[Federal Register Volume 88, Number 179 (Monday, September 18, 2023)]
[Proposed Rules]
[Pages 63897-63917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19543]


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SURFACE TRANSPORTATION BOARD

49 CFR Part 1145

[Docket No. EP 711 (Sub-No. 2)]


Reciprocal Switching for Inadequate Service

AGENCY: Surface Transportation Board.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This decision proposes, in a new subdocket, a new set of 
regulations that would provide for the prescription of reciprocal 
switching agreements to address inadequate rail service, as determined 
using objective standards based on a carrier's original estimated time 
of arrival, transit time, and first-mile and last-mile service. To help 
implement the new regulations, the Surface Transportation Board (Board 
or STB) proposes to require Class I carriers to submit certain data, 
which would be publicly accessible and generalized; and to adopt a new 
requirement that, upon written request by a customer, a rail carrier 
must provide to that customer individualized, machine-readable service 
data.

DATES: Comments are due by October 23, 2023. Replies are due by 
November 21, 2023.

ADDRESSES: All filings must be submitted to the Surface Transportation 
Board either via e-filing on the Board's website or in writing 
addressed to 395 E Street SW, Washington, DC 20423-0001. Filings will 
be posted to the Board's website and need not be served on other 
commenters or any other party to the proceedings.

FOR FURTHER INFORMATION CONTACT: Valerie Quinn at (202) 740-5567. If 
you require accommodation under the Americans with Disabilities Act, 
please call (202) 245-0245.

SUPPLEMENTARY INFORMATION: 
    Overview. In 2016, the Board issued a notice of proposed rulemaking 
in Reciprocal Switching (2016 NPRM), EP 711 (Sub-No. 1) et al. (STB 
served July 27, 2016), under which the agency would exercise its 
statutory authority to require rail carriers to enter into reciprocal 
switching agreements under 49 U.S.C. 11102(c). Due to developments in 
the freight rail industry since the Board's 2016 notice, including 
critical and ongoing service problems, the Board has decided to focus, 
at this time, its reciprocal switching reforms on more specific and 
objective remedies for

[[Page 63898]]

