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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 »

Rail and the Future of International Shipping

Since railroads offer the cheapest method for transporting goods over land and ships are the most economical form of transit by sea, it is only natural for the two systems to become increasingly intertwined within the ongoing expansion of global trade. A similar connection is to be found between rail transport and truck transport. Both developments key to advances in communications assisted by computers, cell phones, and other mobile devices. All work together to make for a smooth transition flow that allows goods to more readily reach their destinations. While ships may move at slow speeds over long distance, the fact that much of their cargo now moves by container means that goods can be moved around the world in the same relative amount of time that they were moved nationwide, in the case of the United States just a few decades ago. It isn’t so much that the ships have sped up, though they are moving about twenty percent faster than they used to, but because merchandise no longer sits around a warehouse so long waiting to be sorted out before moving out to market. Containers have markedly decreased the time goods spend being warehoused, both in transit by… read more »