Ribble Works to Protect Consumers and Lower Energy Costs
Washington, D.C. - Congressman Ribble recently sent a letter to Chairman Daniel Elliott of the Surface Transportation Board (STB) asking them to review their competition policies that effectively allow areas of the country to suffer from a lack of competition and therefore excessive shipping costs. These higher shipping costs for raw materials such as coal or timber, result in higher prices for energy and manufactured products for Wisconsin families. Captive rail stations are those which are served by only one Class 1 railroad company.
“Northeastern Wisconsin’s economy relies primarily on heavy manufacturing and agriculture, including the timber, pulp and paper, and energy sectors. These industries often rely on rail service to ship their raw materials and finished products. Unfortunately, 88 percent of Wisconsin and 97 percent of the 8th District is captive and only served by one company,” stated Congressman Ribble.
Since 1980, the number of major railroads in the United States dropped from more than forty to seven. Only four companies handle roughly 90 percent of the nation’s traffic. In 2009, the Consumer Federation of America released a report highlighting the cost of excessive rail shipping rates. For instance, 50 percent of the costs of coal are transportation costs, which are passed on to the consumer in the form of higher prices. Excessive rates cost consumers nearly $3 billion annually in the form of higher prices on everyday expenses, such as groceries and their utility bill.
Ribble continued, “In order for Wisconsin businesses to provide low-cost products and services to Wisconsinites, we have to make sure they are competing in a market that has strong rail service competition. I will continue to fight to protect consumers from anti-competitive shipping policies to help lower their monthly bills. Imagine how small the average Wisconsin family’s utility bill could be if we had greater rail competition in the marketplace.”
A number of Wisconsin industry stakeholders gave the following statements in response to Congressman Ribble’s STB letter:
Green Bay Area Chamber of Commerce
Great Lakes Timber Professionals Association
Wisconsin Electric Cooperative Assocation (WECA)
Attached is a copy of the letter sent to the STB, dated July 11th.