One of the classic battles in rural America is the fight over railroad shipping rates, which ebbs and flows according to economic conditions and the regulatory environment. At several of the economic summits we attended, co-ops and farm groups have brought up this issue in the 21st century.
From the congressional office:
Rep Walz Backs Bill to Protect Consumers from Hidden ‘Railroad Tax’
Cosponsors bill to Stop Freight Railroads’ Abuse of Monopoly Power to Overcharge Shippers
(Washington, D.C.) – Recently, Congressman Tim Walz co-sponsored legislation to stop big railroads’ monopoly power over rail customers and to end the hidden tax levied on American consumers by big railroad overcharges for shipping U.S. consumer goods.
“Times are tough and American families are struggling,” said Congressman Walz. “Because the big railroads are free to force unreasonably higher shipping costs to move goods by rail, people are forced to spend more of their hard earned money on everything from food on the table to electricity to light their homes. These higher costs amount to a hidden tax on U.S. consumers for millions of goods shipped by rail each year. It’s long past time we ended the big railroads’ sneaky surcharge on American consumers.
Walz has cosponsored H.R. 233, the Railroad Antitrust Enforcement Act, which would end the major railroads’ broad exemption from the nation’s antitrust law to which all other U.S. business must adhere.
Under the current exemption, U.S. freight railroads have consolidated to four regional monopolies carrying 90 percent of the nation’s freight rail traffic. These railroads routinely exert their market power through increased shipping rates and poor service for captive rail shippers. The legislation would eliminate this exemption.
“For too long rail customers in Minnesota and across the nation have been captive to a railroad monopoly and suffered declining service, unreliable rail shipments and unreasonably high costs, which are then passed along to the American consumer,” said Walz. “This legislation is long overdue. Competition is healthy and will ensure a level playing field in our freight rail system and ultimately protect consumers.”
The legislation has the backing of a broad coalition of organizations representing consumers, businesses, rural America, as well as legal and regulatory experts. These organizations include the National Rural Electric Cooperative Association, the American Chemistry Council, American Farm Bureau Federation, and National Farmers Union.
“I commend Congressman Walz for standing up to the big railroads on behalf of American consumers,” said Glenn English, Chairman of Consumers United for Rail Equity. “With his help we will finally shed light on the rail industry’s abusive practices that are increasing railroad profits at the expense of U.S. consumers.”
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