inadequate rail service. Therefore, the Board is closing Docket No. EP 
711 (Sub-No. 1) and proposing a new set of regulations that would 
supplement the Board's existing provisions on reciprocal switching in 
cases where the rail carrier is providing inadequate service. A 
separate notice announcing the closure is being published concurrently.
    The newly proposed regulations would provide for the prescription 
of a reciprocal switching agreement when service to a terminal-area 
shipper or receiver fails to meet certain objective performance 
standards. The proposed standards are intended to reflect a minimum 
level of rail service below which regulatory intervention may be 
warranted, considering shippers and receivers' need for reliable, 
predictable, and efficient rail service as well as rail carriers' need 
for a certain degree of operating flexibility. The Board proposes 
that--when an incumbent rail carrier's service fails to meet the 
performance standards, the incumbent carrier lacks an affirmative 
defense, and the prescription of a reciprocal switching agreement would 
be practicable--it is in the public interest to allow access to an 
alternate rail carrier through prescription of a reciprocal switching 
agreement, which is consistent with the public interest prong of 
section 11102(c). The use of objective performance standards would also 
provide predictability and efficiency in regulatory proceedings in 
which a petitioner seeks a prescription. 49 U.S.C. 10101(15).
    To facilitate implementation of the new regulations, the Board 
proposes to require Class I rail carriers to provide, upon written 
request by a shipper or receiver, that customer's own individualized 
service data. Additionally, to ensure that the Board would have an 
informed view of service issues across the network, the agency proposes 
to make permanent the filing of certain data that the Board has 
collected on a temporary basis in Urgent Issues in Freight Rail 
Service--Railroad Reporting, Docket No. EP 770 (Sub-No. 1), and to 
provide for consistency in reporting that data.\1\
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    \1\ Following the completion of Docket No. EP 711 (Sub-No. 2), 
the Board intends to take further action in Docket No. EP 770 (Sub-
No. 1) and in First-Mile/Last-Mile Service, Docket No. EP 767, in 
which the Board invited comments on first mile/last mile (FMLM) 
service issues.
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    The Current Framework for Alternate Access through Reciprocal 
Switching. Alternate access generally refers to the ability of a 
shipper or receiver or an alternate railroad to use the facilities or 
services of an incumbent railroad to extend the reach of the services 
provided by the alternate railroad. The provisions of 49 U.S.C. 11102 
and 10705 make three alternate access remedies available to shippers/
receivers and carriers: the prescription of terminal trackage rights, 
the prescription of reciprocal switching agreements, and the 
establishment of through routes. As discussed below, reciprocal 
switching agreements provide for the transfer of a rail shipment 
between Class I rail carriers or their affiliated companies within the 
terminal area in which the shipment begins or ends its journey on the 
rail system. The incumbent rail carrier either (1) moves the shipment 
from the point of origin in the terminal area to a local yard, where an 
alternate carrier picks up the shipment to provide the line haul; or 
(2) picks up the shipment at a local yard where an alternate carrier 
placed the shipment after providing the line haul, for movement to the 
final destination in the terminal area. The alternate carrier might pay 
the incumbent carrier a fee for providing that service. The fee is 
often incorporated in some manner into the alternate carrier's total 
rate to the shipper. A reciprocal switching agreement thus enables an 
alternate carrier to offer its own single-line rate or joint-line 
through rate for line-haul service, even if the alternate carrier's 
lines do not physically reach the shipper's/receiver's facility. See 
2016 NPRM, EP 711 (Sub-No. 1) et al., slip op. at 2.
    A reciprocal switching agreement can be voluntary or may be 
prescribed by the Board as provided in section 11102(c). Section 
11102(c) authorizes the Board to require rail carriers to enter into 
reciprocal switching agreements when practicable and in the public 
interest or when necessary to establish competitive rail service. 49 
U.S.C. 11102(c)(1). Currently, the Board has two sets of regulations 
under which it considers whether to prescribe a reciprocal switching 
agreement in non-emergency situations.
    Part 1147 of the Board's current regulations addresses reciprocal 
switching related to inadequate service. Under part 1147, the Board 
will prescribe a reciprocal switching agreement (or terminal trackage 
rights under section 11102(a) or a through route under section 10705) 
if the Board determines that there has been a substantial, measurable 
deterioration or other demonstrated inadequacy in rail service by the 
incumbent carrier. 49 CFR 1147.1(a). Part 1144 governs reciprocal 
switching to address a broader set of issues, including certain types 
of complaints about pricing and/or service. Under part 1144, the Board 
will prescribe a reciprocal switching agreement or through route as 
necessary to remedy or prevent an act that is contrary to the 
competition policies in 49 U.S.C. 10101 or is otherwise 
anticompetitive, provided that certain other conditions are also met. 
49 CFR 1144.2(a)(1); 49 U.S.C. 10101.
    The 2016 NPRM. In the 2016 NPRM, the Board proposed to remove the 
references to reciprocal switching from part 1144 and to create new 
regulations at a new part 1145 to govern reciprocal switching. The new 
regulations would have eliminated the requirement that the petitioner 
show that the reciprocal switching agreement was needed to prevent an 
act that is contrary to the competition policies in section 10101 or is 
otherwise anticompetitive. Under part 1145 as proposed in the 2016 
NPRM, the Board would prescribe a reciprocal switching agreement when 
it either was practicable and in the public interest or was necessary 
to provide competitive rail service, based on certain criteria. 2016 
NPRM, EP 711 (Sub-No. 1) et al., slip op. at 16; see also id. at 9 
(proposing to repeal part 1144 and to reverse the policy adopted by the 
Interstate Commerce Commission in Midtec Paper Corp. v. Chi. & NW 
Transp. Co. (Midtec), 3 I.C.C.2d 171 (1986), to the extent that the 
agency indicated an intent to treat the two standards in section 
11102(c) as a single standard).
    In assessing whether a reciprocal switching agreement would be 
practicable and in the public interest, the Board proposed a general 
test that would consider whether the benefits of the proposed agreement 
would outweigh its potential detriments, considering all relevant 
factors. 2016 NPRM, EP 711 (Sub-No. 1) et al., slip op. at 18. Examples 
of potentially relevant factors included (1) whether the arrangement 
would further the rail transportation policy of section 10101; (2) the 
efficiency of the proposed arrangement; (3) whether the arrangement 
would allow access to new markets; (4) the impacts, if any, of the 
arrangement on capital investment, quality of service, and employees; 
(5) the amount of traffic that would be moved under the arrangement; 
and (6) the impact, if any, of the arrangement on the rail 
transportation network. 2016 NPRM, EP 711 (Sub-No. 1) et al., slip op. 
at 18. The Board proposed not to find that the prescription of a 
reciprocal switching agreement would be practicable and in the public 
interest if either of the affected rail carriers showed that service 
under the agreement is not feasible, is unsafe, or

