ARLINGTON, VIRGINIA, US — Saying many of its agricultural shipping members are “captive to one railroad,” the National Grain and Feed Association (NGFA) testified at a March 15 Surface Transportation hearing in support of finalizing competitive (or “reciprocal”) switching rules the association said would increase rail-to-rail competition.
Max Fisher, chief economist for NGFA, testified on the STB’s proposal to revise competitive switching rules, which would allow shippers served by a single railroad to request bids from a nearby competing railroad. STB’s proposal has been pending since 2016.
“In a highly consolidated and largely captive industry, this may be the best opportunity to create some semblance of rail-to-rail competition,” he said. “Many of NGFA’s members are captive to one railroad and have little bargaining power in the absence of rail-to-rail competition.”
STB’s current regulations governing reciprocal switching were promulgated in 1985 by the board's predecessor, the Interstate Commerce Commission. The regulations provide that reciprocal switching would only be prescribed if the agency determines that a railroad is engaging in activity considered “anticompetitive.”
Under the STB’s proposal, there would be no need to show anticompetitive conduct. Rather, the STB would require the establishment of a switching arrangement if it is “practicable and in the public interest” or is “necessary to provide competitive rail service.”
NGFA submitted comments on Feb. 14 as part of the formal record urging the STB to require competitive switching for shippers and receivers that are within 100 miles of another railroad.
View the NGFA’s full comments on competitive switching here.STB also is working to promulgate revisions to its rate reasonableness procedures for shippers and receivers that would be too far from an interchange to participate in reciprocal switching.