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Klobuchar Legislation to Ensure Fairness in the Railroad Industry Approved by Senate Judiciary Committee

Legislation will promote competition and protect rail customers and shippers

March 6, 2009

Washington, D.C. – Yesterday, by a vote of 14 to 0, the Senate Judiciary Committee approved legislation sponsored by U.S. Senator Amy Klobuchar to ensure fairness between rail companies and protect consumers and shippers.  The Railroad Antitrust Enforcement Act of 2009 would subject the freight railroads to the same antitrust laws that most other industries have to abide by, making it easier for shippers to sue freight railroads for anti-competitive behavior. 

The legislation is also sponsored by Senators Herb Kohl (D-WI), Byron Dorgan (D-ND), Russ Feingold (D-WI) and Patrick Leahy (D-VT).  It now moves to the full Senate for consideration.

“Today farmers, energy producers and manufacturers in the Upper Midwest who depend on freight rail service find themselves captive to a handful of giant railroad companies who control this essential form of transportation,” said Klobuchar.  “As rail competition has all but disappeared, shippers, producers and consumers are paying the price, especially in rural areas. The Railroad Antitrust Enforcement Act is a necessary step toward ensuring fair competition and protecting rail customers and shippers.”

According to a GAO report, three decades ago there were 63 Class I railroads operating in the United States, but today there are only seven. As rail competition has all but disappeared, producers and consumers are paying the price, especially in rural areas.  These captive shippers, with access to only one rail line, suffer the most.

The act would remove some current exemptions of the antitrust laws on the freight rail industry and subject the American freight railroad industry to all the provisions of the nation’s antitrust laws. 

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