The U.S. Surface Transportation Board (STB) has extended the comment period for its proposed rulemaking on reciprocal switching as a remedy for poor rail service, giving stakeholders until December 20 to submit feedback on this potentially transformative policy change.
A Long-Standing Industry Challenge
For decades, businesses relying on rail freight have faced persistent service challenges - delayed shipments, inconsistent performance, and opaque communication from carriers. These issues create costly supply chain disruptions that damage business operations and customer relationships.
"Imagine your production lines humming with activity, orders pouring in, everything pointing to strong growth - then suddenly everything grinds to a halt because critical rail shipments don't arrive," described one industry observer. "The financial losses are bad enough, but the reputational damage from missed customer commitments can be devastating."
The Reciprocal Switching Solution
Reciprocal switching allows shippers served by only one railroad to access competing carriers when service standards aren't met. Under this system, when a railroad has physical access to a facility that another carrier doesn't, the first railroad transfers shipments to the second in exchange for compensation.
STB Chairman Martin Oberman explained the rationale: "The Board has decided to focus its reciprocal switching efforts on providing relief to rail customers suffering from poor service. The proposed rule would establish specific, objective, and measurable standards for when reciprocal switching should be granted."
The current proposal differs significantly from a 2016 version by focusing on service metrics rather than distance requirements. When a railroad fails to meet any of three key performance standards, affected shippers could petition for switching rights.
Three Key Performance Metrics
1. Service Reliability
Measures a railroad's ability to deliver shipments within their original estimated arrival time (OETA). The proposal suggests requiring 60% on-time performance (within 24 hours of OETA) in the first year, increasing to 70% subsequently.
2. Service Consistency
Tracks transportation time variability. For unit trains and empty cars, if average transit times increase by 20-25% compared to the prior year, shippers would qualify for relief.
3. Local Service Performance
Evaluates "industry spot and pull" operations - a railroad's ability to place and retrieve cars within defined service windows. The proposal sets an 80% success rate threshold over 12 weeks, with service windows not exceeding 12 hours.
Industry Reactions
Rail industry consultant Tony Hatch praised the service-focused approach: "I call this the 'STB Full Employment Act' because you need a regulator constantly focused on service issues. This is a positive development."
Association of American Railroads CEO Ian Jefferies acknowledged the need for service improvements but cautioned: "The devil is in the details. Are the metrics right? There are questions about whether contract traffic should be included - it absolutely should not."
Potential Impacts and Challenges
Proponents argue reciprocal switching could:
- Improve service quality through competition
- Reduce transportation costs
- Increase supply chain resilience
However, implementation challenges include:
- Technical and operational coordination between railroads
- Potential for increased costs from switching fees
- Possible legal disputes over implementation
The extended comment period reflects STB's commitment to thorough consideration of all stakeholder perspectives before finalizing what could become a landmark reform in U.S. rail freight regulation.