“We want to be competitive and expand (agricultural) businesses and create jobs,” Keith testified. “To do that, we need a partner in the rail industry to assist in responding to competitive market forces, both domestically and internationally. We need reasonable rates, reasonable business terms and quality service. We also need access to a reasonable and cost-effective method to address problems with rates, terms and service.”
One way to do that, the NGFA suggested, was for the STB to establish a government-based dispute-resolution system to serve a broader range of shippers and other industries that are not NGFA-member companies and hence not eligible for the NGFA’s rail arbitration service. An STB-based system also could be used to resolve certain types of rail-related disputes currently not eligible for NGFA rail arbitration, such as some unreasonable practice complaints. “Whatever dispute-settlement system is agreed to, it must be understandable and practical,” the NGFA advised. “And it needs to encourage one-on-one dialogue between carriers and their customers.”
The NGFA in previous statements submitted as part of the rail competition proceeding also recommended that the STB reconsider its previous decision on the so-called three benchmark small rail rate case by increasing to at least $3 million over five years the amount that could be recovered by a shipper that wins a rate case brought against a carrier. The current amount that can be recouped in such cases is only $1 million, which the NGFA noted creates a barrier to shippers given the cost involved in filing a case and the likelihood of prevailing. The NGFA has 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.