Bill would make federal antitrust laws applicable to all common carriers


Capital Press

Congress is taking another crack at railroad antitrust legislation, and supporters believe this could be the year a bill finally passes.

The House Judiciary Committee on Sept. 16 approved the Railroad Antitrust Enforcement Act of 2009.

According to supporters, the bill would close a loophole that has allowed the major railroads to remain exempt from antitrust regulation.

Similar legislation has come before Congress several times in the past, but has never gained enough traction for passage.

This year could be different, said Travis Jones, executive director of the Idaho Grain Producers Association.

"We believe there's been a significant increase in support to get a bill through Congress and to the president's desk this year," he said.

The House bill would amend the Clayton Act to make federal antitrust laws applicable to all common carriers subject to the Surface Transportation Board.

It would also amend the Federal Trade Commission Act to authorize FTC enforcement against rail carriers for unfair methods of competition and allow private parties to seek injunctive relief against a rail carrier for violation of antitrust laws.

In several areas of the country, shippers are essentially held captive to a single railroad and customers have had little recourse when disputing rates and surcharges, Jones said.

"Grain producers in Idaho are very well aware that we need the railroad," he said. "We have to have them, but we just haven't had any luck in resolving disputes."

The freight rate for most grain shipped from Idaho is anywhere from 180 to 300 percent of the railroad's variable costs to move the product, industry officials have estimated.

The Staggers Rail Act of 1980 established 180 percent of variable costs as the threshold of "unreasonableness."

The major railroads remain firmly opposed to antitrust legislation. The House bill, sponsored by Rep. Tammy Baldwin, D-Wis., would create additional costs and administrative burdens for the railroads that would ultimately impact customers, industry officials said.

"This bill is not just about antitrust law, it is an attempt to overturn long-established regulatory policies that have provided enormous benefits to shippers and American consumers," J. Michael Hemmer, a senior vice president for Union Pacific Railroad, told the House judiciary committee earlier this year.

While grain groups in the West and Midwest have been generally supportive of increased rail competition, some have doubts that a stand alone antitrust bill is the best approach.

"We're not entirely sure it's the solution," said Lola Raska, executive director of the Montana Grain Growers Association.

The Montana group is concerned that antitrust legislation would result in additional costs to the railroads that would be passed on to shippers -- and eventually to producers.

"Anything that ultimately passes costs on to the producer we have to take a look at," Raska said.

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