[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Proposed Rules]
[Pages 65768-65775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25924]
=======================================================================
-----------------------------------------------------------------------
SURFACE TRANSPORTATION BOARD
49 CFR Part 1244
[Docket No. EP 385 (Sub-No. 8)]
Waybill Sample Reporting
AGENCY: Surface Transportation Board.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Surface Transportation Board (Board) proposes to amend its
regulations with respect to the Waybill Sample data that railroads are
required to submit to the Board. The proposed amendments to the Waybill
Sample regulations would simplify the sampling rates of non-intermodal
carload shipments and specify separate sampling strata and rates for
intermodal shipments.
DATES: Comments are due by January 28, 2020. Replies are due by
February 27, 2020.
ADDRESSES: Comments and replies may be filed with the Board either via
e-filing or in writing addressed to: Surface Transportation Board,
Attn: Docket No. EP 385 (Sub-No. 8), 395 E Street SW, Washington, DC
20423-0001. Comments and replies will be posted on the Board's website
at www.stb.gov.
FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 245-0368.
Assistance for the hearing impaired is available through the Federal
Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: A waybill is a ``document or instrument
prepared from the bill of lading contract or shipper's instructions as
to the disposition of the freight, and [is] used by the railroad(s)
involved as the authority to move the shipment and as the basis for
determining the freight charges and interline settlements.'' 49 CFR
1244.1(c). Among other things, a waybill currently contains the
following data: (1) The originating and terminating freight stations;
(2) the railroads participating in the movement; (3) the points of all
railroad interchanges; (4) the number and type of cars; (5) the car
initial and number; (6) the movement weight in hundredweight; (7) the
commodity; and (8) the freight revenue. Rail carriers are required to
file a sample of waybills, which includes this data. See 49 CFR
1244.2(a). The Board creates an aggregate compilation of the sampled
waybills of all reporting carriers, referred to as the Waybill Sample.
The Waybill Sample is the Board's principal source of data about
freight rail shipments. It has broad application in, among other
things, rate cases, the development of costing systems, productivity
studies, exemption decisions, and analyses of industry trends.
First collected in 1946 by the Board's predecessor,\1\ the
Interstate Commerce Commission (ICC), the Waybill Sample is also used
by other Federal agencies, state and local government agencies, the
transportation industry, shippers, research organizations,
universities, and others that have a need for rail shipment data.
Because some of the submitted waybill data is commercially sensitive,
the Board's regulations place limitations on the release and use of
confidential Waybill Sample data. See 49 CFR 1244.9; see also 49 U.S.C.
11904.\2\
---------------------------------------------------------------------------
\1\ See Bureau of Transp. Econ. & Stat., Interstate Com. Comm'n,
Statement No. 543, Waybill Statistics their History and Uses 15, 19,
40 (1954); Waybill Analysis of Transp. of Prop.--R.Rs., 364 I.C.C.
928, 929 (1981) (``Since 1946, the Interstate Commerce Commission
has collected a continuous sample of carload waybills for railroads
terminating shipments.'').
\2\ Any grant of access to confidential Waybill Sample data
requires the requestor to execute a confidentiality agreement before
receiving the data. See 49 CFR 1244.9(a)-(e). In addition to the
confidential Waybill Sample, the Board also generates a Public Use
Waybill File that includes only non-confidential data. See 49 CFR
1244.9(b)(5).
---------------------------------------------------------------------------
In January 2018, the Board established its Rate Reform Task Force
(RRTF), with the objectives of developing recommendations to reform and
streamline the Board's rate review processes for large cases, and
determining how to best provide a rate review process for smaller
cases. After holding informal meetings throughout 2018, the RRTF issued
a report on April 25, 2019 (RRTF Report).\3\ Among other
recommendations, the RRTF Report included a recommendation that the
Board change the sampling rates for its Waybill Sample. RRTF Report 14.
The RRTF explained that data from the Waybill Sample is critical to
certain rate cases, in particular the Three-Benchmark methodology, and
that a more robust sample size would address issues with those cases.
Id. at 47. Having considered the recommendations included in the RRTF
Report and the overall utility of the current Waybill Sample, the Board
now proposes to simplify the sampling rate for non-intermodal carload
shipments and specify separate sampling strata and
[[Page 65769]]
rates for intermodal shipments, as explained below.
---------------------------------------------------------------------------
\3\ The RRTF Report was posted on the Board's website on April
29, 2019, and can be accessed at https://www.stb.gov/stb/rail/Rate_Reform_Task_Force_Report.pdf.
---------------------------------------------------------------------------
Current Waybill Sampling Requirements. A railroad is required to
file with the Board a sample of its waybill data for all line-haul
revenue waybills terminated on its lines in the United States,\4\ if
the railroad: (a) Terminated at least 4,500 revenue carloads in any of
the three preceding years, or (b) terminated at least 5% of the revenue
carloads terminating in any state in any of the three preceding years.
49 CFR 1244.2(a). Currently, the number of waybills that a railroad is
required to file (i.e., the sampling rate) is set forth at 49 CFR
1244.4(b) and (c), and varies based on the number of carloads on the
waybill.\5\ The current sampling rates for the computerized system of
reporting waybills are shown in Table 1 below.
---------------------------------------------------------------------------
\4\ A railroad moving traffic on the United States rail system
to the Canadian or Mexican border is required to ``include a
representative sample of such international export traffic in the
Waybill Sample.'' 49 CFR 1244.3(c).
