Fuel Smarts

STB Tells Bureaus To Lower Base Rates

December 24, 1998

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Dec. 28 – In most industries, competitors are barred from discussing prices by federal antitrust rules. But since the 1930s, motor carriers have been allowed to collectively set rates, as long as they did so through government approved rate bureau agreements. Under the 1995 Interstate Commerce Commission Termination Act, all such agreements were to expire on December 31, 1998. In mid December the Surface Transportation Board gave them another year, but warned that new agreements won’t be approved in 1999 unless class or “baseline” rates are reduced to “market based” levels.
Current baseline rates are “unrealistically high,” the agency said, noting that shippers routinely get discounts of 50-60%. The bureaus argued that other businesses set prices high to accommodate discounts, but those prices, STB responded, “are not set through discussions among competitors that are protected by government immunity.”
The STB also called for changes in the current freight classification system to allow more shipper input.
The agency granted the extension because many provisions of the ICC Termination Act, including STB reauthorization, are scheduled for Congressional review during 1999. If Congress makes no changes to existing
laws, it will move forward with its required changes at the end of 1999.

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