Contact: Chad Kolton                                                                       April 27, 2010
202-288-5519
ckolton@hdmk.org

Case For Reform: New Government Study Says Railroads Profit at Expense of Consumers, Shippers and Some Farmers
Coalition Says Rail Relief is Overdue, Calls for Action

WASHINGTON, D.C. - A detailed new report on rural transportation issues released today by the U.S. Department of Agriculture includes dramatic findings about the cost to American farmers and consumers from the lack of competition in the freight rail industry, and "considerable evidence" that freight rail companies used excessive fuel surcharges to artificially boost profits.

Bob Szabo, Executive Director of Consumers United for Rail Equity (CURE), a coalition of freight rail customers seeking changes in federal law to allow for more competitive railroad pricing and reliable service, issued the following statement about the report:

"This study shows once and for all that the current lack of protections against monopoly pricing by freight rail companies is hurting our economy, raising prices and affecting job creation. Bipartisan legislation is pending in Congress that will provide much-needed relief for America's farmers and consumers, and we call on Congress and the President to enact it into law this year."

Key report findings include:

• "The rapid consolidation of the railroad industry through mergers has resulted in a decrease in the unrestricted interchange of traffic, routing choices, and the level of competition among railroads."
  
• "Railroad service problems and high rates can directly impact rural consumers by pushing up electricity rates."
  
• "Almost 75 percent of agricultural areas lost rail competition from 1992 to 2007." 
  
• "There is considerable evidence that railroad fuel surcharges recovered more than the additional cost of fuel, artificially boosting railroad profits. From 2001 to 2007, surcharges were 55 percent higher than the incremental increase in the cost of fuel."

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