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New rule targets rail service issuesNew rule targets rail service issues

STB proposal mandates reciprocal switching in certain situations

Joshua Baethge

September 8, 2023

2 Min Read
rail rules
Ed Freeman/Getty Images Plus

On Thursday, the U. S. Surface Transportation Board unanimously approved a proposal to address inadequate rail service concerns in certain parts of the country. If approved, the rule would create a path for customers to use reciprocal switching. That process compels rail carriers with sole access to a customer’s facility to ship freight cars to a nearby junction point where they can be transferred to a competing carrier.

The decision comes after years of complaints from customers about poor rail service in areas only served by one carrier. STD Chairmen Martin Oberman notes that the number of Class I rail carriers has decreased from approximately 40 in 1980 to only six today. Still, no customers have obtained a reciprocal switching order in 40 years.  In fact, nobody has even tried to get one since 1990.  Oberman believes this is due to an overwhelming perception that obtaining a reciprocal switching order is next to impossible.

“Since joining the STB nearly five years ago, it has become apparent to me that many of the ills of the national freight rail network stem from a lack of competition in the industry and the fact that many rail customers are captive to one Class I railroad,” Oberman says. “In my view, Congress provided the Board with authority to issue reciprocal switching orders as one way to inject competitive alternatives into the rail network.”

Under the terms of the proposed rule, reciprocal shipping orders would be invoked if the current rail carrier fails to meet any of three performance stands. They include poor service reliability as determined a carrier’s on-time shipping rate over a three-month period.

Service consistency would also be taken into consideration. The proposed rule would allow reciprocal switching if a petitioner shows their carrier’s shipping efficiency moving freight through the rail system varied significantly compared to the same 12-week period in the previous year

Customers could also petition for a reciprocal switching order if a carrier is deemed to have provided inadequate local service. This standard would be determined by the carrier’s success rate in making local deliveries, or “industry spot and polls,” over a 12-week period.

The rule would require carriers to provide historical data of their service metrics within seven days of a customer’s request.

“One of the principal goals of the rule is to incentivize carriers to maintain sufficient resources—specifically work force and locomotives—so that they can meet at least the minimal service standards set by this rule,” Oberman says.  “One hope is that the proposed rule will have the desired effect and that shippers currently receiving poor service will see service improve to the point that litigation before the Board will not be necessary.”

The STB will be accepting comments on the proposed rule through Oct. 23. The board will then be required to issue its responses by Nov. 21.

About the Author(s)

Joshua Baethge

Policy editor, Farm Progress

Joshua Baethge covers a wide range of government issues affecting agriculture. Before joining Farm Progress, he spent 10 years as a news and feature reporter in Texas. During that time, he covered multiple state and local government entities, while also writing about real estate, nightlife, culture and whatever else was the news of the day.

Baethge earned his bachelor’s degree at the University of North Texas. In his free time, he enjoys going to concerts, discovering new restaurants, finding excuses to be outside and traveling as much as possible. He is based in the Dallas area where he lives with his wife and two kids.

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