#Stb rail full

Unfortunately, SAC fails on economics grounds as well. The cost and complexity might be somewhat tolerable if SAC truly was the “gold standard” for reviewing rates that some claim it to be.

#Stb rail full

Because of the incredible complexity involved, Russell Pittman of the US Department of Justice’s Antitrust Division concluded that SAC “ has become what a reviewing court feared it would be: ‘a full employment bill for economists.’” Recent SAC cases have taken an average of 5 years to complete and cost each shipper well over $5 million.

If that sounds ridiculously complicated that’s because it is. To successfully challenge a rate, a shipper must design, on paper, an entire railroad business, and prove that it could serve the same traffic at a lower cost than the rates charged by the existing railroad. The heart of the problem plaguing the STB’s current rate review process stems from the Board’s arcane Stand-Alone-Cost (SAC) standard for measuring the reasonableness of rail rates. The Surface Transportation Board’s (STB) Acting Chairman, Ann Begeman, perfectly encapsulated these concerns when she declared that the Board’s rate review process “is too costly, too time consuming, and too unpredictable.” As members of the Board continue to look for better and less bureaucratic ways to operate, a sensible proposal has emerged in the form of new legislation introduced by Senator Tammy Baldwin (D-WI), “ Rail Shipper Fairness Act.” There is near universal agreement that the agency charged with resolving freight rail issues is stymied by its own outdated and overly-burdensome rules. STB Reform: Providing a Much Needed Dose of Reality May 26, 2017