US Senate moves to restore rail regulation

20 September 2007 20:06  [Source: ICIS news]

WASHINGTON (ICIS news)--The Senate Judiciary Committee approved a bill on Thursday that would restore some federal and state regulation of railroad mergers and rate-setting practices, moves long sought by US chemical manufacturers.


The committee approved by voice vote S-772, the Railroad Antitrust Enforcement Act of 2007, a measure that chemical producers and other high-volume rail freight shippers hailed as a breakthrough.


Glenn English, chairman of a coalition of electric utilities, chemical firms, grain companies and paper manufacturers, said the bill will remove antitrust law exemptions that railroad operators have enjoyed since the US rail industry was largely deregulated in 1980.


Those exemptions, said English, “have provided cover for the railroads’ unrestrained monopoly power, unfair pricing schemes and unreliable rail service across the board”.


Chemical producers and an array of other high-volume rail shippers have long complained that railroads have been able to impose unreasonable rates and other fees because of the rail industry’s antitrust law exemptions.


The bill approved by the committee would repeal those antitrust exemptions, allow the Justice Department and Federal Trade Commission to review mergers under antitrust law and allow state regulators and private parties to file lawsuits against railroads for alleged anticompetitive conduct.


Bob Szabo, executive director and counsel for the coalition, Consumers United for Rail Equity (CURE), said prospects for approval of a companion bill in the US House Judiciary Committee look more promising now that the Senate panel has approved it.


However, Tom White, spokesman for the Association of American Railroads (AAR), said the legislation is “absurd and based on the false assumption that railroads have broad exemptions under antitrust law, and that is not the case”.


White warned that if the bill were to become law it would kill the few antitrust exemptions that rails have for merger activity and routing arrangements and also increase rail regulation by the Surface Transportation Board (STB), the federal agency governing rail operations.


“It is absurd to subject any industry to two regulatory schemes,” White said, referring to the transportation board’s authority and antitrust regulation that the bill would restore.


“Obviously we oppose this, and we hope it will fail in the full Senate and House,” White said.

By: Joe Kamalick
+1 713 525 2653

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