Changes Needed in Procedures for Setting Freight-Car Rental Rates

When one railroad uses another railroad's freight car, it pays a per-diem rental rate. The Interstate Commerce Commission (ICC) establishes the criteria and procedures for determining per-diem rates. The per-diem rate reimburses freight-car owners for the costs of owning a freight car and for a fair return on investment. Although this should ideally allow an adequate supply of freight cars to move easily and fairly among railroads, shortages have been common. In 1966, Congress authorized an incentive payment to be added to the per diem; ICC implemented the incentive program in 1970. The Railroad Revitalization and Regulatory Reform Act of 1976 mandated that ICC revise its rules, regulations, and practices for compensation paid for the use of freight cars.