The STB rules affect mergers and consolidations of class 1 railroads--those with annual revenues over $250 million--and are supposed to require more proof from railroads that a merger will be in the public's best interest. STB seeks more emphasis on enhancing competition while ensuring stable, reliable service for all involved.

The railroads think the rules are too tough. The Association of American Railroads, the umbrella trade organization, says the new rules make railroads subject to stricter rules for competition than other industries. Major rail carrier CSX Corp. says in a statement that STB "has raised the bar for rail consolidation," making future transactions, "all the more difficult to achieve."

As a major user of railroads, the chemical industry has a big stake in the rules. And it is not pleased. "The STB decision definitely misses the mark," says Frederick L. Webber, president and CEO of the American Chemistry Council (ACC). "It allows the railroads to continue down the same track of providing unreliable service and unreasonable rates to captive customers."

The problem, according to ACC, is that the rules do not require railroads to ensure competition, but only suggest that they should. Thomas E. Schick, of ACC's Distribution Team, tells C&EN that STB must force railroads to enhance competition because the railroads are not doing it on their own. "We are continuing to look at a legislative solution" that will compel STB to do so, he says.

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