Ribble Works to Protect Consumers and Lower Energy Costs

Jul 24, 2013 Issues: Energy, Jobs and the Economy, Transportation

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
“Wisconsin energy companies and other rail shippers continue to express concerns about the cost and availability of rail service.  On behalf of our member rail shippers, the Green Bay Area Chamber of Commerce applauds Congressman Ribble’s efforts to improve the timeliness and functionality of the Surface Transportation Board so that it can more effectively protect shippers and consumers,” said Laurie Radke, president, Green Bay Chamber.

Cooperative Network
“Our rural cooperative members continue to have concerns about excessive shipping rates and the Surface Transportation Board’s burdensome process of seeking rate resolution. Cooperative Network greatly appreciates Congressman Reid Ribble’s efforts to hold the Surface Transportation Board accountable to our members who ship and receive product by rail,” said Bill Oemichen Cooperative Network President & CEO.

Great Lakes Timber Professionals Association
"The Great Lakes Timber Professionals Association commends Congressman Ribble for his persistent efforts supporting business in Wisconsin as well as across the United States. Rail once played a significant role in the movement of goods across the state, however service has dwindled over the past few years forcing alternative forms of transportation to be adopted by pro-business states such as Wisconsin.  Because of its service to the country in time of war, railroads have been exempted from many antitrust regulations. Perhaps its time consider service to the country a higher priority than the bottom line."

Wisconsin Electric Cooperative Assocation (WECA)
“Wisconsin’s electric cooperatives applaud Congressman Reid Ribble for notifying the Surface Transportation Board of his concern about the lack of competitive rail service shipping rates,” said Share Brandt Wisconsin Electric Cooperative Association General Manager. “Our power suppliers are captive to only one shipper and have experienced sudden rate increases in the past that have greatly increased costs for electric ratepayers. The cost and complexity of filing a challenge to the rates with the STB is discouraging and results in no accountability for our nation’s railroads.”

Attached is a copy of the letter sent to the STB, dated July 11th.