The largest U.S. freight railroad, Union Pacific, came out against the version of the rail regulatory bill that cleared the Senate Commerce, Science and Transportation Committee last month.
James R. Young, UP's chairman, president and CEO, said the company's concerns have grown about the bill developed by Sen. Jay Rockefeller, D.-W.Va., who chairs that committee, in the weeks since the commerce committee approved the measure on Dec. 17.
"Without additional changes, we cannot support the bill," Young told Wall Street analysts in a conference call on UP's fourth-quarter earnings. But he said "our commitment here is to work with the staff" to try to get some rail-favored changes as the legislation develops.
"My number-one concern is the ability in this business to earn returns," he said. But the Rockefeller bill does not include replacement-cost accounting that is an important change UP wants regulators to adopt, Young said.
It does direct the Surface Transportation Board to study that issue. Some shipper sources have said they would oppose railroads being allowed to adopt that accounting method, and that it would effectively push up freight rates compared with traditional means for allowing railroads to count their costs.
The bill also did not include language that might end or curb a limited exemption for railroads from antitrust laws, but Rockefeller said he intends to include such language when the measure goes before the full Senate. Young said the antitrust issue is one of his concerns about the bill.
He said, however, that railroads have worked with Rockefeller and know that he and other lawmakers recognize the need for freight railroads to increase their freight hauling. "I hope that common sense will prevail here and we are incented to grow this business, and not the other way," Young said.