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Shippers Seek Rail Competition

by Dave Wilkins, Idaho Staff Writer
Capital Press, May 6, 2005

Backers of a rail competition bill are giving it another shot.

Introduced in the U.S. Senate last week, the Railroad Competition Act of 2005 is intended to help rail customers who have little or no choice of which carriers they use.

"This bill seeks to return the power to the customers and bring capitalism back into many regions where rail shipping has strayed into monopoly," Sen. Larry Craig, R-Idaho, said in a news release.

The bill has several co-sponsors, including Craig, Sen. Conrad Burns, R-Mont., and Sen. Max Baucus, D-Mont.

Many areas of the country, including Montana and Southern Idaho, have only one major railroad serving the region. Shippers in those areas are said to be "captive" rail customers.

The lack of competition has hurt shippers of farm commodities and other goods, according to the bill's supporters.

The bill would ensure that rail customers receive rate quotes for shipments between various points on a railroad's system and provide regional and short line railroads access to major systems.

The bill would also provide captive rail customers with access to federal arbitration when they're unable to resolve disputes with the railroad. Under the current system, customers can spend millions in legal fees to challenge freight rates.

Past efforts to get a rail competition bill through Congress have failed. A similar bill in 2003 got a hearing, but didn't make it out of committee.

The new bill has broad-based national support from a coalition of shippers and stands a good chance of passage, said Idaho farmer Evan Hayes, vice president of the National Barley Growers Association.

Supporters of the legislation include the national barley group as well as the National Association of Wheat Growers.

In Idaho, the legislation is supported by the Idaho Grain Producers Association, Potato Growers of Idaho, Idaho Sugarbeet Growers Association and the timber industry.

"We have a pretty strong base of support here in Idaho," Hayes said by cell phone earlier this week while preparing a field for barley planting near Soda Springs.

"Here in Idaho, we're basically captive to one railroad," he said.

The railroad industry has consolidated to the point that there are only four major carriers left, Hayes said. There were once more than 40 major railroads in the country.

The bill would force the few remaining carriers to be more competitive.

The legislation would provide for "final offer arbitration" as a means of resolving disputes. When deadlocked, customers and the railroad would bring their final offers to a federal mediator, who would select one or the other.

In the past, disputes have gone to the Surface Transportation Board for often lengthy and expensive legal proceedings. Final offer arbitration would expedite the process and make it much less costly, Hayes said.

Another provision of the bill would establish a transportation oversight committee within the U.S. Department of Agriculture.

"That's a big item," Hayes said. "We look at that as a very positive statement."

The bill would also provide $35 billion in guaranteed government loans for railroad infrastructure improvement, a 10-fold increase from what was offered in the 2003 version.

Growers and shippers want the railroads to succeed, but they want dealings to be fair, Hayes said.

"We understand that we need a healthy railroad, and if we don't have a healthy railroad, we're in trouble," he said.

The Railroad Competition Act

Dave Wilkins is based in Twin Falls, Idaho.
Shippers Seek Rail Competition
Capital Press, May 6 , 2005

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