Hearing Wrap Up: Senate Commerce Examines Freight Rail Reform Implementation

August 11, 2016

WASHINGTON – The Senate Commerce, Science, and Transportation Committee today held a full committee hearing on “Freight Rail Reform: Implementation of the Surface Transportation Board Reauthorization Act of 2015” in Sioux Falls, S.D.

At the hearing, witnesses testified on the implementation of the recently-enacted Surface Transportation Board Reauthorization Act, the first reauthorization of the Surface Transportation Board (STB) since its creation two decades ago. Sen. Thune introduced this legislation to make the STB more efficient and effective. The hearing continued the Committee’s oversight work to help ensure a competitive, efficient, and reliable national rail system.  The hearing featured all three appointed members of the STB and four representatives of farmers, manufacturers, and energy suppliers that depend on rail.

Excerpts from Sen. Thune’s opening statement:

“[A]bout three times as many rail carloads originate in the state compared to the number that end up here, South Dakotans disproportionately depend on rail to get our products to market, create jobs, and grow incomes. That’s why it’s so important that, when problems arise in our nation’s rail system, we have efficient and effective oversight.”

Last year, following intensive oversight activity, I introduced the Surface Transportation Board Reauthorization Act of 2015 to make the STB a more efficient and effective agency. After working on a bipartisan basis with cosponsor Ranking Member Bill Nelson, and working with my colleagues in the House of Representatives, I was pleased to see it signed into law last December. This hearing marks about eight months since the enactment of my legislation, and it is an opportunity to examine completed and on-going implementation work at the STB and hear about ways to maximize the law’s benefits for the businesses that depend on rail.” 

“While many of the most important provisions of the law are still in-progress, thus far the Board has met or is on track to meet each deadline in the legislation, a feat most other Federal agencies regularly fail to do, and I greatly appreciate their efforts.… I hope the Board will continue the good progress since enactment of the legislation, and I expect this Committee to continue its active oversight to maximize the benefits of the law. This legislation is another example of the Senate getting back to work for the American people. That works includes the five-year, $305 billion highway bill, FAA reauthorization and aviation security bill, and the pipeline safety bill as significant Committee achievements within the past year to improve our nation’s transportation and infrastructure.”

Key hearing takeaways:

The Honorable Daniel R. Elliott III, Chairman of the Surface Transportation Board:

"I want to reiterate my thanks to you, Chairman Thune, for your deep interest in freight railroad issues both in South Dakota and throughout the nation, and your work with the Surface Transportation Board on rail service issues, and for this Committee’s thoughtful oversight of the STB.”

"As a result of the Reauthorization Act, the Board has achieved greater transparency and efficiency, which directly benefits the stakeholders that we serve.”

"I would like to thank Chairman Thune in particular for the enhanced reporting provided by the Reauthorization Act.  As you may have seen, we have issued a number of major decisions in the first six months of this year.  Significant credit for this development is due to the reporting established by the Reauthorization Act and the support it provides to our continuing timeliness improvements.”

The Honorable Deb Miller, Vice Chairman of the Surface Transportation Board:

“Senators Thune and Nelson and the entire Committee drafted and passed an excellent bill and I think the Board has done an excellent job in carrying out the goals of the Act.”

“The Act has wisely addressed the need for the Board to be more transparent and accountable by allowing the Board Members to communicate more easily and by providing progress reports on its workload. I also appreciate the requirements under the Act for the Board to examine ways to improve our rate case processes and methodologies, which are long overdue. The addition of investigative power and changes to the arbitration process will also be beneficial, as they will give the Board additional means of resolving issues between railroads and shippers.”

The Honorable Ann D. Begeman, Board Member of the Surface Transportation Board:

“Chairman Thune, thank you for your efforts to reauthorize our agency and hold the Board more accountable to shippers, rail carriers, and the public.  Because of you and your Committee’s efforts, the agency can no longer operate under a ‘business as usual’ mentality.”

Mr. Michael Skuodas, Vice President of Distribution and Business Development at POET:

"Prior to the enactment of this critical legislation, the procedures and institutional barriers at the Surface Transportation Board (STB) made lodging legitimate complaints about rail service difficult and costly to execute. Timely, effective, and meaningful resolution to genuine issues was elusive for so many in our industry.”

"With this in mind, we are here to say thank you on behalf of POET, the ethanol industry, and shippers from South Dakota for your leadership on all of these key rail issues and in particular for your work to enact and implement the recent STB reform legislation. You, your Senate colleagues, and your staff gave us the opportunity to be heard, and while we still have work to do to ensure STB will fully implement the new regulations, we have reason to be optimistic that conditions will improve.”

"Chairman Thune, you have been instrumental in addressing the rail concerns of our industry including the service related issues in 2014 and now with enactment of STB reform. On behalf of all of our employees and their families we thank you." 

Mr. Dan Mack, Vice President of Transportation and Terminal Operations at CHS, Inc.:

“Regarding the subject of today’s hearing, I want to especially thank Chairman Thune and Ranking Member Nelson and members of the Committee for your bipartisan work passing the STB Reauthorization Act of 2015 (S. 808). This is the first freight rail policy reforms to pass Congress in a generation and the first time the agency was reauthorized since its creation. The rail industry has changed a great deal over the past twenty years, and this law is helping to modernize the STB to better reflect this new reality.”

Mr. Tom Heller, Chief Executive Officer of Missouri River Energy Services:

MRES and FRCA applauds you, Mr. Chairman, for holding this very important hearing on the implementation of the STB Reauthorization Act of 2015.  Your personal and steadfast oversight, accompanied by the efforts of your staff, is helping to make the difference in transforming the STB into a more effective, accountable, and transparent agency – desperately needed in today’s market for both shippers and railroads as freight demands increase here at home and overseas.”

Mr. Troy Knecht, Vice President of the South Dakota Corn Growers Association:

“The SDCGA is grateful to Senator Thune for addressing rail concerns shared by everyone in agriculture. We appreciate his leadership in passing of the STB reauthorization bill. It is a critical piece of legislation that affects all major markets.”

“I want to thank you for the opportunity to speak on behalf of the 12,500 corn farmers of South Dakota, and Senator Thune for his vision in addressing this issue.”

Watch the hearing HERE.