MAC Joins Rail Customers on Capitol Hill
to Promote Reform Legislation
Cooperatives commend Klobuchar and Ellison for their support
St. Paul, Minn. (March 7, 2008) – The Minnesota Association of Cooperatives (MAC) and other rail customers from across the country will converge on Washington, D.C., on March 12 to urge Congress to pass reform legislation aimed at preventing the abuses that have become commonplace in the freight rail industry.
Sponsored by Consumers United for Rail Equity (CURE), Rail Customer Day is an opportunity for local rail customers to bring important railroad issues to the attention of their representative(s) in Washington, D.C. Rail customers will address the railroads’ outrageous rail rates and unreliable service as well as the complacent attitude of the Surface Transportation Board (STB), the industry’s regulatory body whose laissez faire attitude has led to an industry rife with these monopoly abuses.
“MAC thanks Sen. Amy Klobuchar and Rep. Keith Ellison for being the most recent co-sponsors of H.R. 1650, the Railroad Antitrust Enforcement Act, this week, just in time for rail lobby day next week. Minnesotans are being hard hit by the increased costs experienced by captive rail shippers,” said Amy Fredregill, MAC vice president. “Our state’s farmers are typically members of the rural electric co-ops that are experiencing much higher rates due to the railroads increasing the cost of coal transportation. Consumers in turn are being forced to cover these increased costs. The Consumer Federation of America estimates the ‘cost of captivity’ at $300 annually for every family in the United States.”
Klobuchar and other members of the delegation have also signed on to the Surface Transportation Reform Bill in the Senate and House. Fredregill said MAC appreciates their leadership and encourages all members of the Minnesota delegation to support both pieces of legislation. Both bills are needed to address the issues of captive rail customers.
“For too long the Surface Transportation Board has been failing to perform its role of preventing monopolistic behavior by certain railroads, and this failure to perform has led to higher consumer electric bills and increased prices for goods and services,” said Bill Oemichen, MAC president and CEO. “Competition is vital to maintaining a marketplace for high-quality goods and services at a reasonable price, and the transition of our rail infrastructure through mergers where there are now only a few main railroads means the cost of transporting our nation’s goods and services has increased dramatically.”
In 1980, Congress passed the Staggers Rail Act with the intent of reinvigorating the railroad industry through market competition. At the same time, the legislation charged the Interstate Commerce Commission—now the STB—with protecting rail customers from unreasonable rates and practices where transportation competition does not exist. However, the STB has consistently handed down policy decisions that favor the railroads’ bottom lines instead of fairness to rail customers and consumers, according to Oemichen.
MAC and CURE support congressional efforts to bring accountability and fairness to the rail industry to help put a stop to the abusive behavior directed at rail customers and consumers. Legislation includes:
- The Railroad Antitrust Enforcement Act of 2007 (S. 772/H.R. 1650): These bills would repeal railroad antitrust exemptions and allow the U.S. Department of Justice and the Federal Trade Commission (FTC) to review mergers under antitrust law. The Senate Judiciary Committee reported out S. 772 in a unanimous bipartisan vote last year and the legislation currently is awaiting action on the Senate floor.
- The Railroad Competition and Service Improvement Act of 2007(S. 935/H.R. 2125): These bills would require the STB to address rail-service problems, streamline the rate challenge process, and remove barriers to competition. Rep. James Oberstar is the primary author of H.R. 2125.
Consumers United for Rail Equity (CURE) represents a wide variety of rail customers including public utilities, and rural electric co-ops; agriculture; chemical, ethanol, cement, and other manufacturers; forest and paper companies; and their customers. For more information about CURE visit: www.railcure.org
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