STB Planning to Hold Grain Public Hearing

WASHINGTON — Some time this fall, the Surface Transportation Board is planning to hold a public hearing to address "certain issues related to the rail transportation of grain," the agency announced in a news release.

The United States Government Accountability Office (GAO) on June 21 released preliminary observations on rates, competition and capacity issues within the American rail freight industry. GAO reported that the changes that have occurred in the rail industry since the Staggers Rail Act of 1980 are widely viewed as positive.

The financial health of the industry has improved substantially as railroads have cut costs and boosted productivity, officials say. Moreover, most rates declined as productivity improvements were passed on to shippers. However, one category of rates examined by GAO — grain rates — diverged from the industry trends.

According to the GAO preliminary report, the amount of grain traffic with comparatively high markups over variable cost increased notably between 1985 and 2004.

The Board intends to hold a public hearing after GAO releases its final report, as a forum for interested persons to provide views and information about the market conditions that led to these findings by GAO and about grain transportation markets in general. Because U.S. grain producers compete in a broader North American, and global, marketplace, the STB also anticipates inviting information regarding the interplay between the American and Canadian wheat markets, how the Canadian regulatory system differs from the American system, and what impact those differences might have on grain production in the United States.

A date for the hearing will be set once the final GAO findings and recommendations are released.