The Surface Transportation Board is planning to consider a voluntary arbitration program aimed at addressing small rate disputes.
The board intends to conduct a rulemaking proceeding on this issue, according to a preannouncement notice for the Federal Register. As part of the proceeding, the board will take comments on the issue.
Shippers that could be affected include those within the agricultural, chemical, industrial and scrap recycling industries, among others.
The STB is considering creating a voluntary small rate case arbitration program after five Class I railroads asked the board this summer for one. This program would function alongside the board’s existing arbitration program.
The five railroads — CN (NYSE: CNI), CSX (NASDAQ: CSX), Kansas City Southern (NYSE: KSU), Norfolk Southern (NYSE: NSC) and Union Pacific (NYSE: UNP) — filed their requests on July 31.
According to their petition as described in the preannouncement notice, the railroads would participate in the proposed program for five years, provided that the board adopts certain terms, such as a right to withdraw from the program if the board adopts the final offer rate review process (FORR) and doesn’t exempt carriers that participate in the FORR process.
But trade groups representing shippers’ interests may not be enthusiastic. In their own filings to the STB regarding the Class I railroads’ petition, they generally objected to the petitioners’ requested program, according to the preannouncement notice. However, the groups said they were agreeable to some modifications to the proposed program, although they still objected to the program overall. The groups’ objections pertain to confidentiality, exemption from the FORR and a prohibition on revenue adequacy considerations, according to the preannouncement notice.
The groups involved in these actions included the National Grain and Feed Association; Olin Corp.; American Fuel & Petrochemical Manufacturers; American Chemistry Council; Corn Refiners Association, Institute of Scrap Recycling Industries; National Industrial Transportation League; The Chlorine Institute; and The Fertilizer Institute.
The U.S. Department of Agriculture has also been following the petition.
According to the preannouncement notice, the board favors the resolution of disputes through alternative dispute resolution whenever possible. Furthermore, the board’s Rate Reform Task Force recommended the consideration of arbitration for small disputes. As such, the board approved instituting a rulemaking process pertaining to the Class I railroads’ request.
There will be opportunities to provide comments as the proceeding progresses, according to the notice.
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