In March, ISRI petitioned the Surface Transportation Board (STB) to lift the ex parte restrictions on communications with the Surface Transportation Board regarding the 704 proceeding to revoke the long standing rail exemption for ferrous scrap. The rail exemption forbids shippers from using the STB’s investigative authority when conflicts between those covered commodities and the railroads occur. The STB granted ISRI’s petition to openly communicate with the STB including meetings with the Board and staff. And, as a result of ISRI’s petition, the American Association of Railroads (AAR) replied to the STB requesting that cost benefit analysis be part of all rule makings.
This week, ISRI, along with many other associations responded to the AAR petition arguing that while we support cost benefit analysis in rule makings, it should not be made a permanent and required component for all rulemaings. For example, ISRI argued that the STB should not be required to conduct a cost benefit analysis for each rule making when it would be impracticable for such an alsysi to be conducted. In most cases, it would be impossible to analyze the costs to the thousands of various commodities traveling over the rail system. Additionally, the STB does not have the financial or staff capability to conduct multiple cost benefit analysis at the same time. No other U.S. agency is required by regulation to conduct such analysis. Moreover, most cost benefit analysis are conducted for rules that concern environmental or health impacts rather than commercial and market impacts.
The AAR petition is a naked attempt to slow down the STB’s enforcement and rule making capabilities. ISRI also argued that even while we generally support the use of cost benefit analysis when appropriate, the proceedings such as 704 and 721 (reciprocal switching) should not be impacted since cost benefit analysis is not applicable and a thorough waybill analysis was conducted that demonstrated the need to revoke the rail exemption for ferrous scrap commodities.
ISRI will be meeting with the STB regarding the 704 revocation proceeding shortly. ISRI will also be participating in a hearing regarding the demiurge tariff charges being imposed across the nation as the rail industry shifts towards precision rail scheduling.
If you would like to learn more about ISRI’s efforts or participate with these rail issues, please contact Billy Johnson