US STB Chair Nominee Vows To Address Rail Shippers' Concerns
31 July 2009 - 7:29AM
Dow Jones News
President Barack Obama's nominee to head the U.S. agency that
regulates the railroad industry said he would be "proactive" in
addressing shippers' allegations of pricing abuses by freight-rail
companies, and indicated that the decades-old law that deregulated
the railroad industry is outdated.
The comments by Daniel R. Elliott III came as a House Judiciary
subcommittee approved a bill Thursday that would eliminate
exemptions from antitrust law for commercial railroad companies.
The bill, introduced earlier this year by Rep. Tammy Baldwin,
D-Wis., could face a hearing and a vote by the full committee as
early as September.
Meanwhile, Sen. John D. Rockefeller, D-W.Va., chairman of the
Senate Commerce Committee, and Sen. Herb Kohl, D-Wis., chairman of
the Judiciary's antitrust subcommittee, are crafting a proposal to
overhaul the Surface Transportation Board and repeal antitrust
exemptions for railroads. The package, which would modify a bill
introduced by Kohl earlier this year that was tabled, hasn't been
unveiled.
Patti Reilly, a spokeswoman for the Association of American
Railroads, a trade group representing CSX Corp. (CSX), Union
Pacific Corp. (UNP), Burlington Northern Santa Fe Corp. (BNI) and
Norfolk Southern Corp. (NSC), said the earlier bill was
"overreaching" and would saddle railroads with "onerous"
regulations.
"We maintain the system is in place and the system works,"
Reilly said.
Robert Szabo, executive director of Consumers United for Rail
Equity, which represents shippers, said he was "heartened" by
Elliott's testimony, which he viewed as part of a broader effort by
the Obama administration and Congress to strengthen antitrust
laws.
"Up until him, every chairman has refused to look at the
competition issues affecting rail customers," Szabo said.
Companies that rely on railroads to transport their goods have
long accused railroads of charging exorbitant prices, accusations
that railroads deny.
During his confirmation hearing Wednesday, Elliott said his work
as associate general counsel for the United Transportation Union,
the largest railroad union, enables him to be sensitive to the
concerns of railroads and shippers alike and that he would be fair
in overseeing disputes.
Elliott is expected to win Senate confirmation as chairman of
the Surface Transportation Board as early as next week. He would
join the three-member board, which approves rail mergers and
decides rate disputes between shippers and railroads.
Pressed by Rockefeller, Elliott suggested the 1980 Staggers Act
that deregulated the industry was outdated, given that rail
companies are financially stronger than they were then.
Elliott said shippers' concerns that the law has eroded
competition and given railroads too much pricing power have been
heard "loud and clear."
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com
(Alex Roth contributed to this report.)