Shippers Held Hostage: How America’s Freight Rail Network Keeps Customers “Captive” and What the STB Can Do About It

The U.S. freight rail network serves as the logistical backbone for many of the nation’s most essential industries, and no sector relies on it more than the minerals and materials industry. From crushed stone and cement to industrial minerals used in manufacturing, the minerals supply chain depends on rail to move high-volume, low-value, and heavy commodities over long distances. For many mines, processing plants, and minerals manufacturers, rail is not just convenient; it is the only economically viable transportation mode.

That reality creates a structural challenge commonly described as captive shipping. A facility connected to only a single Class I railroad, with no competitive alternative and no practical truck or barge option, becomes entirely dependent on the rates, service levels, and terms offered by that carrier. Many mineral producers, including remote quarries and inland processors, fall directly into this category because of geography, topography, and historic rail development patterns.

The result is a persistent cost and competitiveness problem. Minerals are price-sensitive commodities. Transportation can account for as much as half of the delivered cost. When service is unreliable or rates rise well above competitive levels, the consequences ripple throughout the economy. Mines can face production slowdowns, construction projects can be delayed, manufacturers can experience material shortages, and consumers can ultimately face higher prices.

The mineral supply chain is essential for building our nation’s domestic energy independence, a key priority for the current Administration. For industries that supply essential building blocks to every major sector, unreliable or non-competitive rail service does more than inconvenience companies. It can slow entire supply chains.

The Surface Transportation Board (STB) serves as the critical oversight body in an otherwise deregulated rail environment. The Staggers Act of 1980 delivered major efficiency gains to the rail system, but it also gave the STB (and before that the Interstate Commerce Commission) responsibility for stepping in when shippers face non-competitive conditions. Minerals producers know these conditions all too well.

Recent STB action, including the 2024 rule on reciprocal switching based on objective service metrics, has created new pathways for shippers to seek relief when performance falls below defined standards. If service quality declines significantly, the rule allows a second carrier to gain access through a switching agreement. This tool introduces a measure of competition for facilities that would otherwise have none.

The minerals industry still needs more comprehensive solutions. Reciprocal switching only works when a second carrier is physically capable of serving the facility, which is not the case for many mines located far from competing rail lines. Rail services that fall under specific contracts between a shipper and a railway, which is common in the minerals sector, can also fall outside the scope of some relief mechanisms.

To ensure fairer and more competitive rail transportation for minerals producers and all other captive shippers, the STB can take several steps.

1. Strengthen and enforce service metrics

Minerals shippers depend on predictable and reliable transportation. Enhanced measurement of last-mile performance, dwell time, car supply, and interchange reliability would enable earlier and more effective intervention.

2. Streamline and improve access to rate review

Rate challenges are often slow, expensive, and administratively difficult. Faster timelines and simplified procedures would make it realistic for mineral producers and processors to pursue relief when needed.

3. Expand remedies when reciprocal switching is not feasible

In regions where reciprocal switching cannot introduce competition, the STB should consider temporary rate caps, expedited arbitration procedures, or structured contract renegotiation processes that provide targeted relief without undermining the broader economics of the rail network.

4. Increase transparency in rail performance and pricing

More public data on service levels, bottlenecks, and market dominance would help mineral shippers identify problems early and would build accountability across the network.

5. Protect competition in merger reviews

The minerals industry is particularly vulnerable to consolidation because its facilities are fixed and location dependent. Closer coordination between the STB, DOJ, and FTC can ensure that rail mergers do not further restrict access or eliminate potential interchange opportunities.

The minerals sector supports construction, manufacturing, energy systems, water infrastructure, and national security. Its ability to deliver materials efficiently relies on a freight rail system that functions fairly. Strengthening oversight tools, improving transparency, and modernizing rate relief mechanisms would allow the STB to foster a more competitive environment for captive mineral shippers.