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Public Statements

Baker Introduces Bill to Make Railroad Industry More Competitive

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Location: Washington, DC


Baker Introduces Bill to Make Railroad Industry More Competitive

U.S. Rep. Richard Baker, R-Baton Rouge, has been joined by House Transportation committee chairman James Oberstar (D-MN) and ten other House members in introducing the Railroad Competition and Service Improvement Act of 2007 (H.R. 2125). This legislation aims to make the Surface Transportation Board (STB) a fair moderator in disputes between railroads, customers and the public, to preserve existing rail-to-rail competition in areas of the country where competition is working, and to reduce impediments to competition that adversely affect rail customers.

"This is a national problem, but one with particular bearing on Louisiana, where railroads are using their monopolistic powers to price gouge Louisiana companies that have access to only one railroad," Baker said. "By artificially increasing their costs of business, the railroads are forcing these employers to either lay off Louisiana workers, limit their growth, move out of state, or close down altogether."

Baker's bill seeks to address these problems by continuing the goals of deregulation and ensuring that more rail customers have access to railroad competition, while making the STB discharge its responsibilities to liberate captive rail customers from unrestrained railroad monopoly power.

In the Staggers Rail Act of 1980, Congress deregulated the railroad industry on routes where rail customers had access to competition. Congress tasked the Interstate Commerce Commission, which has since been replaced by the STB, to ensure competition and protect those rail customers without access to competition.

Since then, however, the railroad industry has evolved not toward greater competition but toward increasing concentration, with 40 Class I railroads reduced to just four major railroads - two in the East and two in the West - that now move over 95 percent of the nation's traffic. Many short-line railroads created since 1980 are restricted from interconnecting with a single major railroad, and the STB has continued to protect captive shippers from regional monopolies that prevent customers from gaining access to competition.

The bill requires the STB to promote effective competition among rail carriers at origins and destinations, enforce reasonable rates for rail customers in the absence of competition, and ensure efficient and reliable rail transportation service for rail customers.

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