NGFA Reiterates Rail Competition Concerns to STB

The NGFA’s statement also noted that average rail rates for agricultural shipments increased 30 percent from 2006-10, which has a disproportionate impact on low-margin commodity-based industries like the grain, oilseed and feed sectors. “…[T]he U.S. agricultural industry does not necessarily seek to be the ‘cheapest’ freight compared to other industries – if it is, it may lose service at some stage,” the NGFA said. “But if rates continue to spiral upward (even in recession periods like 2007-08), some agricultural production regions will lose business volume. If certain sections of the United States lose markets because of excessive transportation costs, then the U.S. agricultural sector as a whole will lose its competitive edge in global markets. And the nation will lose jobs and the extremely positive contribution U.S. agriculture makes to the nation’s economy.”

• STB Rail Arbitration: The NGFA reiterated its previous comments encouraging the STB to establish a government-based dispute-resolution system to serve a broader range of shippers and other industries not eligible for service under the NGFA’s rail arbitration service. It also could serve to resolve certain types of disputes between railroads and their customers that currently are not eligible for NGFA rail arbitration, such as some unreasonable practice complaints. “…[C]reating better access to dispute-resolution, in the NGFA’s view, does not encourage litigation,” the statement read. “To the contrary, the NGFA’s experience has been that it actually discourages litigation and its many downsides, such as excessive costs and lengthy time periods for resolution…,by encouraging business-to-business dialogue that quickly and efficiently can eliminate challenges to remaining competitive.”