Obama Regime's New Executive Order for Railroads

Railway Age reports:

Executive Order No. 13725, issued April 15 by President Obama, and published in the April 20 Federal Register, mandates that Executive Branch federal agencies take specific actions to promote competition.

News reminder: The Surface Transportation Board (STB) Reauthorization Act of 2015 removed the STB from the cabinet level Department of Transportation, amputating all administrative ties with DOT and establishing the STB as an independent federal agency.

Thus, you might think that the STB, as an independent federal agency, is not subject to Executive Orders. Think again.

Notwithstanding the STB’s independent status, its three voting members—especially the two of the same political party as the president—have a strong self-interest incentive to comply, which should disturb the sleep of railroad management and investors, while raising the hopes of captive rail shippers having few or no effective alternatives to rail transportation.

The Executive Order, entitled, in part, “Steps to Increase Competition,” instructs Executive Branch federal agencies—while encouraging independent federal agencies, such as the STB—to take “actions in their areas of responsibility to address undue burdens on competition.”

This Executive Order could be a catalyst for action favoring rail captive shippers on two already pending matters.

One is whether to grant shippers, captive to a single railroad within terminal areas, access to a second railroad, with the STB establishing the level of compensation to the railroad whose track is used by the competitor. The result could cap or reduce affected freight rates.

An article worth your time.