Mr. President, as the Senate begins the important task of debating the highway bill reauthorization, another critical infrastructure issue comes to mind: railroads. In Montana, we rely heavily on both passenger and freight rail for our…
Mr. President, as the Senate begins the important task of debating the highway bill reauthorization, another critical infrastructure issue comes to mind: railroads. In Montana, we rely heavily on both passenger and freight rail for our transportation needs. However, Montana is served by only one major railroad, resulting in shippers being captive to little or no competition for price or service quality. That lack of competition hurts our competitiveness for agriculture and manufacturing. It drives up the cost of electricity, because of the increased costs for coal. Sometimes, it even costs us jobs in Montana.
To address the problems faced by many captive shippers, I am introducing today the Railroad Competition Act of 2005. I am joined by my colleagues, Senators Rockefeller, Dorgan, Craig, Dayton, Vitter, Thune, Johnson, Baucus, and Coleman. This legislation will extend competition to many captive rail customers and correct problems in the Surface Transportation Board's implementation of railroad deregulation. Specifically, the legislation ensures that rail customers will receive rate quotes for movements between various points on a railroad's system; frees regional and short line railroads to provide access to additional major systems; provides captive rail customers who cannot afford to participate in expensive rate challenge proceedings access to arbitration; and directs the STB to adopt a more realistic and workable rate reasonableness standard.
In addition to a lack of competition in many markets, the rail industry in America is badly in need of investment into its infrastructure. To address the infrastructure problem, the legislation increases ten-fold the current Railroad Rehabilitation and Infrastructure Financing program. The legislation also expands who is eligible for the loans and loan guarantees, so that qualified shipping entities can also invest in rail infrastructure.
This is about jobs, plain and simple. Last year, when the intermodal hub in Shelby, Montana was closed, over 40 jobs were lost. The Port Authority in Shelby reached out to the railroads to persuade them to keep the hub open, but without competition, the single supplier chose to close. Those jobs are real losses in Shelby, a town of a little over 3,000 people. As high rail rates make U.S. products less competitive, imports flow in to fill the gap--and that costs us jobs. I understand that the rail industry employs a lot of people, and I am glad for those jobs. But we can not let lack of choice and competition in price and service cost us jobs in other areas.
Since passage of the Staggers Act in 1980, the railroad industry has experienced significant consolidation, from over 40 major railroads down to 7. Roughly 35 percent of the rail traffic in America is captive, driving up the cost of transportation and placing a heavy burden on shippers.
Captive shippers, like my farmers in Montana, have nowhere to go to seek relief. The Surface Transportation Board, the watchdogs over the rail system, is a complicated and expensive mess that hardly provides a fair forum for disputes. To bring a rate reasonableness case, challenging the unfair rates charged to captive shippers, a rail customer must first file huge fees--fees that will double in the coming weeks. Then, the customer must construct a hypothetical railroad and prove to the STB that rail transportation theoretically can be provided at a lower fee. That process can cost over $2 million per case, and take years to see through. At the end, even if the shipper wins, all he gets is a lower fee in the future. Too often, damages for past overcharging are not awarded. Meanwhile, the railroad sits idly by, under no obligation to justify its rates, and continues to collect the exorbitant fees that are under dispute. This system can not stand.
The Railroad Competition Act of 2005 directs the STB to address this nonsensical system, and develops a final offer arbitration option, allowing shippers to take their case to a neutral arbiter. These provisions are necessary, not to
punish railroads, but to develop a level playing field that keeps my small businesses and agriculture producers in business.
Railroads are an essential part of our nation's infrastructure, a vast system that includes our highways, railroads, electric transmission lines, pipelines, and digital infrastructure. In a rural state like Montana, we rely on the rails to cover long distances efficiently, so rail must remain a viable shipping option. We need to achieve affordability, while still allowing sustainability for the railroads. There is a necessary public interest in our shared infrastructure, and the Railroad Competition Act of 2005 is designed to address legitimate public concerns, in Montana and around the nation, about rail operations. I look forward to working with my colleagues to secure passage of this important legislation.
Mr. President, today I am introducing legislation to address the difference between the import tariff placed on unfinished cork and refined cork. Unfinished cork has a higher import tariff than already-refined cork--this problem is in need of a resolution.
Unfinished cork is the principal element of a fishing pole's grip and must be imported as it is not available domestically. Many fishing rod companies reside in Montana, such as the R.L. Winston Rod Company of Twin Bridges. I am aware that fishing rod manufacturers, particularly fly-fishing rod manufacturers, are under pressure to increase the price of their equipment because of prohibitively high tariff on the import of unfinished cork.
While the tariff on already-finished cork is 6 percent, unfinished cork is subject to a 14 percent tariff. It just does not make good sense to charge a significantly higher levy on an unfinished product that is imported and then handcrafted by American workers.
This inconsistency must end by leveling the difference between the two tariffs. The reduction will enable American workers to continue manufacturing custom-made fishing rod grips, keep the price of all fishing poles down, and bring a measure of common sense to this portion of our tariff law. Once resolved, domestic businesses will be able to finish fly rods here, leading to an increasingly competitive place in the market for American goods. With this change Montana's small businesses will benefit as will our overall economy in the state.
I am pleased that some of my colleagues in the House have decided to assist in this effort. I truly appreciate the work of Representative Simmons of Connecticut, who is leading this legislation in the House. He has already signed on 17 co-sponsors to this legislation at last count. His assistance has been invaluable, and I look forward to working with him as this legislation moves forward.
I ask unanimous consent that the text of the bill be printed in the Record.