Association points out lack of railroad competition for animal feed transport

The National Grain and Feed Association said that while adequate competition to discipline the market behavior of rail carriers exists in some marketplace situations, such as in the case with other modes of transportation, cost-effective solutions are not in place for rail customers when a lack of market competition exists. NGFA submitted these comments to the federal Surface Transportation Board and suggested ways to restore balance in the railroad industry for feed transportation.
In its comments, NGFA suggested that STB address switching charges by establishing a revenue-to-variable-cost threshold that, if exceeded, would require railroad companies to demonstrate that such charges are reasonable. The association also suggested the STB reconsider its previous decision on the three benchmark small rail rate case by increasing to at least $3 million over five years the amount that would be recoverable by a shipper that wins a rate case brought against a carrier.
The comments were issued as a last step before a June 22 STB public hearing on rail competition, at which NGFA President Kendell Keith is scheduled to speak on behalf of rail shippers and receivers of feed and feed ingredients.