The Surface Transportation Board Issued a Notice of Proposed Rulemaking: Comments Due October 23, 2023

The Surface Transportation Board (“STB”) issued a Notice of Proposed Rulemaking (“NPRM”) in a new sub docket of Ex Parte 711 (Sub. No. 2), regarding open access a.k.a. competitive switching rules. Comments on the proposal are due October 23, 2023; Reply comments are due November 21, 2023. The summary below provides some high-level points, but the decision is lengthy, highly detailed, and subject to further analysis (particularly with respect to the detailed discussion of performance standards).

This decision closes Docket No. EP 711 (Sub-No. 1) and proposes, in a new subdocket, a new set of regulations that would provide for the prescription of reciprocal switching agreements to address inadequate rail service, as determined using objective standards based on a carrier’s original estimated time of arrival, transit time, and first-mile and last-mile service. To help implement the new regulations, the Board proposes (1) to require Class I carriers to submit certain data, which would be publicly accessible and generalized; and (2) to adopt a new requirement that, upon written request by a customer, a rail carrier must provide to that customer individualized, machine-readable service data.

Among other issues, the STB specifically requested comments on the following:

• Whether the reciprocal switching tariff of an alternate carrier applicable to shippers in the same area should be considered as evidence, and how to reconcile inconsistencies in railroad tariffs (e.g., instances in which one railroad lists a location as open to reciprocal switching and another railroad does not).
• Whether such prescriptions should include a minimum level of switching service and, if so, whether the Board should establish a separate and specific penalty structure to be imposed on carriers that do not meet that level of service.
• Whether it could require a carrier to disclose data about past service to a shipper or receiver when a different entity paid for the service.
• Whether it should give the entity that paid for the service the opportunity to seek confidential treatment of service data that a carrier provides to a shipper or receiver upon request.
• Which compensation methodologies are appropriate.
• What is the proper performance metric for unit trains.

Related to the railroad affirmative defenses:

• Whether 20% and the 12-week notice period are reasonable, and whether (and, if so, how) the Board should consider any history of the shipper notifying the carrier of surges that did not come to fruition
• Whether, and under what circumstances, the Board has the authority to consider reciprocal switching requests from shippers that have entered into a valid rail transportation contract with the incumbent carrier.
• Whether the Board may consider the performance data described above, based on service that a carrier provided by contract, as the grounds for prescribing a reciprocal switching agreement that would become effective after the contract expired.
• Whether the Board may require a carrier to provide performance metrics to a rail customer during the term of a contract upon that customer’s request.
• When, prior to the expiration of a transportation contract between the shipper and the incumbent carrier, the Board may prescribe a reciprocal switching agreement that would not become effective until after the contract expires.

For further information contact John Scheib at scheib@gentrylocke.com.

Read more in the Notice of Proposed Rulemaking, below: