The return this week of former Surface Transportation Board (STB) chairman Dan Elliott to the agency will likely usher in a period of change in the manner in which it regulates railroads.
The US Senate confirmed President Barack Obama's nomination of former labor attorney Elliott, 52, who last month promised Congress to "have a more careful examination with respect to what is going on in the rail industry."
He began serving on the board in 2009 but had to depart at the end of 2014 because he had not been confirmed. It is not clear why his confirmation had languished in the Senate since Obama's nomination, as his return to the board has not been controversial and he was confirmed in a voice vote.
STB has been functioning with only two of its three members as Acting chairwoman Deb Miller (D) and vice chairwoman Ann Begeman (R) have worked as a two-member board since then, as two members whose votes could cancel each other out.
In May, Elliott told senators he wants to reform board processes and shorten the amount of time it takes to resolve freight rate disputes.
"We are going to have a more careful examination with respect to what is going on in the rail industry," Elliott told the Committee on Commerce, Science and Transportation.
Reform of STB is in the air in Washington, DC, as the Senate earlier this month unanimously passed the Surface Transportation Board Reauthorization Act (S 2777). The bill introduced by Senate Commerce, Science and Transportation Committee chairman John Thune (R-South Dakota) would expand the board to five members from three, make it fully independent from the Department of Transportation and foster quicker dispute resolution through arbitration, among other changes.
Shippers' groups have become increasingly concerned about delays of major decisions because Elliott was not present, leaving major cases undecided such as the National Industrial Transportation League's reciprocal switching proposal.
An attorney representing shippers told Argus this week that it appears Elliott is determined to make some changes, such as the way revenue adequacy for railroads is determined. The other members of the board also seem to be anxious to get things moving.
"Acting chairwoman Miller and vice chairwoman Begeman did a good job in his absence, and rail service problems are less than they were at year-end, so chairman Elliott has a chance to really hit the ground running on regulatory reform," the attorney said. "I think many in the rail industry are expecting changes to STB procedures."
A key piece of the new regulatory framework will be the board's decision on the National Industrial Transportation League's reciprocal switching proposal and the results of revenue adequacy public hearings scheduled at STB next month.
There are also factors like the outcome of Total Petrochemicals' challenge of CSX chemical shipping rates. The board's current process for challenging rate cases does not work well for chemicals shippers, the attorney said.
"The cases take so long, and cost so much to pursue, that it will be very hard for Dan to improve that process sufficiently to encourage many rate challenges. So, he has his work cut out for him."
The Association of American Railroads said it looks forward to "continuing a constructive working relationship" and used the occasion to advocate against any major changes in the way STB regulates railroads.
"The STB oversees a balanced regulatory framework that relies on competitive market forces while providing a safety net for those customers who need it," president Ed Hamberger said. "It is a regulatory approach that keeps the nation's freight railroads competitive with other transportation modes and in a position to continue investing billions of dollars back into maintaining and modernizing the nation's 140,000-mile rail system."
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