Proposed U.S. Rule Railroads to Allow Shippers to Switch Cargo to Rivals

The U.S. Surface Transportation Board proposed a rule that allows shippers to switch cargo among large railroads if there’s reasonable access to competing tracks, Bloomberg reports.

The regulation would potentially change 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 proposal to force railroads to allow some manufacturers to hire a competing railroad to haul their products has been championed by the National Industrial Transportation League. The STB, as the agency is known, will take comments on the proposed rule until September 26th.

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

But railroads maintain this rule is a bad idea, and they  continue opposing  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.

President and CEO Cal Dooley of the American Chemistry Council said the new rule should help keep freight rail and manufacturing healthy.