[Federal Register Volume 59, Number 163 (Wednesday, August 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20841]


[[Page Unknown]]

[Federal Register: August 24, 1994]


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INTERSTATE COMMERCE COMMISSION

49 CFR Part 1039

[Ex Parte No. 346 (Sub-No. 35)]

 

Rail General Exemption Authority--Exemption of Ferrous Recycles

AGENCY: Interstate Commerce Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission is considering whether to exempt from 
regulation the rail transportation of ferrous recyclables, Standard 
Transportation Commodity Code (STCC) Nos. 40211 (iron and steel scrap), 
33119 (blast furnace, open hearth, rolling mill or coke oven products, 
NEC), and 34912 (steel shipping containers). If these commodities are 
exempted, they will be added to the list of exempt commodities in the 
Commission's regulations, and the exemption will be subject to the 
conditions and limitations provided therein.

DATES: Comments are due on September 23, 1994.

ADDRESSES: Participants must send an original and 10 copies of their 
statement referring to Ex Parte No. 346 (Sub-No. 35) to: Office of the 
Secretary, Case Control Branch, Interstate Commerce Commission, 
Washington, DC 20423.

FOR FURTHER INFORMATION CONTACT:Beryl Gordon, (202) 927-5610. [TDD for 
hearing impaired: (202) 927-5721.].

SUPPLEMENTARY INFORMATION: The Association of American Railroads (AAR), 
numerous member railroads in their individual capacities,\1\ and the 
Institute of Scrap Recycling Industries, Inc. (ISRI) (collectively, 
petitioners) have petitioned the Commission to institute a proceeding 
to consider the exemption from regulation under 49 U.S.C. 10505 of the 
rail transportation of ferrous recycles, i.e., STCC Nos. 40211 (iron 
and steel scrap), 33119 (blast furnace, open hearth, rolling mill, or 
coke over products, NEC), and 34912 (steel shipping containers).\2\ The 
proposed exemption would be effected by adding these ferrous 
recyclables to the list of exempt commodities set forth at 49 CFR 
1039.11(a) and adding conforming language at the beginning of the 
second full paragraph of paragraph (a), as set forth below. The 
proposed exemption would encompass all provisions of Subtitle IV of 
Title 49 of the United States Code, subject to the exceptions set forth 
in 49 CFR 1039.11, for all rail carriers nationwide. As discussed 
below, we are instituting this rulemaking.
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    \1\These railroads are: Burlington Northern Railroad Co., 
Chicago and North Western Railway Company, Consolidated Rail Corp., 
CSX Transportation, Inc., Norfolk Southern Railway Co., The 
Atchison, Topeka and Santa Fe Railway Company, Soo Line, Inc., 
Southern Pacific Transportation Co., and Union Pacific Railroad Co.
    \2\Accompanying the proposal are supporting verified statements 
from AAR, AAR member railroad Consolidated Rail Corp., and ISRI 
members Columbia Iron and Metal Co. and David J. Joseph Co.
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    Section 10505 requires us to grant an exemption when we find that: 
(1) regulation is not necessary to carry out the national rail 
transportation policy of 49 U.S.C. 10101a (NRTP); and (2) either (a) 
the transaction or service is of limited scope, or (b) regulation is 
not needed to protect shippers from an abuse market power. Petitioners 
assert that their proposal meets these criteria.
    Petitioners propose the subject commodities for exemption for the 
following reasons:
    (1) Continued regulation of these commodities is not necessary to 
carry out the NRTP at 49 U.S.C. 10101a. According to petitioners, 
although the transportation of this traffic is highly competitive, an 
exemption would further increase competition for this traffic and 
promote numerous NRTP goals, such as (a) increased competition for the 
traffic, (b) safe and efficient transportation, (c) reduced 
administrative burdens for both rail carriers and shippers, and (d) 
increased ratemaking flexibility and financial stability for rail 
carriers (including, by eliminating tariff and contract filing 
requirements, the ability to respond more quickly to market changes and 
shipper demand for resulting rates and services).
    Current competition is reflected in statistics on rates and 
revenues from rail transportation of ferrous recyclables. These 
allegedly demonstrate that market share, rates, and revenue for this 
traffic have all declined in real dollar terms over the last 10-15 
years.\3\
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    \3\Petitioners claim that rail market share has dropped since 
1977 from a high of 54.1% to 34% in 1990. Petitioners state that 
industry revenue per ton-mile for ferrous recyclables declined from 
8 cents in 1981 to 4.9 cents in 1991, a 39% decrease.
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    (2) The involved rail transportation is limited in scope. The 
transportation of ferrous recyclables is a small percentage of total 
rail transportation.\4\
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    \4\Petitioners state that ferrous recyclable traffic comprised 
only 1.3% of total rail carloads of traffic in the United States in 
1991.
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    (3) This traffic is subject to significant intermodal, intramodal, 
and geographic competition, making regulation unnecessary to protect 
shippers from market power abuse. According to petitioners, this 
competition in the transportation market is enhanced by competition in 
the market for the commodities themselves.
    We invite comments and data concerning the proposal. Persons 
submitting comments should address whether the exemption of the subject 
commodities meets the statutory criteria of 49 U.S.C. 10505. Persons 
also may address the appropriateness of the exemption for any of these 
commodities on an individual basis.

