Proposed rule would compel railroads to share tracks
OMAHA, Neb. — A Surface Transportation Board proposed rule announced this week could force railroads to share their tracks with competitors if the rule is approved by federal regulators.
The rule would only apply to certain companies that don’t have many shipping options. The companies that have been fighting for this change since 2011 praised Wednesday’s announcement while railroads decried the proposal.
President and Chief Executive Officer Cal Dooley of the American Chemistry Council said the new rule should help keep freight rail and manufacturing healthy.
“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,” Dooley said.
The proposal to force railroads to allow some manufacturers to hire a competing railroad to haul their products has been championed by the National Industrial Transportation League.
“Our member companies across a host of industries need this type of competitive, market- based rail transportation alternative,” said Jennifer Hedrick, executive director of the National Industrial Transportation League.
Citi analyst Christian Wetherbee said in a research note that the proposed rule will likely have a minimal impact on railroad profits because of the restrictions on it.
To get the relief, regulators said every shipper that applies will have to show that the arrangement is in the public interest and necessary to ensure competitive rail service.
But railroads maintain this rule is a bad idea. President and CEO Ed Hamburger of the Association of American Railroads said forcing railroads to give competitors access to customers on their lines would unnecessarily complicate matters.
“The freight rail industry’s position remains unchanged: forced access is an ill- conceived approach that compromises the efficiency of the entire network by gumming up the system through added interchange movements, more time and increased operational complexity,” Hamburger said.