Suppliers to Congress: STB shooting first, asking questions later

Written by William Vantuono, editor-in-chief, Railway Age
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Will Senate Commerce Committee Chair John Thune and his congressional colleagues with jurisdiction over railroads shoot down STB’s pending reregulatory actions?
Office of Sen. John Thune.

The industry groundswell attacking the Surface Transportation Board's pending actions on forced access and commodity reregulation has grown to include the railway supply community, including the three principal trade associations (REMSA, RSI and RSSI) and numerous members, and the railway contracting community, led by the NRC.

Congressional leaders John Thune, Chairman, Senate Committee on Commerce, Science and Transportation and Bill Nelson, Ranking Member; and Bill Shuster, Chairman, House Committee on Transportation and Infrastructure, and Peter DeFazio, Ranking Member, have received a letter signed by dozens of suppliers and contractors pointing out the STB’s “recent trend of imposing regulations first, and discovering the consequences later.”

Following is the full text of the letter:

Towson University’s Regional Economic Studies Institute recently quantified the national impact of major freight railroads on the U.S. economy, finding that sizeable industry investments supported 1.5 million jobs, generated $33 billion in taxes and produced $274 billion in economic activity in 2014 alone. Like many economists before, the researchers concluded that the regulatory structure surrounding the industry—set forth by Congressional leadership in passing the Staggers Act—provides certainty and stability and allows the industry to earn the revenues needed to invest and create such positive ripple effects.

As the collective voice of businesses that serve railroads and provide the equipment and technologies to enhance the efficiency and safety of their operations, we know this first hand. Over-involvement of the federal government in the day-to-day business decisions of railroads once pushed this sector and the larger railroad ecosystem of customers and suppliers to the brink of collapse. Without the wisdom to partially deregulate the industry in 1980, America would have lost a privately owned and maintained economic engine that provides quality jobs to support families and communities, affordable and environmentally friendly options for businesses to move goods and critical infrastructure to support passenger railroads.

So it is especially troubling to see the Surface Transportation Board (STB) move forward on reregulatory efforts, including so called “reciprocal switching” and commodity reregulation. The “Rail Customer Coalition” recently wrote you advocating for these misguided proposals and casting them as common sense and in the common interest of the American public. Nothing could be further from the truth, and as a result, we are asking you to ensure the STB regulates as you intended in the 2015 reauthorization.

As leaders on issues pertaining to surface transportation, the railroad supply community asks you to please consider the facts as it relates to the STB and proposed regulations.

Reciprocal switching, or more accurately, forced access, would upend longstanding precedent. It would force railroads to switch traffic to competitors without any suggestion that the incumbent railroad failed to offer competitive services, or has otherwise engaged in any sort of unreasonable behavior. A rash of new switches could possibly advantage a few, but in the aggregate it would strain a 140,000-mile network and degrade services for the majority of customers.

We are deeply concerned that this regulatory effort could greatly cut into capital spending by the railroads. Past analysis by the Association of American Railroads found that a similar proposal could affect an estimated 7.5 million carloads of traffic, placing nearly $8 billion in revenues at risk. Reduced revenues mean reduced money for investment in the rail network and reduced demand for businesses like ours. Continued investments are critical for maintaining a safe and efficient rail network and allow us to provide strong employment opportunities in our communities.

The government dictating what a private business can do with its property and operations is antithetical to the free market and should be soundly rejected by a Congress that has never advised the STB to embark on this path.

A separate commodity regulation would subject five commodity groups to STB economic regulation for the first time in two decades, despite the fact that railroads face strong competition for the service from trucks. The proposal comes without any evidence that the transportation markets are different today than in past decades, and more alarmingly, without petitions from these commodity groups. Such a rule would again signal that the STB views competition through a narrow prism.

The railroad supply community plays an integral role in maintaining the world’s safest, most efficient and highly competitive freight railroad system. We also provide high-paying and high-skilled manufacturing jobs in our communities. We are concerned that the STB has interpreted its reauthorization as a signal that Congress wanted the independent agency to regulate more.

We support a transparent and efficient STB and believe that the agency maintains an important role in maintaining a proven regulatory structure. But we do not support the STB’s recent trend of imposing regulations first, and discovering the consequences later.

