Law360 discusses freight rail regulation with Marc Scribner.
The STB in July 2016 agreed to draft new rules that would compel a rail carrier to pass off customers' shipments to a rival railroad at interchanges if certain operating conditions are met. It's a mechanism called reciprocal switching, or competitive switching, but it's rarely been used under the existing STB regulations, which have been in place for 30 years.
Shippers in the manufacturing, agriculture and energy-producing sectors have said they want the new rules because they’ll boost competitive access to rail service and, in theory, better rates. But railroad giants have lambasted the proposal as far-reaching and disruptive to how they manage and operate their complex network of tracks across the country.
The STB has been taking public comment on the proposal since last year, but it isn’t likely to get finalized any time soon since the five-member board has not been fully appointed. After this week, the board will be down to just two members following the resignation of vice chairman Daniel Elliott this Saturday.
Critics of the proposal say now is not the time to re-regulate the freight rail industry, and have urged the U.S. Senate to carefully vet future appointees to the STB board by “empowering new board members who understand this basic economic reality.”
“The Senate should ensure new federal regulators recognize that three decades of partial railroad deregulation have resulted in a surge in railroad investment while shipping rates have dramatically declined, and that means more efficient and cheaper transportation of industrial and consumer goods,” said Marc Scribner, a senior fellow and transportation policy expert with the Competitive Enterprise Institute.
Read the full article at Law360.