Eastern Railroad Discussion > WSJ: "NO" on reciprocal switching

The editorial board of the Wall Street Journal weighs in against proposals to allow reciprocal switching in the US. The arguments hinge on private property rights ("why would you improve your facility if your competitor could take it over at any time?")  and cite the "labor problem" which causes service to slide for customers.

Paywall likely

https://www.wsj.com/articles/inflation-scapegoat-railroads-price-increases-logstics-supplies-biden-administration-11651410487?mod=hp_opin_pos_6#cxrecs_s

If open access were a thing it wouldn't be private property... But you know what they say about ifs and buts...



Edited 2 time(s). Last edit at 05/06/22 13:22 by MC6853.

Haven't we already established this principle in the utility industry?  The wires carry current from a whole bunch of sources, deliver it per customer needs. 

Until the editorial board of the WSJ has spent a few years behind a captive shippers desk living the daily battle with poor rail service; I could give a crap regarding their opinion on reciprocal switching.

CW

Posted from iPhone

Should Burger King have a right to have use of a McDonald's facility at a particularly desirable location?  Like it or not, railroads are not public utilities.  We can't pick and choose and property rights apply equally.  If you prefer a socialist economy you are free to advocate for one, but it is not my choice.  Reciprocal switching can be negotiated and can be part of merger concessions, but that's a business matter between two or more private companies.

Meantime get the popcorn ready.

Gordon

RRs probably paid some chump to write that article to further their position.

STB even said (more or less) if the RRs served their customers, they wouldn't have to entertain the notion through the hearings they had.

Funny, the RRs fear competition so much.  But it's not really competetion when there are really two duo-opolies.  I'd think they would want shortlines & terminal RRs etc. to go spot & pull & then they take the long haul portion -that's all they care about anyway.

The big RRs make money inspite of themselves, not because they're great at customer service.

Not really sure. There are only 18 markets out of 51 in the US with a deregulated electrical market. 


march_hare Wrote:
-------------------------------------------------------
> Haven't we already established this principle in
> the utility industry?  The wires carry current
> from a whole bunch of sources, deliver it per
> customer needs. 

There appears to be a fundamental misunderstanding as to exactly what reciprocal switching is. It does not mean I must let you operate your trains on my tracks to serve my customers.

What it does mean is that you can quote my customers a rate as if you physically served them. My local will pick up the car from the customer site and deliver it to you at the nearest interchange. I will charge a switching fee which you will incorporate into the rate you bill the customer.

CW

Posted from iPhone

The shippers and STB have good wind in their sails right now.

Monopolies and duopolies want to protect their profitable markets.

Posted from Android

I did pricing for a railroad. The ICG. If I said the charge was $1,000, it was $1,000.

Unless the railroad pricing people get stupid, reciprocal switching won't effect railroad rates.  I had a hard and fast rule; "Never cut the rate on another railroad to get business.  Never."  You have no cost advantage over the competing railroad and the freight is already moving by rail. All you'll do is set off a rate war that will leave you and your competitors carrying the freight for less money.

The sales force hated me for that.  The easiest thing for a sales person to do is offer a lower price.  But I wasn't there to make friends.

I couldn't collude with the other railroads and agree to a set price.  That could send me to prison.  But I could act responsibly.  And that I did.



Edited 1 time(s). Last edit at 05/06/22 19:28 by Greyhounds.

As evidenced by the movement to trucks it's obvious that there's go guarantee that freight will move by rail.
Time to consider open access, private company owns and maintains the rails, you oay them a use fee by
the ton-mile, customer wants to ship and you don't want it, well somebody else will!

Out 

Still works the same way but without a local for a unit train, right?

But still crewed by you for a fee with the intact train delivered (on origin) or received (on destination) at the nearest interchange?

Juniata Wrote:
-------------------------------------------------------
> There appears to be a fundamental misunderstanding
> as to exactly what reciprocal switching is. It
> does not mean I must let you operate your trains
> on my tracks to serve my customers.
>
> What it does mean is that you can quote my
> customers a rate as if you physically served them.
> My local will pick up the car from the customer
> site and deliver it to you at the nearest
> interchange. I will charge a switching fee which
> you will incorporate into the rate you bill the
> customer.
>
> CW
>
> Posted from iPhone

The WSJ editorial board speaking for the big hedge funds no doubt...


Allen

Everyone keeps saying PSR and draconian attendance policies are designed to get to a single person crew but I think this is actually the goal: get out of running a railroad and into running a toll road.


callum_out Wrote:
-------------------------------------------------------
> As evidenced by the movement to trucks it's
> obvious that there's go guarantee that freight
> will move by rail.
> Time to consider open access, private company owns
> and maintains the rails, you oay them a use fee
> by
> the ton-mile, customer wants to ship and you
> don't want it, well somebody else will!
>
> Out 

Juniata Wrote:
-------------------------------------------------------
> Until the editorial board of the WSJ has spent a
> few years behind a captive shippers desk living
> the daily battle with poor rail service; I could
> give a crap regarding their opinion on reciprocal
> switching.
>
> CW
>
> Posted from iPhone


Bingo.....!!

Posted from Android

Yes. As a matter of fact, I recently saw where an Omaha utility is bringing a rate case against UP for the level of their reciprocal switch charge. Coal trains originate in the Powder River Basin on BNSF then interchange to UP for what amounts to a roughly 8 mile “switch”.

CW


pbouzide Wrote:
-------------------------------------------------------
> Still works the same way but without a local for a
> unit train, right?
>
> But still crewed by you for a fee with the intact
> train delivered (on origin) or received (on
> destination) at the nearest interchange?
>
> Juniata Wrote:
> --------------------------------------------------
> -----
> > There appears to be a fundamental
> misunderstanding
> > as to exactly what reciprocal switching is. It
> > does not mean I must let you operate your
> trains
> > on my tracks to serve my customers.
> >
> > What it does mean is that you can quote my
> > customers a rate as if you physically served
> them.
> > My local will pick up the car from the customer
> > site and deliver it to you at the nearest
> > interchange. I will charge a switching fee
> which
> > you will incorporate into the rate you bill the
> > customer.
> >
> > CW
> >
> > Posted from iPhone

bradleymckay Wrote:
-------------------------------------------------------
> The WSJ editorial board speaking for the big hedge
> funds no doubt...
>
>
> Allen

Yes. And the management, directors, bankers, and other owners of capital.

Posted from Android

I believe the transmission lines are privately owned and you pay to use them. If the capacity is full no room for you.

Posted from iPhone

L231 Wrote:
-------------------------------------------------------
> I believe the transmission lines are privately
> owned and you pay to use them. If the capacity is
> full no room for you.
>
> Posted from iPhone

Many electric overhead lines are privately owned, others are controlled by interconnect companies like PJM. They carry utility generated electricity, merchant generation power, municipal power, etc and collect fees.

FERC oversees the interstate networks.

Posted from Android

Juniata Wrote:
-------------------------------------------------------
> Yes. As a matter of fact, I recently saw where an
> Omaha utility is bringing a rate case against UP
> for the level of their reciprocal switch charge.
> Coal trains originate in the Powder River Basin on
> BNSF then interchange to UP for what amounts to a
> roughly 8 mile “switch”.
>
> CW
>

I believe UP, BNSF, and the Omaha Public Power District had a previous dust-up on exactly this topic. The utility threatened to build its own short line before the railroads came to agreement. 

This is a textbook case of reciprocal switching and a currently captive customer

Trains:  https://www.trains.com/trn/news-reviews/news-wire/nebraska-utility-to-challenge-union-pacific-reciprocal-switch-rate/