AAI’s Encourages Surface Transportation Board to Update Reciprocal Switching Rules in Light of Ongoing Consolidation and Lack of Competition in Freight Rail

AAI filed comments in the Surface Transportation Board’s (STB’s) Notice of Public Hearing (Docket No. 711) regarding reciprocal switching. Ongoing consolidation in the U.S. rail system has diminished competitive options for shippers of critical commodities, putting more pressure on the competitive access remedies available to the STB, including: (1) the prescription of through routes, (2) terminal trackage rights, and (3) reciprocal switching. Under reciprocal switching, an incumbent carrier transports a shipper’s traffic to an interchange point, where it switches its rail cars over to the competing carrier. This enables a competing carrier to offer its own competitive single-line rate, even if its lines do not physically reach a shipper’s facility. The STB’s proposed regulations eliminate the need to show anticompetitive conduct, a change strongly supported by AAI in its comments. AAI also encourages the STB to reject arguments that the proposed reciprocal switching regulations are unduly costly and will interfere with incentives to invest in rail infrastructure.