Contact: Jim Morrell                                                                            March 3, 2011

202-789-4365

jmorrell@hdmk.org                                                                                               

SENATE COMMITTEE VOTES TO END RAILROADS’ SPECIAL INTEREST LOOPHOLE

Judiciary Committee Approves Bill to Remove Industry’s Antitrust Exemptions

WASHINGTON – The U.S. Senate Judiciary Committee today approved legislation that would remove the antitrust exemptions currently exploited by the freight railroad industry.  The bipartisan bill, the Railroad Antitrust Enforcement Act, S. 49, was introduced by Senator Herb Kohl (D-WI) and Senator David Vitter (R-LA).

“This is an important step in righting a wrong that is stalling job creation and threatening the economic recovery,” said Glenn English, Chairman of Consumers United for Rail Equity, a coalition of freight rail customers.  “For too long, the market has been blocked from setting fair prices for shipping products via rail, which has hurt shoppers, exporters, farmers and manufacturers.  This bipartisan bill says ‘no’ to continuing a huge special interest loophole and says ‘yes’ to fair competition and market rates.”

Because they are exempt from federal antitrust laws, freight railroads are able to charge anti-competitive and excessive rates to rail-dependent customers that are then passed along to consumers through everything from higher electricity rates to grocery bills.  The Railroad Antitrust Enforcement Act would abolish these unnecessary antitrust exemptions. 

The United States currently has just four major freight railroads.  These railroads provide nearly 90 percent of the nation’s freight rail transportation, by revenue.  Last year, a joint USDA-DOT report issued found there is “considerable evidence” that freight rail companies collected excessive fuel surcharges from rail customers to artificially boost profits.

“We thank Senators Kohl, Vitter, Klobuchar, Hatch, Leahy, Franken, Tester and Schumer for their leadership in fixing a huge market distortion and helping American consumers, businesses, and our economy, and thank the Senate Judiciary Committee for its fast action on this critical legislation,” said English. 

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