\5\ The Board's regulations set forth different sampling rates
for computerized and manual systems of reporting. See 49 CFR
1244.4(b)-(c). Under the manual system, railroads submit Waybill
Sample data through authenticated copies of a sample of audited
revenue waybills instead of using a computerized system. Id. section
1244.4(a). The manual system is not currently used by any railroads
and is not the primary subject of this notice of proposed rulemaking
(NPRM). However, parties may provide comments on whether the manual
system should be eliminated given its current lack of use.
Table 1--Current Waybill Sampling Rates
[Computerized System of Reporting]
------------------------------------------------------------------------
Sample rate
Number of carloads on waybill \6\
------------------------------------------------------------------------
1 to 2.................................................. 1/40
3 to 15................................................. 1/12
16 to 60................................................ 1/4
61 to 100............................................... 1/3
101 and over............................................ 1/2
------------------------------------------------------------------------
RRTF Proposal and Board Rationale. In its report, the RRTF
recommended changing the current waybill sampling rates for all non-
intermodal shipments to 1/10. RRTF Report 48. For intermodal shipments,
the RRTF recommended two strata: (1) Intermodal shipments with one or
two trailer or container units (TCUs) per waybill, recommended to be
sampled at the current 1/40 rate, and (2) intermodal shipments with
three or more TCUs per waybill, recommended to be sampled at the same
rate proposed for non-intermodal shipments, 1/10. Id. at 48-49.
Although these recommendations would both increase the sampling rates
for most smaller shipments (with 1 to 15 carloads per waybill) from 1/
40 or 1/12 to 1/10 and decrease the sampling rates for larger shipments
(with 16 or more carloads per waybill) from 1/2, 1/3, or 1/4 to 1/10,
the RRTF determined that the net effect of the recommended changes
would be an increase in the overall number of waybills sampled. Id. at
48. In addition, by sampling intermodal traffic separately and (for one
or two TCUs) at the current 1/40 rate, the RRTF concluded that a
greater portion of the Waybill Sample data would represent regulated
traffic instead of traffic that is currently exempt.\7\ Id. at 49.
---------------------------------------------------------------------------
\6\ The column showing the sample rate indicates the fraction of
the total number of waybills within each stratum that must be
submitted (e.g., for waybills of one to two carloads, the railroad
must submit one out of every 40 waybills).
\7\ Under 49 CFR 1090.2, rail and highway trailer-on-flatcar/
container-on-flatcar (TOFC/COFC) service--which generally covers
intermodal shipments--is exempt from the requirements of 49 U.S.C.
subtitle IV, regardless of the type, affiliation, or ownership of
the carrier performing the highway portion of the service.
---------------------------------------------------------------------------
The RRTF supported its recommendation by describing the anticipated
effect the changes would have in rate cases under the Board's Three-
Benchmark methodology.\8\ The RRTF stated that, by increasing its
sampling of traffic, ``the Board could avoid the scarcity issue that
has plagued some past Three-Benchmark cases.'' Id. at 47. See, e.g., US
Magnesium, L.L.C. v. Union Pac. R.R., NOR 42114, slip op. at 9 n.12
(STB served Jan. 28, 2010) (``We acknowledge that the failure of either
party to submit a comparison group more similar to the traffic at issue
here is likely due to limitations in the number of comparable movements
in the Waybill Sample.''). The RRTF also stated that a robust sample
size is a critical component of the Three-Benchmark methodology and
explained that there must be enough observations in the Waybill Sample
to select a group of traffic that reflects the nuances of the traffic
in dispute. RRTF Report 47. It stated that its recommendation to modify
waybill sampling rates would alleviate concerns about non-
representative samples and minimize the need for ``other relevant
factors'' arguments. Id.
---------------------------------------------------------------------------
\8\ The Three-Benchmark methodology is a simplified process of
rate review, intended for smaller rate disputes, where the potential
rate relief is capped at $4 million. See Simplified Standards for
Rail Rate Cases (Simplified Standards), EP 646 (Sub-No. 1) (STB
served Sept. 5, 2007), aff'd in part sub nom. CSX Transp., Inc. v.
STB, 568 F.3d 236 (D.C. Cir. 2009), vacated in part on reh'g, 584
F.3d 1076 (D.C. Cir. 2009); Rate Regulation Reforms, EP 715 (STB
served July 18, 2013), remanded in part sub nom. CSX Transp., Inc.
v. STB, 754 F.3d 1056 (D.C. Cir. 2014). Under this methodology, the
reasonableness of a challenged rate is judged by examining the
challenged rate using three benchmark figures, each of which is
expressed as a revenue-to-variable cost (R/VC) ratio. One of the
benchmarks, R/VCCOMP, requires selection of a group of
comparable traffic, the ``comparison group,'' that the Board
concludes is most similar in aggregate to the issue movements. To
``enable a prompt, expedited resolution of the comparison group
selection,'' the Board requires each party to submit its final offer
comparison group simultaneously, and the Board chooses one of those
groups without modification. See Simplified Standards, EP 646 (Sub-
No. 1), slip op. at 18.
---------------------------------------------------------------------------
The Board agrees with the RRTF that a modification to its waybill
sampling rates is warranted. Specifically, a net increase in sample
size would provide more comprehensive information to the Board and
other users of Waybill Sample data in a variety of contexts, such as
exemption decisions, stratification reports, traffic volume and rate
studies, Board-initiated investigations, certain rate cases (discussed
in more detail below), and any other waybill data-related analysis the
Board currently performs or might seek to perform in the future. A more
robust data sample would augment the Board's ability to make informed,
well-reasoned decisions in these areas. In addition, the Board agrees
that it should change its sampling requirements so that a greater
portion of the Waybill Sample data would represent regulated traffic
instead of exempt traffic.
