(Press-News.org) WASHINGTON - While a 1980 reform law enabled the modernization and stabilization of the U.S. freight railroad industry, federal regulation has not kept pace with the industry's transformation and should be replaced with a system better-suited for today's freight rail system, says a new congressionally mandated report from the National Research Council's Transportation Research Board. Current policies designed to protect rail shippers who lack transportation options from excessive rates are not working for shippers of most commodities, including grain. More appropriate, reliable, and usable procedures are needed to resolve these rate disputes without threatening the earnings railroads need to pay for their capital-intensive networks.
The Staggers Rail Act of 1980 eliminated or eased many regulations governing railroad pricing and operations and allowed railroads to redress decades-long declines in traffic, stagnant productivity, and oversized networks that had become chronically under-maintained and misaligned with demand. By the late 1990s, the Staggers Rail Act had succeeded in spurring the development of a financially stronger, more productive, and more innovative railroad industry that was better able to compete with trucks, invest in capacity, and respond to shippers' needs.
Approximately one-third of all freight traffic today is moved by rail, and shippers of bulk commodities such as grain, coal, and chemicals remain especially dependent on rail. Since 2000 their rates have been rising faster than inflation, and complaints about unreliable railroad service have been voiced by some shippers, the report says. Under the Staggers Rail Act, shippers have the ability to challenge some rates that seem unreasonable, but the formula used to identify unusually high rates that can be challenged is arbitrary and unreliable. The committee that wrote the report recommended that the U.S. Department of Transportation develop, test, and refine a more reliable tool that compares disputed rates to those charged in competitive rail markets for comparable shipments. Repealing the current formula would require congressional action.
This replacement would, in turn, allow the Surface Transportation Board (STB), which regulates railroads, to use faster and more economical methods for judging whether a shipper paying an unusually high rate is entitled to relief. Customary adjudication methods can cost millions of dollars for litigation and some have taken years to resolve, deterring shippers with smaller claims from seeking rate relief. Simplified methods that are economically valid and useable have yet to be developed. Therefore, the committee recommended STB hearings that are used to rule on whether a challenged rate is reasonable be replaced with independent arbitration hearings that compel faster, more economical resolutions of rate cases.
The committee also recommended permitting parties in rate arbitrations to propose reciprocal switching - allowing shippers to transfer freight at the interchange of tracks owned by competing railroads - as a remedy for unreasonable shipping rates.
The Staggers Rail Act mandates that regulators not grant rate relief so freely that railroads are denied the revenues they need to invest in their networks, and the committee recognized that railroads need to be able to charge rates that generally exceed their operating costs.
"The committee's two main recommendations go hand-in-hand," said committee chair Richard Schmalensee, Howard W. Johnson Professor of Management Emeritus and professor of economics emeritus at the Massachusetts Institute of Technology. "Currently, burdensome STB rate hearings compensate for an unreliable initial process for identifying unusually high rates and in effect, they safeguard railroad revenues by making it too costly for most shippers to litigate a case. So, a more credible method for identifying unusually high rates would permit the use of less burdensome arbitration procedures, while not risking the adequacy of railroad revenue."
STB should discontinue issuing annual reports on the revenue adequacy of individual railroads, and its responsibility for reviewing railroad mergers should be transferred to the U.S. Department of Justice because these STB functions no longer serve their original purposes. Finally, the committee recommended a thorough review of the data collection and dissemination practices of STB. Data that would permit systematic assessment of railroads' service quality would be especially valuable.
INFORMATION:
The study was sponsored by the U.S. Department of Transportation. The National Academy of Sciences, National Academy of Engineering, Institute of Medicine, and National Research Council make up the National Academies. They are private, independent nonprofit institutions that provide science, technology, and health policy advice under a congressional charter granted to NAS in 1863. The National Research Council is the principal operating arm of the National Academy of Sciences and the National Academy of Engineering. For more information, visit http://national-academies.org. A committee roster follows.
Contacts:
Dana Korsen, Media Officer
Chelsea Dickson, Media Associate
Office of News and Public Information
202-334-2138; e-mail news@nas.edu
national-academies.org/newsroom
Twitter: @NAS_news and @NASciences
RSS feed: http://www.nationalacademies.org/rss/index.html
Flickr: http://www.flickr.com/photos/nationalacademyofsciences/sets
Pre-publication copies of Modernizing Freight Rail Regulation are available from the National Academies Press on the Internet at http://www.nap.edu or by calling 202-334-3313 or 1-800-624-6242. Reporters may obtain a copy from the Office of News and Public Information (contacts listed above).
NATIONAL RESEARCH COUNCIL
Transportation Research Board
Committee for Study of Freight Rail Transportation and Regulation
Richard L. Schmalensee (chair)
Howard W. Johnson Professor of Management, Emeritus
Sloan School of Management
Massachusetts Institute of Technology
Cambridge
Kenneth D. Boyer
Professor of Marketing and Supply Chain Management
Department of Economics
Michigan State University
East Lansing
Jerry Ellig
Senior Research Fellow
Mercatus Center
George Mason University
Arlington, Va.
