The National Grain and Feed Association (NGFA) has called on the federal Surface Transportation Board (STB) to improve its rules and policies to improve the ability of agricultural shippers to challenge unreasonable rail freight rates.
In a statement submitted to the agency, the NGFA commended the STB for proposing changes and soliciting public comments on the current methods available to shippers to challenge unreasonable rates. But the nation’s leading association representing shippers of grains, oilseeds, feed and feed ingredients, and other grain products said the agency’s proposals fell well short of achieving its stated goal.
The NGFA instead urged the STB to undertake a more comprehensive, in-depth review of its so-called “simplified standards” for rail rate regulation, with a goal of proposing further and more significant modifications. The NGFA said if the STB finds that its current methods for challenging unreasonable freight rates are inadequate – as the NGFA believes – the agency should ask Congress for additional statutory authority “designed to provide genuinely simplified and expedited standards for resolving rail rate disputes.”
In its statement, the NGFA commented on several changes proposed by the STB as part of its rate-regulatory reform proceeding (STB EP 715):
- It urged the STB to increase to at least $3 million the amount that could recovered over a five-year period using the most streamlined mechanism currently available for challenging freight rail rates – known as the three-benchmark (3B) method. Under this method, the STB proposed to increase the recovery limit to $2 million, up from the current $1 million.
As justification, the NGFA said the costs of bringing a 3B rate case likely still would discourage shippers from pursuing such relief. It noted that in the few 3B cases that have been filed by non-agricultural shippers, the defendant railroads have raised numerous arguments requiring the use of experts and current waybill data that required responses from shippers, each of which added costs and complexities. The NGFA also noted the STB did not account for the additional costs incurred by shippers in presenting oral arguments in 3B rate cases before the agency.
- The NGFA supported the STB’s proposal to eliminate the current $5 million limit that shippers potentially can recover using a second “simplified” agency mechanism for challenging unreasonable rail rates – the so-called “simplified stand-alone cost” (SSAC) rules. But it urged the agency to delete a concurrent proposal that would undermine use of this method for challenging rates by imposing a complex and expensive new burden that would require shippers to calculate the full replacement cost of rail system facilities used to serve the shipper filing the rate complaint.
“We continue to believe it is highly questionable whether the existing SSAC rules promulgated in 2007 created a meaningful avenue that grain shippers – with diverse origin-and-destination points, and without high-volume, repetitive, long-term rail movements – could use to seek rate relief,” the NGFA said. “Rather than creating additional hurdles for utilizing (this) methodology, the STB should be exploring ways to make the SSAC rules less expensive, less complicated and more expedited.”
Established in 1896, the NGFA is a U.S.-based nonprofit trade association that consists of more than 1,050 companies from all sectors of the grain elevator, animal feed and feed ingredient, integrated livestock and poultry, grain processing, biofuels and exporting business. NGFA-member companies operate more than 7,000 facilities nationwide that handle more than 70 percent of U.S. grains and oilseeds.
Affiliated with the NGFA are 26 state and regional grain and feed trade associations. The NGFA also has strategic alliances with the North American Export Grain Association and Pet Food Institute.