Additionally, the added number of observations in the Waybill
Sample would likely allow the Board to avoid redacting, for
confidentiality reasons, as many results from some of the Board's
routine analysis published on its website, such as the STCC 7
stratification report. While such analysis serves as a useful barometer
for stakeholders, its publication is limited by the Board's commitment
to protect the confidentiality of identifiable railroad and shipper
information when too few records exist within a given category of
traffic. Moreover, because the Board currently receives monthly waybill
data from Class I carriers and quarterly data from Class I, II, and III
carriers, increasing the sampling rate would provide the Board with
more observations in any given month or quarter from which it could
draw meaningful insights throughout the year.
The Board agrees with the RRTF that increasing waybill sampling
rates would also assist parties in Three-Benchmark cases by providing a
greater number of potentially comparable movements from which they
could create their comparison group proposals.\9\ Parties
[[Page 65770]]
proposing comparison groups use a variety of comparability factors,
such as the length of movement, commodity type, and traffic densities
of the likely routes involved. In general, as more comparability
factors are added to make the comparison group more specific to the
case, the number of observations from the Waybill Sample that match
those factors is likely to decrease. By increasing the observations in
the Waybill Sample, parties generally would have more observations to
choose from and increased flexibility to design comparison groups with
relevant comparability factors. Accordingly, a more robust Waybill
Sample could lead to more representative comparison groups, thereby
increasing the reliability of the parties' presentations.
---------------------------------------------------------------------------
\9\ In a recently issued NPRM, the Board proposed a new
procedure for challenging the reasonableness of railroad rates in
smaller cases. See Final Offer Rate Review, EP 755 et al. (STB
served Sept. 12, 2019). In that decision, the Board stated that,
under the proposed Final Offer Rate Review (FORR) procedure, a party
would be able to seek access to waybill data pursuant to the Board's
regulations. Id. at 9. The benefits of increased waybill sampling
discussed in this NPRM could also apply to the proposed FORR
procedure, should a party choose to use comparable traffic to
support its final offer.
---------------------------------------------------------------------------
The increased comparison group flexibility would also increase the
number of potentially comparable movements available to shippers of
categories of traffic for which there are currently insufficient
observations in the Waybill Sample to create a representative
comparison group.\10\ The Board's proposed changes in sampling,
discussed below, would result in more shipments being included in the
Waybill Sample, some of which may fall into categories of traffic that
previously had fewer than 25 movements in the Waybill Sample.\11\
Moreover, for the reasons noted above, even for categories of traffic
for which a comparison group with 25 or more observations can already
be formed, more observations in the Waybill Sample could allow for the
addition of more specific traffic characteristics and would further
increase the reliability of the parties' presentations.\12\
---------------------------------------------------------------------------
\10\ According to the Central Limit Theorem, once a sample has
sufficient observations, it is considered to be normally distributed
and can be used to approximate the mean and variance of the
population from which it was sampled. Generally, around 25 or 30
observations is considered to be enough for those approximations.
See Robert V. Hogg et al., Probability and Statistical Inference 202
(9th ed. 2015). In Rail Transp. of Grain, Rate Reg. Review, EP 665
(Sub-No. 1) et al., slip op. at 13-14 (STB served Aug. 31, 2016),
the Board expressed concern about comparison groups with
insufficient observations and sought comment on whether a 20-
observation minimum should be established in connection with a new
comparison group approach it was exploring in that proceeding.
Because the Board seeks to improve significantly the utility of the
Waybill Sample in this proposal, it has used a 25-observation
minimum for the purposes of analyzing this proposed rule.
\11\ Based on an analysis of the 2014 through 2017 Waybill
Samples, this tends to be the case for groups of traffic that do not
have as high of a volume of movements as others, meaning that fewer
of those movements are captured in the Waybill Sample.
\12\ For example, comparability factors such as length of
movement ranges could be tightened and more granular commodity codes
could be used (e.g., seven-digit STCC level versus five-digit STCC
level). In some cases, geographic comparability could be taken into
consideration to make the comparison group more similar to the
traffic at issue. Currently, depending on the commodity group at
issue, the application of such specific criteria could result in a
comparison group without sufficient observations.
---------------------------------------------------------------------------
The issue of whether to enlarge the Waybill Sample to include a
larger sample of common carrier movements was briefly discussed in the
Board's decision in Simplified Standards, EP 646 (Sub-No. 1), slip op.
at 83. There, the Board declined to increase the waybill sampling size
at that time due to concerns about the cost of gathering, processing,
and costing a larger sample. However, it is now appropriate to revisit
the issue. The Board finds that the expenses associated with increased
sampling can be better managed by the agency because of technological
and computing advances now available to it, and finds that the largely
computerized and automated processes allow for the management of
additional data at a reasonable additional cost. All reporting carriers
submit waybill data in computerized form today, and the Board does not
anticipate that it would be a significant burden for rail carriers, or
the entity the carriers use to manage the data, to adjust their data
collection and reporting mechanism(s) for the proposed sampling rates.
Given that this data is critical to central regulatory functions of the
Board, the additional cost is justified by the anticipated improvements
in reliability of comparison group presentations and by the increased
granularity of analyses performed by the Board.
For the reasons discussed above, the Board proposes to adjust the
waybill sampling rate for carriers using the computerized system of
reporting as discussed below. The Board's proposal is intended to
provide a more comprehensive sampling of waybills that would improve
the utility of the Waybill Sample for both the Board and other users of
waybill data in a variety of contexts (e.g., increasing the reliability
of parties' evidentiary presentations in certain rate reasonableness
proceedings), which would further the rail transportation policy goals
of 49 U.S.C. 10101. See 49 U.S.C. 10101(2), (4), (6), (13).
