Regulators back streamlined system to challenge rail rates

OMAHA, Neb. (AP) — Shippers are praising proposed changes that federal regulators have approved to the system used to dispute rates railroads charge, aiming to update a system that is so costly and cumbersome it is little used.

The new procedures the U.S. Surface Transportation Board approved this week may give shippers a way to resolve rate disputes of less than $4 million in a matter of months instead of years, and at a much lower cost. But the major freight railroads expressed reservations about the new system that would take effect sometime early next year.

“The board has long sought a suitable method of making adjudication of smaller rate disputes accessible, reasonable, and less time-consuming for affected parties," STB Chairman Martin Oberman said. “Experience has shown that the board’s prior efforts to provide rate review methods suitable for smaller disputes have been rarely used by shippers.”

The American Chemistry Council trade group estimated that challenging the rates railroads charge under the existing system costs between $4 million and $5 million and takes about five years on average. So that makes it impractical for most companies to use.

“These new procedures are an important move in the right direction that will provide the STB, railroads and shippers with a speedier option for resolving small rate cases in the absence of effective market competition,” said Kimberly Wise White, the American Chemistry Council’s vice president of Regulatory and Scientific Affairs.

The STB said that if all seven of the largest railroads agree to it, a new arbitration system will be adopted to resolve these rate disputes. But if Union Pacific, BNSF, Norfolk Southern, CSX, Kansas City Southern, Canadian Pacific and Canadian National don't all promise to abide by...