The ceiling rate that a railroad may charge a captive shipper, as determined by the Surface Transportation Board in a rate case. Rates above 180% of variable cost are presumptively subject to challenge. The STB uses methodologies such as Stand-Alone Cost to determine the maximum reasonable rate.
A proceeding before the Surface Transportation Board in which a shipper challenges a railroad rate as unreasonably high, typically under the Simplified Standards for Rail Rate Cases or the Full Stand-Alone Cost methodology. Rate cases are complex, expensive, and time-consuming, often involving detailed economic and engineering analyses. A successful rate case can result in a refund of overcharges and a maximum reasonable rate going forward.
The independent U.S. federal agency responsible for the economic regulation of the nation's freight railroads, including jurisdiction over rates, mergers, acquisitions, line sales, and abandonments. The STB was created by the ICC Termination Act of 1995 as the successor to the Interstate Commerce Commission. It adjudicates shipper complaints about unreasonable rates and competitive access.
A regulatory standard under which a railroad is considered revenue adequate if its revenues are sufficient to cover all costs and earn a return on investment equal to that of a company of comparable risk. The STB annually determines whether each Class I railroad is revenue adequate. Revenue adequacy status affects a railroad's ability to defend rates in STB proceedings.
A formal filing by a shipper with the Surface Transportation Board alleging that a railroad's rate or practice is unreasonable, discriminatory, or otherwise unlawful. Complaints can seek rate relief, damages, or changes in railroad practices. The complaint process provides shippers a regulatory remedy when commercial negotiations fail.
The ability of a shipper to use more than one railroad for a given movement, either through reciprocal switching, trackage rights, or geographic proximity to competing lines. Competitive access is a key factor in rate negotiations and is central to rail regulatory policy. Shippers with competitive access generally obtain lower rates than captive shippers.