Senators team up to craft new legislation focused on railroad antitrust exemption and reforming STB

[The Straight Story]

Railroad shipping: Senators team up to craft new legislation focused on railroad antitrust exemption and reforming STB

Jeff Berman, Group News Editor -- Logistics Management, 6/2/2009

WASHINGTON—Two U.S. Senators eyeing major changes in the freight railroad industry said they are joining forces to craft legislation that they said will address the longstanding concerns of rail shippers and make the rail industry more competitive.

In a letter addressed to Senate colleagues, Senators Herb Kohl (D-WI) and John Rockefeller (D-WV) said they have petitioned Senate Majority Leader Harry Reid to withdraw the pending cloture petition on S. 146, the Railroad Antirust Enforcement Act. The Senators explained that Commerce and Judiciary Committees “intend to work together on comprehensive rail competition legislation,” resulting in a bipartisan package that reforms the Surface Transportation Board (STB) and repeals the railroad’s antitrust exemption in the form of a robust reform package.

The antitrust issue: In March, the Senate Judiciary Committee voted by a 14-0 margin to pass legislation—S. 146, which was introduced by Kohl—that would remove antitrust exemptions currently granted to the railroad industry. This legislation is geared to “bring the freight railroad system under the nation’s antitrust laws and bring protection to farmers, manufacturers and electricity customers” whom have suffered from increased rates and decreased quality and service, which is due to a lack of competition among freight carriers, as stated in an April 2008 letter penned by seven U.S. senators to Reid.

Along with removing antitrust exemptions, this legislation would:

* revise provisions prohibiting anticompetitive transactions except for those approved by specified federal agencies acting under certain statutes to eliminate the exemption for certain STB approved transactions;

* empower the Federal Trade Commission (FTC) to regulate, and engage in antitrust enforcement regarding, collective rate agreements and certain transactions, including railroad mergers and acquisitions;

* revise STB authority to provide that a rail carrier, corporation, or a person participating in an approved transaction is not exempt from specified antitrust laws; and

* permits treble damages against railroad common carriers in antitrust suits to parties injured by antitrust violations without regard to whether such railroads have filed rates or whether a complaint challenging rates has been filed, among others.

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