Trouble with Trains

Trouble with Trains

Trouble with Trains. I’m Greg Martin with today’s Line On Agriculture.

Fortune Magazine is currently featuring an article about how excessive shipping costs charged by the freight rail industry are hurting farmers and export growth here in the U.S.  Bob Szabo, executive director of Consumers United for Rail Equity or CURE explains the organization and its directive.

SZABO: It’s a single issue advocacy group funded by its members. It’s members are made up of individual interests, companies, whatever and trade associations whose members depend on the railroad for transportation. And a pretty high number of these rail dependent companies are what we call “captive,” at least in some places. That is they must use the railroad, trucks won’t do and they are only served by one railroad, single service railroad.

Szabo talks about what is at issue here.

SZABO: In the last 30 years the major railroads of this country have consolidated down to 4 main railroads and they’ve divided the country up - for 40% of the traffic that goes on the railroads there is no competition. In other words that traffic is what we call “captive” and it has to pay whatever the railroad says it must pay. And the railroad company is overseen with a very light hand by a very weak agency called the surface transportation board.

It is a federal agency that very few people have ever heard of and they are exempt from anti-trust laws.

SZABO: The problem is it’s hurting a lot of American companies. Actually the importers who bring stuff into our country get cheaper rates for moving those containers of stuff from ports to markets in the U.S. than American manufacturers and producers get for moving their stuff to the same markets in the United States. And that’s a problem obviously that leads to loss of American jobs and jobs being exported.

Szabo says this has a two-art solution.

SZABO: We want them under the same anti-trust laws that all other American companies are under. It’s our anti-trust laws that are our first line of defense for competitive markets in this country. We also want to see this board which say the railroads don’t have to provide their customers access to a competing railroad and we believe in a quote “deregulated marketplace” we should have access to competing railroads. I think the general public, particularly in the agriculture community needs to say to their members of Congress, do something about this freight rail problem that that’s hurting American jobs and hurting the ag community.

That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network. 

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