Industrial Shippers Petition STB For Rail Access

Industrial Shippers Petition STB For Rail Access

The National Industrial Transportation League has asked the Surface Transportation Board to order competitive switching of cargoes to a second rail line in limited situations.

Bruce Carlton, executive director of the NITL, a major lobby group for rail shippers whose factories are often captive to one railroad, called the plan “a game-changer” in how regulators currently treat competitive access issues, but said it also avoids a broad-based mandatory access rule that railroads have already vowed to oppose. It is the first major action by shippers after the STB last month held a two-day hearing on rail competition issues

The NITL petition asks the STB to initiate a formal rule-making schedule, and proposes that shippers be allowed to individually seek agency orders that cargoes be switched to an alternative railroad within limited geographic areas. Carlton said the NITL has not been in talks with the big Class I carriers or the Association of American Railroads in preparing the petition.

“This is about classic captive shippers,” Carlton said. He also said representatives of member shipper companies played a key role in designing this detailed plan, which asks the STB to allow case-by-case requests by shippers for agency action based on conditions at specific locations.

If adopted, the plan would trigger an STB competitive or reciprocal switching order only after a shipper demonstrates that a customer facility is served by just one railroad, that it has no effective means of shipping goods otherwise, and that there is or can be a working interchange to another railroad within a reasonable distance

With the petition filed July 7, the NITL’s attorney said it sets off a mandatory schedule for railroads to reply and for the STB to decide whether to initiate a formal rule-making process. “It’s a long pathway,” Carlton said, but “we feel this is an important first step.”

The plan leaves out some major areas of concern for many rail shippers, including the power of freight railroads to lock in cross-country transits for shipments that originate on their lines, the so-called bottleneck rule. It also omits paper barriers built into short line purchase agreements with Class I railroads, clauses that lock in cargo flows to the originating railroad without access to competitive bids or service.

Considering the competitive switching issue to be its biggest concern, the NITL decided to take the various access issues a step at a time, Carlton said.

-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter @jboydjoc.