The Association of American Railroads (AAR) on November 12th filed comments with the Surface Transportation Board (STB) regarding its Final Offer Rate Review (FORR) proposed rule. On behalf of the freight rail industry, AAR called on the Board to withdraw the proposal because it is unlawful.

“The STB’s Final Offer Rate Review proposed rule is fatally flawed and exceeds the agency’s authority in determining rate reasonableness,” said Ian Jefferies, AAR President and CEO. “The STB’s standard-less Final Offer proposal abdicates the agency’s statutory responsibility to judge the reasonableness of rail rates and abandons careful deliberation vital to a balanced regulatory structure. Freight railroads oppose FORR because it is unlawful and undermines the fundamental legal and economic principles established by Congress.”
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The Board’s proposed rule would establish a new rate review procedure that would deny shippers and railroads alike their right to a full hearing as required by law and represents a radical departure from the market-based, economic principles that have traditionally guided the Board’s maximum rate determinations. The model is a winner-take-all approach that disregards due process rights and undermines the important principle of regulatory predictability.

The AAR also filed comments today in the STB’s Streamlined Market Dominance Approach proceeding. On December 12, the industry will make its case on the Board’s methodology for determining revenue adequacy, which the STB uses to assess the financial health of individual railroads.