US chemical council lauds railroad anti-monopoly bill

07 March 2009 00:26  [Source: ICIS news]

HOUSTON (ICIS news)--A bill to repeal anti-monopoly exemptions for US railroads would allow more government scrutiny of future rail mergers and allegations of anti-competitive activity, the American Chemistry Council (ACC) said on Friday.

The US Senate Judiciary Committee on Thursday approved the Railroad Antitrust Enforcement Act of 2009. The committee action clears the way for a vote by the full Senate. A similar measure was under consideration by a US House committee.

Current exemptions from anti-monopoly restrictions allow railroads to operate “from a different set of rules than their customers”, said ACC spokesman Scott Jensen. The ACC is a member of Consumers United for Rail Equity (CURE) a group of industries that use freight rail services.

“The railroads have used this exemption to consolidate the country’s rail shipping down to four regional monopolies, giving these corporate behemoths tremendous monopoly pricing power that results in record profits at the expense of captive shippers,” CURE chairman Glen English said in a press statement.

The bill by Senator Herb Kohl (Democrat-Wisconsin) would repeal the railroads’ exemption from anti-monopoly laws; allow the US Department of Justice and the Federal Trade Commission to review rail mergers under antitrust law; and allow state attorneys general and private parties to sue for treble damages and pursue court orders to halt anticompetitive conduct, CURE said.

The Association of American Railroads (AAR) said the repeal of anti-monopoly exemptions would create a confusing set of regulations.

The Senate Commerce Committee was developing separate legislation that could subject railroads to more economic regulation by the US Surface Transportation Board (STB), the AAR said.

“Overlapping regulatory schemes could derail the industry's ability to meet the nation's increased need for environmentally sound freight transportation,” said AAR president and CEO Edward Hamberger.

CURE executive director Bob Szabo said the AAR complaint “is the phoniest argument the railroads have come up with”.

He said other industries operate under multiple sets of regulations with relatively few problems.

Jenson said bulk shippers including chemicals producers are dependent on railroads.  “It is not in our interest to do anything that would harm them,” he said.

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By: Brian Ford
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