Railroad Access and Competition Issues (CRS Report for Congress)
Premium Purchase PDF for $24.95 (16 pages)
add to cart or
subscribe for unlimited access
Pro Premium subscribers have free access to our full library of CRS reports.
Subscribe today, or
request a demo to learn more.
| Release Date |
Revised April 4, 2011 |
| Report Number |
RL34117 |
| Report Type |
Report |
| Authors |
John Frittelli, Specialist in Transportation Policy |
| Source Agency |
Congressional Research Service |
| Older Revisions |
-
Premium Revised Jan. 10, 2008 (17 pages, $24.95)
add
-
Premium Aug. 3, 2007 (19 pages, $24.95)
add
|
Summary:
Beginning in the late 1970s, Congress gave railroads flexibility to set rates and to enter into confidential contracts with their customers. Over the last decade, large railroads have consolidated and, particularly in recent years, have achieved higher profitability. These changes have left some bulk shippers, particularly those that claim to be "captive" to a single railroad, frustrated with what they perceive as poor rail service and exorbitant rates. "Captive shippers" claim that the railroad serving them acts like a monopolyâcharging excessively high rates and providing less service than they require.
Such complaints have led Congress to consider whether the present, largely deregulated, regime should be revised to accommodate the interests of "captive shippers." A major point of contention is whether current railroad industry practices should be changed to guarantee such shippers more railroad routing options. Legislation, supported by captive shippers and opposed by the railroads and other shippers, failed to reach the floor of either the House or Senate in the last Congress, and has been reintroduced in the 112th Congress (S. 49 and S. 158).
In the wake of renewed congressional interest, the Surface Transportation Board (STB or Board), successor agency of the Interstate Commerce Commission (ICC), is reviewing its policies with respect to railroad access and competition issues. It announced a hearing on "bottleneck rates" and "competitive access" matters. Changes in these policies might benefit some shippers of bulk products, such as coal and grain, but could be disadvantageous to shippers of other products, such as maritime containers and domestic truck trailers, that want railroads to maintain high levels of investment in order to provide fast, reliable service for high-value shipments.
The captive shipper issue has wider economic implications than just the division of revenue between railroads and their customers. Higher fuel prices, congestion on certain segments of the interstate highway system, and rising domestic and international trade volumes are driving shippers to demand more rail capacity. Freight revenues are a significant means of financing rail capacity because the railroads receive negligible public financing. If it acts in this area, Congress would face consideration of how a legislated or regulatory solution to the "captive shipper" problem would affect the development of a more robust and efficient railroad system.