[[Page 63899]]

will unduly hamper the ability of that carrier to serve its shippers. 
Id.
    In assessing whether a reciprocal switching agreement would be 
necessary to provide competitive rail service for shippers served by a 
single Class I railroad, the Board proposed to consider whether 
intermodal and intramodal competition were effective with respect to 
the movements for which the agreement was sought. Id. at 27.\2\ As with 
the other test, the Board proposed not to prescribe a reciprocal 
switching agreement based on certain feasibility, safety, or 
operational considerations.
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    \2\ The Board also proposed possible methodologies for 
determining how an incumbent carrier would be compensated if the 
incumbent carrier and the alternate carrier could not reach 
agreement on their own. 2016 NPRM, EP 711 (Sub-No. 1) et al., slip 
op. at 24-26.
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    The Board engaged the public on the proposal in various ways, 
including by receiving and reviewing filed comments, holding a public 
hearing, and subsequently inviting supplemental comments. Board Members 
also participated in ex parte meetings in which they received input 
from numerous interested parties.
    The 2016 NPRM and hearing generated a broad range of responses from 
those supporting reform and those opposing the reciprocal switching 
proposal. A fuller overview of the initial comments and replies 
submitted in response to the 2016 NPRM can be found in the December 28, 
2021 notice announcing the hearing. See Reciprocal Switching, EP 711 
(Sub-No. 1), slip op. at 4-6 (STB served Dec. 28, 2021). Rail carriers 
generally objected to modifications to the Board's current reciprocal 
switching regulations. Other commenters suggested a streamlined 
approach to reduce complexity and provide more certainty. Some 
commenters recommended procedural changes, (see Shipper Coal. Comment 
23-31, Oct. 26, 2016), and others raised concerns with various aspects 
of the proposal.
    Service Problems. As the Board was developing and considering the 
2016 NPRM, it was also addressing a series of major service problems 
plaguing the rail network. In April 2014, the Board announced that it 
would hold a hearing to provide interested persons the opportunity to 
report on recent service problems, to hear from rail industry 
executives on plans to address their service problems, and to discuss 
additional options to improve service. U.S. Rail Serv. Issues, EP 724, 
slip op. at 1 (STB served Apr. 1, 2014). Docket No. EP 724 ultimately 
led the Board to adopt rules requiring the Class I railroads, and the 
Chicago Transportation Coordination Office through its Class I members, 
to file weekly service data with the Board. U.S. Rail Serv. Issues--
Performance Data Reporting, EP 724 (Sub-No. 4) (STB served Nov. 30, 
2016).\3\
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    \3\ See also Revisions to Reguls. for Expedited Relief for Serv. 
Emergencies, EP 762 (STB served Apr. 22, 2022) (proposing to amend 
the agency's emergency service regulations and noting that, since 
late 2013, railroad service challenges have periodically affected a 
wide range of geographic regions and commodities).
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    In April 2022, given widespread concern about rail service and 
deteriorating trends reflected in the data collected, the Board 
convened a two-day hearing to explore issues related to the reliability 
of the national rail network. Urgent Issues in Freight Rail Serv., EP 
770, slip op. at 1 (STB served Apr. 7, 2022). The Board stated that it 
had been hearing from a broad range of stakeholders about inconsistent 
and unreliable rail service related to tight car supply and unfilled 
car orders, delays in transportation for carload and bulk traffic, 
increased origin dwell time for released unit trains, missed switches, 
and ineffective customer assistance. Id. at 2. Shippers also expressed 
concern in the reciprocal switching proceeding that carriers' recently 
adopted operating procedures have introduced new service issues and 