Proposed Waybill Sampling Rates. The Board proposes revisions to
the sampling rates for the Waybill Sample for carriers using the
computerized system of reporting. Although the RRTF recommended a
sampling rate for all non-intermodal shipments of 1/10, based on
additional analyses, described below, the Board instead proposes to
increase the sampling rates to 1/5 for non-intermodal shipments in each
of the existing sampling strata, as shown in Table 2 below. Under this
proposed rule, the Board would continue to use separate strata for the
sampling of non-intermodal shipments, with the strata differentiated by
the number of carloads on the waybill. For non-intermodal shipments,
the effect of the proposed rate would be an increase in the sampling
rate for waybills with 1 to 15 carloads and a decrease in the sampling
rate for waybills with 16 or more carloads.
[[Page 65771]]
Because of the unique characteristics of intermodal shipment
billing practices,\13\ the Board also proposes to separate sampling of
intermodal shipments from carload shipments. Specifically, the Board
would create two sampling strata specific to intermodal shipments--one
for shipments with one to two TCUs per waybill and another for
shipments with three or more TCUs per waybill. As shown in Table 2,
intermodal shipments with one or two TCUs per waybill would be sampled
at a rate of 1/40, and intermodal shipments with three or more TCUs per
waybill would be sampled at the same proposed rate as non-intermodal
shipments, 1/5. An increase in sampling of intermodal shipments with
one or two TCUs per waybill, which comprise the vast majority of
intermodal shipments, would lead to an over-sampling of those
movements.\14\ The Board's proposed approach would not only
appropriately differentiate sampling strata based on industry waybill
practices, but it would also avoid instances in which blocks of TCUs
comprising a single intermodal shipment are over-sampled.
---------------------------------------------------------------------------
\13\ In a separate proceeding that has since been discontinued,
commenters noted that intermodal TCUs often move under separate
waybills, even if the TCUs are placed on flatcars that move in
multiple flatcar blocks. See Review of the Gen. Purpose Costing
Sys., EP 431 (Sub-No. 4), slip op. at 13 (STB served Aug. 4, 2016).
\14\ To illustrate, under the Board's current regulations, a
block carrying 100 TCUs, all moving from the same origin to the same
destination but with each moving under a separate waybill (i.e., 100
total waybills), would be sampled at an average of 2.5 times (i.e.,
100 waybills sampled at a rate of 1/40). Under the Board's proposed
regulations, if intermodal shipments were sampled at the same rate
as non-intermodal shipments, the same large block would ultimately
be sampled 20 times (i.e., 100 waybills sampled at a rate of 1/5).
Considering this billing practice, along with the volume of
intermodal shipments and the fact that intermodal transportation is
generally exempt from Board regulation, the Board finds increasing
the sampling rate of intermodal shipments with one to two TCUs per
waybill is not necessary. By establishing separate sampling strata
for intermodal shipments as proposed, the Board can avoid over-
sampling intermodal traffic with one or two TCUs per waybill by
maintaining the current rate of 1/40, in which case the same large
block carrying 100 TCUs would be sampled 2.5 times, as it would be
under the current regulations.
---------------------------------------------------------------------------
The Board's proposal for intermodal shipments largely mirrors the
RRTF recommendation that the Board adopt a sampling rate of 1/40 for
waybills with one to two TCUs and apply the same sampling rate
recommended for non-intermodal shipments for waybills with three or
more TCUs. Consistent with the approach recommended by the RRTF, the
Board proposes the same sampling rate for intermodal waybills with
three or more TCUs as it proposes for non-intermodal shipments.
Table 2--Proposed Waybill Sampling Rates
[Computerized System of Reporting) \15\
------------------------------------------------------------------------
------------------------------------------------------------------------
Number of non-intermodal carloads on Sample rate
waybill
------------------------------------------------------------------------
1 to 2.................................... 1/5
3 to 15................................... 1/5
16 to 60.................................. 1/5
61 to 100................................. 1/5
101 and over.............................. 1/5
------------------------------------------------------------------------
Number of intermodal trailer/container Sample rate
units on waybill
------------------------------------------------------------------------
1 to 2.................................... 1/40
3 and over................................ 1/5
------------------------------------------------------------------------
Analysis of Proposed Waybill Sampling Rates. As discussed above,
these proposed changes would both provide a more robust sample
generally and address the shortcomings that were acknowledged by the
Board and parties in Board proceedings concerning the scarcity of data
in some rate cases. See US Magnesium, L.L.C., NOR 42114, slip op. at 9-
12, 9 n.12 (noting the dearth of observations for certain toxic-by-
inhalation commodities in the parties' comparison groups); Simplified
Standards, EP 646 (Sub-No. 1), slip op. at 83 (acknowledging that there
may be instances in Three-Benchmark cases where a particular movement
is so unique that there would be insufficient comparable movements in
the Waybill Sample).
---------------------------------------------------------------------------
\15\ If the Board ultimately adopts changes to 49 CFR part 1244,
the Board will publish notice in the Federal Register of a revised
edition of Statement No. 81-1, Procedure for Sampling Waybill
Records by Computer (2009 edition). See 49 CFR 1244.4(c)(1)
(requiring the Board to publish notice of any change to Statement
No. 81-1 in the Federal Register). The current edition of Statement
No. 81-1 is posted on the Board's website and can be accessed by
navigating to the tab Industry Data, the tab Economic Data, and then
clicking on the link for ``Procedure for Sampling Waybill Records by
Computer.''
