I have mentioned this in previous threads involving reciprocal switching. The concept before the STB currently is similar to the interswitching process that has been in place in Canada since about 1986. Roughly 72-75% of rail served points in Canada may utilize interswitching. It has not harmed the railroads financially or operationally. It has not resulted in significant increases in transit time of shipments.
Prior to retirement my employer made extensive use of interswitching at our Canadian plants. Depending on the lane, our service generally was better than had we used the carrier serving us for the initial linehaul. By way of example, we had a production site in Valleyfield, PQ that was switched by CN. About 2-3 miles distant was a CN/CSX interchange yard known as Cecile Junction. We could have routed shipments to the southeastern US via CN over Buffalo thence CSX (which was the routing protocol CN insisted on) but, by utilizing interswitching and having CN deliver the traffic to CSX at Cecile, we actually saved at least 4-5 days. And CN's interswitching fee was simply included in the CSX linehaul rate and invisible to us.
We also used interswitching for awhile to move traffic from the same production site to destinations in the south central US on KCS. To reach KCS, we could use either CN or, through interswitching - CP. We would have both carriers bid on these lanes when contracts came up for renewal. In these instances, as Balt notes previously, the CP routing had slightly longer transit times (2 days longer, if memory serves) but, that was more than offset at times by CP providing more competitive rates over their portion of the move. CN eventually got "the message" and started using a sharper pencil when providing contract quotes.
Interswitching or reciprocal switching won't necessarily be the best answer in every situation so shippers need to make intelligent decisions on where and when to use it.
CW
jeffhergert Euclid Of the total number of rail customers served by only one railroad, what percentage of them would meet the logistical requirments to be granted the right to reciprocal switching? What percentage would actually take advanatage of it by installing the necessary trackwork? What would be done if both railroads involved in a reciprocal switching agreement offered almost the exact same price all of the time? Reciprocal switching already exists at some locations. Where it does exist, it may not be extended to all customers. Right now, it's done by mutual agreement of the railroads involved. I don't think it's possible at this time to say how many new customers will benefit from forced reciprocal switching. It depends on how it's done in the final form. One proposed scheme (proposed by a shipper's group a few years back) had a zone of 31 miles from any interchange point. I'm sure that proposed zone would cover all the large customers, but leave out many others that are probably more dependent on rail than the large customers. Installing new track (an interchange track) is a good question. There's lots of places where railroads used to interchange cars, but those tracks have been removed. Could railroads be compelled to restore interchanges that, in many cases, have long since been removed? I imagine, all things be equal, where two railroads offer the same price the one with better service will get the business. All things may not always be equal. A customer on railroad A may send/receive a lot of cars to points on railroad B. It may be in railroad A's favor to grant reciprocal switching to railroad B in exchange for access to customers on B. Jeff
Euclid Of the total number of rail customers served by only one railroad, what percentage of them would meet the logistical requirments to be granted the right to reciprocal switching? What percentage would actually take advanatage of it by installing the necessary trackwork? What would be done if both railroads involved in a reciprocal switching agreement offered almost the exact same price all of the time?
Of the total number of rail customers served by only one railroad, what percentage of them would meet the logistical requirments to be granted the right to reciprocal switching? What percentage would actually take advanatage of it by installing the necessary trackwork? What would be done if both railroads involved in a reciprocal switching agreement offered almost the exact same price all of the time?
Reciprocal switching already exists at some locations. Where it does exist, it may not be extended to all customers. Right now, it's done by mutual agreement of the railroads involved.
I don't think it's possible at this time to say how many new customers will benefit from forced reciprocal switching. It depends on how it's done in the final form. One proposed scheme (proposed by a shipper's group a few years back) had a zone of 31 miles from any interchange point. I'm sure that proposed zone would cover all the large customers, but leave out many others that are probably more dependent on rail than the large customers.
Installing new track (an interchange track) is a good question. There's lots of places where railroads used to interchange cars, but those tracks have been removed. Could railroads be compelled to restore interchanges that, in many cases, have long since been removed?
I imagine, all things be equal, where two railroads offer the same price the one with better service will get the business. All things may not always be equal. A customer on railroad A may send/receive a lot of cars to points on railroad B. It may be in railroad A's favor to grant reciprocal switching to railroad B in exchange for access to customers on B.
Jeff
It seems as though reciprocal switching is based on a fundamental premise that a lack of competition allows railroads to set prices unfairly high. So the solution is to mandate fairness by requiring reciprocal switching.
If that was all there was to it, railroads without reciprocal switching could charge three times what would be a “fair.” So because reciprocal switching would be introduced as a mandate for fairness, I am skeptical of the motive and the likelihood of a successful result.
