I may have missed it in another post, but what is mandatory reciprocal switching? I understand that the railroads are opposed to it. Why?
It is a leftist plot to seize money from railroads…
Under reciprocal switching, a railroad, for a fee, switches carload freight to another railroad to give a captive shipper access to facilities it might not otherwise reach. The switching charges are paid by the receiving railroad. The customer pays the originating railroad, which would build the switching fee, and perhaps an additional amount, into its overall charges to compensate it for the revenue foregone by switching the traffic to its rival for carriage.
The NITL proposal would allow a captive shipper or receiver to gain access to a second rail carrier if the customer’s facility is located within a 30-mile radius of an interchange where regular switching occurs. Only true captive customers—defined by NITL as a business with no alternatives from other railroads or other modes— could qualify. The switch would not occur if the affected railroad could prove the practice would be unsafe or is unfeasible or harmful to existing rail service, the shipper group said."
Or you could say that it is a rightist plot to mulct more money from a shipper who does not have access to a different railroad company.
Politics not allowed,
[quote user=“BroadwayLion”]
It is a leftist plot to seize money from railroads…
Under reciprocal switching, a railroad, for a fee, switches carload freight to another railroad to give a captive shipper access to facilities it might not otherwise reach. The switching charges are paid by the receiving railroad. The customer pays the originating railroad, which would build the switching fee, and perhaps an additional amount, into its overall charges to compensate it for the revenue foregone by switching the traffic to its rival for carriage.
The NITL proposal would allow a captive shipper or receiver to gain access to a second rail carrier if the customer’s facility is located within a 30-mile radius of an interchange where regular switching occurs. Only true captive customers—defined by NITL as a business with no alternatives from other railroads or other modes— could qualify. The switch would not occur if the affected railroad could prove the practice would be unsafe or is unfeasible or harmful to existing rail service, the shipper group said."
Or you could say that it is a rightist plot to mulct more money from a shipper who does not have access to a different railroad company.
[quote user=“Sam1”]
[quote user=“BroadwayLion”]
It is a leftist plot to seize money from railroads…
Under reciprocal switching, a railroad, for a fee, switches carload freight to another railroad to give a captive shipper access to facilities it might not otherwise reach. The switching charges are paid by the receiving railroad. The customer pays the originating railroad, which would build the switching fee, and perhaps an additional amount, into its overall charges to compensate it for the revenue foregone by switching the traffic to its rival for carriage.
The NITL proposal would allow a captive shipper or receiver to gain access to a second rail carrier if the customer’s facility is located within a 30-mile radius of an interchange where regular switching occurs. Only true captive customers—defined by NITL as a business with no alternatives from other railroads or other modes— could qualify. The switch would not occur if the affected railroad could prove the practice would be unsafe or is unfeasible or harmful to existing rail service, the shipper group said."
Or you could say that it is a rightist plot to mulct more money from a shipper who does not have access to a different railroad company.
It would seem that to be truly captive, with respect to other modes, the business’ road access would have to have a weight restriction such as a light load bridge that would prevent truck access. I don’t doubt that there are some cases where this condition exists, but I would guess it’s rare.
PS. After reading the thread on the truck hitting the South Shore bridge, I guess access road clearance could also be an issue.
I think forced reciprocal switching represents seizure of private property. Say i have Joohn Deere outlet in a midwest town, and 25 miles away there is a Caterpiller Tractor dieler. Should I be forced to Caterpiller tractor’s on behalf of my competitor?
If a busiiness doesn’t like the service on the one railroad that serves him, he ought to have located where two railroads provided service, build his own branchline, or truck to the railroad he wishes to use.
That is my opinion, anyway. Dave Klepper
But what if that customer had two railroads serving him, and one of them pulled up stakes (ie, was abandoned)?
Or should the customer abandon his loyal customer base and move someplace else (perhaps many miles away) where there are two railroads, and potentially a competitor - who perhaps already has an exclusive claim to that territory?
I’m not advocating “unlawful seizure,” but I kind of agree that a customer shouldn’t be held hostage due to a “monopoly”, either.
Building a new rail line is expensive, not to mention regulatory issues and the fact that said line may have to be tens of miles long.
And forcing the cargo onto trucks just transfers the cost onto the local taxpayers who fund road maintenance.
Did the shipper protest the abandonment? Could he have obtained some mitigation from authorities permitting the abandonment? Did he keep a clear record of rates before abandonment in order to register an appropriate complaint that probably would see action if all of a sudden the remaining railroad used its new monopoly status to raise rates? There are various routes for protesting real unfairness without forcing a railroad to give business to its competitor.
But is the railroad “giving” business to its competitor? As I understand it, the arrangement would be similar to that of a small regional railroad that handles the final delivery/pickup with the customer. The switching railroad would get paid for the switching service. I’m not fur it or agin it, I just don’t see the reason for strong objection. I also don’t see where it’s that much different in principle from haulage or trackage agreements, except in that it’s mandatory.
