On Jan. 29, ISRI, alongside several other associations, submitted comments to the Surface Transportation Board concerning the board’s proposed new approach, issued Sept. 30, 2020, for evaluation of market conditions, including transportation competition, in class exemption and revocation proceedings. “The proposed new approach would apply a market dominance-style analysis that deviates from the governing revocation statute, adds unnecessary and substantial complexity and delay to exemption proceedings, and would deter shipper parties from seeking regulatory oversight,” the comments read.
The approach, developed by the STB’s Office of Economics, proposes a focus on “(1) developing a snapshot of the current state of a commodity’s rail transportation market, (2) identifying changes in market conditions, and (3) considering certain potential influences from alternative transportation modes that could impact that market.”
In the comments, ISRI—along with the American Forest & Paper Association and the National Industrial Transportation League—observes that the STB does not focus its revocation decision on the Rail Transportation Policy, a “fatal flaw.” “Any potential usefulness pales in comparison to the challenges and problems that would be created by the proposed new approach,” the letter states.
ISRI further notes the proposed process will add complexity, cost, and time for any revocation request, because it uses a complicated model that experts hired by the railroad would likely challenge. “As evidenced by large rate cases which have grown into litigation behemoths over time, complex and costly proceedings benefit the railroads simply by deterring shippers from even attempting to seek relief at the Board,” ISRI and the associations write.
ISRI and the associations also take issue with the STB’s market-dominance-style approach, which “would be unwieldy in the extreme and is contrary to the governing statute.”
“It’s a very complex model, and it costs a lot of money to run these numbers,” Billy Johnson, ISRI’s chief lobbyist, says of the proposed approach. “Members can’t afford to do that.” He notes that Congress already laid out the necessary requirements for the STB to exempt or revoke an exemption for an industry. “It’s a very simple way to do it … and the [STB’s Office of Economics] is making it more complicated than it needs to be.”
By March, ISRI plans to submit further comments concerning the economic model proposal, Johnson says.