The six Class I railroads’ ability to meet their first reporting deadline under the Surface Transportation Board’s (STB) final rule on Reciprocal Switching for Inadequate Service “is in jeopardy,” the Association of American Railroads (AAR) told the Board on Aug. 20. The railroads, it said, are still awaiting a template and any accompanying instructions from the STB on the required reporting of new, standardized forms of original estimated time of arrival (OETA) and industry spot and pull (ISP) data.
The STB reported in April that under the new rule “eligibility for prescription of a reciprocal switching agreement will be determined in part using objective performance standards that address reliability in time of arrival, consistency in transit time, and reliability in providing first-mile and last-mile service.” The Board said it “will also consider, in determining whether to prescribe a reciprocal switching agreement, certain affirmative defenses and the practicability of a reciprocal switching agreement.” To help implement the new regulations, the STB said it will require “all Class I railroads to submit certain service data on an ongoing and standardized basis, which will be generalized and publicly accessible.” Railroads will also be required “to provide individualized, machine-readable service data to a customer upon a written request from that customer,” according to the STB. The rule takes effect Sept. 4, 2024.
The STB in September 2023 issued a Notice of Proposed Rulemaking that it said focused on “providing rail customers with access to reciprocal switching as a remedy for poor service.” It called the move “an important step in addressing the many freight rail service concerns expressed by stakeholders since 2016.”
The AAR in its Aug. 20 STB filing (download below) reported that “[a]s per the Board’s decision, OETA and ISP ‘data must now be submitted using a standardized template to be developed by the agency.’” To date, however, that template and instructions have not been provided, according to the association, which noted that the Class I’s “have been working to adapt their systems and processes to produce the new metrics as the decision requires.” AAR requested that the STB “delay the initial reporting deadline until 30 days after it provides the standardized template … so the railroads will have sufficient time to comply.”
Railway Age Capitol Hill Contributing Editor Frank N. Wilner, author of “Railroads & Economic Regulation” that details the history of railroad-shipper conflicts, offered this commentary when the final rule was issued in April:
“The significance is that following decades of dithering, regulators finalized a meaningful rule on competitive access. For the first time, observable rail service standards are established; captive shippers gain insight into their individualized service records; and the STB will collect on-time performance and first/last mile standardized data.
“The rule allows captive shippers demonstrating poor service reliability under three STB-established standards—on-time performance, transit time and first/last mile success in spotting and pulling cars—to petition the agency for access to a second, competing railroad through a physical interchange at any yard used to collect, classify and distribute freight cars. There is no maximum distance limiting the remedy.
“Thus, the trigger for relief is service failure and not rate abuse as many shippers also sought. The Board, however, has other rate methodologies benefiting shippers, including Final Offer Rate Review currently under judicial appeal.
“Especially notable is that the rule—forever contentious politically and among stakeholders—gained five-vote unanimity that speaks forcefully of this Board’s collegial approach to economic regulation. There most assuredly was compromise at every intersection during drafting. It is a pragmatic approach creating space to do more in the future, should events warrant.
“And what a distinct and positive difference from not too awfully long ago when the New York Times reported how the agency had ‘become entrapped in bitter internal battles and a source of great embarrassment to the White House, which watched the [regulators it nominated] bicker publicly.’”
Further Reading
- Reciprocal Switching: Not Quite Done
- ‘Poor Service’ Drives STB’s Proposed Reciprocal Switching Rule
- Rail Stakeholders Weigh in on Reciprocal Switching Proposal
- STB and Reciprocal Switching: Abject Regulatory Failure
- STB to AAR on Reciprocal Switching: 15 More Days to Comment
- POINT/COUNTERPOINT: STB EP 711, ‘Reciprocal Switching for Inadequate Service’
- A Primer on Reciprocal Switching
- AAR to STB: Reciprocal Switching a ‘Wealth Transfer to More-Profitable Entities’
- STB to AAR: Sorry, No Extension
- STB proposes “forced access” regulations
- Shippers ask STB to deliver a free lunch
