In their relentless pursuit to push more of the cost of operating railcars on to shippers, the UP has requested the STB to “terminate our obligation to comply with the mileage equalization provisions of the National Tank Car Allowance Agreement adopted by the Interstate Commerce Commission in Investigation of Tank Car Allowance System (“System – 1986”), 3 I.C.C.2d 196 (1986).” If the STB approves the petition, it would mean the railroads would treat the empty movement of tank cars in a similar way that other privately owned cars are handled.
Over the years the railroads have chipped away at the mileage allowance agreement. The last change big change, also led by the UP, was in January of 2015 when they stopped allowing empty shop movements under mileage allowance. The other railroads soon followed suite.
Now the UP argues that the mileage equalization allowance on tank cars should be scrapped and all empty movements not directly preceded by a loaded revenue movement should be charged as empty revenue movements. Empty car equalization is $0.95 per mile in excess of the 106% of loaded revenue movements. UP’s current empty car freight rates are much higher:
- $1,555 for 250 miles or less
- $1,744 for 251-500 miles
- $3.49 per mile if over 500 miles
Under the STB’s rules, shippers have 20 days to reply to the petition (May 15). Union Pacific has proposed that if the petition is not rejected or denied outright, then the STB should provide notice of the petition in the Federal Register and set a schedule to receive public comments.