that captive shippers have had little, if any, recourse during these 
disruptions. (Coal. Ass'ns Comment 10, Feb. 14, 2022; Priv. Railcar 
Food & Beverage Ass'n (PRFBA) Comment 20, Feb. 14, 2022; Indus. Mins. 
Ass'n-N. Am. Comment, Feb. 14, 2022; U.S. Wheat Assocs. Comments, Feb. 
14, 2022; Am. Fuel & Petrochem. Mfrs., Feb. 14, 2022.) \4\ The 
Coalition Associations further asserted that service disruptions 
following changes to a railroad's operating practices exposed the 
inadequacy of the Board's current regulations to remedy service 
disruptions effectively. (Coal. Ass'ns Comment 10, Feb. 14, 2022.) In 
Docket No. EP 770 (Sub-No. 1), the Board has required additional, 
temporary reporting of data needed for a timelier understanding of the 
extent and location of acute service issues and labor and equipment 
shortages and has required the four largest U.S. Class I rail carriers 
\5\ to submit to the Board ``service recovery plans.'' Urgent Issues in 
Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1) (STB served May 
6, 2022); Urgent Issues in Freight Rail Serv.--R.R. Reporting, EP 770 
(Sub-No. 1) (STB served May 2, 2023) (extending the temporary reporting 
period for all Class I rail carriers to December 31, 2023).
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    \4\ A number of these parties sought reciprocal switching relief 
as part of the acquisition of Kansas City Southern and its railroad 
affiliates by Canadian Pacific Railway Limited. Canadian Pac. Ry.--
Control--Kan. City S., FD 36500 et al., slip op. at 83-85 (STB 
served Mar. 15, 2023).
    \5\ BNSF Railway Company (BNSF), CSX Transportation, Inc. 
(CSXT), Norfolk Southern Railway Company (NSR), and Union Pacific 
Railroad Company (UP).
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    New Approach. Given the major service problems subsequent to the 
2016 NPRM and the history of recurring service problems that continue 
to plague the industry, the Board has concluded that it is appropriate, 
at this time, to focus reciprocal switching reform on addressing 
inadequate service. The Board recognizes that, over the past several 
months, Class I carriers have taken steps that are intended to improve 
service and that, in some cases, service has improved. These recent 
developments do not, however, provide the certainty that is needed to 
protect the public interest, as well as the interests of rail 
customers, in adequate service on a general and sustained basis. The 
Board expects that the more objective and transparent standards, 
defenses, and definitions in this proposal, compared to the previous 
proposal, would provide that certainty. Through the approach that is 
proposed in this new subdocket, the Board intends to provide 
appropriate regulatory incentives to Class I carriers to achieve and to 
maintain higher service levels on an ongoing basis. The Board 
anticipates that the data access and standardization provisions in this 
proposal, which have no equivalent in the previous proposal, would 
ensure and enhance these benefits.
    Accordingly, to allow the Board to focus on service issues as 
provided herein, and to advance more objective standards and related 
defenses and definitions, the Board will not at this time adopt the 
rules proposed in the 2016 NPRM. We will close Docket No. EP 711 (Sub-
No. 1) and instead propose, in Docket No. EP 711 (Sub-No. 2), a new 
rule focused on more defined processes for the prescription of a 
reciprocal switching agreement in cases of inadequate service.
    As discussed more fully below, under part 1145, the Board would 
find that prescription of a reciprocal switching agreement is 
``practicable and in the public interest'' based on objective standards 
measuring the adequacy of rail service and a straightforward analysis 
regarding the practicability of the proposed agreement. 49 U.S.C. 
11102(c). It is clear that both the reliable and timely delivery of 
rail shipments and the efficient movement of shipments through the rail 
system are essential to meeting the public need for adequate rail 
service. The public need

