DOJ Favors Reciprocal Switching Rule

The U.S. Department of Justice has submitted a brief to the U.S. Surface Transportation Board that is largely in favor of the Board promulgating rules to allow reciprocal switching.

The STB will hold hearings on the matter on March 15-16. The proposed reciprocal switching rule has languished on the agency’s agenda since 2016 but changes in the Board’s membership has revived interest in the issue.

The STB is considering allowing certain shippers with access to just one railroad to seek a reciprocal switching agreement with another railroad that is nearby.

The railroading providing direct service to the shipper would be required to interchange cars to the nearby railroad for a fee to be set by regulators.

The DOJ brief described the proposed STB rule as “a well-tailored first step” toward increasing competition.

The brief said the rule would increase the likelihood of direct competition, is not overly burdensome, and would minimize the need for complex rate regulation.

It noted that Canadian National and Canadian Pacific are already familiar with reciprocal switching, which is practiced in Canada and known as interswitching.

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