News RSI Petition to STB on Car Hire Rates

Petition: RSI Car Hire Petition to STB 2024

By The Railway Supply Institute

The Railway Supply Institute (RSI) has formally submitted a petition urging the Surface Transportation Board (STB) to review and reassess the existing Arbitration Rule which governs car hire rate negotiations within the railroad industry. This critical appeal comes amid growing concerns over the unsustainable trajectory of boxcar supply, where investments have not kept pace with the looming retirement of a substantial portion of the North American boxcar fleet. RSI’s primary argument is that the current framework for establishing car hire rates, particularly the default rates set by the Arbitration Rule, is inhibiting necessary private investments in new and existing boxcars, potentially heralding a shortage that will affect various industries reliant on this mode of transport.

In light of the current economic models and market dynamics, RSI demonstrates the pressing need for STB’s involvement to avert an imminent deficit in boxcar availability by advocating for a market-based solution that reflects the true state of supply and demand. This change is vital for ensuring a reliable and sufficient boxcar fleet that supports America’s industrial and infrastructure health. Furthermore, the dominance of TTX, a railcar pooling company with unique anti-trust exemptions, has also been highlighted as a concern for competitive balance within the market.

Key points in the petition include:

  • The impending retirement of 22% of North American boxcars by 2030, which current levels of investment are insufficient to replace.
  • The Arbitration Rule’s methodology for determining default rates is flawed, contributing to a disincentive for investing in new boxcars.
  • Market dominance by TTX and competitive concerns due to the company’s expanding share in the boxcar market.
  • The call for STB to reassess and potentially revoke the Arbitration Rule in order to restore a competitive and economically viable boxcar fleet.

Read the Full Text of the Petition Below and at the STB website.

 

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