WASHINGTON, D.C. — An amendment to the U.S. Senate’s proposed Surface Transportation Bill (S.1813) offered by Sen. Herb Kohl (D-Wis.) would include his Railroad Antitrust Enforcement Act of 2011 (S.49) in the larger bill.

Kohl’s amendment would remove most freight railroad antitrust exemptions and make rail transportation more competitive for its rural customers, according to Bob Szabo, executive director and lead counsel for Consumers United for Rail Equity (CURE), a Washington, D.C.-based coalition of rail shippers.

“We’re supportive of the Kohl amendment. We very much hope it is possible to get the amendment onto the highway bill,” said Szabo, whose organization has promoted rail shipping equity for rail shippers, including grain elevators and other businesses which provide rail services for rural and other transporters, since 1984.

“The four remaining (Class I) freight railroads have unrestrained monopoly power over their customers because they are not regulated. The law does not provide an effective way to regulate the freight railroads,” he said. “The absence of any antitrust coverage is a real problem for rail customers.

“Antitrust laws are there to ensure competitive markets. The absence of antitrust coverage allows them to maintain markets that are not competitive, to the detriment of their customers.”

Kohl’s amendment makes sense because it is attached to legislation – the Senate’s Moving Ahead for Progress in the 21st Century (MAP-21) bill – that stands a good chance of passage this year. However, there are more than 100 amendments being considered for inclusion in MAP-21.

“Given the election year and the bipartisan bickering, not that many (bills) have a shot at being enacted this year,” Szabo said. “If the (Republicans and Democrats) can get connected on the content, this is one of the few bills that should get passed this year.”

Rail shippers were also pleased with last week’s news that Senate Majority Leader Harry Reid (D-Nev.) has offered his own amendment to S.1813 that includes some pro-rail customer measures.

“This is significant for a couple of reasons,” Szabo said. “First, the pro-rail customer amendments were developed by the bipartisan Senate Commerce Committee staff. Second, S.1813, which failed a cloture vote, is expected, when amended, to achieve cloture and final passage in the Senate. While negotiations likely will still be required with the House, since the Senate legislation is bipartisan it may be near the final legislation produced by Congress.”

The Reid amendment requires the Surface Transportation Board (STB) to publish quarterly a list of all complaints received from shippers, increases the maximum damage recovery ceiling, requires quarterly reports to the jurisdictional committees of Congress on the status of unfinished regulatory proceedings and establishes a workforce assessment plan to determine the optimum number of staff the board needs to conduct its business.

“S.1813 as amended by the majority leader’s amendment is expected to pass the Senate. Whether or not we can get the Kohl amendment on the bill, we’re going to have some rail antitrust provisions on the bill,” Szabo explained.

According to the Assoc. of American Railroads (AAR), the current regulatory framework established by the Staggers Rail Act of 1980 helps keep costs low for shippers, encourages railroad capital investment and enables freight railroads to support 150,000 high-paying rail jobs. For those reasons, AAR believes the framework should be maintained.

Not so, according to CURE, which points to record-high profits for the four Class I freight railroads, when campaigning for rail reform measures in Congress. “(The railroads) are driving up the cost of rural America’s electricity because many rural folks get their power form their rural electrical co-op, most of which are fueled by coal, which is subject to captive shipping rates by the railroads,” Szabo said.

“Fertilizer prices are higher because of the monopoly over fertilizer transportation. Often the transportation of the finished agricultural product is being priced artificially (higher) by the railroads. They’ve made it very difficult to export ag products from the middle of the country effectively.”

Rail shippers received a boost last week during CURE’s annual meeting on Capitol Hill, when STB Chair Daniel Elliott, USDA Under Secretary for Rural Development Dallas Tonsager, three members of the bipartisan Commerce Committee staff and two members of Kohl’s staff briefed CURE members on the rail amendments.

“The USDA is behind us on this rail issue. And we learned from the STB that they will be announcing their competition issue intentions very soon,” Szabo reported.

The National Assoc. of Wheat Growers was among nearly 50 groups representing rail shipper interests who wrote to senators last week urging them to support adoption of S.49 as an amendment to their surface transportation legislation. House Speaker John Boehner (R-Ohio) announced his chamber will not take up its version of a transportation funding bill until at least this week.