Railroad arbitration process could change for smaller shipping disputes
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New procedures the U.S. Surface Transportation Board approved this week that may give shippers a way to resolve rate disputes of less than $4M in a matter of months instead of years., according to Associated Press.
âThe board has long sought a suitable method of making adjudication of smaller rate disputes accessible, reasonable, and less time-consuming for affected parties," noted STB Chairman Martin Oberman 
The agency noted previous efforts to provide rate review methods suitable for smaller disputes have been rarely used by shippers. The issue is important because the American Chemistry Council trade group estimates that challenging the rates railroads charge under the existing system costs between $4M and $5M and takes about five years on average
The STB said that if all seven of the largest railroads agree to it, a new arbitration system will be adopted to resolve smaller rate disputes. However, the new system will not be implemented unless rail companies such as Union Pacific (UNP) BNSF, Norfolk Southern (NYSE:NSC), CSX (CSX), Kansas City Southern, Canadian Pacific (CP) and Canadian National Railway (CNI) promise to abide by the decision from the arbitration process.
An alternative proposal would see the STB decide whether a railroad's rates are reasonable. In the event a rate is rejected, the board would accept either the company's or the railroad's proposed rate without spending an extended period of time working to decide what the rate should be.
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