NGFA to 'carefully examine' STB rail rate review proposal

By Stephen Davies

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WASHINGTON, Aug. 31, 2016 - The National Grain and Feed Association will be taking a close look at a Surface Transportation Board proposal to develop a new rail rate review process designed to make it easier for grain shippers to challenge unreasonable rates.

“We are particularly gratified that the STB recognizes and acknowledges that its three existing rail rate review methodologies present ‘accessibility challenges' for grain and other commodity shippers, and that the litigation costs required to bring a rate case under even the most simplified existing method can quickly exceed the value of the damages involved in the case,” NGFA President Randy Gordon said. “We appreciate the obvious time and effort that the STB put into developing the concepts contained in its advance rulemaking notice, and the fact that it includes several recommendations made previously by the NGFA. We will be carefully examining these concepts and plan on being fully engaged in providing constructive input to the agency as it proceeds with this rulemaking.”

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Under procedures outlined in the Advance Notice of Proposed Rulemaking (ANPR), the STB would design a “comparison group” of similar rail shipments that it would use to judge the reasonableness of the rate being challenged.

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“Having the (STB) design the comparison group, rather than the parties, would streamline this procedure as compared to the Board's existing Three-Benchmark methodology,” the STB said in a news release. “And, rather than receiving rebuttal submissions and closing briefs - as in some of the rate case procedures available now - the ANPR envisions a final evidentiary hearing before Board staff (either in person or via conference call).”

The NGFA has been an active participant in a previous STB proceeding that focused on the utility of the agency's existing rate methodologies for grain rate cases - a proceeding that laid the groundwork for the agency's new rulemaking,” NGFA said. “As part of that previous proceeding, the NGFA in 2015 developed and proposed to the STB a totally new rate methodology, called the ‘agricultural commodity maximum rate methodology,' that would create a more accessible, streamlined, cost-effective and workable process for grain shippers to challenge unreasonable rates.”

Opening comments on the STB's advance notice of proposed rulemaking are due Nov. 14, with reply comments due Dec. 19.

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