US rail regulators are pushing ahead with plans to implement a proposed rule to create a voluntary arbitration program to handle small rate disputes.
The Surface Transportation Board (STB) on 28 December denied a motion from shipper groups that it put the arbitration plan on hold unless Class I railroads agreed to arbitrate cases under what is known as the revenue adequacy standard, calling the request "premature."
The shippers' motion "essentially seeks to truncate the rulemaking process by requiring rail carriers to pledge whether they would participate in the proposed arbitration program based solely on the single issue of revenue adequacy before the record had been fully developed," the STB said.
Under the revenue adequacy standard, the STB determines annually whether a railroad earns enough to cover its costs of operating a network while also providing a reasonable rate of return for investors. Carriers have argued over the last decade that using revenue adequacy to measure a carrier's system-wide health suffers from serious legal, factual and policy flaws.
The board said it expects the railroads to lay out their position on revenue adequacy during the rulemaking comment period.
The STB issued the proposed rule on 15 November, in response to a plan a group of five Class I railroads, CSX, Kansas City Southern, Norfolk Southern, Union Pacific and the US subsidiary of Canadian National, put forth in July 2020. But the carriers made clear they did not want revenue adequacy to be part of the arbitration process.
Shippers' trade groups, including the American Chemistry Council, the Corn Refiners Association, the National Industrial Transportation League, The Chlorine Institute and The Fertilizer Institute, urged STB to abandon the proceeding if railroads will not say whether they would agree to arbitrate cases under the revenue adequacy standard, arguing that continuing would be a waste of time and resources.
Comments on the proposed rulemaking are due by 14 January, but the board has extended the deadline for reply comments until 15 April.
Union Pacific applauded the decision and said it looks "forward to working toward an outcome that is good for everyone."
Michael McBride, an attorney representing the shippers, said: "We are pleased that the STB extended the deadline for reply comments."
