Surface Transportation Board (STB)

Surface Transportation Board (STB): A federal agency that regulates financial aspects of various modes of surface transportation.

Investopedia / Mira Norian

The Surface Transportation Board (STB) is a federal agency that regulates financial aspects of surface transportation, primarily freight rail. The Washington, D.C.–based board has jurisdiction over a broad range of railway issues, as well as some passenger rail activity and intercity buses. 

According to the STB’s mission statement, the body “resolves disputes in support of an efficient, competitive, and economically viable surface transportation network that meets the needs of its users.” As an independent agency, the STB operates outside of the U.S. Department of Transportation (DOT). 

Key Takeaways

  • The Surface Transportation Board (STB) is a federal agency that regulates economic aspects of freight rail and certain other transportation segments. 
  • The STB has five members, with each member serving a five-year term.
  • The agency was created in 1996, effectively replacing the nearly century-old Interstate Commerce Commission. 
  • The STB Reauthorization Act of 2015 enabled the board to become an independent body, separate from the U.S. Department of Transportation (DOT).

Understanding the STB

One of the main areas of jurisdiction for the STB is to provide economic regulation of railway freight. Specifically, the agency makes decisions related to rate and service disputes along with business transactions such as mergers, railway line sales, line construction, and line abandonments.

For example, the board would have to approve a merger between two major rail companies, if such a transaction could potentially have anticompetitive effects, as reported in Logistics Management magazine. The STB may also rule in cases where a shipper argues that a railway is charging an unreasonable fee to use its tracks, as reported in the Pet Food Processing newsletter.

The STB has regulatory authority over several other transportation segments as well. These include:

  • Certain passenger rail matters
  • The intercity bus industry
  • Pipelines other than water, gas, or oil
  • Household goods carriers’ tariffs
  • Rate regulation of noncontiguous domestic water transportation, such as freight shipping between the mainland United States and Hawaii, Alaska, Puerto Rico, and other U.S. territories

The STB has an annual budget of roughly $37.5 million and a staff of approximately 150 full-time employees.

STB History and Operations

The STB was created through the ICC Termination Act of 1995, effectively replacing the Interstate Commerce Commission, which operated from 1887 to 1995. At its inception in 1996, the board was essentially an offshoot of the DOT. However, the STB Reauthorization Act of 2015 severed those administrative ties, creating a fully independent agency.

Nonetheless, in the interest of preventing fraud and waste, the Inspector General of the DOT has the authority to monitor the agency’s financial management, property management, and business operations to ensure that they are in agreement with federal law.

The STB consists of five members, including one who serves as its chair. The members are appointed by the president and have to be confirmed by the U.S. Senate. Each board member’s term lasts for five years, with a two-term limit.

The agency has roughly 150 full-time employees, most of whom serve in one of six main offices. These include:

  • Office of the General Counsel, which offers legal guidance to the board and represents the STB when it faces lawsuits because of its actions.
  • Office of the Managing Director, which handles the agency’s budget and personnel management, as well as various administrative functions.
  • Office of Proceedings, which helps draft decisions on behalf of the board and manages legal filings and recordations (recording actions and processes) when, for example, two parties enter into a business agreement.
  • Office of Environmental Analysis, which reviews the environmental impact of board actions when relevant, often coordinating with other government agencies.
  • Office of Economics, which provides economic and financial analysis to help guide the board when making decisions involving issues such as rates, mergers, and line construction.
  • Office of Public Assistance, Governmental Affairs, and Compliance, which serves as an outreach body, providing information to members of Congress, as well as to media outlets and members of the public on STB actions.

The agency also has an Equal Employment Opportunity (EEO) Office that helps monitor compliance with EEO regulations to create equal employment access irrespective of a candidate’s race, color, sex, age, religion, national origin, or mental/physical disability.


What Does the Surface Transportation Board (STB) Have Jurisdiction Over?

The Surface Transportation Board (STB) has regulatory authority over economic and financial matters governing freight rail. This could include, for example, disputes over the reasonableness of railway rates or the effect of a railway merger on the competitive landscape. The agency also has jurisdiction over some other types of transportation, including the intercity bus system, certain passenger rail disputes, and pipelines that don’t supply water, gas, or oil. 

Is the STB Part of the U.S. Department of Transportation?

No. The STB is an independent federal agency. When the board was created through federal legislation in 1996, it was an offshoot of the U.S. Department of Transportation (DOT). However, the STB Reauthorization Act of 2015 turned the board into a fully independent agency.

Who Serves on the STB?

The STB Reauthorization Act of 2015 calls for a board with five members who have to be confirmed by the U.S. Senate. However, the board operated for several years with only three members. It wasn’t until January 2021 that the board finally seated its fourth and fifth members. Board members are allowed to serve a maximum of two full terms, although they can remain for up to one additional year if their replacement has not yet received confirmation.

What Is the STB’s Budget?

The STB requested a budget of $37.5 million for the 2021 fiscal year. Of that total, roughly $26.3 million is allotted for wages and benefits for employees.

Article Sources
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  1. Surface Transportation Board. “Surface Transportation Board.”

  2. Surface Transportation Board. “About STB.”

  3. Surface Transportation Board. “STB Rejects Use of Voting Trust in Proposed Merger Between CN and KCS.”

  4. The White House. “Executive Order on Promoting Competition in the American Economy.”

  5. American Feed Industry Association. “Via Electronic Mail Re: Executive Order on Promoting Competition in the American Economy.”

  6. U.S. Department of Transportation, Office of Inspector General. “Surface Transportation Board.”

  7. Surface Transportation Board. “Board Members.”

  8. Surface Transportation Board. “Offices.”

  9. Surface Transportation Board. “General Counsel.”

  10. Surface Transportation Board. “Office of the Managing Director.”

  11. Surface Transportation Board. “Office of Proceedings.”

  12. Surface Transportation Board. “Office of Environmental Analysis.”

  13. Surface Transportation Board. “Office of Economics.”

  14. Surface Transportation Board. “Office of Public Assistance, Governmental Affairs, and Compliance.”

  15. Surface Transportation Board. “Equal Employment Opportunity Office.”

  16. Surface Transportation Board. "STB Reauthorization Act Reports."

  17. Surface Transportation Board. “Michelle Schultz Sworn in as New Member of the Surface Transportation Board.”

  18. Surface Transportation Board. “Robert Primus Sworn in as New Member of the Surface Transportation Board.”

  19. Surface Transportation Board. “Budget Request Fiscal Year 2021,” Page 29.

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