New regulation aims to simplify the process for shippers to access alternative rail service providers

STB Proposes Easing Access to Competing Rail Services for Shippers

The Surface Transportation Board (STB) has introduced a proposal aimed at simplifying the process for shippers to obtain freight services from railroads that do not directly serve their facilities.

This initiative follows a federal court decision in July that overturned the STB’s 2024 rule, which would have enabled shippers experiencing poor rail service to access a second railroad. Reciprocal switching, the practice at the center of the proposal, allows a shipper served by one railroad to utilize a competitor’s linehaul services. In this arrangement, the local railroad transports railcars to a transfer point for a fee, giving so-called “captive” shippers an alternative carrier and the ability to negotiate for better rates and services.

STB Chairman Patrick J. Fuchs commented, “This proposal leverages market dynamics, offers genuine choices for American businesses as outlined by law, and removes outdated regulatory barriers that have been limiting rail competition. By eliminating these regulations, the board would realign with statutory language that encourages innovation, entrepreneurship, and economic growth, while strengthening supply chain resilience.”

The proposed changes would eliminate federal rules from the 1980s that required shippers to prove “anticompetitive conduct” by railroads before seeking regulatory intervention. Notably, the STB has never issued a service order under these longstanding regulations.

This move comes as Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC) seek approval from the STB for a merger that would create the first coast-to-coast freight railroad in the United States. The proposed merger has sparked concerns among agricultural, chemical, and energy shippers, who argue it could lead to higher costs and diminished service quality.

According to the STB, “Since these regulations were enacted, the legal framework has evolved, the rail industry has undergone significant changes, and there is no longer widespread support for the rules among stakeholders.”

While the proposal would relax restrictions and give shippers more flexibility to pursue better deals, it stops short of granting open access, which would allow any carrier to serve shippers over tracks it does not own.

The agency stated that the proposal, unanimously backed by its three current members, “would restore the board’s ability to evaluate each case individually, based on the statutory standards set by Congress. The law acknowledges that competitive access issues are complex and require case-by-case consideration, taking into account each carrier’s operations, market position, and other relevant factors.”

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Read more articles by Stuart Chirls here.

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