The board also is closely watching Class I railroad transitions to Precision Scheduled Railroading and wants to get to the bottom of shipper complaints about related changes to demurrage and accessorial charges.
Fuchs, who spoke at the North American Rail Shippers annual conference last week, joined the board in January.
It’s important for the board to look at history while respecting the changes brought by partial economic deregulation, Fuchs says, noting that the Staggers Act of 1980 made railroads much more profitable, productive, and safer.
“Nobody wants to turn the regulatory clock back to the pre-Staggers day,” Fuchs says.
But regulations must evolve as railroads have since Staggers, he says.
“We’re looking at some of the bigger regulatory issues, involving rate review and service and demurrage, and we’re taking a fresh look at reciprocal switching and commodity exemptions,” Fuchs says. “And we’re considering our options — one of the options is always the status quo.”
Most of the board’s efforts have been focused on reforming the way rate review cases are handled.
The board favors negotiated settlements between shippers and railroads handled through the board’s informal complaint process.
“Collaboration is better than litigation,” Fuchs says.
But the board realizes that small shippers often can’t afford to resolve disputes or effectively use the agency’s cumbersome process to challenge rates. The board’s staff last month released a report that proposed ways the board could streamline its rate review process.
In the most complex reviews, the board creates a hypothetical railroad to determine what costs should be. Board staff members spend time arguing about “hypothetical bathrooms for hypothetical employees at this hypothetical railroad,” Fuchs says, pointing to a recent case involving CSX Transportation and coal receiver Consumers Energy.
“It does make you wonder whether or not this is the most cost-effective way we can be thinking about reasonable rates,” Fuchs says. The board is likely to make changes to the process, he predicts.
The board’s hearing on demurrage and accessorial charges, which railroads levy on shippers to speed loading and unloading of freight cars, will be in the spotlight during the board’s oversight hearing on Wednesday and Thursday.
Fuchs says demurrage plays an important role in keeping railroads fluid, noting that the U.S. Railroad Administration effectively used demurrage charges to clear congestion on the East Coast during World War I.
Shipper complaints about the new policies are at a high level, Fuchs says.
“It’s something we want to get to the bottom of and make sure we’re understanding,” he says.
Fuchs says he’s data-driven and when weighing the issues, he will take into account that railroads are just one part of the transportation system.
Exclusionary charges and operating practices are rightly within the purview of the regulatory agencies. Someone has to provide an equitable forum for objectively gathering relevant info and suggesting a reasonable solution. The long haul/short haul disputes of 120-130 years ago should provide some guidance about reasonable cost and service issues.
I hear a bomb ticking……
Once again, our bureaucratic “govment” is 10 years behind the eight-ball. And like PTC, the STB and their brethren will demand that the railroads execute their “new” regulations within 6 months.
The board could easily have some software company create a computer model that would do the cost analysis for them, but that would probably be better done by a private company than through the government, most government software is bloated and tends not to work as intended or designed.
Robert; with all due respect; this is one area in which you are dead wrong. In the past 39 years since the Staggers Act; the pendulum has swung decidedly in favor of the railroads in terms of their ability to price more or less at will. If you take the intervening years since about 2006 – and I’m including 2008 during the Great Recession – rail rates have continued to increase despite what has been regular service failures. If a railroads service is acceptable, rates go up. If a railroads service stinks – rates still go up.
It is high time the STB take action to level the playing field by easing the process by which rate cases are handled and by providing captive shippers some measure of viable service alternative by enacting the NITL’s reciprocal switching proposal.
And I think this is especially important now that Wall Street is “managing the railroads” with their myopic focus on short term gain. With all this PSR nonsense; I am seeing more abuse of Class 1 power than at just about any time during my 40 year career in this industry.
Re: They’d do even better
Well, in the end, it comes down to #screw# or be #screwed#. And the guy who is losing the #screwing# battle will always run to daddy (aka government) for help.
Seem to me the railroads have merged themselves into a monopoly position with may shippers. The railroads choose to do this. Don’t forget, competition is HORRIBLE. Only idiots ACTUALLY like competition; the smart-n-savvy just say they do, and then ACTUALLY do the opposite (it’s called duplicity, it’s one of the most important words that exists) Competition limits profits, reduces bonuses, and causes more work. It’s MUCH better to limit competition. That’s why smart-n-savvy people, throughout history, always try to form monopolies. AND, monopolies always #screw# their costumers. THAT’S the entire point of being a monopoly in the first place.
So, now that daddy is involved, it’s up to the smart-n-savvy people on both side to start purchasing political scum in order to gain an advantage. If the railroad get #screwed# maybe they can cut a deal trading open-access for some other advantage. But, who knows; that’s what the smart-n-savvy people are paid to do: figure-out how to get the best deal and #screw# the other guy.
The government should stay out of all aspects of railroad operations other than safety. We’ve been down the path of railroad regulation with disastrous results. The railroads were on their deathbeds until the Staggers act and now they are prospering . They’d do even better if the government would butt out totally except for safety.)
I worked on a particular aspect of several rate cases on behalf of the railroad. Of those, only one was won by the railroad. The process was tedious for me and others working the team. It took much time out of our regular work. I would hope that this process would be replaced by something simpler.
Consumers and shippers can only hope that there will be some form of re-regulation to manage the molopoly or oligopoly power of class 1 railroads. They have too much power over the public and shippers.
Class 1s do not invest enough in infrastructure and capacity and spend more on share buybacks than Capital Expenditures. Too much money spent of lobbyists and lawyers to fight shippers.
Perhaps it is time to consider open access with safeguards against prejudicial treatment of “guest” operators.