Environmental and Energy Considerations

    We preliminarily conclude that, if an exemption is granted, it will 
not significantly affect either the quality of the human environment or 
the conservation of energy resources. We invite comments in this area.

Initial Regulatory Flexibility Analysis

    Pursuant to 5 U.S.C. 605(b), we preliminarily conclude that an 
exemption would not have a significant economic impact on a substantial 
number of small entities. No new regulatory requirements would be 
imposed, directly or indirectly, on such entities. The impact, if any, 
would be to reduce the amount of paperwork, tariff filing, and related 
activities. An exemption, if granted, would be based on a finding that 
(a) the transportation at issue is of limited scope, and/or (b) 
regulation of this transportation is not necessary to protect shippers 
(including small shippers) from abuse of market power. See 49 U.S.C. 
10505(a). Such findings, if made, would indicate that a significant 
number of small entities would not be substantially affected. We invite 
comments in this area.

List of Subjects in 49 CFR Part 1039

    Agricultural commodities, Internmodal transportation, Manufactured 
commodities, Railroads.

    Decided: August 16, 1994.

    By the Commission, Chairman McDonald, Vice Chairman Phillips, 
and Commissioners Simmons and Morgan. Commissioner Simmons dissented 
in part with a separate expression.
Vernon A. Williams,
Acting Secretary.

    For the reasons set forth in the preamble, title 49, chapter X, 
part 1039 of the Code of Federal Regulations is proposed to be amended 
as follows:

PART 1039--EXEMPTIONS

    1. The authority citation for part 1039 would continue to read as 
follows:

    Authority: 49 U.S.C. 10321 and 10505; and 5 U.S.C. 553.

    2. In Sec. 1039.11, paragraph (a), the following new entries are 
added at the end of the table, and the text following the table is 
amended in the first sentence by removing the word ``Also'' and adding 
in its place ``Other than the specific recyclable commodities listed 
above, also''.


Sec. 1039.11  Miscellaneous commodities exemptions.

(a) * * * 

------------------------------------------------------------------------
  STCC                                                                  
  No.      STCC tariff                      Commodity                   
------------------------------------------------------------------------
                                                                        
                                  *****                                 
33119..  6001-V, eff. 1-  Blast furnance, open hearth, rolling mill or  
          1-94.            coke oven products, NEC.                     
34912..  ......do.......  Steel shipping containers.                    
40211..  ......do.......  Iron and steel scrap.                         
                                                                        
                                 *****                                  
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[FR Doc. 94-20841 Filed 8-23-94; 8:45 am]
BILLING CODE 7035-01-P-M