U.S. Senate must act quickly to get freight rail reforms moving

 
By Mark A. Biel
Guest columnist
Posted8/1/2018 1:00 AM
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  • Mark A. Biel

    Mark A. Biel

U.S. chemical production is surging, helping to power our economy and our country. However, widespread problems with America's freight rail system threaten to derail this progress. We need freight rail policy reforms to make the system more reliable and competitive. As a first step, the U.S. Senate must act quickly to fill critical vacancies on the Surface Transportation Board (STB).

Chemistry is an essential part of helping to make our lives better, from developing new technologies to saving energy and providing basic needs such a clean drinking water and plentiful food supply. Chemical production is growing again, with the chemical industry on track to grow faster than the overall U.S. economy. Illinois is leading the way, ranking as the fourth largest chemical producing state in the nation. Illinois chemical manufacturers create more than 46,000 jobs, and the business of chemistry supports another 300,000.

Every day, freight rail companies carry goods and chemicals from farms and factories, transporting the staples of life and raw materials for countless consumer products. Railroads are a vital link in our national and global economy.

But the freight rail system is jeopardizing this economic boon with skyrocketing rates and chronic service issues, forcing shippers to pay more for less service. To help address these problems, America needs long-overdue freight rail reform to make the system more accessible, reliable, and competitive while bolstering the U.S. economy.

That is why the Chemical Industry Council of Illinois has joined the Rail Customer Coalition, a collection of trade associations working to support sensible policy reforms that would allow greater access to competitive freight rail service.

The Surface Transportation Board (STB), a federal agency with broad economic oversight of the nation's freight rail system, is the key to that reform and continued success for our country. Because market power is concentrated in a handful of railroads, the STB serves an indispensable role for keeping rates competitive and rail service reliable. The STB is in a unique position to adopt long-overdue free market reforms like competitive switching and rate benchmarking to ensure that everyone benefits.

Competitive switching would remove regulatory barriers and put the marketplace to work. It would allow a rail customer served by a single railroad to request that its freight be moved to another railroad, for a fee, if one is reasonably accessible.

Rate benchmarking would help shippers without competitive options by replacing the STB's overly bureaucratic rate review process with a much simpler process. Benchmarking uses the wealth of existing rate data for shipments in competitive markets. A shipper could challenge a rate that is unreasonably higher than its competitive benchmark.

Unfortunately, with only two of five seats filled, the STB has been at a standstill for more than a year. Now, two nominees, approved by Sen. Tammy Duckworth, a Hoffman Estates Democrat, and her colleagues on the Senate Commerce Committee, await confirmation by the full Senate.

The White House recently nominated a final member, former Metra Chairman and Chicago Alderman Martin Oberman. Mr. Oberman helped rebuild Metra's image and could bring that same reformer's mindset to Washington. The Commerce Committee, and then the full Senate, must first confirm him for the position. We hope the Senate will come together and swiftly confirm these three nominations to the STB.

Competition and free enterprise are American values. We cherish them because they work -- they create jobs, grow businesses, promote innovation, and lower prices for consumers. Let's get the freight rail system back to work for America's manufacturers, farmers, energy producers, and others who rely on freight rail -- and ultimately, all American consumers.

Mark A. Biel is chief executive officer for the Chemical Industry Council of Illinois, a statewide trade association based in Des Plaines representing 205 members with 656 facilities in Illinois.

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