The Surface Transportation Board has rejected a request by groups of rail shippers to temporarily suspend a rule-making process on whether to establish a voluntary arbitration program for low-fare disputes.
But the board has asked the Class I railways to indicate whether they plan to agree to tariff arbitration if revenue adequacy is considered, STB said on Wednesday.
The STB’s decision, available here, also amends the deadline by which comments can be received on this and another Final Offer Tariff Review (FORR) proceeding that also seeks to resolve small tariff disputes.
STB launched a rule-making process in November in response to the Class I railways’ joint petition asking the board to amend existing arbitration rules so that a voluntary arbitration program for small cases. tariffs can be established. Litigation over low rates involves relief caps of $ 4 million or less.
Class I railways have previously said that the proposed arbitration program would provide meaningful access to tariff revision for small tariff disputes, as it would be inexpensive and consistent with statutory and economic principles.
But five groups of rail shippers – the American Chemistry Council, the Corn Refiners Association, the National Industrial Transportation League, the Chlorine Institute and the Fertilizer Institute – wanted the STB to temporarily stay the process until the council could get it. a commitment from Class I railways as to whether they would still participate in the program if an arbitrator considers revenue adequacy when adjudicating a tariff dispute. The National Grain and Feed Association also provided support to the shipper groups.
Revenue adequacy is when a railway “achieves a net rate of return on investment that is at least equal to the current cost of capital to the rail industry” during the previous year, according to STB . Railways and shippers have wrestled with revenue adequacy for years, with shippers saying offering alternative business models that calculate revenue adequacy could make rail fare challenges more accessible to captive shippers who do not. ‘have no viable alternative rail option.
But in Tuesday’s decision, the board said it couldn’t ask Class I railways for that commitment, as public speech and commentary have yet to take place on the matter. But the STB also said it had emphasized that it expected rail carriers to express their position on revenue adequacy in their comments.
“[The] Essentially, the joint shippers’ motion seeks to truncate the rulemaking process by requiring rail carriers to commit to participating in the proposed arbitration program on the sole issue of revenue adequacy before the case is filed. be fully developed, âSTB said in its decision on Tuesday. . But “ask the petitioners [rail carriers] making the commitment sought by the joint shippers at this point would be premature, as the petitioners are likely still developing their position on this and other issues. â¦ In addition, even if a carrier now takes a position on its willingness to participate in an arbitration program, the final decision of the carrier could change depending on subsequent developments in the arbitration case and the FORR case.
âCertainly, the board made it clear that a ban on methodologies and evidence relating to income adequacy was not an acceptable limitation of the arbitration program. He fully expects rail carriers to convey in their comments their position on this important feature âof the regulation, the STB said.
While public comments on the making of arbitration rules and the making of the rules on FORR are still expected on January 14, the deadline for response comments has been extended to April 15.
Subscribe to FreightWaves email newsletters and get the latest freight information straight to your inbox.
Click here for more FreightWaves articles by Joanna Marsh.