The Surface Transportation Board (STB) on May 18 ruled to maintain the status of a 1992 Code of Car-Hire rule, opting to observe market responses to recent changes before considering further action. In STB Docket No. EP 334 (Sub-No. 8A) (download below), “JOINT PETITION FOR EXEMPTION OF ARBITRATION RULE FROM APPLICATION OF 49 U.S.C. § 10706 AND MOTION TO DISMISS,” the Board said it “removes this proceeding from abeyance and denies a petition to reopen a 1992 decision approving an agreement that established a process governing the negotiation of car-hire rates for deprescribed rail cars and the arbitration of related disputes. negotiation of car-hire rates for deprescribed rail cars and the arbitration of related disputes. Given that several changes to that process have recently been adopted, the Board finds that the appropriate course is to observe how the market responds to those changes to assess their real-world impact on rates, investment and competitive dynamics before determining whether further intervention is warranted. Additionally, the Board directs the Association of American Railroads to review and address the process’ voting structure, notify the Board when it has done so, and, if necessary, promptly seek any required action from the Board.” Regulation of car-hire charges “evolved from ICC (Interstate Commerce Commission)-prescribed formulas in the 1960s to market-based rates, with the 1992 Rule establishing negotiation and arbitration processes,” STB noted “In the 1990s, final rules froze rates at Dec. 31, 1990, levels, allowing deprescription of up to 10% annually from 1994 for 10 years. After…