[[Page 63900]]

for adequate rail service is, in turn, central to the design of the 
Interstate Commerce Act, as amended by the ICC Termination Act of 1995, 
Pub. L. 104-88, 109 Stat. 803: an essential aspect of the rail 
transportation policy set forth in the Act is to ensure the development 
and continuation of a rail system that meets the needs of the public 
and the national defense. 49 U.S.C. 10101(4).
    The Board's experience in recent service oversight proceedings 
reaffirms that carriers' failure to provide reliable, timely, and 
efficient delivery of rail shipments can result in serious consequences 
for the transportation network and beyond. For example, in the year 
following the Urgent Issues hearings in 2022, the Board has continued 
to closely monitor rail service performance data submitted in that 
docket and pursuant to 49 CFR part 1250.\6\ That data showed that, for 
certain metrics, railroads did not meet the performance targets that 
the railroads themselves set for improving service. Overall, the data 
for key performance indicators--such as velocity, terminal dwell, FMLM 
service (i.e., industry spot and pull), operating inventory, and trip 
plan compliance--showed that railroad operations remained generally 
challenged through much of the last two years, with associated impacts 
on shippers and the public. Poor performance by rail carriers can 
substantially impair shippers' ability to operate their businesses on 
an economic basis. That impairment in turn harms the United States' 
economy as a whole. See, e.g., Am. Fuel & Petrochem. Mfrs. Written 
Testimony 4, Apr. 28, 2022, Urgent Issues in Freight Rail Serv., EP 770 
(noting that its ``member companies have been forced to reduce facility 
throughput and subsequently inform their downstream customers that 
shipments may be delayed''). Inadequate rail service, particularly when 
it can be avoided or mitigated, is therefore contrary to the public 
interest. See Oversight Hr'g Pertaining to Union Pac. R.R. Embargoes, 
EP 772, slip op. at 2-3 (STB served Nov. 22, 2022).
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    \6\ Rail service data collected pursuant to 49 CFR part 1250 is 
available on the Board's website at www.stb.gov/reports-data/rail-service-data/.
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    Relationship to Other Access Rules. The new regulations at part 
1145 would provide an independent basis for prescription of a 
reciprocal switching agreement, separate and apart from parts 1144 and 
1147, rather than replacing aspects of part 1144 as proposed in the 
2016 NPRM, even though those parts, historically, have not been 
utilized frequently by the rail shipper community.\7\ For the reasons 
set forth in this NPRM, the Board has determined that the proposed part 
1145 would provide an essential addition to the current remedial 
framework. In particular, since part 1147 was promulgated, 
technological advancements have permitted railroads to track and to 
provide much more granular and timely service data, which in turn gives 
the Board and other stakeholders a better view of service difficulties. 
Accordingly, the Board's concerns in Expedited Relief for Service 
Inadequacies about delineating specific standards for service adequacy, 
see Expedited Relief for Service Inadequacies, 3 S.T.B. at 975, are far 
less pressing today. Worrisome and persistent declines in service 
reliability are more clearly demonstrated now than when the Board 
adopted part 1147 in 1998.
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    \7\ Although concerns about reliability also underlie part 1147 
of the Board's regulations, 49 CFR 1147.1, see Expedited Relief for 
Service Inadequacies, 3 S.T.B. 968 (1998), that rule does not appear 
to have had its full intended effect. Among other things, part 1147 
does not include provisions that provide certainty to industry 
participants, such as by setting a minimum term for the duration of 
a prescription thereunder. Despite demonstrated widespread service 
failures across the national network, no petition for prescribed 
access has been pursued under part 1147 in many years. Separately, 
comments from shippers and their counsel indicate that they 
interpret current part 1144 as unduly restrictive as to a shipper's 
ability to obtain relief under part 1144. 2016 NPRM, EP 711 (Sub-No. 
1) et al., slip op. at 8.
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    The Board notes, however, that, even after the enactment of the 
proposed new part 1145, shippers may still pursue access to an 
alternate rail carrier under parts 1144 and 1147 and that these parts 
do allow for continued development, including, as appropriate, 
reassessment by the Board of adjudicatory policies and the appropriate 
application of those rules in individual cases.
    Indeed, in choosing to focus reciprocal switching reform on service 
issues at this time, the Board does not intend to suggest that 
consideration of additional reforms geared toward increasing 
competitive options--e.g., further changes to the reciprocal switching 
regulations (either with regard to the public interest prong or the 
competition prong), or reforms regarding terminal trackage rights, 
through routes, or the so-called ``bottleneck'' doctrine--is 
foreclosed, whether in this subdocket or otherwise. For example, as 
discussed infra at note 27, the Board is considering whether the 
prescription of terminal trackage rights under 49 U.S.C. 11102(a) would 
be an appropriate remedy for proven failures in local service.
    To provide a clearer path to address the impact of service 
deficiencies on the network, the new regulations at part 1145 would 
provide for prescription of a reciprocal switching agreement based on 
defined service standards pursuant to the ``practicable and in the 
public interest'' prong of section 11102(c). Further distinguishing the 
new approach from parts 1144 and 1147, the Board proposes to expressly 
overrule the standards and criteria regarding reciprocal switching 
established in Midtec as applying to any petition under the new part 
1145. And a petition filed under the proposed part would not be 
required to address any of the standards or criteria established under 
part 1144.\8\
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    \8\ Based on the long history of the Board's consideration of 
issues stemming from Midtec and the ensuing caselaw, and the 
numerous comments submitted in response to the 2016 NPRM, the Board 
recognizes that stakeholders may have broader views of what actions 
the Board should consider undertaking with respect to the residual 
application of part 1144, as well as the application of other 
competitive access statutes, regulations, and caselaw. In light of 
the approach proposed in the new part 1145, the Board welcomes 
comment on what other actions, if any, it should consider with 
respect to competitive access and, in particular whether it should 
further broaden the application of the public interest prong of 
section 11102. See also infra note 27.
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    Proposed Standards. The standards that are proposed here are 
informed by the recent level of performance that carriers themselves 
have acknowledged largely do not meet the expectations or needs of the 
public. While, in some cases, an increase in shipping times might be 
due to circumstances beyond the carrier's control, some carriers have 
acknowledged that their service levels in recent years do not meet 
customer expectations and must be addressed through carrier 
improvement. See, e.g., BNSF Supp. Serv. Recovery Plan 1, June 23, 
2022, Urgent Issues in Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-
No. 1) (``[W]e note that BNSF's service has not been meeting our 
customers' expectations for several months.''); CSXT Revised Serv. 
Recovery Plan 2, June 23, 2022, Urgent Issues in Freight Rail Serv.--
R.R. Reporting, EP 770 (Sub-No. 1) (citing crew shortages as the cause 
of ``ongoing congestion and delay on the CSXT network'' and discussing 
recovery efforts); UP Revised Serv. Recovery Plan 4, June 23, 2022, 
Urgent Issues in Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1) 
(describing an inability to maintain transit schedules and continued 
efforts to achieving greater fluidity); NSR Revised Serv. Recovery Plan 
2, June 23, 2022, Urgent Issues in Freight Rail Serv.--R.R. Reporting, 
EP 770 (Sub-No. 1) (describing its ``aggressive efforts to

