US chemical makers, other producers ask Senate for rail vote

11 March 2014 22:04  [Source: ICIS news]

WASHINGTON (ICIS)--Chemical sector leaders and a broad coalition of other industries on Tuesday urged the US Senate to move quickly to approve a new member for a federal rail regulator, saying that delays are adding shipping costs to them and the overall economy.

Consumers United for Rail Equity (CURE) asked Senate Majority Leader Harry Reid (Democrat-Nevada) and Minority Leader Mitch McConnell (Republican-Kentucky) to act quickly to approve the nomination of Debra Miller to the Surface Transportation Board (STB).

CURE, whose 37 member trade associations are all high-volume rail shippers, noted that Miller’s appointment to the STB was given bipartisan approval by the Senate Committee on Commerce, Science and Transportation in early January, but she cannot take up her board position without a confirming vote by the full Senate.

CURE president Steve Sharp noted that with its existing vacancy, the three-member board is hamstrung because with only two sitting board members action on rates and other matters can only occur if there is unanimous agreement among the two.

The STB is an economic regulatory agency established by Congress to review and resolve railroad rate and service disputes and proposed railroad mergers.

But Sharp noted that even when the board has a full complement, “the rate case process at the STB is complex, lengthy and expensive, minimising its utility for keeping freight rate abuses in check”.

CURE, whose members include petrochemical, fuels, forestry and paper interests, electric power utilities, steel producers, coal and agricultural rail shippers, has long charged that STB has failed to adequately address what the industries regard as excessive freight rates among the nation’s rail carriers.

“From 2005 to 2011, the total rate premium paid by commodity shippers increased by 90%,” Sharp said, “even as carload volumes declined by 1.1%.”

He said that the STB’s rate regulatory system “is not working properly”.

“Unchecked increases in freight rail rates hurt American competitiveness by creating added costs at each point in the supply chain and create a drag on our economy,” Sharp said.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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