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Feb. 17, 2014

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GOVERNMENT WATCH THE JOURNAL OF COMMERCE 19 IN BRIEF By Mark Szakonyi THE TYPES OF questions federal regulators pose to railroads and shippers at a hear- ing next month could give some indication of how the Surface Transportation Board views a controversial proposal to increase access for shippers restricted to a single line. The March 25-26 hearing will explore issues relating to a pet it ion on so- ca lled reciproca l s w i t c h i n g t h a t would force carri - ers to give shippers with access to only one line access to another railroad's line if it's within 30 miles of the customer's current or future loading spot. The National Industrial Transportation League, the nation's largest shippers asso- ciation, argues its proposal would make the railroads more competitive and save ship- pers with access to only one line, who refer to themselves as "captive shippers," about $900 million annually. The rail industry counters that a rule change would reduce how much they can invest in their networks and hurt overall service. The rule change would benefit a small group of shippers and hurt the larger customer base, according to the Association of American Railroads. Shippers and railroads would be most interested in hearing what tack Deb Miller takes, assuming the Democrat nominee to the three-member board is confirmed before the hearing. The Senate Committee on Commerce, Science and Transportation approved the presidentially approved nomi- nation in January, but Miller is awaiting a full Senate vote. If confirmed, she would succeed Francis Mulvey and join Chair - man Daniel Elliott, a Democrat, and Vice Chairman Ann Begeman, a Republican, on the board. It's too soon to discern how Miller views the reciprocal switching proposal, one of the few vehicles available to rail ship- pers looking to push back against carriers' pricing power. The former secretary of the Kansas Department of Transporta- tion doesn't have a record on rail issues to analyze, and, to no one's suprise, she shied away from taking a stance on the larger fight between railroads and some shippers over costs during her Senate hearing in November. At the time, however, Miller said she had spoken to agriculture shippers about their pricing concerns and the hurdles they face in challenging rates with the STB. She also said it "wasn't unreasonable" to reconsider how the rail regulatory agency calculates whether a carrier is "revenue adequate," a contentious metric the STB uses to determine pricing challenges by shippers. JOC Contact Mark Szakonyi at and follow him at RAIL SHIPPERS LOOK TO FLIP THE SWITCH Cargo owners and carriers await a potential new voice in the STB's March hearing on reciprocal switching It's too soon to discern how Miller views the reciprocal switching proposal. n FMC Under Fire Over OTI Proposal Two months before sponsoring a bill this month aimed at reforming the Federal Maritime Commission, Rep. Duncan Hunter, R-Calif., chairman of the House Coast Guard and Maritime Transportation Subcommittee, urged the FMC to consider industry criticism of a proposed overhaul of rules for ocean transportation intermediaries. In a Dec. 12 letter to FMC Chairman Mario Cordero, Hunter questioned why the FMC proposed to increase the financial responsibility requirement for forwarders and non-vessel-operating common carriers above levels Congress set to harmonize the domestic industry. Hunter, along with the two highest-ranking members in the House Transportation and Infrastructure Committee, this month introduced a bill that would prevent FMC commissioners from serving more than one year after their five- year term expires. The bill also would limit commissioners' tenure to two terms. n Economist: Weak Yen Could Lift Japan's Exports Japanese export volumes could surge this year after a disappointing 2013 as manufacturers start to reflect the decline of the yen in more competitive pricing in overseas markets, according to one leading economist. Japanese exports increased 15.3 percent year-over-year in December by value, with major gains seen in the auto, steel and organic chemicals sectors. But containerized export shipments rose just 2.6 percent despite the yen's falling 17 percent against the dollar. "By the standards of advanced economies — and economic theory, no less — such an exchange rate swing should have delivered at least a nice bounce in shipments," HSBC's Frederic Neumann said. He believes, however, that if corporate Japan becomes convinced that the yen will stay weak or continue to wobble, export prices may tumble. "Then shipments would soar and Japan's competitors, like Korea, may finally feel a squeeze," he added. JOC

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