[[Page 63901]]

restore our service to what we and our customers expect'').
    The proposed standards are intended to address (1) a rail carrier's 
failure to meet its original estimated time of arrival (OETA), i.e., to 
have adequate on-time performance; (2) a deterioration in the time it 
takes a rail carrier to deliver a shipment (transit time); and (3) a 
rail carrier's failure to provide adequate local (or FMLM) service, as 
measured by the carrier's success in meeting an ``industry spot and 
pull'' (ISP) standard. Each standard would provide an independent path 
for a petitioner to obtain prescription of a reciprocal switching 
agreement under part 1145.
    That prescription would facilitate future line-haul service by an 
alternate rail carrier but--of critical note--would not necessitate 
that result. Under part 1145, the petitioner would not be required to 
rely on the alternate carrier for any portion of the petitioner's 
traffic during the term of the prescription. As a result, even upon 
falling short of a performance standard in part 1145, resulting in an 
award of reciprocal switching to the petitioner, the incumbent rail 
carrier would have the opportunity (subject to contractual commitments 
by the petitioner) to continue to compete for the petitioner's traffic.
    Original Estimated Time of Arrival. To address poor performance in 
timely delivery by a line-haul carrier, part 1145 would provide for the 
prescription of a reciprocal switching agreement (and would facilitate 
line-haul service by an alternate rail carrier) when the incumbent rail 
carrier failed to meet an objective service reliability standard. The 
Board finds that it is in the public interest to provide, by a more 
easily administrable rule, for the prescription of a reciprocal 
switching agreement when an incumbent carrier fails to provide reliable 
service, both because a clearer and more objective rule would create an 
incentive for rail carriers to provide adequate service in the first 
instance and because, if a rail carrier did not do so, the affected 
shippers and receivers would then have more certainty in their 
opportunities to obtain line-haul service from an alternate carrier. 
Rail carriers themselves recognized at the hearing in Docket No. EP 711 
(Sub-No. 1) that prescribed access is an appropriate response to 
inadequate service. (See Hr'g Tr. 938:12 to 939:21, Mar. 16, 2022.)
    The new service reliability standard, based on the rail carrier's 
OETA, would advance the public interest by establishing a reasonable 
expectation that, after a Class I rail carrier provides an estimated 
time of arrival for a line haul, the carrier will customarily meet that 
estimated time of arrival. The proposed rule also recognizes that, in 
some cases, delay may result from circumstances beyond the carrier's 
control. The proposed rule would not require perfection in rail 
carriers' operations, even in the absence of circumstances beyond the 
carrier's control. But the degree and frequency of delays that have 
recently characterized service by Class I rail carriers make clear that 
the public interest would be better served by targeted regulatory 
intervention that facilitates service by an alternate rail carrier when 
service reliability has fallen below certain levels.
    Transit Time. Part 1145 would provide for the prescription of a 
reciprocal switching agreement to address deteriorating efficiency in 
Class I carriers' movements, specifically when the incumbent rail 
carrier failed to meet an objective standard for consistency, over 
time, in the transit time for a line haul. This approach would promote 
the public interest by providing an incentive for carriers to maintain 
velocity through the rail system. This metric also helps to prevent the 
possibility that a rail carrier would increase the OETA for a shipment 
for the sole purpose of meeting the OETA performance standard--a 
practice that could obscure inadequate service.
    Industry Spot and Pull. Part 1145 would provide for the 
prescription of a reciprocal switching agreement to address inadequate 
local service, specifically when the incumbent rail carrier has failed 
to meet an objective standard for completing the placement and removal 
of shipment at a shipper's or receiver's facility during a planned 
service window. As noted above, this local service is referred to as 
industry spot and pull or ISP. Failures to complete local work as 
scheduled impairs shippers' ability to conduct their business and 
therefore impairs the public interest. (PRFBA Opening Comments 18, Dec. 
17, 2021, First Mile/Last Mile Serv., EP 767; Sweetener User Assoc. 
Comment 2, Apr. 18, 2022, Urgent Issues in Freight Rail Serv., EP 770 
(noting that issues with local service have forced companies to reduce 
production in key product lines and shut down manufacturing 
facilities).) In addition, because some OETAs are calculated based on 
constructive placement rather than actual placement, the ISP metric 
also captures aspects of service adequacy that might otherwise be 
missed.
    Through reliance on these three performance standards (OETA, 
transit time, and ISP), part 1145 would enhance implementation of 
section 11102(c) and ultimately would help to advance the policies in 
section 10101. As suggested above, the application of objective 
performance standards for adequate rail service, as provided for in 
part 1145, would promote predictability and efficiency in regulatory 
proceedings thereunder, thereby reducing unnecessary regulatory costs 
and ultimately strengthening rail carriers' incentive to provide 
adequate service. Part 1145 therefore would advance the policies in 
section 10101 of having a rail system that meets the public need, of 
ensuring effective competition among rail carriers, of minimizing the 
need for regulatory control, and of reaching regulatory decisions on a 
fair and expeditious basis. See 49 U.S.C. 10101(1), (2), (4), (5), 
(14).
    Part 1145 would likewise enhance implementation of Sec. Sec.  
11102(c) and 10101 by providing a minimum term for a prescribed 
reciprocal switching agreement. By establishing a minimum term, part 
1145 would allow for more effective planning and investment both by 
rail customers and by alternate carriers, thereby encouraging their 
voluntary participation in providing service and promoting more 
workable opportunities for shippers. As discussed below, after the 
minimum term, the Board could terminate the prescription if the 
incumbent carrier demonstrates that it could meet the performance 
standards, for example by demonstrating that it consistently has been 
able to meet, over an appropriate period of time, the performance 
standards for similar traffic to or from the relevant terminal area.
    By more effectively addressing the public need for adequate rail 
service, and by doing so specifically through a clearer and more 
certain regulatory process, proposed part 1145 would appropriately 
supplement other statutory provisions and regulations governing common 
carriage and bills of lading. But the common carrier obligation and 
laws governing bills of lading also have other implications. For 
example, they provide for a private party to be compensated for losses 
incurred by that party. See 49 U.S.C. 11101, 11706, 80111; 49 CFR part 
1035, App. B. Thus, the common carrier obligation and laws governing 
bills of lading are, to some extent, concerned with private remedies 
against a railroad for past service failures. The Board recognizes that 
regulations with objective standards, even those that recognize and 
account for circumstances outside of a carrier's control, implicitly 
value the benefits of certainty and

