July 3, 2023

Senators reintroduce ‘reasonable’ rail service bill


A bipartisan bill that charges the Surface Transportation Board to better define what should constitute “reasonable” rail service has been reintroduced in the Senate.

The Reliable Rail Service Act, introduced by Sens. Tammy Baldwin, D-Wis., and Roger Marshall, R-Kan., charges the Surface Transportation Board to refine the definition of the common carrier obligation, which the senators say is currently ambiguous.

The common carrier obligation calls upon the railroads to provide rail service on a reasonable request. The federal statute came out of the Staggers Act of 1980, which deregulated the freight rail industry. In return for deregulating the rail industry and enabling the railroads to have greater input in their business decisions, the freight railroads must provide service to rail shippers.

Baldwin had introduced a similar bill last September.

According to a bill summary provided by Baldwin, the legislation seeks to clarify the common carrier obligation and establish specific criteria for STB to determine whether a rail carrier has violated the common carrier obligation.

That criteria includes the impacts that reductions or changes in rail service might have had on rail service; the availability and maintenance of reasonable local service schedules and delivery windows; the impacts of reductions in employment levels and in equipment; and the ability of the railroad to meet local operational and service requirements.

“The Reliable Rail Service Act gives the Board necessary statutory clarity along with significant discretion and flexibility to account for variations unique to local rail carrier and shipper circumstances, which will provide transparency for all stakeholders while improving STB’s oversight to help address our nation’s freight railroad supply chain challenges and lower costs for consumers,” said the bill summary.

Defining what should be considered as sufficient rail service and determining whether individual railroads have been meeting their common carrier obligation have been key issues in recent years. A number of rail shippers and rail unions have argued over the last year in particular that the decline in railroads’ head count levels, which they attributed to precision scheduled railroading as well as to layoffs during COVID-19 pandemic, may have hampered rail service because there weren’t enough crews and resources available to meet market demand. 

Meanwhile, recent proceedings involving BNSF (NYSE: BRK-B) and Union Pacific (NYSE: UNP) have also raised questions about whether STB should redefine the common carrier obligation and whether Congress can grant the board the authority to do so.

Last week’s introduction of the Reliable Rail Service Act garnered support from more than 30 shippers groups as well as 14 rail unions.

“Clarification of the common carrier obligation has been needed for decades and this bipartisan bill provides Surface Transportation Board (STB) with clear oversight rules to help address our nation’s freight railroad supply chain challenges and improve rail service for agricultural shippers,” said Mike Seyfert, president and CEO of the National Grain and Feed Association, in a news release last week. 

“American dairy producers rely upon fair and consistent rail service on both ends of their business — from sourcing feed and inputs to transporting dairy products to end customers, both domestic and foreign,” said Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF). “The logistics challenges that have plagued the dairy industry over the past several years have been exacerbated by outdated rules governing rail freight movements. 

“NMPF thanks Senators Baldwin and Marshall for introducing the bipartisan Reliable Rail Service Act today that would provide statutory clarity and enhanced oversight to the Surface Transportation Board to correct the rail transportation challenges faced by the U.S. dairy industry. We look forward to working with Congress to move this important legislation into law.”

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