WASHINGTON — The Biden administration wants U.S. regulatory agencies to address consolidation and what it considers to be anticompetitive pricing by railroads and ocean shipping firms, the Wall Street Journal reports in a paywalled article.
The Journal — citing a source familiar with the situation — says the administration will issue an executive order this week asking the Surface Transportation Board and Federal Maritime Commission to address the “aggressive pricing” made possible by consolidation that has left a small number of companies able to charge high fees, raising the expense for companies to ship products.
The executive order will reportedly urge the STB to move forward with a proposed rule on reciprocal or competitive switching, which would allow shippers served by only one railroad to request bids from another railroad, if one is nearby. The STB first proposed such a rule in 2016 but has taken no additional action.
The order will also ask the STB to consider proposals making it easier for shippers to challenge railroad rates, and to make it possible for shippers to create routes across multiple railroads to lower their costs.
The report says this will be just one part of what is expected to be a sweeping executive order with the goal of creating more competition throughout the economy. It will also seek to curtail non-compete agreements that limit job options and job licensing, as well as new rules to address the agricultural economy.
A little overreach on Biden’s part…there’s actually nothing wrong with the transportation market today, compare prices paid today on a dollar for dollar basis vs 20, 30 years ago, and taking inflation into account they’re actually lower.
I like Landon’s last sentence! blessings
The market works best when there is competition. The regulation before Staggers was far greater than what Biden is proposing. At that time, railroads couldn’t even lower rates without permission.
Competitive switching or allowing shippers to require a RR to interchange traffic to another increases competition and allows shipments to take more direct routes. This should result in better rates and service, and possibly diversion of traffic from trucks.
Key to making it work is allowing the RR that does the switching or gets short hauled the ability to charge a sufficient rate for these services to justify reinvestment in the right of way. This would limit how much rates would drop, to some degree.
The other question is how the current RR regulation law is written. Does the STB actually have this power without congress acting. Biden is supposed to be the President, not a king.
Some good ol political sword rattling on behalf of the bigger and louder group of shippers (donors) is how take it. Of course, the railroads not helping themselves by increasing rates, implementing precision railroading and ultimately reducing service on behalf of Wall Street investors. So no one should be surprised in my opinion
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That being said, I don’t think it is a good position either to add more regulation considering goods can move by multiple ways if not always the most cost effective. Let the market figure it out
Curious position to take, considering the government monopoly and pervasive control taken within the healthcare industry. I fear a return to the days of the ICC.