[[Page 63902]]

clarity over a process that provides for a more open-ended and case-
specific inquiry. Because of this trade-off, and the different and 
oftentimes more severe or rigid form of liability and intervention that 
would come with falling short under the common carrier obligation, the 
Board does not view it as appropriate to apply, or draw from, these 
proposed standards to regulate or enforce the common carrier 
obligation. See, e.g., State of Montana v. BNSF Ry., NOR 42124, slip 
op. at 7 (STB served Apr. 26, 2013); Granite State Concrete Co. v. STB, 
417 F.3d 85, 92 (1st Cir. 2005).
    As suggested above, the objective of part 1145 would be to 
facilitate future service by an alternate rail carrier (without 
mandating the use of alternate service) to help ensure that the 
transportation system as a whole meets the public need. Part 1145 would 
rely on evidence of past performance by the incumbent carrier to 
identify patterns of deficient service that, due to the level and 
duration of the deficiency, indicate the need for regulatory 
intervention in the public interest. Due to the specific purpose and 
form of regulatory intervention under part 1145, the performance 
standards set forth in this NPRM as constituting the standard for 
obtaining a reciprocal switching order from the Board are in no way to 
be construed as constituting standards by which a railroad's compliance 
with the common carrier obligation under section 11101(a) is to be 
measured. In other words, a failure to comply with the performance 
standards under the proposed part 1145 does not, standing alone, 
establish a basis under other laws for seeking damages, or other 
remedies related to the common carrier obligation, for service 
problems. If the Board enacts part 1145, the Board does not intend the 
performance standards therein to serve as a standard for performance by 
rail carriers (whether as a baseline or as a cap) that would provide 
the basis for relief under laws of common carriage, for relief under 
laws that govern bills of lading, for prescribed access to an alternate 
rail carrier under part 1147, for the prescription of emergency service 
under part 1146, or for applying any other law.
    Beyond the opportunity to seek prescription of a reciprocal 
switching agreement under the proposed part 1145, a shipper or receiver 
would continue to have the opportunity to seek prescription of a 
reciprocal switching agreement (or other forms of prescribed access, as 
applicable) under parts 1144 and 1147. Part 1144 provides for 
prescribed access on a permanent basis when the competitive standards 
therein are met. Part 1147 would accommodate temporary relief from 
service issues that are not covered by the specific performance 
standards in part 1145.
    To implement part 1145, the Board would require Class I carriers to 
make certain data available to customers. As such, within seven days of 
a written request from a shipper or receiver, the incumbent rail 
carrier would be required to provide that customer all relevant 
individualized performance records necessary to bring a case at the 
Board (i.e., the historical records necessary to ascertain whether a 
carrier did not meet the OETA, transit time, and/or ISP standards). To 
assist the Board with general oversight, the agency also proposes to 
codify the collection of certain data concerning service, some of which 
is currently being provided on a temporary basis in Docket No. EP 770 
(Sub-No. 1). As a general matter, this material would also allow a 
reciprocal switching petitioner to compare its service to that of the 
industry or the incumbent carrier's service on a system and regional 
level to see whether service problems are systemic and/or worsening.