---------------------------------------------------------------------------
To determine the impact of increasing its sampling rates, the Board
has reviewed Waybill Sample data from 2014 to 2017; grouped the
movements into categories based on commodity,\16\ mileage ranges,\17\
and terminating railroad; and analyzed how the proposed sampling rates
would affect the number of these movement categories having fewer than
25 observations.\18\ Under the current sampling rates, the Board found
that, in an average year, approximately 7.6% of those movement
categories have 25 or more observations. Under the Board's proposed
sampling rates, an estimated 20.4% of those categories would have 25 or
more observations, nearly triple the current number. Even though only
one-fifth of the categories would have at least 25 observations under
the Board's proposal, this segment represents most of the total revenue
in the Waybill Sample. Under the current sampling rate, 84.2% of the
revenue is represented in movement categories with at least 25
observations. Under the proposed sampling rate, 93.4% of the revenue
would be represented in movement categories with at least 25
observations. The proposed modification would therefore capture more
than half of the revenue that is currently moving in categories with
fewer than 25 movements. These percentage breakdowns are shown in Table
3 below.
---------------------------------------------------------------------------
\16\ Commodity categories were split at the seven-digit STCC
level.
\17\ Mileage ranges were split as follows: 0-499.9 miles; 500-
999.9 miles; 1,000-1,499.9 miles; and 1,500 miles or more.
\18\ In order to estimate how counts of observations would
change with the proposed sampling rate, the Board took the
observations currently in the Waybill Sample, extrapolated how many
observations exist in the total population of movements that
occurred in a given year by multiplying counts of movements by their
expansion factors, and then divided by five for non-intermodal
movements and by 40 for intermodal movements. This is a slight
simplification of the Board's proposed sampling rates, since it does
not distinguish intermodal movement sampling rates depending on the
number of TCUs, but it is reasonable for analysis purposes because
the vast majority of intermodal moves are under the three TCU
threshold.
[[Page 65772]]
Table 3--Estimated Movement Categories in an Average Year
[2014-2017]
----------------------------------------------------------------------------------------------------------------
Percent of
Movement Percent of revenue in
Total movement categories movement movement
categories with 25+ categories categories
observations with 25+ with 25+
observations observations
----------------------------------------------------------------------------------------------------------------
Current Rate.................................... 31,321 2,369 7.6 84.2
Proposed Rate................................... 31,321 6,395 20.4 93.4
----------------------------------------------------------------------------------------------------------------
Similarly, under the current regulations, when aggregating the
Waybill Sample data over the four-year 2014 to 2017 period, 19.7% of
the same categories include 25 or more observations. Using the four-
year approach, under the proposed sampling rate, the number of
categories with 25 or more observations would nearly double to 38.5%.
Here the proposed modification would capture approximately two-thirds
of the currently missed revenue, increasing from 94.0% to 97.9% of
total revenue. This breakdown is shown in Table 4 below.
Table 4--Estimated Movement Categories Over Four Years
[2014-2017]
----------------------------------------------------------------------------------------------------------------
Percent of
Movement Percent of revenue in
Total movement categories movement movement
categories with 25+ categories categories
observations with 25+ with 25+
observations observations
----------------------------------------------------------------------------------------------------------------
Current Rate.................................... 31,321 6,177 19.7 94.0
Proposed Rate................................... 31,321 12,059 38.5 97.9
----------------------------------------------------------------------------------------------------------------
The Board considered the 1/10 sampling rate for non-intermodal
shipments recommended by the RRTF. The Board's analysis, however,
showed that a \1/5\ sampling rate had a better chance of reducing the
number of movement categories with scarce observations. Although the
improvement was modest--for example, 90.4% of the revenue in the
Waybill Sample would be in movement categories with 25 or more
observations in an average year with a 1/10 sampling rate compared to
93.4% with a \1/5\ sampling rate--the potential increase in covered
movement categories would lead to a more robust sample without a
significantly increased burden on reporting carriers. While the waybill
sampling rates listed in Table 2 above may still, in some instances,
fail to produce a representative sample for comparison, the proposed
changes would significantly improve the chances of having sufficient
observations for a representative sample as well as add to the
robustness of any of Board analyses using the Waybill Sample.
For movement categories that already have 25 or more observations,
such as traffic in categories with a higher volume of movements by
rail, the Board analyzed the extent to which more observations in the
Waybill Sample would allow for more granular or even additional
comparability factors. As can be seen in Table 5 below, the Board
estimates that the proposed sampling rate would increase the median
number of observations for categories that already have at least 25
observations in an average year from 59 to 269, which is more than four
times as many observations. This illustrates how the proposed sampling
rate would shift the number of observations upwards across categories,
even if the categories already had 25 observations. Such an increase in
observations would increase the representativeness of potential
comparison groups defined using the same criteria as these categories.
Furthermore, as noted above, by having more observations in a
comparison group, it would be possible to define the comparison group
even more narrowly and still maintain robustness.
Table 5--Quartile Analysis of Movement Categories With 25+ Observations in an Average Year
[2014-2017]
----------------------------------------------------------------------------------------------------------------
1st Quartile Median 3rd Quartile
observations observations observations
----------------------------------------------------------------------------------------------------------------
Current Rate.................................................... 37 59 126
Proposed Rate................................................... 101 269 562
----------------------------------------------------------------------------------------------------------------
Table 6 below shows similar estimated increases in observations
over four years of data. The Board estimates that the proposed sampling
rate would increase the median number of observations for categories
that already have at least 25 observations over the course of a four-
year period from 70 to 320.
