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New rule proposed to allow shippers to switch US railways

SHIPPERS will be allowed to switch cargo among large railways if there's reasonable access to competing tracks, under a proposed rule from the US Surface Transportation Board (STB), reports Bloomberg.

The regulation would potentially upend decades-old restrictions that limit shippers' control of their own rail freight. Currently, rail carriers pick up cargo and carry it to its final destination without customers being able to request that it be dropped off for a competitor to handle.

The rule "would allow a party to seek a reciprocal switching prescription that is either practicable and in the public interest or necessary to provide competitive rail service," the regulator said in a decision posted on its website.

The STB will take comments on the proposed rule until September 26.

Shippers have pushed for so-called reciprocal switching to give them more options and help mitigate rising rail rates by increasing competition among carriers.

"STB's decision follows years of deliberation and strong calls from shippers to adopt reforms in response to soaring freight rail rates and poor service," the Rail Customer Coalition said in a statement. The group includes trade groups representing farmers, manufacturers and chemical makers.

Railways have opposed the practice, which they call "forced access," saying it would gum up rail traffic by increasing switching operations.

The Association of American Railroads, a trade group, said the existing system allows for voluntary switching and compels railroads to cooperate if cargo is moved by two or more carriers.

"Forced access would be a step backwards for the supply chain in our country as railroads would ultimately require more resources to move the same amount of freight," the association said.