New rail study: “Policy must tolerate market power”

From: Railway Age

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For more than three decades, railroad regulators have used the same method to determine which shippers are captive; and, if so, to determine a remedy to limit railroad market power and assure rates charged captive shippers are reasonable.

The process—part established by Congress and part by the Interstate Commerce Commission and its successor, the Surface Transportation Board (STB)—is complex, lengthy, expensive and rarely understood outside the small army of attorneys, accountants, economists, financial experts, specialists in railroad operations, statisticians and other technicians who collectively pocket millions of dollars to represent shippers and railroads through a process so convoluted that only the prince of convolution, engineer Rube Goldberg, could love it.


The two current STB members—Acting Chairman Deb Miller, a Democrat, and Republican Ann Begeman, both from rural agricultural states—also criticize the existing process for protecting captive shippers. “The board has a duty to ensure that shippers have a viable means to challenge a rate,” Begeman said in a recent dissent. “I already know that is not the case for grain shippers.”

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