U.S. Manufacturing, Agricultural and Energy Industries Welcome Proposal to Provide Regulatory Relief and Allow for Greater Access to Competitive Freight Rail Service

July 27, 2016

WASHINGTON (July 27, 2016)— The Surface Transportation Board (STB) announced a proposed rule today that would permit shippers without access to other transportation options to request that their freight be moved to a competing rail line if another Class I railroad is reasonably accessible. The proposed reform, referred to as competitive switching, was envisioned by the Staggers Rail Act more than three decades ago, but it has never been allowed at the STB. 

Competitive switching has the strong support of the Rail Customer Coalition, which represents the largest users of freight rail service and a broad cross section of manufacturing, agricultural and energy industries. Furthermore, the U.S. Department of Agriculture has gone on record as saying, “Competitive switching offers a market based solution to balance the needs of the railroads and shippers and is in keeping with the goals of the Staggers Act.”

STB’s decision follows years of deliberation and strong calls from shippers to adopt reforms in response to soaring freight rail rates and poor service. While the details of the STB proposal will need to be reviewed carefully over the coming days, the following organizations issued statements in response to STB’s announcement:

 

“We appreciate STB’s support of the revised reciprocal switching regulations proposed by the National Industrial Transportation League (NITL). Our member companies across a host of industries need this type of competitive, market-based rail transportation alternative. NITL is grateful that the Board is providing a forum for stakeholder comment, and we look forward to responding on behalf of our members following further review and analysis of the STB’s decision.”

Jennifer Hedrick, Executive Director

National Industrial Transportation League (NITL)

 

“We welcome STB’s decision to move forward on competitive switching, which will help put the marketplace back in the driver’s seat and improve the flow of goods throughout our economy. Easing regulatory barriers to competitive switching will help reduce the need for government intervention and foster a healthy and efficient freight rail system. We look forward to working with the Board to ensure that its final rule will provide our industry, and other major freight rail customers, with better access to competitive and reliable service.”

Cal Dooley, President & CEO

The American Chemistry Council

 

“We appreciate the STB’s efforts to try to foster competition in the freight railroad industry. ARA believes this is a step in the right direction that will hopefully lead to more efficient and dependable rail service. Access to rail transportation through cost-effective switching between carriers is of critical importance to the agricultural industry, which is a seasonal business with retail- distribution facilities located in more rural areas.”

Richard Gupton, Senior Vice President, Public Policy & Counsel

Agricultural Retailers Association

 

“Any effort that seeks to increase competition in the rail industry would decrease costs for the chemical industry while providing better options to ship and receive product. NACD is pleased STB is moving forward with this long awaited proposed rulemaking, and we welcome this advancement in light of exorbitant rail costs due to the lack of competition in the rail industry.”

Eric R. Byer, President 

National Association of Chemical Distributors

 

“The timely transportation of fertilizer is of critical importance to the fertilizer industry and its farmer customers. We are very pleased that STB has moved forward with this important proposal and look forward to reviewing the details and providing comments on the matter.”

Chris Jahn, President

The Fertilizer Institute

 

“Steel shippers rely upon efficient, competitive rail service.  As such, the SMA views expanded access to competitive switching as a useful method to maximize efficiency within the existing rail network.”

Philip K. Bell, President

Steel Manufacturers Association

 

“We’re pleased to see the STB move forward with this proposal.  Nearly 70 percent of all ethanol is shipped by rail, so improving access to competitive rail service is essential for our members to get low-cost, renewable fuels to consumers at the pump.”

Emily Skor, CEO

Growth Energy

 

“Transportation of goods to market in a cost-effective manner is critical to our nation’s family farmers and ranchers. The Surface Transportation Board’s recently proposed rule on competitive switching is an important step in fostering fair and competitive shipping costs for the agricultural sector. NFU appreciates this action and looks forward to continued engagement with STB for the benefit of our nation’s producers.”

Roger Johnson, President

National Farmers Union

 

“The Freight Rail Customer Alliance (FRCA) is pleased that the Surface Transportation Board has issued its Decision on a request to adopt revised competitive switching rules  – a pending matter before the Board since 2011.  The alliance has long supported efforts at the STB to increase competition in the railroad industry and spread its benefits more widely, especially for rail-dependent captive shippers.  Competitive switching is one avenue to help achieve this. FRCA views this NPRM as an important step, and will be reviewing the proposal in the coming weeks.”

Ann Warner, Executive Director

Freight Rail Customer Alliance