[[Page 65773]]
Table 6--Quartile Analysis of Movement Categories With 25+ Observations Over Four Years
[2014-2017]
----------------------------------------------------------------------------------------------------------------
1st Quartile Median 3rd Quartile
observations observations observations
----------------------------------------------------------------------------------------------------------------
Current Rate.................................................... 39 70 177
Proposed Rate................................................... 136 320 780
----------------------------------------------------------------------------------------------------------------
Once again, the proposed sampling rate is estimated to result in
more than four times as many observations as under the current rate.
For example, consider the median category with at least 25 observations
over four years as shown in Table 6. Using a 500-mile range as a
comparability factor, a party would have 70 observations to include in
a potential comparison group. If that party wanted to define the
mileage range more narrowly, they would lose some of those observations
depending on the mileage range chosen and, at some point, would likely
have fewer than 25 observations. If, however, a party started with 320
available observations with a 500-mile range, as we estimate would be
the case in the median category under the proposed sampling rates, they
could likely narrow the mileage range further without dropping below a
sufficient number of observations. In other words, with more
observations available, interested parties would be able to choose
additional and more narrow comparability factors to identify movements
that are more similar to the issue traffic but also still maintain a
sufficient number of observations.
Conclusion. For the reasons described above, the changes proposed
in this NPRM (as shown below) would create a more robust Waybill Sample
and result in more comprehensive information that would assist both the
Board in its decision-making and analyses and other users of waybill
data in their analyses without creating an undue burden on railroads
(as shown below and in the Appendix). The changes also appropriately
differentiate sampling strata based on current industry waybill
practices for intermodal shipments. The Board invites public comment on
this proposal.
Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980
(RFA), 5 U.S.C. 601-612, generally requires a description and analysis
of new rules that would have a significant economic impact on a
substantial number of small entities. In drafting a rule, an agency is
required to: (1) Assess the effect that its regulation would have on
small entities; (2) analyze effective alternatives that may minimize a
regulation's impact; and (3) make the analysis available for public
comment. Section 601-604. In its notice of proposed rulemaking, the
agency must either include an initial regulatory flexibility analysis,
section 603(a), or certify that the proposed rule would not have a
``significant impact on a substantial number of small entities,''
section 605(b). Because the goal of the RFA is to reduce the cost to
small entities of complying with federal regulations, the RFA requires
an agency to perform a regulatory flexibility analysis of small entity
impacts only when a rule directly regulates those entities. In other
words, the impact must be a direct impact on small entities ``whose
conduct is circumscribed or mandated'' by the proposed rule. White
Eagle Coop. v. Conner, 553 F.3d 467, 480 (7th Cir. 2009). An agency has
no obligation to conduct a small entity impact analysis of effects on
entities that it does not regulate. United Dist. Cos. v. FERC, 88 F.3d
1105, 1170 (DC Cir. 1996).
This proposal would not have a significant economic impact upon a
substantial number of small entities, within the meaning of the
RFA.\19\ Under the Board's existing regulations, a railroad is required
to file Waybill Sample data for all line-haul revenue waybills
terminated on its lines if: (a) It terminated at least 4,500 revenue
carloads in any of the three preceding years; or (b) it terminated at
least 5% of the revenue carloads terminating in any state in any of the
three preceding years. 49 CFR 1244.2. Under this criteria, 53 railroads
are currently required to report Waybill Sample data. Of these 53, the
Board estimates that 36 are Class III carriers, and thus small
businesses within the meaning of the RFA. Of the 53 railroads required
to report Waybill Sample data, 45 railroads currently use Railinc
Corporation (Railinc)--a wholly-owned information technology subsidiary
of the Association of American Railroads--to sample their waybills.\20\
Eight railroads currently sample their own waybills.
---------------------------------------------------------------------------
\19\ For the purpose of RFA analysis for rail carriers subject
to Board jurisdiction, the Board defines a ``small business'' as
only including those rail carriers classified as Class III carriers
under 49 CFR 1201.1-1. See Small Entity Size Standards Under the
Regulatory Flexibility Act, EP 719 (STB served June 30, 2016) (with
Board Member Begeman dissenting). Class III carriers have annual
operating revenues of $20 million or less in 1991 dollars, or
$39,194,876 or less when adjusted for inflation using 2018 data.
Class II carriers have annual operating revenues of less than $250
million or $489,935,956 when adjusted for inflation using 2018 data.
The Board calculates the revenue deflator factor annually and
publishes the railroad revenue thresholds in decisions and on its
website. 49 CFR 1201.1-1; Indexing the Annual Operating Revenues of
R.Rs., EP 748 (STB served June 14, 2019).
\20\ Some railroads hire a third party to collect their
waybills. That third party then sends these waybills to Railinc for
sampling.
---------------------------------------------------------------------------
For the railroads that submit their waybills to Railinc for
sampling, there would be no additional burden or costs on entities as
result of the changes proposed in this NPRM. These entities would
continue to submit all of their waybills to Railinc, which would then
sample the data in accordance with the Board's revised sampling rates.
Because the Board contracts with Railinc to sample railroads' waybills,
the entities that use Railinc to sample their waybills would incur no
additional costs from Railinc as a result of the Board's proposed
changes. Of the approximately 36 Class III carriers, the Board
estimates that 34 fall into this category and therefore would not incur
any additional burden or cost.
For the railroads that choose to sample their own waybills, the
proposed amendments would not result in a significant economic impact.
