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Jury Still Out on Reciprocal Switching for Railway Shippers

No favorable decision for NITL’s petitioning of the United States Surface Transportation Board (STB) to adopt new reciprocal switching rules between the country’s four Class I railroad carriers has been reached. “Shippers and railroads sometimes agree, and sometimes we don’t,” said president and CEO of the National Industrial Transportation League, Bruce Carlton, at last week’s New York Rail Trends Conference. With reciprocal switching, under certain conditions, railroad competitors share railways between shipping customers for a fee. If a shipper needed the access of a particular Class I railroad that it would otherwise not use, having no contractual agreement, the non-contractual Class I rail line can grant the ‘captive’ shipper (located in a terminal area) of its competitor, railway access, charging the competitor rail line a service fee. The NITL petition calls for specific conditions to be applied to the STB rules of mandatory reciprocal shipping. The petition states that the captive shipper would have to be within 30 miles of a working interchange of at least two Class I rail carriers and the point of origin to destination transportation rate charged by the competing rail carrier exceeds 240% of its variable service cost. Another caveat of the petition is that… read more »