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Rockefeller Bill Could Hurt Larger Rails

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  • Rockefeller Bill Could Hurt Larger Rails

    Rockefeller to introduce antitrust regulation against rails

    West Virginia Senator Jay Rockefeller is poised to introduce the first major railroad industry regulations in nearly three decades. Transportation trade publication The Journal of Commerce reports that the long-serving Democrat, who chairs the Senate, Commerce, Science, and Transportation Committee, may present a bill within days.



    This could be bad news for the rail giants like Union-Pacific and Burlington Northern, which are only just beginning to recover from the nation's deep recession.
    For those of you who find it ironic that a Senator named Rockefeller plans to push antitrust laws, don't be too surprised. He's been a determined supporter of re-regulation of railroads for years. What's changed is that in a Democrat-controlled Congress, such a bill might have a chance.

    It's the latest battle in the centuries-long conflict between the oligopolistic freight rail industry and regulators. The most recent era of tensions began in 1980, when the rail lobby steamrolled through Congress the Staggers Act, designed to deregulate the industry and keep railroad companies in business, while keeping prices reasonable. The [un?]intended outcome was massive consolidation, from 63 Class-I railroads operating in the U.S. in 1976 to less than a dozen today. The market share of the big four (the other two are CSX and Norfolk Southern) is around 90 percent.

    So if I'm in charge of, for instance, a small Louisiana utility cooperative that ships coal, or a materials conglomerate Dow that ships chemicals, and I think Union-Pacific is charging me too much money, I can't take my business elsewhere. I probably can't sue, either, as the industry is largely exempt from antitrust challenges in court. I can appeal to the government-run Surface Transportation Board, but that may cost hundreds of thousands of dollars and -- re-regulation advocates like Rockefeller say -- I'll likely lose.

    Based on the content of an earlier bill, tabled in June, Rockefeller's new rules will probably beef up the regulatory power and budget of the Surface Transportation Board, and might strip some antitrust exemptions. Such changes could lead to millions of dollars in decreased revenue for the rail industry, so look for a fierce (albeit low-profile) Capitol Hill fight between rail lobbyists, antitrust regulators, and shipper advocates in the coming months.
    Steve Gordon
    Gordon, Elias & Seely, L.L.P.
    FELA Lawyer
    FELA Lawyer Blog
    Serving Injured Railroad Employees Nationwide
    Call for a FELA Lawyer 24/7/365
    800-773-6770

  • #2
    Might this bill result in the breakup of the dozen big railroads into more regional lines? Would we likely see railroads, like BNSF, shed some of their relatively recent aquisitions such as the Achiton Topeka & Sante Fe, break them off while still retaining the Transcon? Would the Transcon be shared between the resultant Class I's?

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    • #3
      Originally posted by Hobo View Post
      Might this bill result in the breakup of the dozen big railroads into more regional lines? Would we likely see railroads, like BNSF, shed some of their relatively recent aquisitions such as the Achiton Topeka & Sante Fe, break them off while still retaining the Transcon? Would the Transcon be shared between the resultant Class I's?
      All possible. it is going to be very interesting where the Unions fall on this issue. Do you or anyone else know their positions.

      It will certainly open up a lot more DLC spots [ROFLOL!]

      Steve
      Steve Gordon
      Gordon, Elias & Seely, L.L.P.
      FELA Lawyer
      FELA Lawyer Blog
      Serving Injured Railroad Employees Nationwide
      Call for a FELA Lawyer 24/7/365
      800-773-6770

      Comment


      • #4
        Originally posted by FELA FELLA View Post
        All possible. it is going to be very interesting where the Unions fall on this issue. Do you or anyone else know their positions.

        It will certainly open up a lot more DLC spots [ROFLOL!]

        Steve
        Don't know what UTU thinks about this. I am sure that the UTU leadership is all over this issue, LOL! :tongue:
        Last edited by Hobo; 09-15-2009, 05:03 AM.

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        • #5
          Well our wonderful national leadership was all over supporting RSIA and all that has done has served to bite us in the butt and has not increased jobs one iota.
          sigpic"The fact that we are here today to debate raising America 's debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America 's debt weakens us domestically and internationally. Leadership means that, "the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."
          ~ Senator Barack H. Obama, March 2006

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          • #6
            another monopoly being broken? say it isn't so.
            -sigpicLet's All Hunch!

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            • #7
              This proposal is not a very good one. Of course our idiot Congress don't know or read any history and do not realize that deregulation is what saved the RR industry 30 years or so ago. As for these "captive shippers" I am not inclined to be all that sympathetic to them. If they can prove that they pay a significantly higher rate for freight based on miles, labor, fuel, and other factors then the rate should probably be adjusted. Most of them (in my opinion) just want to bitch and fucking moan about rates going up because of fuel price increases etc. when their new shipping contract come around. If they feel the RR is too expensive then let the motherfuckers use trucks instead, there is an alternative to rail after all..... oh wait that would be even more expensive to haul 15,000 net tons of coal or grain with 18 wheelers. So how about Johny grain elevator owner shut the fuck up and pay your fucking bill and be happy that a busy ass RR is even willing to put up with spotting a handful of cars here and there and picking up your piecemeal loads.

              Oh yeah did I mention I have a bad attitude?

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              • #8
                Penguin,

                I agree with most of what you posted (good post BTW,) but in some cases when fuel was through the roof last year, NS especially, more than passed along the fuel surcharge. That is to say they made money off of the fuel surcharge, not just passed along the extra cost. True, a lot of the shippers are bitching & moaning & I agree 100%, haul your 15,000 tons by some other method & see how much it costs!! Then again, in some cases, the carriers treat the customers like sh!t & rape them on charges, so they reap what they sew in some instances. I'm not for re-regulation. Hell, congress hasn't done much if anything to regulate trading, banking, credit default swaps etc., to fix the financial mess those pricks got us in to last year... so who knows about this set of proposed regulations gaining any steam either.
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                • #9
                  I'm thinking it means you will see SF trains going to Yuma and UP trains go where they usually wouldn't. Meaning mergers didn't mean shit... They still can go where they want. A direct result of charging the same prices while everyone is hurting. Kinda like stealing the same amount when business was good but forgetting to cut back when business took a dive...

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