STB RELEASES STUDY

Captive Shipper Study Shows Abuse of Railroad "Power"

  A Surface Transportation Board (STB) study examining allegations that railroads hold shippers captive to service at higher rates, was released November 12, and has captive shippers claiming the study is definitive evidence that railroads "abuse monopoly power...resulting in higher prices for American consumers, the agricultural sector and rural America."  Shippers contend railroads have abused a "unique exemption" from federal antitrust law, charging rates 500-700% above their cost and refusing to provide service to shippers who are captive to a single railroad.  Consumers United for Rail Equity (CURE), a long-standing coalition of shippers, said the study provides "evidence that is overwhelming and stark...clearly proving that freight railroad overcharges are resulting in a hidden tax..."  The study shows that 44% of rail traffic tonnage is captive to a single railroad, with rural areas representing 35% of grain harvest, especially hard hit.  The percentage of shippers captive to a single line has increased since 2001. STB researchers said they found it difficult to make certain determinations called for in the report's mandate because of a lack of transparency in railroad operations.