STB Announces Procedure to Expedite Rail Rate Cases
Mary Kennedy DTN Basis Analyst
Bio
Mon Mar 21, 2016 01:17 PM CDT
Grain shippers will have the opportunity next month to share ideas with the U.S. Surface Transportation Board on how to improve the process for shippers to challenge railroad freight rates they believe are unreasonable.
On March 9, the U.S. Surface Transportation Board announced final rules for revising the procedural schedule for certain large railroad rate cases. The action was taken to comply with the Surface Transportation Board Reauthorization Act of 2015, which called for revising regulations that set the procedural schedule for "stand-alone cost," or "SAC" case handling."...
"...told the agency at the June 10 hearing that its current rate-challenge appeal procedures "are simply inappropriate and unworkable for agricultural commodities because they are too complex and costly compared to the potential recover of rate overcharges."
NGFA Board member Bruce Sutherland, vice president of Michigan Agricultural Commodities (MAC), presented real-world examples to the STB of current rate-pricing practices by a major Class I rail carrier. "These increases in rail rates are several orders of magnitude greater than typically thin grain-trading margins," Sutherland said. "Consequently if we are to be price-competitive in selling commodities to domestic user and foreign buyers, we inevitably have to try and pass on the cost impacts we can't absorb back to farmer customers. Seldom are we able to pass such costs forward to the ultimate buyer, as they have alternative sources of supply in the grain market -- which is a truly competitive market."
WOW... we have a long way in Canada to go...No-one wants to pay the political price...we will let the bullies decide... it is simpler that way! Ritz got slaughtered for trying.
Mary Kennedy DTN Basis Analyst
Bio
Mon Mar 21, 2016 01:17 PM CDT
Grain shippers will have the opportunity next month to share ideas with the U.S. Surface Transportation Board on how to improve the process for shippers to challenge railroad freight rates they believe are unreasonable.
On March 9, the U.S. Surface Transportation Board announced final rules for revising the procedural schedule for certain large railroad rate cases. The action was taken to comply with the Surface Transportation Board Reauthorization Act of 2015, which called for revising regulations that set the procedural schedule for "stand-alone cost," or "SAC" case handling."...
"...told the agency at the June 10 hearing that its current rate-challenge appeal procedures "are simply inappropriate and unworkable for agricultural commodities because they are too complex and costly compared to the potential recover of rate overcharges."
NGFA Board member Bruce Sutherland, vice president of Michigan Agricultural Commodities (MAC), presented real-world examples to the STB of current rate-pricing practices by a major Class I rail carrier. "These increases in rail rates are several orders of magnitude greater than typically thin grain-trading margins," Sutherland said. "Consequently if we are to be price-competitive in selling commodities to domestic user and foreign buyers, we inevitably have to try and pass on the cost impacts we can't absorb back to farmer customers. Seldom are we able to pass such costs forward to the ultimate buyer, as they have alternative sources of supply in the grain market -- which is a truly competitive market."
WOW... we have a long way in Canada to go...No-one wants to pay the political price...we will let the bullies decide... it is simpler that way! Ritz got slaughtered for trying.
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