Mandatory Switching Proposal

On March 1, 2013 the Association of American Railroads released the following statement by AAR President and CEO Edward R. Hamberger in response to National Industrial Transportation League’s proposal on mandatory switching. Hamberger said: 

 “America’s freight railroads have invested more than $525 billion dollars over the past 30 years making this country’s rail network the safest, most reliable and efficient system in the world. As a result, the services provided to large and small customers are second to none.

 “The National Industrial Transportation League’s (NITL) proposal will trigger serious service failures on today’s nationwide rail system and wipe out the efficiencies U.S. businesses have come to expect and rely on if they are to survive in today’s competitive global marketplace. Those failures will be caused by a substantial and unnecessary increase in the handling of loaded and empty freight rail cars, if the NITL proposal were to be enacted.

 “At a time when American businesses are just beginning to turn the corner, NITL is ignoring the needs of the vast majority of U.S. shippers.”

The NITL is requesting the Surface Transportation Board (STB) eliminate the existing competitive access rules and precedents as they apply to reciprocal switching and replace them with their new proposed rule to govern competitive switching.   The proposal includes includes the conditions listed below:

  • the shipper’s or receiver’s facilities for which switching is sought are served by only one Class I rail carrier;
  • there is no effective inter- or intramodal competition for the rail movements;
  • there is (or can be) a “working interchange” between a Class I rail carrier and another Class I within a “reasonable distance” of the shipper’s facilities
  • a competitive switching agreement shall not be imposed if either rail carrier can establish that the arrangement is not feasible, or unsafe or, that it would unduly hamper the ability of either carrier to serve its shippers

According to the NITL a study showed that its proposal would add reasonable competition into the freight rail market.

NITL’s petition can be found on the National Industrial Transportation League’s website, or by clicking on the link below.