Contact: Scott Jensen (202) 249-6511
WASHINGTON (Sept. 16, 2013)
On September 9, the Surface Transportation Board (STB) announced final rules establishing disclosure requirements for rail transactions involving interchange agreements. An interchange agreement is a contractual commitment in the sale or lease of a railroad line to a newly created short line or regional railroad that restricts the purchasing railroad from interchanging traffic with any railroad but the seller. The American Chemistry Council (ACC) issued the following statement in response:
"ACC welcomes the STB's new disclosure requirements that will help shine a light on railroad agreements that limit access to competitive freight rail service.
"Interchange commitments clearly inhibit potential competition between Class I railroads and interfere with market-based rates. In fact, a significant purpose of such an agreement is to ensure that in spinning off a short-line railroad, a Class I railroad will not have to compete with another carrier for the covered traffic.
"While the decision does not address existing agreements, this action will allow for increased transparency and more open consideration of future transactions. The new requirements will help to determine if there are competition issues for STB to address. In order to do so, the involved parties will have to submit detailed data to STB regarding the logistics of the rail transport, including shipping, cost and interchange agreement information.
"To ensure the new requirements provide meaningful improvements, we urge the STB to inform the public specifically how the information it collects will be used to evaluate the potential anti-competitive impacts of interchange commitments in future rail transactions."