Proposed Rule Could Help Improve Rail Service Shipment Times - Modern Distribution Management

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Proposed Rule Could Help Improve Rail Service Shipment Times

A proposed STB rule would make it easier for a shipper served by a single railroad to interchange with a different railroad.
STB Rail Rule

On Sept. 7, the U.S. Surface Transportation Board (STB) proposed a regulation that would make it easier for a shipper exclusively served by one freight railroad, and facing poor service, to arrange for a different railroad to handle their service.

STB is an independent federal agency charged with economic regulatory power over various modes of surface transportation, primarily freight railroads. The proposal would eliminate regulatory barriers for companies that want the opportunity to switch their rail cars to a competing railroad due to regularly missed/late shipments. The rule would increase competition among railroads, and, in turn, help drive improved service for companies served by rail.

“Since the golden spike was ceremonially driven in 1869, connecting this country from coast to coast with rail service, our country’s railroads have had a unique business model. This model has always hinged on the fact that if they owned the track your factory or company was adjacent to, you were locked into their services no matter the level of their pricing or the quality of that service,” explained SMART TD officials in a news release in support of the proposal. SMART TD is a union representing 125,000 current and retired transportation workers. 

According to the Associated Press, STB Chairman Martin Oberman said increasing competition “could do wonders for the countless companies that rely on railroads to deliver raw materials and finished products by giving railroads another incentive to improve service.”

What’s Next? 

STB is accepting comments on the Notice of Proposed Rulemaking, Reciprocal Switching for Inadequate Service, Docket No. EP 711 (Sub-No. 2). Comments on the proposal are due Oct. 23, and reply comments are due Nov. 21.

You can view the board’s proposed rulemaking at the link at the bottom of STB’s posted news release.

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