Railroad Regulation:

Shipper Experiences and Current Issues in ICC Regulation of Rail Rates

RCED-87-119: Published: Sep 9, 1987. Publicly Released: Oct 15, 1987.

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In response to a congressional request, GAO provided information on: (1) the Interstate Commerce Commission's (ICC) implementation of the market dominance and rate reasonableness provisions of railroad deregulation legislation; and (2) shippers' ability to obtain rate relief from ICC under the legislation.

GAO found that: (1) most of the rate dispute cases were settled through shipper and railroad negotiations; (2) although ICC believed that many shippers obtained rate relief through contract rates, out of 19 cases where ICC ruled that a rate was unreasonable, only 6 cases resulted in a negotiated contract, and only one of the shippers involved believed the contract rate to be rate relief; (3) ICC published coal rate guidelines to help railroads set reasonable rates, help shippers evaluate proposed rates, and encourage negotiated rates; (4) the guidelines contained no practical method for apportioning fixed costs among shippers, which resulted in widely varying methods of calculating upper limits on costs; and (5) recent case decisions have helped clarify what approaches to determine these costs ICC will find acceptable.

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