No favorable decision for NITL’s petitioning of America Surface Transportation Board (STB) to adopt new reciprocal switching rules between the state’s four Class I railroad carriers was attained.
With reciprocal switching, under specific conditions, railway challengers share railways between transport customers for a payment. If a shipper required the accessibility of a particular Class I railroad that it might otherwise not use, having no contractual agreement, the non-contractual Class I rail line can allow the ‘captive’ shipper (situated in a final area) of its competition, railway access, charging the rival rail line a service charge.
The NITL request calls for particular conditions to be placed on the STB rules of mandatory mutual transport. The petition says that the captive shipper would have to be within 30 miles of the working interchange of the least two-class I rail carriers as well as 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 the fact that the selection of when to participate in switching should rest with the railway carriers mutually concerned. Said railway carriers will not engage in any competitive changing agreement that is risky, not safe for all parties concerned, or that would undermine service quality of the railways to their shippers.
Hearings in Washington, DC last month shed light on long term competition issues involving captive shippers and the railroad industry. The shippers site that they are now being taxed and needing to withstand capricious service and hedged costs because of the monopoly of the railroads. The place of the railroads is that compulsory mutual substitution would degrade service and change added prices to shippers. Railroads state that shippers have competitive service alternatives along with appeasement choices with the STB. The hearings are on the heels of Senator Rockefeller’s (D – WV) proposed legislation for railway sector reform. The rail business has window to evaluate the NITL petition, and the STB has a five-month time frame to begin rulemaking proceedings.
