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ISRI Submits Comments to STB on Revoking Rail Exemptions

Last week, ISRI submitted comments in response the Surface Transportation Board’s (STB) proposal to revoke the exemptions for certain commodities including ferrous and paper scrap.

If this change does occur as proposed, it would permit the scrap recycling industry to challenge rates through the STB administrative process to foster sound economic transportation conditions, maintain reasonable rate where there is not effective competition, and prohibit predatory pricing and practices. These exemptions being contested for scrap materials have been in place for over twenty-years when the transportation markets were very different when the predecessor agency, the ICC, concluded that regulation was not necessary to protect iron and steel scrap shippers from potential abuses of market power. However, based on major changes that have occurred to the transportation markets since 1995 when the exemptions were granted, the Surface Transportation Board initiated a review of rail data including the confidential waybill samples from 1992 – 2013, the length of hauls, and percentages of tons moving less than 600 miles. This data led the STB to propose revoking the exemptions based on the STB finding that there has been an increase in the railroad’s market power of scrap shipments. ISRI will also be filing reply comments shortly to respond to the railroad’s objections to revoking the exemptions. For more information, please contact Billy Johnson at (202) 662-8548.

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