I mentioned wondering what would happen if two reciprocal switching railroads both offered nearly the same rate all the time. I was thinking that it would be interpreted by the customer as the rate being inherently unfair again despite the introduction of competition.
This time the cause of the customer complaint would be that the two competing railroads are colluding, or price fixing, simply based on the fact that the two rates are identical. The industry could respond by saying that the rates match because the work matches, and that proves that there is no unfairness which is the goal of the reciprocal switching in the first place.
Otherwise the simplistic expectation of reciprocal switching is that the customer calls the first railroad for a price, and they called the second railroad for a competitive bid. Then because of the competition created by reciprocal switching, the customer expects there to be a substantial difference in the price and terms of both competing railroads. That way the shipper sees the intended result of reciprocal switching and chooses the bargain of the best deal.
So I would bet that if the price and terms were frequently identical, the customer would complain that the deal is unfair and that the competition is not working due to price fixing. As long as there is a fundamental distrust, the price will never be considered fair.
tree68 BaltACD Remember... In other words, "it's complicated..." No question about that.
BaltACD Remember...
In other words, "it's complicated..." No question about that.
If the businesses involved value car cycle time - reciprocal switching will add days to the cycle times and thus increase the number of cars that will be needed to sustain the same level of product transported.
Never too old to have a happy childhood!
BaltACDRemember...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
tree68 BaltACD Nominal 1 day delay in arriving carrier #1's yard. Switched to Carrier #2 on day 2 (if before 7 AM consignee is notified, if not the next 7 AM) Day 3 or 4 car is switched to consignee in the next regular switch. That's not a lot different from the single operator (CSX) operations here. Substitute "through freight with drops" for train number 1, and "local" for #2 and you're on the mark. In fact, if the local is going south today, then the car will have to wait until tomorrow, when the local goes north, to be delivered to the consignee.
BaltACD Nominal 1 day delay in arriving carrier #1's yard. Switched to Carrier #2 on day 2 (if before 7 AM consignee is notified, if not the next 7 AM) Day 3 or 4 car is switched to consignee in the next regular switch.
That's not a lot different from the single operator (CSX) operations here. Substitute "through freight with drops" for train number 1, and "local" for #2 and you're on the mark. In fact, if the local is going south today, then the car will have to wait until tomorrow, when the local goes north, to be delivered to the consignee.
Remember - what you are effectively doing is piling one carriers normal operating delays on top of a second carriers normal operating delays - on both the inbound and outbound sides of any movements between the carriers. If the consignee doesn't get daily switching even more days are added to the overall trip.
BaltACDNominal 1 day delay in arriving carrier #1's yard. Switched to Carrier #2 on day 2 (if before 7 AM consignee is notified, if not the next 7 AM) Day 3 or 4 car is switched to consignee in the next regular switch.
Lithonia OperatorThis article explains it well: https://www.logisticsmgmt.com/article/stb_rolls_out_proposed_reciprocal_switching_regulations
https://www.logisticsmgmt.com/article/stb_rolls_out_proposed_reciprocal_switching_regulations
The one thing that is not highlighted is the two to four day delay in car cycle times for cars that end up in a reciprocal switching arrangement.
Nominal 1 day delay in arriving carrier #1's yard.Switched to Carrier #2 on day 2 (if before 7 AM consignee is notified, if not the next 7 AM)Day 3 or 4 car is switched to consignee in the next regular switch.
Cars will be delayed going back to Carrier #1, however there is no notification requirements.
Minimum delays are 2 days inbound and 2 days outbound, and possibly more.
This article explains it well:
Still in training.
[quote user="Lithonia Operator"]
I read this article: https://www.trains.com/trn/news-reviews/shipper-coalition-urges-federal-regulators-to-permit-reciprocal-switching/
But I don't think I really get what reciprocal switching is. And even if I sort of get it, I'm unclear on why it's called "reciprocal switching." Who is reciprocating what with whom?
Could someone give me a layman's-level explanation of this? Like with an example using two railroads and a customer company, real or hypothetical.
[/quote]
President's Island, Memphis ,Tn. [ A mixed useage industrial area is islolated by a long Causway, with about a 3 mile (?) long railline.].
When it was 'opened' up, local railroads {then:IC, Frisco} split the switchng duties on what seemed to be a six month on, and 6 month off, roatation. MoPac would bring a cut of cars down about every day(?)} Did not see SouRwy, and L&N on The Island(?). I have no idea how it works these days- since copnsolidations have happened-( BNSF and IC now CN ). It seemed to be worked 24 hrs a day back then.
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