The purpose of the changes proposed in this NPRM is to create a more
robust Waybill Sample, resulting in more comprehensive information that
would assist both the Board in its decision-making and analyses and
other users of waybill data in their analyses. The proposal would
increase the rate at which the Board samples certain railroad shipments
and appropriately differentiate sampling strata based on industry
waybill practices for intermodal shipments. These changes would result
in additional observations for certain shipments, but the proposed
amendments would not significantly alter small entities' current
practices for sampling their shipments. Based on the total burden hours
described in the Paperwork Reduction Act analysis below, the Board
estimates that, for
[[Page 65774]]
railroads conducting their own sampling, the change in reporting
procedures would result in an estimated one-time burden of
approximately 80 hours per railroad. Moreover, this impact would not be
on a substantial number of small entities, as the Board estimates that
only two of the approximately 36 Class III carriers would incur this
burden.
For the reasons described above, the Board certifies under 5 U.S.C.
605(b) that this proposed rule, if promulgated, would not have a
significant economic impact on a substantial number of small entities
within the meaning of the RFA.
Paperwork Reduction Act. Pursuant to the Paperwork Reduction Act
(PRA), 44 U.S.C. 3501-3521, Office of Management and Budget (OMB)
regulations at 5 CFR 1320.8(d)(3), and in the Appendix, the Board seeks
comments about the impact of the revisions in the proposed rules to the
currently approved collection of Waybill Sample data (OMB Control No.
2140-0015) regarding: (1) Whether the collection of data, as modified
in the proposed rule and further described below, is necessary for the
proper performance of the functions of the Board, including whether the
collection has practical utility; (2) the accuracy of the Board's
burden estimates; (3) ways to enhance the quality, utility, and clarity
of the data collected; and (4) ways to minimize the burden of the
collection of data on the respondents, including the use of automated
collection techniques or other forms of information technology, when
appropriate.
The Board estimates that the proposed requirements would add a
total one-time hour burden of 640 hours (or approximately 213.3 hours
per year as amortized over three years) because the railroads, in most
cases, would need to edit their software programs to implement these
changes. Once the burden of the one-time programming changes is
incurred, the annual burden would remain the same as before this
modification. The Board welcomes comment on the estimates of actual
time and costs of collection of Waybill Sample data, as detailed below
in the Appendix.\21\ The proposed rules will be submitted to OMB for
review as required under 44 U.S.C. 3507(d) and 5 CFR 1320.11. Comments
received by the Board regarding the data collection will also be
forwarded to OMB for its review when the final rule is published.
---------------------------------------------------------------------------
\21\ In the Appendix, Tables B-2, B-3, and B-4 show a total
annual burden of 774.6 hours, incorporating the annualized one-time
hour burden of 213.3 hours under the proposed rule, and the existing
annual burden of 561.3 hours.
---------------------------------------------------------------------------
List of subjects in 49 CFR Part 1244
Freight, Railroads, Reporting and recordkeeping requirements.
It is ordered:
1. The Board proposes to amend its rules as detailed in this
decision. Notice of the proposed rules will be published in the Federal
Register.
2. Comments are due by January 28, 2020. Replies are due by
February 27, 2020.
3. A copy of this decision will be served upon the Chief Counsel
for Advocacy, Office of Advocacy, U.S. Small Business Administration,
409 3rd Street SW, Washington, DC 20416.
4. This decision is effective on its service date.
Decided: November 22, 2019.
By the Board, Board Members Begeman, Fuchs, and Oberman.
Kenyatta Clay,
Clearance Clerk.
For the reasons set forth in the preamble, the Surface
Transportation Board proposes to amend part 1244 of title 49, chapter
X, of the Code of Federal Regulations as follows:
PART 1244--WAYBILL ANALYSIS OF TRANSPORTATION OF PROPERTY--
RAILROADS
0
1. The authority citation for part 1244 continues to read as follows:
Authority: 49 U.S.C. 1321, 10707, 11144, 11145.
0
2. Amend Sec. 1244.4 by revising the first sentence of paragraph
(c)(1) and replacing the current table in paragraph (c)(2) with a new
table to read as follows:
Sec. 1244.4 Sampling of waybills.
* * * * *
(c) The Computerized System. (1) The tape shall be required to
conform to the standards and format specified in Statement No. 81-1,
Procedure for Sampling Waybill Records by Computer (2019 edition),
issued by the Surface Transportation Board.
* * * * *
(2) Effective January 1, 2021, and thereafter, unless otherwise
ordered, the sampling rates for the computerized system are as follows:
------------------------------------------------------------------------
Number of non-intermodal carloads on waybill Sample rate
------------------------------------------------------------------------
1 to 2.................................................. 1/5
3 to 15................................................. 1/5
16 to 60................................................ 1/5
61 to 100............................................... 1/5
101 and over............................................ 1/5
------------------------------------------------------------------------
Number of intermodal trailer/container units on waybill Sample rate
------------------------------------------------------------------------
1 to 2.................................................. 1/40
3 and over.............................................. 1/5
------------------------------------------------------------------------
* * * * *
Note: This appendix will not appear in the Code of Federal
Regulations
Appendix
Information Collected Under the Paperwork Reduction Act
Title: Waybill Sample.
OMB Control Number: 2140-0015.
Form Number: None.
Type of Review: Revision of a currently approved collection.
