House farm bill requires freight rail cost study

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"Rail-dependent shippers across the country thank the House for voting to require a new, independent look at the problems created in America’s rural economy by a lack of competition in the freight rail industry," CURE President Steve Sharp said in a statement. "We’re confident this new report will show once again that farmers and consumers ultimately pay the bill through everything from lost exports to higher electricity bills — and hopefully will support action by Congress and the Obama Administration to pass pro-competition legislation that provides much-needed relief."

Freight rail companies argue that the antitrust exemptions are crucial to the industries' way of doing business.

Lawmakers in the Senate introduced legislation earlier this year to role back the exemptions, which was backed by CURE. The sponsors of the bill, Sens. Amy Klobuchar (D-Minn.) and David Vitter (R-La.), argued that the exemptions allowed freight rail companies to operate monopolies in rural areas.

“It’s simply unfair that companies like Blandin Paper Company in Minnesota pay higher prices because railroads enjoy an exemption from the antitrust laws,” Klobuchar said in a statement when the bill was introduced in March. “This legislation makes commonsense reforms that will require the railroad industry play by the same antitrust rules as other industries and will help keep costs down for businesses, farmers and consumers.”

The group that lobbies for freight rail companies in Washington, the Association of American Railroads (AAR), opposed the measure to end the antitrust exemptions.

The group argued that the changes the bill would wreck havoc on the movement of goods and cargo in the U.S.

“This bill proposes sweeping changes that would negatively impact this country’s freight rail industry,” AAR President Edward Hamberger said in a statement.

“Sections of this bill are designed to override existing regulatory decisions and could potentially roll back government-approved transactions in railroad history," Hamberger continued. "That retroactive application would inevitably create conflicts and uncertainty for railroads, railroad customers and courts. The resulting regulatory uncertainty could undermine the private freight railroads’ ability to sustain necessary and critical private investments in America’s rail infrastructure."