Washington, D.C. (Nov 13, 2023) – Three leading industry groups that rely on the nation’s freight rail system filed joint comments calling for enhanced standards to address rail service failures that harm American manufacturers, farmers, and energy producers.
The American Chemistry Council (ACC), The Fertilizer Institute (TFI), and the National Industrial Transportation League (NITL) commended the Surface Transportation Board (STB) for its proposal to allow rail customers that receive inadequate service to gain access to a competing railroad, while calling for improvements to the proposal.
In its September 7 notice, the STB proposed to provide reciprocal switching as a remedy for poor rail service. Reciprocal switching allows shippers served by a single railroad the ability to have their freight transferred to another major railroad. In their joint comments, the associations support the STB’s overall framework, but propose alternative service standards and other changes to provide more effective and meaningful remedies to resolve freight rail problems.
ACC stands firmly behind efforts to foster rail competition and believes the STB’s framework could provide significant relief when railroads fail to provide adequate service to their customers. However, the Board’s proposed standards are too limited, potentially leaving our members with substantial operational challenges before qualifying for competitive service. We urge the STB to revise these standards to better reflect shipper needs.
Specifically, the associations propose:
- Increasing the minimum standard for on-time deliveries from 60% to 70% and establishing graduated standards for deliveries that deviate further from the Original Estimated Time of Arrival (OETA).
- Adopting a stronger standard for service consistency, suggesting that shippers should qualify for reciprocal switching if their transit times increase by more than 15% year-over-year, or more than 25% over three years.
- Instituting more stringent measures for local car delivery and pickup service (known as “industry spot and pull” performance), including a threshold that at least 80% of spots and pulls occur within the scheduled timeframes, with additional requirements to address consecutive failures to move cars.
- Setting a minimum of five years for the duration of a reciprocal switching prescription to provide a sufficient incentive for alternate carriers to offer competitive service.
In light of persistent freight rail problems and more consolidation within the freight rail industry, the groups urge the STB to act swiftly and decisively to finalize reciprocal switching reforms that will promote greater competition and efficiency throughout the rail network.