Summary: As part of its continuing effort to reduce paperwork
burdens, and as required by the Paperwork Reduction Act of 1995
(PRA), 44 U.S.C. 3501-3521, the Surface Transportation Board (Board)
gives notice that it is requesting from the Office of Management and
Budget (OMB) approval for the revision of the currently approved
data collection, Waybill Sample, OMB Control No. 2140-0015, as
further described below. The requested revision to the currently
approved collection is necessitated by this Notice of Proposed
Rulemaking (NPRM), which would amend the Waybill Sample data
railroads are required to submit to the Board pursuant to 49 CFR
1244.4. All other data collected by the Board in the currently
approved collection is without change from its approval (currently
expiring on September 30, 2020).
Respondents: Respondents include any railroad that is subject to
the Interstate Commerce Act and that terminated at least 4,500
carloads on its line in any of the three preceding years or that
terminated at least 5% of the revenue carloads terminating in any
state in any of the three preceding years. For the purposes of this
analysis, the Board categorizes railroads required to report Waybill
Sample data as either quarterly or monthly and as either sampling
their own waybills or having a third party conduct their sampling.
As a result, there are four categories of respondents, as shown in
Table B-1 below.
Table B-1--Respondents
------------------------------------------------------------------------
Number of
Categories of respondents respondents
------------------------------------------------------------------------
Railroads that conduct their own sampling and report 5
monthly................................................
Railroads that conduct their own sampling and report 3
quarterly..............................................
Railroads that have a third party sample their waybills 2
and report monthly.....................................
[[Page 65775]]
Railroads that have a third party sample their waybills 43
and report quarterly...................................
------------------------------------------------------------------------
Number of Respondents: 53.
Estimated Time Per Response: The estimated hour burden for
waybill samples submitted to the Board is shown in Table B-2 below.
(Note: respondents that are identified as reporting monthly actually
report monthly, quarterly, and annually (or 17 times per year). All
other respondents report quarterly and annually (five times a
year)). The annualized one-time hour burden resulting from this NPRM
is shown in Table B-3 below.
Table B-2--Estimated Existing Annual Hour Burden Under Current Regulations
----------------------------------------------------------------------------------------------------------------
Total
Total number Estimated estimated
Categories of respondents Number of of samples annual hours annual hours
respondents submitted per sample for samples
submitted submitted
----------------------------------------------------------------------------------------------------------------
Railroads that conduct their own sampling and 5 85 2.5 212.5
report monthly.................................
Railroads that conduct their own sampling and 3 15 2.5 37.5
report quarterly...............................
Railroads that have a third party sample their 2 34 1.25 42.5
waybills and report monthly....................
Railroads that have a third party sample their 43 215 1.25 268.8
waybills and report quarterly..................
---------------------------------------------------------------
Total Annual Hour Burden.................... .............. .............. .............. 561.3
----------------------------------------------------------------------------------------------------------------
Table B-3--Estimated Additional One-Time Hour Burden Under Proposed Regulations
----------------------------------------------------------------------------------------------------------------
Estimated
annual one- Total annual
Categories of respondents Number of time hour one-time hour
respondents burden (per burden
respondent)
----------------------------------------------------------------------------------------------------------------
Railroads that conduct their own sampling and report monthly.... 5 26.7 133.3
Railroads that conduct their own sampling and report quarterly.. 3 26.7 80.0
Railroads that have a third party sample their waybills and 2 * 0 * 0
report monthly.................................................
Railroads that have a third party sample their waybills and 43 * 0 * 0
report quarterly...............................................
-----------------------------------------------
Total Annual One-Time Hour Burden........................... .............. .............. 213.3
----------------------------------------------------------------------------------------------------------------
* The Board pays for the third-party contractor to prepare samples. There is no one-time hourly or non-hourly
burden to these railroads.
Frequency of Response: Seven respondents report monthly; 46
report quarterly.
Total Burden Hours (annually including all respondents): 774.6
hours. This estimated total burden hours is shown in Table B-4
below.
Table B-4--Total Burden Hours
----------------------------------------------------------------------------------------------------------------
Estimated
Estimated annual one-
annual hours time hour Total annual
Categories of respondents for samples burden hour burden
submitted (amortized
over 3 years)
----------------------------------------------------------------------------------------------------------------
Railroads that conduct their own sampling and report monthly.... 212.5 133.3 345.8
Railroads that conduct their own sampling and report quarterly.. 37.5 80.0 117.5
Railroads that have a third party sample their waybills and 42.5 * 0 42.5
report monthly.................................................
Railroads that have a third party sample their waybills and 268.8 * 0 268.8
report quarterly...............................................
-----------------------------------------------
Total Annual Burden Hours................................... 561.3 213.3 774.6
----------------------------------------------------------------------------------------------------------------
* The Board pays for the third-party contractor to prepare samples. There is no one-time hourly or non-hourly
burden to these railroads.
Total Annual ``Non-Hour Burden'' Cost: There are no other costs
identified because filings are submitted electronically to the
Board.
Needs and Uses: The Board is, by statute, responsible for the
economic regulation of common carrier rail transportation in the
United States. The information in the Waybill Sample is used by the
Board, other federal and state agencies, and industry stakeholders
to monitor traffic flows and rate trends in the industry, and to
develop testimony in Board proceedings. The Board has authority to
collect this data under 49 U.S.C. 11144 and 11145. As described in
more detail above in the NPRM, the Board is amending the rules that
apply to the collection of the Waybill Sample to simplify the
sampling rates of non-intermodal carload shipments and to create
more accurate sampling strata and rates for intermodal traffic. The
Board's collection and use of this data enables the agency to meet
its statutory duty to regulate the rail industry.
[FR Doc. 2019-25924 Filed 11-27-19; 8:45 am]
BILLING CODE 4915-01-P