Railroads, shippers seek ways to build trust

Railroads and shippers are working at resolving their mutual distrust to seek new ways to resolve disputes, instead of starting costly and lengthy cases at the US Surface Transportation Board (STB).

Relationships between carriers and their customers are often antagonistic. Disputes over rates and service can deteriorate into petitions to the STB or lawsuits in court.

The board has long "been a champion of doing mediation before the start of case," said former STB general counsel Ray Atkins, now with law firm Sidley, at the Railroads + Shippers = Solutions conference this week in Washington, DC.

The STB has established mediation and arbitration processes, but not many parties have participated so far. None have taken advantage of arbitration rules that were revised in 2016 to expand the types of cases and awards involved to include rate disputes. Then-STB chairman Dan Elliott said at the time that he hoped the changes would lead to less need for formal litigation.

The problem may be in lingering mistrust between the two sides, Elliott told Argus on the sidelines of the conference. The difficulty has been "shippers sensing that the railroads are pushing them around, and then the railroads sensing that the shippers are complaining" and do not understand how rail operations work.

There are some examples of successful dispute resolutions efforts. The National Grain and Feed Association has a 20-year-old arbitration agreement that settles issues between shippers and their carriers. And the Montana Grain Growers Association and the Montana Farm Bureau Federation in 2009 signed an agreement with BNSF that established an avenue to mediate and arbitrate rail freight rates.

Elliott, now with law firm Conner & Winters, is following through. He has proposed development of a think tank to bring railroads and shippers together to come up with better ways of resolving disputes. They best way to get things started is to change the tone of the conversation so they can "talk to each other and work things out," he said.