STB Publishes Final Rules on New Rate Review Process

The National Grain and Feed Association (NGFA) commended the Surface Transportation Board (STB) today for issuing its long-awaited final rules for the voluntary Small Case Arbitration Program and the Final Offer Rate Review (FORR) process.

STB issued its final rule on Dec. 19 for a streamlined FORR process that would provide rail customers with a more workable approach to challenge unreasonable freight rail rates. STB also published its final rules for the voluntary Small Case Arbitration Program. Both sets of rules would apply to rate disputes that involve rates for regulated commodities not subject to a rail transportation contract.

If all Class I rail carriers opt-in for the arbitration program the Board will issue a notice to commence the new arbitration program. By agreeing to participate in arbitration, carriers will commit to participate in any arbitration proceedings brought against them under this program for a five-year term. If one or more Class I carriers choose to not opt-in for arbitration, all Class I carriers will be subject to rate challenges under the FORR process.

“The final rules issued by STB today mark an important milestone for agricultural shippers and their ability to operate efficiently in the rail transportation system. NGFA-member companies have experienced unreasonably high rail rates with the rapid consolidation of the North American freight rail marketplace and the implementation of new operating models by several Class I railroads. FORR provides an avenue for agricultural shippers to challenge rail rates in a timely and cost-effective manner,” NGFA President and CEO Mike Seyfert said.

“We thank Chairman Martin Oberman, STB commissioners and staff for their efforts to improve the rules for reviewing the reasonableness of railroad rates and to make them more workable, accessible and useful for agricultural shippers.

"We appreciate the incorporation of several of NGFA’s recommendations into both the arbitration program and the FORR process. We look forward to continuing to work with the STB on other pending proceedings that would further facilitate more reliable rail service at competitive rates.”

In 2014, NGFA developed and submitted to the STB its own version of a simplified rate-challenge methodology intended to be workable for agricultural rail users. Subsequently, a 2015 report by the National Academy of Sciences’ Transportation Research Board also found the STB’s rate-challenge processes to be complex, time-consuming and costly, with only one agricultural shipper having gone through the rate challenge process in more than 40 years.

The rules for the FORR process can be found here and the rules for the arbitration program can be found here.