What if…
The National Industrial Transportation League has estimated
a $900 million savings for shippers if competitive switching/reciprocal
shipping is implemented by the US rail carrier industry. Competitive switching
indicates providing a shipper or receiver who’s obligated to a single railroad
the opportunity to have its freight moved on another carrier's line, with
payment of an access fee. The NIT League has petitioned the decision-making
body, the US Surface Transportation Board, for this provision indicating the
cost savings would originate through increased competition amongst rail
carriers. Their goal is to provide shippers opportunity to seek competing bids
from other rail carriers for transportation savings or service improvements.
If competitive switching/reciprocal shipping is enacted,
shippers’ flexibility would result, but what would be the ultimate impact to
the rail operators? Market share shift vs. share swap? New carrier entities
emerging in regional/niche markets? Carrier consolidation within the industry? And
for shippers, would the estimated $900 million savings ultimately be realized,
or would additional logistical time and fee factors affect costs of utilizing
multiple rail carriers?
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