Staggers Rail Act Archives

: Elliott

NEW YORK – Former UTU Associate General Counsel Dan Elliott, now chairman of the U.S. Surface Transportation Board — the federal agency regulating rail mergers, line sales, abandonments and labor protection — returned to his roots July 4, speaking to more than 500 UTU officers and members attending the union’s eastern regional meeting here.

Terming train and engine workers “the unsung heroes” of the freight railroad industry’s renaissance, Elliott said, “None [of the resurgence] would have been possible without the people in this room. Labor was a major contributor to the rebirth of the rail industry as productivity shot through the roof [since Congress partially deregulated railroads through the Staggers Rail Act of 1980]. This is all thanks to your working harder, smarter and better,” he said.

Elliott recalled that prior to partial deregulation afforded by the Staggers Act, railroad bankruptcies were increasing, track often was in such poor repair that there were standing derailments, service quality had deteriorated and job security was problematic.

The Staggers Act, said Elliott, set loose market forces, giving railroads “greater flexibility to make decisions, develop better ideas and operate more efficiently. There are fewer trucks on the highway and the United States has some of the lowest freight rates in the world. It has all been done with private investment.” He said his job and the job of the STB is to “make sure the industry stays healthy.”

As for his elevation to the STB – which required a nomination by President Obama and confirmation by the Senate — Elliott said, joking, it was something he had long sought. Reflecting on an early-career appearance before the STB’s predecessor agency, the Interstate Commerce Commission, Elliott recalled having to make a difficult argument seeking labor protection.

“I was told to say my piece and sit down. So I went to Washington to the ICC Building. There were scores of railroad attorneys, a press table and spectators. I said my piece. And the chairman asked me to explain why UTU members should have lifetime income protection when nobody else in the room had it. I knew right then and there that I wanted to be the one asking the questions and not answering them,” Elliott said.

WASHINGTON – The U.S. Surface Transportation Board says it will hold a hearing Dec. 9 to review certain exemptions from economic regulation afforded railroads – specifically, commodity exemptions, boxcar exemptions and intermodal trailer and container exemptions.

The exemptions from STB rate and service oversight were first imposed in 1976, and modified in 1980 following substantial deregulation of the rail industry by the Staggers Rail Act.

Creating those exemptions, said the STB, “fundamentally changed the economic regulation of the railroad industry. Prior to 1976, [the STB’s predecessor, the Interstate Commerce Commission] heavily regulated the industry. The ICC focused its regulation on ensuring equal treatment of shippers, which in some instances, led to railroad pricing decisions based on factors other than market considerations.

“These agency exemption decisions were instrumental in the U.S. rail system’s transition from a heavily regulated, financially weak component of the economy into a mature, relatively healthy industry that operates with only minimal oversight,” said the STB in announcing the hearing.

“The transition, however, was not without challenges, sometimes because an exemption … excuses carriers from virtually all aspects of regulation, even though the STB’s continuing jurisdiction over exempted movements also extinguishes any common law cause of action regarding common carrier duties,” said the STB.

“In recent years, the STB has received informal inquiries questioning the relevance and/or necessity of some of the existing commodity exemptions, given the changes in the competitive landscape and the railroad industry that have occurred over the past few decades,” said the STB.

“The STB will, therefore, hold a hearing to explore the continuing utility of and the issues surrounding the categorical exemptions.”

The Journal of Commerce reported Oct. 21 that the decision to hold the hearing followed a September promise to the Senate Commerce Committee by STB Chairman Dan Elliott that the STB would begin an examination of past regulatory practices.