Safe, reliable, and affordable rail transportation is critical to the business of chemistry. Nearly one quarter of U.S. shipments of chemical products travel by rail, and these shipments are essential to safe drinking water, a plentiful food supply, life-saving medicines, and more.
The chemical industry is one of the largest customers of freight rail. We rely on the railroads to provide reliable and affordable service to deliver our products. Unfortunately, our members are being subjected to skyrocketing rates, poor service and antiquated policies.
In 1980, Congress passed the Staggers Rail Act of 1980 to reform the nation’s railroads. Since then a series of mergers has reduced the number of Class I railroads from 26 to just seven. This consolidation, along with policies designed to protect the economic health of the rail industry, has driven freight rail rates steadily higher. Since 2001, real rates for rail shippers have increased 30% while railroad profits per ton/mile have tripled. Defying the basic principles of supply and demand, rates have risen even though the volume of freight carried by the railroads has decreased 10% since 2006.
To balance the needs of railroads and their customers, Congress created the Surface Transportation Board (STB). The Board is charged with resolving rail disputes, ensuring that railroads are able to earn adequate returns, and preventing railroads from abusing their market power over their customers.
While the financial health of the railroads has improved significantly, the STB suffers from persistent administrative and policy problems that disadvantage freight rail customers. For instance, the Board’s rate review procedures are overly complex, burdensome, and unworkable for most shippers. In addition, STB policies effectively block many shippers from accessing competitive rail service.
ACC is working with the Rail Customer Coalition to advance practical regulatory reforms at the STB that would allow greater access to competitive freight rail service and that would make the Board operate more effectively for all stakeholders.
The STB should implement a more efficient, workable method to review and determine the reasonableness of freight rail rates that accounts for the dramatic changes in the railroad industry. The Board should recognize that railroads are financially sound and adopt a simpler and more realistic standard for reviewing rates.
The STB should allow for “competitive switching,” which would allow a rail customer that is served by a single major railroad to request to have its traffic switched to a different carrier at a nearby interchange, allowing the shipper to seek competing bids for rail service.
Most major U.S. railroads are implementing new operating models designed to cut costs and shift burdens to rail customers. Congress and STB should ensure that such actions do not lead to service failures or compromise the future resiliency of the rail network. In addition, the Board should prevent railroads from imposing unreasonable fees and rules on shippers.
ACC and its
members are committed to the safe transportation of chemicals. Our member companies devote significant resources toward emergency response training and tank car safety.
A comprehensive Frderal regulatory framework addresses all facets of rail safety and security. By working together, shippers and rail carriers along with the federal government have been able to greatly reduce the number of accidents and their impacts. According to the Association of American Railroads, rail hazmat accident rates have declined 91 percent since 1980, and more than 99.999 percent of rail hazmat shipments reach their destination without a release caused by a train accident.
Responsible Care® initiative, member companies and our partners are committed to enhancing every aspect of rail safety. Collectively, our member companies have invested billions of dollars in training, technology and tank car safety and will continue to do so in the future. In addition, ACC helps first responders prepare for emergencies through programs like
Policymakers need to pursue a comprehensive approach to safety that starts with policies that prevent rail accidents and then work cooperatively with stakeholders to reduce potential impacts.
Efforts to upgrade tank cars should be driven by science-based performance standards developed through collaboration between federal agencies, railroads, shippers and tank car manufacturers.
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