For Immediate Release:                     
www.railcure.org                                               

Senate Committee Votes to End Railroads’ Antitrust Exemption

Washington, D.C. (March 5, 2009) — Legislation to remove the railroads’ antitrust exemption to increase competition and fairness in the freight rail industry won quick approval by the Senate Judiciary Committee today.  The Railroad Antitrust Enforcement Act of 2009 (S. 146) was approved by a bipartisan 14-0 vote. 

“I applaud these Senators for their efforts to put an end to this broad and unwarranted exemption from antitrust law,” said Glenn English, Chairman of Consumers United for Rail Equity (CURE) and CEO of the National Rural Electric Cooperative Association. “The railroads have used this exemption to consolidate the country’s rail shipping down to four regional monopolies, giving these corporate behemoths tremendous monopoly pricing power that results in record profits at the expense of captive shippers.”

The four largest U.S. freight railroads – Union Pacific Corporation, CSX Corporation, BNSF Railway, and Norfolk Southern – in January reported a combined $358 million increase in quarterly revenues from the previous year, even while the economic recession was creating record job losses and shrinking the Dow Jones Industrial Average by 19 percent.  All four railroads also reported lower volumes of freight moved during the period, highlighting their ability to extract greater profits per shipment through their monopoly pricing power.

“These monopoly railroads are putting the squeeze on captive shippers to make higher and higher quarterly profits, which result in excessive prices for everything from electricity to food for American consumers,” English said. “They are doing this when most American families can least afford price increases on basic necessities.”

The Railroad Antitrust Enforcement Act of 2009, authored by Senator Herb Kohl (D-WI), would:

• Repeal the railroads’ exemption form antitrust law;
• Permit the U.S. Department of Justice and the Federal Trade Commission to review mergers under antitrust law; 
• Ensure that STB rulings and regulations conform to the nation’s antitrust laws; and
• Allow state attorneys general and private parties to sue for treble damages and pursue court orders to halt anticompetitive conduct, both of which are not currently allowed under federal law.

“The Senate Judiciary Committee has shown great leadership by passing this legislation in a bipartisan fashion,” English said. “This bill brings much-needed scrutiny to freight railroad consolidation and monopoly practices, and I look forward to seeing this legislation finally brought to the floor of the House and Senate this year.”

A companion House bill (H.R. 233) authored by Rep. Tammy Baldwin (D-WI) is currently pending in the House Judiciary Committee. The legislation passed the committee in the last Congress by a bipartisan voice vote. 

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Consumers United for Rail Equity (CURE) represents a wide variety of rail customers including public utilities, rural electric co-ops, agriculture groups, as well as chemical, ethanol, cement, forest and paper companies, and other manufacturers.

For more information about CURE visit: www.railcure.org