US feed groups and growers applaud passage of bill to reform Surface Transportation Board

The Surface Transportation Board (STB) was created in the ICC Termination Act of 1995 and is the successor agency to the Interstate Commerce Commission. It has regulatory jurisdiction over the US railroad rates, mergers, line acquisitions, new rail-line builds, and other rail system issues.

The panel was never reformed until now. The reauthorization bill passed the House with bipartisan support this week after clearing the Senate by unanimous consent in June.

The National Grain and Feed Association (NGFA) was among the groups to speak out in favor of the bill, S. 808​​, which amends the powers of the STB and reauthorizes it.  

The American Soybean Association [ASA] also said it hailed the passage of S.808, while the National Corn Growers Association (NCGA) wrote in support of the legislation when it first was introduced in the spring.

The feed and crop growers’ lobby had called for the STB to have the power to oversee disagreements that could happen between freight rail companies and producers shipping products.

They also wanted the board to be able to review or investigate rail practices, without the need to wait for a formal complaint.

“Shippers and receivers of agricultural products rely heavily on rail transportation and partner with the nation’s rail carriers to get commodities to market,”​ said NGFA President Randy Gordon of the recent approval. “However, the STB needs to have the right tools to provide the necessary oversight of freight railroads. This legislation goes a long way in improving and strengthening the STB so it can carry out its statutory responsibilities and provide the meaningful safeguards intended under existing law.”​

Bill provisions ​

The most important sections of the bill involve the establishment of timelines and procedures for STB's dispute resolution process, providing the board with the authority to initiate rate review investigations, and increasing the board's membership from three to five. It now awaits the signature of US President Obama.

Among the details of the bill that were important to the feed organizations and grower associations were that the board will be able to continue at least one of the streamlined methods put in place to review challenges to shipper rail rates, reported the NGFA.

The STB also has to issue several reports to Congress covering: its activities; every time it starts an investigation; provide quarterly rail rate review cases; formal and informal service complaints’ and on the status of pending regulatory proceedings, reported the NGFA.

The new STB would have five members instead of three, which should improve communication abilities for members of the board, said NGFA officials. Previously, a public meeting was necessary any time two board members spoke to each other about certain topics. 

The legislation also established an arbitration process to address rates, charges, practices and rules, said NGFA officials.

However, both sides would have to agree to take part and it would only be an option if the rail carrier was dominant in that market, said officials. And, it could not be used to address issues with a wide scope such as labor-protective conditions or differences between multiple railroads.

Additionally, the bill called for the congressional Government Accountability Office to review proposed contracts that included movements that had multiple origin-destination pairs.

Once signed, the legislation also will allow for the board to become an independent US agency, instead of being in the Department of Transportation, said officials in the bill.