by kilroy
From the PR News Wire.
GAO: Freight Rail Rates Spike in 2005 More Costs Shift to Customers
WASHINGTON, Aug. 28 /PRNewswire-USNewswire/ -- Shipping rates in the
freight rail industry continue to increase, with 2005 rates marking the
largest annual increase since 1985, according to an August 2007 Government
Accountability Office (GAO) report.
In 2005, freight rail rates jumped by 7 percent, while railroads also
shifted other costs to shippers that had been included in the overall rate.
In addition, rail customers increasingly are required to own and maintain
freight rail cars and other railroad equipment, greatly increasing the
costs of doing business with railroads. GAO reported that the 7 percent
increase is an aggregated number -- which means that the increase to
captive shippers, who have no transportation alternatives, is significantly
higher.
Meanwhile, the Surface Transportation Board (STB), the federal
regulatory body charged with overseeing the rail industry, is unable to
adequately determine or regulate potential monopolistic practices.
The new report, "Freight Railroads: Updated Information on Rates and
Other Industry Trends" provides an update to the October 2006 GAO report
that analyzed the state of the freight rail industry and the efficacy of
federal oversight of the industry. The report looked at 2005 data that was
not previously available and reinforces the GAO's earlier finding that
there is little competition available to rail customers.
"Railroads continue to enjoy unrestrained ability to increase prices at
a whim and transfer almost every imaginable cost to the rail customers,"
said Glenn English, Chairman of Consumers United for Rail Equity (CURE), a
coalition of rail customers seeking changes in federal rail policies.
English is the CEO of the National Rural Electric Cooperative Association
and is a former ten-term member of Congress. "Meanwhile, unreliable and
shoddy service has become standard operating procedure for most railroad
companies. Yet, the industry continues to be protected by an STB that is
either unable or unwilling to provide adequate oversight."
The report also found that the amount of industry revenue reported as
"miscellaneous" tripled between 2004 and 2005, increasing from about $633
million to over $1.7 billion. Included in this miscellaneous category were
fuel surcharges, which the STB recently banned the railroads from
collecting because they found them to be improperly calculated. To date,
the STB has refused to order the railroads to return any of the
illegitimate fuel surcharges. Consumers across the country ultimately pick
up the tab.
GAO: Freight Rail Rates Spike in 2005 More Costs Shift to Customers
WASHINGTON, Aug. 28 /PRNewswire-USNewswire/ -- Shipping rates in the
freight rail industry continue to increase, with 2005 rates marking the
largest annual increase since 1985, according to an August 2007 Government
Accountability Office (GAO) report.
In 2005, freight rail rates jumped by 7 percent, while railroads also
shifted other costs to shippers that had been included in the overall rate.
In addition, rail customers increasingly are required to own and maintain
freight rail cars and other railroad equipment, greatly increasing the
costs of doing business with railroads. GAO reported that the 7 percent
increase is an aggregated number -- which means that the increase to
captive shippers, who have no transportation alternatives, is significantly
higher.
Meanwhile, the Surface Transportation Board (STB), the federal
regulatory body charged with overseeing the rail industry, is unable to
adequately determine or regulate potential monopolistic practices.
The new report, "Freight Railroads: Updated Information on Rates and
Other Industry Trends" provides an update to the October 2006 GAO report
that analyzed the state of the freight rail industry and the efficacy of
federal oversight of the industry. The report looked at 2005 data that was
not previously available and reinforces the GAO's earlier finding that
there is little competition available to rail customers.
"Railroads continue to enjoy unrestrained ability to increase prices at
a whim and transfer almost every imaginable cost to the rail customers,"
said Glenn English, Chairman of Consumers United for Rail Equity (CURE), a
coalition of rail customers seeking changes in federal rail policies.
English is the CEO of the National Rural Electric Cooperative Association
and is a former ten-term member of Congress. "Meanwhile, unreliable and
shoddy service has become standard operating procedure for most railroad
companies. Yet, the industry continues to be protected by an STB that is
either unable or unwilling to provide adequate oversight."
The report also found that the amount of industry revenue reported as
"miscellaneous" tripled between 2004 and 2005, increasing from about $633
million to over $1.7 billion. Included in this miscellaneous category were
fuel surcharges, which the STB recently banned the railroads from
collecting because they found them to be improperly calculated. To date,
the STB has refused to order the railroads to return any of the
illegitimate fuel surcharges. Consumers across the country ultimately pick
up the tab.
Why do we drive on parkways and park in driveways?
