Following a request by President Biden, the Surface Transportation Board has moved to its front burner the rail shippers’ request large freight railroads be requiried to adopt reciprocal switching.
Biden asked the STB to look at that and other issues in his Executive Order seeking to inject more competition into the economy. (AA, 8-1-21, P. 1)
Reciprocal switching, also called competitive switching, requires one railroad to allow access to its rail network by rail equipmemt from a different railroad. This has been done in Canada for years without any problems, but U.S- based railroads have strenuously opposed the proposed change.
Early in August, STB Chairman Martin J. Oberman and Vice Chairman and Vice Chairman Robert Primus met with shipper groups to gauge their interest in this and other issues raised by the Presdient in his order. Board member Michelle Schultz also met separately with the shippers.
At the meeting, Oberman asked the shipper groups if it would be worthwhile to obtain additional information in light of wider adoption of Precision Scheduled Railroading (PSR), continuing service issues and the naming of new board members, giving the STB its full complemnt of five members.
The shipper representatives told Oberman that the deteriorationn of service quality since the adoption of the PSR operations model by most Class 1 railroads acutally creates a greater and more urgent need for competitive switching.
The shipper associations also explained that their prior analysis of the proposal the board has been considering for years has demonstrated that less than 4% of overall carloads would be eligible and that even fewer carloads were likely to qualify under the STB’s proposed case-by-case approach.
The shipper groups told Oberman they do not oppose the case-by-case approach, but any final rule should include safeguards to prevent competitive switching cases from becoming excessively long and viable only for the largest shippers.