Rail News: Federal Legislation & Regulation
The Association of American Railroads (AAR) late last week responded to comments filed by a group of shippers that favor the Surface Transportation Board's (STB) proposed "reciprocal switching" regulation.
The proposed regulation involves "reciprocal" or "competitive switching," which refers to a situation in which a railroad that has physical access to a specific shipper facility switches rail traffic to the facility for another railroad that does not have physical access, according to the STB. The second railroad pays the railroad that has physical access, typically in the form of a per-car switching charge.
In its reply comments, the AAR outlined to the STB how the shipper comments "do nothing to contradict the conclusion that the board's proposed reciprocal switching rules are unlawful," AAR officials said in a press release summarizing the filing.
Association officials also said that "the shippers are using the proposed rule as a means of circumventing existing rate regulation standards."
"The narrow self-interest of certain shippers in a revenue transfer in their favor — based on government intervention that they would never tolerate in their own industries — cannot offset the multiple flaws in the Board's proposal," AAR officials said.
Forced access is an ill-conceived approach that compromises the efficiency of the entire networ, AAR President and CEO Edward Hamberger said.
"This proposed regulation represents a sweeping reversal of the market-based approach favored by Congress over the last three-plus decades," he said in the release.
Hamberger noted existing STB regulations already protect rail shippers as railroads voluntarily switch traffic under the current system, and by law, if freight can get from its origin to final destination only if it is carried by two or more railroads, railroads must cooperate to move the shipments.