AAR Calls Reciprocal Switching a ‘wealth transfer’

Ahead of hearings next month by the U.S. Surface Transportation Board on a proposed rule to allow reciprocal switching, the Association of American Railroads has described the practice as a wealth transfer.

The STB plans to conduct hearings on March 15-16 on a long dormant proposal to promulgate reciprocal switching regulations.

The concept has triggered controversy since it was initially proposed in 2016 with freight railroads and their shippers divided in their views on the issue.

The rule the STB is considering would require a railroad with sole physical access to a shipper to transfer cars from that shipper to a second railroad at a junction point with the latter.

The second railroad would be required to pay a per-car switching fee to the sole access carrier with that fee being determined by the STB.

Reciprocal switching orders would only be issued in cases in which a shipper can prove to regulators that reciprocal switching is feasible and necessary to enhance competition.

In a filing with the STB, AAR, which describes reciprocal switching as “forced switching,” called the proposed rule misguided and wants it abandoned.

“Forced switching is not in the public interest. It is a wealth transfer to more profitable entities,” the AAR said.

The filing also contended that reciprocal switching would exacerbate supply chain problems and suggested it would only benefit large industrial shippers.

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