Proposed rules allow a shipper to gain access to another railroad if the shipper makes certain showings
The National Industrial Transportation League (NITL) commends the Surface Transportation Board (STB) for issuing a decision on NITL’s proposal on competitive switching. The STB has proposed a substantial revision of its reciprocal switching rules, under which rail shippers can seek to obtain single-line pricing from railroads that do not directly serve their facilities. The STB’s proposal is in response to the Petition for Rulemaking filed by The National Industrial Transportation League on July 7, 2011.
“NITL is proud to advance the interests of our members and a diverse array of rail shippers across many industries. We applaud the STB’s decision to move forward on changes to competitive switching regulations. NITL appreciates the Board’s careful consideration of NITL’s proposal to provide this competitive, market-based rail transportation alternative,” said Jennifer Hedrick, Executive Director, NITL.
The STB explained that it is “appropriate to revisit” the existing reciprocal switching rules for two main reasons. First, the Board recognized that the lack of reciprocal switching requests in the past several decades demonstrates its existing rules are not adequately serving shippers’ interests. Second, the Board highlighted the improved financial health of the nation’s railroad industry since the current rules were adopted in the 1980’s, and their productivity and technological advances. With these changed circumstances, the requirement that shippers prove railroad “competitive abuse” in seeking a switch “makes less sense in today’s regulatory and economic environment.”
The STB found the NITL proposal to be a valuable starting point in revamping its rules. NITL had asked the Board to reverse the restrictive rules made by its predecessor agency, the Interstate Commerce Commission, which blocked shippers from seeking competitive switching. The Board agreed and has proposed two alternative pathways. The first path would require the proposed switching to “be practicable and in the public interest,” and the second path would require the proposed switching to be “necessary to provide competitive rail service.”
The proposed rules would only apply to Class I railroads. The STB also proposed two alternative methods by which the STB would set the access price that would be paid by the new competing railroad to the incumbent railroad, if the two railroads cannot reach agreement.
“I thank NITL for bringing their reciprocal switching proposal to the Board for consideration and I am pleased that today we are granting that petition in part,” STB Chairman Daniel R. Elliott III said in a statement. “I encourage all stakeholders to participate in the notice and comment process and I look forward to meeting with them to hear their views directly.”
The STB invited public comment in response to the proposed rules. Written comments are due September 26, 2016 and reply comments are due October 25, 2016. The STB has also issued a limited waiver of its ex parte prohibition for this proceeding. Interested persons may schedule ex parte meetings with STB members for the period October 25th through November 14th. Requests for ex parte meetings must be made by October 10th. Summaries of ex parte meetings will be publicly available.
“NITL is grateful that the Board is providing these forums for stakeholder comment,” said Hedrick. “We look forward to responding on behalf of our members following further analysis of the STB’s decision and discussion with our membership,” added Hedrick.
For more information and the latest updates on NITL’s position on competitive switching and the STB’s decision, visit the Legislative/Regulatory Activity page on www.nitl.org.