Legal Definitions - Surface Transportation Board

Surface Transportation Board (STB)

The Surface Transportation Board (STB) is an independent federal agency administratively housed within the U.S. Department of Transportation. Its primary responsibility is the economic regulation of interstate surface transportation, with a significant focus on railroads. The STB ensures that transportation services are provided fairly, efficiently, and without unreasonable discrimination, addressing issues related to rates, service quality, and competition.

While its main oversight is railroads, the STB also has limited jurisdiction over certain aspects of trucking, intercity bus services, ocean shipping, and specific pipeline matters that are not regulated by other federal agencies.

Here are some examples of situations where the STB's authority would apply:

• Imagine a large manufacturing company in Ohio that relies on a specific railroad to transport its finished goods to distribution centers across state lines. If this company believes the railroad is charging excessively high freight rates compared to similar services, or consistently failing to meet agreed-upon delivery schedules, causing significant financial losses, they could file a complaint with the STB.

  This illustrates the STB's role in regulating railroad rates and service issues. The agency would investigate the complaint to determine if the railroad's practices are fair, reasonable, and non-discriminatory, potentially ordering adjustments to rates or service standards to protect shippers from monopolistic pricing or inadequate service.

• Consider a scenario where two major freight railroad companies, "Northwest Rail Lines" and "Southern Corridor Freight," announce their intention to merge, combining their extensive networks and operations across multiple states. Such a consolidation could significantly alter the competitive landscape of the rail industry.

  The STB would be responsible for reviewing this proposed merger. Its review would assess the potential impact on competition, service quality for shippers, and the broader public interest. The STB has the authority to approve the merger, approve it with specific conditions (such as requiring the merged company to grant track access to other railroads), or even deny it if it determines the merger would harm competition or the public.

• Suppose a company operates a specialized pipeline that transports a unique industrial gas across state borders, and this pipeline is not regulated by the Federal Energy Regulatory Commission (FERC). If the pipeline company proposes a substantial increase in its transportation fees, and its customers argue that the new rates are unreasonable and unjustified, the matter could fall under the STB's purview.

  This demonstrates the STB's specific, limited jurisdiction over certain pipeline matters. In cases where FERC does not have oversight, the STB steps in to review the proposed rates. The agency would analyze the pipeline company's costs, market conditions, and the impact on customers to determine if the new fees are "just and reasonable," ensuring fair pricing for essential services.