American Chemistry Council Backs STB Reciprocal Switching Reform

Why It Matters

Restoring reciprocal switching could increase rail competition, lower shipping costs, and strengthen U.S. manufacturing and agricultural supply chains. The reform also counters consolidation trends that limit market entry for shippers.

Key Takeaways

• ACC backs STB's repeal of reciprocal switching regulations
• Rail consolidation left six carriers dominating market
• Reform aims to restore case‑by‑case competitive access
• Court previously vacated 2024 reciprocal switching rule
• ACC links reforms to manufacturing and supply‑chain resilience

Pulse Analysis

Reciprocal switching—where a carrier with physical access to a shipper’s facility hands traffic to another carrier for a fee—has long been a lever for competition in the freight rail sector. The STB’s original 2024 rule, which set minimum service standards and mandated three‑to‑five‑year switching agreements, was struck down by a federal appeals court that questioned the Board’s authority under the Staggers Rail Act. With the regulatory framework now in flux, the STB’s latest Notice of Proposed Rulemaking seeks to repeal the outdated 1985 regulations in Part 1144, allowing the agency to evaluate switching requests on a case‑by‑case basis and remove barriers that have limited shippers’ options.

The American Chemistry Council’s endorsement underscores the business community’s appetite for more rail competition. ACC highlights that the consolidation of Class I railroads from 31 carriers to just six has created monopoly‑like dynamics, inflating transport costs for manufacturers, utilities, and agricultural producers. By reinstating flexible reciprocal switching, shippers can pressure incumbents to improve service quality and pricing, directly supporting U.S. manufacturing, energy production, and agricultural output. The council also ties the reform to broader economic goals, such as President Trump’s push to reshore production and enhance supply‑chain resilience.

Legal challenges remain a pivotal factor. The court’s vacatur of the 2024 rule reflects ongoing tension between rail carriers and regulators over the scope of the Staggers Act. However, the STB’s proposed deregulation aligns with a broader policy trend favoring market‑based solutions and could set the stage for future decisions on high‑profile mergers, such as the proposed Union Pacific‑Norfolk Southern combination. If enacted, the reforms would give the STB a practical tool to mitigate monopolistic risks, foster competition, and ultimately lower freight costs for a wide range of U.S. industries.