Letter: Railroads need more competition
As the president of a Michigan-based, family-owned grain company, I was disappointed to see a recent column (“New regs would stunt railroads, May 18”) attacking both Michigan agriculture and the U.S. Surface Transportation Board (STB), the federal agency that ensures freight railroads are responsive to farmers and other rail customers in Michigan.
Unfortunately, today’s rail industry is characterized by a lack of competition, with only a handful of large “Class I” carriers. The rail industry also is exempt from U.S. antitrust laws. Many agricultural shippers are captive to a single railroad, and have no cost-effective transportation alternatives to ship products to customers.
Predictably, the repercussions of the railroad monopoly for Michigan agriculture have been declining customer service and escalating rail rates not disciplined by market forces. Within the past three years in Michigan, our dominant Class I railroad leveled a major rate increase that is largely passed back to farmers, hitting them in the pocketbook during a time when they already are struggling with declining market prices for their crops.
These challenges make the freight rail industry a picture-perfect sector to be subject to appropriate federal oversight. That’s why we have supported efforts by Members of Congress to maintain the STB’s statutory authority to encourage more competition in the rail sector and provide a reasonable and cost-effective method that rail shippers can use to challenge unreasonable rail rates.
Despite the scare tactics leveled by the rail industry, the fact is the STB is the only “umpire” overseeing the conduct of what otherwise would be the unfettered market power of monopoly railroads over their customers.
Policymakers shouldn’t listen to scare tactics — they should look at facts. With rising rates, falling reliability and aging infrastructure, large rail companies must be subject to effective oversight.
President, Michigan Agricultural Commodities