José A. Gómez-Ibáñez
Derek C. Bok Professor of Urban Planning and Public Policy
John F. Kennedy School of Government
Harvard University
Cambridge, Mass.
Anne V. Goodchild
Associate Professor
Department of Civil and Environmental Engineering
University of Washington
Seattle
Wesley W. Wilson
Professor
Department of Economics
University of Oregon
Eugene
Frank A. Wolak
Holbrook Working Professor of Commodity Price Studies
Economics Department
Stanford University
Stanford, Calif.
STAFF
Thomas R. Menzies
Study Director
The way insects see and track their prey is being applied to a new robot under development at the University of Adelaide, in the hopes of improving robot visual systems.
The project - which crosses the boundaries of neuroscience, mechanical engineering and computer science - builds on years of research into insect vision at the University.
In a new paper published today in the Journal of The Royal Society Interface, researchers describe how the learnings from both insects and humans can be applied in a model virtual reality simulation, enabling an artificial intelligence ...
CHICAGO (June 10, 2015): As health insurers place more emphasis on paying for quality outcomes rather than for specific services provided by doctors and hospitals, several quality improvement programs have been developed as a way to help health care providers identify problem areas and share best practices. While some studies have evaluated how well these quality improvement programs achieve their goals, not many have focused on the area of trauma care. But now a team of trauma surgeons at the University of Michigan in Ann Arbor have reported how data from a statewide ...
Origami, the Japanese art of paper folding, can be used to create beautiful birds, frogs and other small sculptures. Now a Binghamton University engineer says the technique can be applied to building batteries, too.
Seokheun "Sean" Choi developed an inexpensive, bacteria-powered battery made from paper, he writes in the July edition of the journal Nano Energy.
The battery generates power from microbial respiration, delivering enough energy to run a paper-based biosensor with nothing more than a drop of bacteria-containing liquid. "Dirty water has a lot of organic matter," ...
DARIEN, IL - A new study suggests that one night of partial sleep deprivation promotes biological aging in older adults.
Results show that one night of partial sleep deprivation activates gene expression patterns in peripheral blood mononuclear cells (PBMCs) consistent with increasing accumulation of damage that initiates cell cycle arrest and increases susceptibility to senescence. These findings causally link sleep deprivation to the etiology of biological aging, and further supports the hypothesis that sleep deprivation may be associated with elevated disease risk ...
As it turns out, people who speak their minds loudly and often could be responsible for economic prosperity.
That's according to a new study by Michigan State University economist Siddharth Chandra, director of MSU's Asian Studies Center, and Nita Rudra, associate professor in the Department of Government at Georgetown University.
"Our study demonstrates that freedom to express our opinions is not just something we should enjoy," said Chandra, who's also a professor in MSU's James Madison College. "It could have very important consequences - sometimes preventing the ...
DARIEN, IL - A new study suggests that pre-diagnostic short sleep duration and frequent snoring were associated with significantly poorer cancer-specific survival, particularly among women with breast cancer.
Results show that stratified by cancer site, short sleep duration and frequent snoring were associated with significantly poorer breast cancer-specific survival.
"Our results suggest that sleep duration is important for breast cancer survival, particularly in women who snore," said lead author Amanda Phipps, assistant professor of epidemiology at the University ...
From AGU's blogs: New Tool Could Track Space Weather 24 Hours Before Reaching Earth
A new model, described in a June 9 paper in the journal Space Weather, might finally give scientists a tool to predict a coronal mass ejection's magnetic configuration from afar, which means forecasters could give utility grid and satellite operators a full 24-hour advance warning to protect their systems.
From AGU's journals: Satellite Measurements May Help Real-Time Water Management
With the demand for water stored in reservoirs rising in many areas, it is becoming increasingly ...
This news release is available in French. Montreal, June 10, 2015 -- When you're one and a half years old, having your favourite ball taken away is likely to result in a temper tantrum. But while babies wear their feelings on the sleeves of their onesies, adults often mask their emotions, responding to life's disappointments with stoic reserve.
While you might think that witnessing such reactions would confuse toddlers and lead them to believe emotionally reserved adults aren't being honest -- so by extension are untrustworthy to begin with -- new research shows ...
As little as two minutes of high-intensity exercise four times a day improves health outcomes in adolescents, but the same amount of moderate-intensity exercise does not reap the same rewards, according to a new study from the University of Exeter.
Researchers found that when exercise is broken up into short bursts over the course of a day - replicating the way young children go about being active - only high-intensity exercise is effective in improving blood sugar levels, fat metabolism and blood pressure in adolescents after the consumption of a fatty meal.
The ...
New research suggests pedophiles are more likely to have superficial facial flaws, known as Minor Physical Anomalies (MPAs). They are also more likely to be left-handed, says Fiona Dyshniku of the University of Windsor in Canada. She led an investigation into the prevalence and distribution of physical anomalies among men who are sent for sexological assessment. The study in Springer's journal Archives of Sexual Behavior adds to a growing body of evidence that suggests pedophilia develops prenatally, around the same time that such physical flaws develop.
"Evidence is ...
