We all know the frustration with rail service. Sure, that starts with actual rail operations but includes everything from switching service to rates to customer service and more. PSR was supposed to save the railroads but numerous factors including the strike threat and COVID left rail service deteriorating (see prior article HERE>>). Bottom line is, in spite of all other potential excuses, PSR has not yet delivered and to some has been a disaster (other than for shareholders). As much as rail carriers hate to even speak the words, competitive access has been suggested as a solution, and their own failure to deliver their product has opened this can of worms.
The Surface Transportation Board (STB) is an independent federal agency that oversees the economic regulation of the nation's freight railroads. One of its main functions is to ensure that shippers have reasonable access to rail service and competitive rates. Recently, the STB has proposed a new rule that would make it easier for shippers to request reciprocal switching, a practice that allows a railroad to move a shipper's cargo to another railroad at an interchange point. This would give shippers more options and potentially lower their transportation costs.
The proposed rule has been welcomed by some shippers and shipper associations, who argue that it would promote competition and efficiency in the rail industry. They claim that many shippers are captive to a single railroad and face high rates and poor service quality. By allowing more reciprocal switching, the STB would create a more level playing field and encourage railroads to improve their performance and customer satisfaction.
However, the proposed rule has also faced strong opposition from the railroads and some industry groups, who contend that it would undermine the rail network and harm the economy. They argue that reciprocal switching would interfere with the operational and contractual arrangements between railroads and shippers, and create additional costs and delays. They also claim that the STB's proposal is based on outdated assumptions and does not reflect the current market conditions and competitive forces. They warn that forcing railroads to share their infrastructure and customers with competitors would discourage investment and innovation, and jeopardize the safety and reliability of the rail system.
Don’t miss the opportunity to hear about this from the Chair of the Surface Transportation Board, Marty Oberman, at the North East Association of Rail Shippers (NEARS) fall conference in Portland, ME. To learn more go to www.nears.org>>.
Share your thoughts and opinions with me at dennis@ihlogistics.com>>.
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