You have it backwards. If the Caterpillar dealer is offering a better product at a much cheaper price, how would you feel about having to pay thousands more for an inferior expensive product because you are not allowed to buy the Cat, because the dealer is 25 miles away and the John Deere dealer is in your own town. (My apologies to both brands - I have no idea of how they compare in reality.) Your local corner store would love to prevent you from shopping at the supermarket but your automobile allows you freedom to drive the extra mile.
Forced reciprocal switching is not a seizure of private property. The originating railroad is compensated for the switching it does to deliver the load to the long-haul carrier. Then the long haul portion becomes subject to competitive rates, and it is up to the originating railroad to win that part of the business too.
Obviously the railroads are reluctant to accept the concept, since a captive shipper can be charged a much higher rate and thus generate more profit for less effort. And it is only competitive pressure that keeps any industry efficient.
John
From memory I can’t cite the details of the case, but a few years ago the location of a new auto plant was made contingent upon NS granting CSX (or perhaps the other way around) track rights between the plant site and CSX rails.
That analogy really helps to clarify this issue for me. Thanks, John.
We recently bought a Cat Skid Steer machine. Nice machine, they came and delivered it.
This month we just bought a new John Deere Machine, they came and delivered it. This one replaces three older tractors.
We buy tractors band machines based on what we what, and what we can get for a price we are willing to pay.
ROAR
To me, reciprocal switching is more like being able to use someone else’s property at a rate that may be less than the going rate.
For example, say your lawn mower broke. The rental place down the block charges $25 per day to rent a lawn mower (I have no idea as to rates for such things, just an example with made up numbers.) because that’s the amount they have determined covers maintenance and eventual replacement of the equipment and a profit so they can stay in business. Now the city has an ordinance that says that neighbors must lend theirs to their next door neighbor at $10 per day. Maybe the city has determined that is a fair rate that covers wear and tear, maybe they just pulled the number out of their as–uh, air.
Pretty soon, the lawn mower rental place goes out of business because no one is renting them. Meanwhile, the people who still have a lawn mower finding that the cost of maintaining their own lawn mower is getting out of hand because not only do to they use it, but so do all their neighbors. They decide to get rid of it and instead borrow their neighbor’s. It’s cheaper than owning one. Eventually, their won’t be any lawn mowers available since the business closed and no one wants the expense of owning a lawn mower.
So you say the lawn mower rental place should only charge $10 per day. So to stay in business they do just that. Now everyone has lower rates. The business finds out that they can’t maintain or replace their equipment at a rate of $10 per day. The result is the same, they go out of business and no one wants to own their own lawn mower. Eventually the grass is knee high by the Fourth of July.
Something more railroady.
I have a railroad with Widget Industries 25 miles from the nearest interchange. The rate I’ve determined for Widget’s business is higher tha
Even if the city ordinance allows neighbors to charge the market rate, they may use the neighbor’s mower because it’s easier than driving across town and having to haul the mower around…
Before all the mergers, this wasn’t a problem as such. While a customer might request a rather bizzare routing so as to favor certain railroads, a car (or cars) couldn’t travel coast to coast on one railroad (they can’t now, either, however the potential number of railroads has dropped considerably). In some cases, a car couldn’t travel across the state on just one railroad. So “reciprocal switching” was a fact of every day life.
And everybody got their cut of the rate division.
Methinks that some portion of the problem is that Shipper A wants something shipped between a point on Railroad B and a point on Railroad C. B or C are both upset because the bulk of the long haul is occurring on their competitor’s rails…
This seems like a pretty clear definition:
Reciprocal Switching: The term “reciprocal switching” is the movement of a railcar, in switch service between the interchange tracks of one railroad to a customer’s private or assigned siding on another railroad for the purpose of loading or unloading freight. The service precedes or follows a road haul and is bi-directional to include both the loaded and empty railcar.
On the surface, it seems to be a way to impose a free market competition, but yet it is government imposed, so it cannot be called a free market solution.
Wouldn’t it be a lot easier and more efficient to just have the government set the rail rates out of fairness to all?
The same type of (anti) logic could be used in this case- The lumber yard I work for spent some big bucks to relocate to an area where a rail spur could be put in. Because of that investment, the transposition cost for goods is less than for the same goods coming on a semi truck. We have the location. We invested in the infrastructure. We have the pricing advantage as a consequence.
Using the anti-logic, our competitor should be able to use our rail spur- right? Of course, they’ll be required to compensate us for it’s use. Since they’ll never be able to use it enough to even wear the shine off the rails, I suppose you could say that them giving us $25 to help cover the cost of mowing ROW would cover it-right? No harm done,and we made $25!
Like from each according to his abilities, to each according to his needs?
Yes, exactly.
And thus we get back to rate making before Staggers.