Market Matters Blog           03/16 09:42

   Shippers and Railroads Comment on STB Reciprocal Switching Rule Proposal

   Railroads and shippers chimed in to the recent Surface Transportation Board 
Notice of Proposed Rulemaking on reciprocal switching.

Mary Kennedy
DTN Basis Analyst

   On Jan. 7, 2026, the U.S. Surface Transportation Board (STB) published a 
decision Notice of Proposed Rulemaking (NPRM) to "repeal its regulations on 
'Intramodal Rail Competition, 49 C.F.R. Part 1144' which implement the agency's 
statutory authority to prescribe reciprocal switching agreements, through 
routes, and through rates."

   Established in 1985, 49 C.F.R. Rule 1144, also known as the Intramodal Rail 
Competition regulations, governs how the STB would handle requests from rail 
shippers served by only one railroad to gain access to a second carrier, also 
known as reciprocal switching.

   "The approach set out in the regulations, which narrows the Board's 
statutory discretion, may no longer be appropriate on an industry wide basis, 
and its repeal would allow the Board to consider the prescription of through 
routes, through rates, and reciprocal switching agreements on a case-by-case 
basis under the applicable statutory standards," according to the STB filing.

   "The current proposal would streamline the path for shippers to obtain 
competitive access before the Board, bringing the agency's approach more 
closely in line with statutory intent. The NPRM would restore the Board's 
discretion to consider -- on a case-by-case basis -- the merits of each case 
brought before the agency under the statutory standards set by Congress," noted 
the STB in their Jan. 7 press release.

   Why is the STB doing this again? In July 2025, U.S. Court of Appeals for the 
Seventh Circuit, after several rail carriers contended that the Final Rule on 
reciprocal switching adopted by the STB in April 2024, exceeded STB's statutory 
authority under the Staggers Rail Act of 1980 and vacated the 2024 Final Rule. 
Here is the link to the decision by the court: 
https://media.ca7.uscourts.gov/cgi-bin/OpinionsWeb/processWebInputExternal.pl?Su
bmit=Display&Path=Y2025/D07-08/C:24-1811:J:Scudder:aut:T:fnOp:N:3394224:S:0.

   COMMENTS FROM INDUSTRY ON NPRM

   In their filing to the STB, USDA said, "As the NPRM noted, in the 40 years 
since Part 1144 was adopted, the Board has never issued a prescription under 
its framework, and USDA and other entities have long argued that the 
anticompetitive conduct requirement sets an unrealistically high bar for 
shippers to obtain relief. Over the past 15 years, the Board has held hearings 
and considered various reforms to reciprocal switching. USDA has supported 
those efforts, such as the Board's 2016 NPRM and 2024 rule (now vacated), to 
make reciprocal switching more accessible to shippers/receivers than it is 
currently. Repealing Part 1144 is the right first step in making statutory 
relief available and finding solutions that better serve the public interest, 
or that correct for inadequate competition. However, USDA encourages the Board 
to continue judicious monitoring of shippers' use of reciprocal switching."

   Brotherhood of Locomotive Engineers and Trainmen said, "Based on the reasons 
stated in the filing and easily available alternatives with far less pitfalls 
to achieve the STB's goals, the BLET opposes eliminating Part 1144. The BLET 
believes holding the carriers responsible for regular, reliable service is a 
better solution than imposing something more convoluted. The STB has existing 
remedies available to address these longstanding issues in an appropriate and 
proportional manner and should utilize these remedies."

   
https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1773248551341/310961.p
df (ACC) said, "The Anticompetitive Conduct standard adopted in Part 1144 
stands as an outdated and unwarranted barrier to competition in the freight 
rail industry. The conditions that led to the adoption of the standard no 
longer exist; its repeal is not only permissible, but necessary. ACC strongly 
supports the Proposed Rule to fully repeal Part 1144 and allow the Board to 
consider requests for reciprocal switching, through routes, and through rates 
on a case-by-case basis under its statutory authority."

   Canadian Pacific Kansas City (CPKC) said, "The proposed repeal of Part 1144 
would replace the settled competitive abuse standard with uncertainty as to 
what circumstances would warrant relief from the Board by leaving that 
determination to be made on a case-by-case basis. The result will be both 
increased regulation and harmful uncertainty for all stakeholders. Any 
clarification of the standard would be best made in a rulemaking proceeding and 
should continue to require a showing of competitive harm that has caused 
concrete harm to a shipper in order for the Board's intervention to be invoked. 
CPKC requests that the Board recast the NPRM to seek input on a new standard 
or, alternatively, adopt only a partial repeal limited to reciprocal switching 
subject to a concrete replacement standard to Part 1144."

   American Petroleum Institute (API) said it "strongly supports repeal of Part 
1144. Restoring the Board's full statutory discretion will remove an outdated 
regulatory barrier. It will further align Board practice with Congressional 
intent reflecting modern rail market conditions. This modernization of the 
process will provide meaningful recourse for captive energy shippers and 
promote competition, and could serve to enhance competition, and economic 
efficiency. Finally, it is API's sincere hope that this will also help to 
address some of the ongoing and growing challenges with service reliability."

   BNSF Railway (BNSF) said it "Believes that repealing the CARs (Competitive 
Access and Rail Service) is consistent with BNSF's longstanding position that 
the Board should maintain an approach that allows markets to function and 
narrowly tailors regulatory interventions to solve specific, identified 
problems with the functioning of relevant markets. In addition, in any future 
litigation, the Board should ensure that it considers all relevant forms of 
competition and not focus only on direct intermodal or intramodal competition."

   BNSF added, "Finally, regardless of any changes to the CARs, the Board 
should recognize that it has an independent statutory obligation to evaluate 
the competitive impact of the proposed merger between UP and NS and to deny the 
proposed merger if it concludes that the application has not shown that the 
transaction will enhance competition."

   There are more filings related to the Jan. 7 NPRM on the STB website and 
also the entire filings of the comments above. Also note that reply comments 
(about the March 10 comments) are due by April 24, 2026. Link to the March 10 
filings/comments: https://www.stb.gov/proceedings-actions/filings/.

   Here is the Jan. 7, 2026, STB press release announcing the NPRM and there is 
a link to the STB decision provided at the end of the press release: 
https://www.stb.gov/news-communications/latest-news/pr-26-01/.

   Here is a link to the Federal Register with a history of the STB role in 
freight rail transportation and also explains Part 1144 in more detail: 
https://www.federalregister.gov/documents/2026/01/09/2026-00241/eliminating-regu
latory-barriers-to-competition-review-of-part-1144.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on social platform X @MaryCKenn

    




(c) Copyright 2026 DTN, LLC. All rights reserved.