There is a distinct possibility that under the Biden administration the Surface Transportation Board will take stronger enforcement actions against the Class 1 freight railroads to protect shippers.
Two days after his inauguration, the President named Martin J. Oberman the new STB Chairman. A Democrat, he had served as Vice Chairman.
Former Chairman Ann Begeman’s second term ended Dec. 31, but she can remain a board member until her replacement is sworn in. The other four board member seats were finally filled late last year.
The change in leadership is not seen as significant because both Democrat and Republican members appear to hold similar views on rail regulation.
Although she was respected for her experience and knowledgeability, Republican Begeman’s evident reluctance to take strong action against railroad abuses of their customers frustrated shippers.
Begeman presided over the board when CSX under Hunter Harrison created chaos with the hasty implmenetation of his Precision Scheduled Railroading operations model, which also was embraced by other Class 1 rail lines in recent years.
The board adopted a strong stance on rail data reporting to deal with service failures, and later adopted rules seeking to control unfair demurrage and accessorial fee practices. However, shippers say many abuses continue and the STB hasn’t followed through with enforcement actions..
The board has slowly begun to reform rail rate regulation, but has yet to approve competitive switching, which shippers have sought for years.
“The appointment of a new (and Democratic) member and a new chair may make the agency more likely to edge toward outcomes that lean toward more regulatory intervention, but it is far from inevitable that the difference will necessarily be significantly adverse to the industry,” observe attorneys in the transportation practice group of the law firm of Holland & Knight.