board about other pending proceedings.”

The notice said the STB has waived the rules pertaining to ex parte communications in two recent cases in order to allow individual board members or staff to participate in one-on-one meetings, subject to public disclosure requirements.

The board said it found these meetings useful and has recognized that significant benefits flow from direct and candid discussions with stakeholders.

In a news release, the STB said that more generally, many federal agencies now have regulations and policies facilitating direct interaction with stakeholders on regulatory matters.

STB Rules Change Seeks to Expedite Rate Cases

April 4, 2017

The U.S. Surface Transportation Board wants to move along litigation over rail rates and has proposed changing its rules to achieve that.

The proposal includes implementing a 70-day “pre-complaint” period during which the complainant would notify the defendant of the rate and movement it intends to challenge. Mandatory mediation also would occur during that period.

During the discovery process, the proposed rules would require service of the complainant’s and defendant’s initial discovery requests with the complaint and the answer, respectively.

If the new rules are adopted, an STB staff person would serve as a liaison for the case and assist the parties in technical and procedural matters, particularly during the discovery process.

The proposed rules changes stem from a rulemaking process that began in June 2016.

The STB is seeking public comment on the proposed rules.