We appreciate your continued leadership in setting sensible policies to govern this critical industry that serves U.S. industry and creates local jobs. We ask that you ensure the STB regulates as you intended in the 2015 reauthorization by making your concerns known directly to the STB and we look forward to working with you in the future.



National Railroad Construction and Maintenance Association, Inc. (NRC)

Railway Engineering-Maintenance Suppliers Association, Inc. (REMSA)

Railway Supply Institute (RSI)

Railway Systems Suppliers, Inc. (RSSI)

Railway Tie Association (RTA)

A&K Railroad Materials, Inc.

Amerities Holdings, LLC

Ames Construction, Inc.

Amtrac Railroad Contractors of Maryland, Inc.

Ansaldo STS, A Hitachi Group Company

Arthur N. Ulrich Company

Atlas Company of Lincoln/Judds Brothers

Construction Co.

AXIS Track Report

Balfour Beatty Rail

Bergmann Associates

Birmingham Rail & Locomotive Co., Inc.

Boschert Precision Machinery, Inc.

Bowers & Company CPAs

BSM Technologies

Bullock Construction Inc.

Chester Bross Construction Company

Coleman Heavy Construction, Inc

Commercial Insurance Associates LLC

Design Nine, Inc.

Driven Engineering, Inc.

Dymax Inc.

East Coast Railroad Services, LLC

Edna A. Rice, Executive Recruiter, Inc.

Encore Rail Systems, Inc.

Esco Equipment Service Co.

EVRAZ North America

Fritz-Rumer-Cooke Co., Inc.

Frontier Railroad Services, LLC

Gannett Fleming, Inc.

GE Transportation

Genesis Technologies, Inc.

Georgetown Rail Equipment Company

Granite Construction

Gross & Jones Co.

Hall Signs, Inc.

Hanson Professional Services, Inc.

Harsco Rail

Herzog Railroad Services, Inc.

HiRAIL Corporation

Hudson ROI Equipment, Inc.

Hulcher Services, Inc.

Innovative Parts & Solutions Ltd.

IP Automation, Inc

Johnson’s Frog & Rail Welding, Inc.

Kelly-Hill Company

Koppers, Inc.

L.B. Foster Company

Loram Maintenance of Way, Inc.

Menard’s Railroad Materials

Modern Track Machinery, Inc.

MPL Innovations, Inc.


National Salvage & Service Corporation

Natural Wood Solutions, LLC

Nevada Railroad Materials, Inc.

New York Air Brake, LLC

Ogborn Consulting Group, LLC

Ohio Railroad Association

Omaha Track, Inc.

Omega Industries, Inc.

OMNI Products, Inc.

Orgo-Thermit Inc.

Outsource Administrators, Inc. (OAI)

Peak Performance Asset Services LLC

Plasser American

Polivka International Company, Inc.

Progress Rail, a Caterpillar Company

R.J. Corman Railroad Group, LLC

Rail Construction Equipment Co.

RailPros Field Services

Railroad Construction Co. of South Jersey, Inc.

Railtech Boutet, Inc.

RailWorks Corporation

RCL Services Group, LLC

RedHawk Energy Systems

Reflective Apparel Factory

Rocla Concrete Tie, Inc.

Salco Products, Inc.

Shannon & Wilson, Inc.

Siemens Rail Automation

Simmons Railroad Group, LLC

Site-Specific Solutions, Inc.

Southern National Track Services Inc.

Southern Technologies Corporation

Special Fleet Service

SpillX, LLC

Standard Steel, LLC

Stella-Jones Corporation

Strato, Inc.

STV Incorporated

The Okonite Company

Thomas McGee, L.C.

Trackside Services, Milwaukee, Wisconsin


Truss, LLC

Twinco Manufacturing Company, Inc.

US Trackworks, LLC

V&H, Inc.

Wabtec Corporation

WAGO Corporation

Western-Cullen-Hayes, Inc.

Wheeler Lumber, LLC

Willamette Valley Company

Wilson & Company, Inc.

Winkle Industries

WJ Riegel Rail Solutions, LLC