Part I: Availability of Service-Related Reciprocal Switching Under 
Proposed Part 1145

    A reciprocal switching agreement provides for the transfer of a 
rail shipment between Class I rail carriers or their affiliated 
companies \9\ within the terminal area in which the shipment begins or 
ends its journey on the rail system. Reciprocal switching is merely 
incidental to a line haul.\10\ A terminal area is a commercially 
cohesive area in which two or more rail carriers undertake the local 
collection, classification, and distribution of shipments for purposes 
of line-haul service.\11\ A terminal area is characterized by multiple 
points of loading/unloading and yards for local collection, 
classification, and distribution. Pa. Co., 236 U.S. at 359; Midtec, 3 
I.C.C.2d at 179; Golden Cat, NOR 41550, slip op. at 7. In case of a 
dispute under part 1145 over whether an area constituted a terminal 
area, the Board would consider evidence that the area met the foregoing 
description, including relevant evidence, such as whether the area was 
listed as a normal revenue interchange point in the Official List of 
Open and Prepay Stations issued by the Association of American 
Railroads through Railinc.\12\ Subject to the foregoing definition, a 
particular point of loading/unloading would not be the appropriate 
subject of a prescribed reciprocal switching agreement under part 1145, 
if the point is not, or using existing facilities reasonably could not 
be, integrated into the terminal area operations. Further, if an 
incumbent railroad and alternate railroad have an existing reciprocal 
switching arrangement in a terminal area, and the petitioner's traffic 
is currently served within that same terminal area, the proposed 
operation would presumptively qualify for prescription of a reciprocal 
switching agreement and the incumbent railroad would bear a heavy 
burden of establishing why the proposed operation would not qualify, 
assuming that other conditions to the prescription were met.
---------------------------------------------------------------------------

    \9\ For purposes of this NPRM and the proposed regulatory text, 
``affiliated companies'' has the same meaning as ``affiliated 
companies'' in Definition 5 of the Uniform System of Accounts (49 
CFR part 1201, subpart A). However, the Board seeks public comment 
as to whether its definition should also include third-party agents 
of a Class I carrier.
    \10\ Investigation of Adequacy of R.R. Freight Car Ownership, 
Car Utilization, Distrib. Rules & Pracs., 1 I.C.C.2d 700, 702-03 
(1985); Pa. Co. v. United States, 236 U.S. 351, 355-57 (1915); Chi., 
Indianapolis & Louisville Ry. v. United States, 270 U.S. 287 (1926); 
Port of Portland v. United States, 408 U.S. 811, 820 n.8 (1972); 
Colo. River W. Ry. v. Tex. & New Orleans R.R., 283 S.W.2d 768, 774 
(Tex. Civ. App. 1955); Del. & Hudson Ry. v. Consol. Rail Corp., 366 
I.C.C. 845, 846-47 (1982); Cent. States Enter., Inc. v. Seaboard 
Coast Line R.R., NOR 38891 (ICC served May 15, 1984), aff'd sub nom. 
Cent. States Enter., Inc. v. I.C.C., 780 F.2d 664, 676 (7th Cir. 
1985).
    \11\ Rio Grande Indus., Inc.--Purchase & Related Trackage Rts.--
Soo Line R.R., FD 31505, slip op. at 10-11 (ICC served Nov. 15, 
1989) (``A `terminal area' (as opposed to main line track) must 
contain and cannot extend significantly beyond recognized terminal 
facilities, such as freight or classification yards or team tracks, 
and a cohesive commercial area immediately served by those 
facilities''); see also Golden Cat v. St. Louis S.W. Ry., NOR 41550, 
slip. op at 7 (STB served Apr. 25, 1996) (similar language).
    \12\ The Board specifically seeks comment as to whether the 
reciprocal switching tariff of an alternate carrier applicable to 
shippers in the same area should be considered as evidence, and how 
to reconcile inconsistencies in railroad tariffs (e.g., instances in 
which one railroad lists a location as open to reciprocal switching 
and another railroad does not).
---------------------------------------------------------------------------

    As discussed below, the Board would prescribe a reciprocal 
switching agreement under part 1145 when (1) the petitioner 
demonstrates that the incumbent Class I carrier failed to meet one of 
the performance standards in part 1145 for the petitioner's shipments 
over that lane; \13\ (2) with respect to the lane of traffic that is 
the subject of the petition, the petitioner (a shipper or receiver 
\14\) has practical physical access

[[Page 63903]]

to only one Class I carrier that can serve that lane; (3) the carrier 
fails to establish an affirmative defense; and (4) the prescription 
would be practicable.\15\ A prescription under part 1145 would 
facilitate a transfer within the terminal area as would enable an 
alternate carrier to provide line-haul service on behalf of the 
petitioner. The prescription would have a minimum term subject to 
renewal as discussed below.
---------------------------------------------------------------------------

    \13\ The Board describes these standards in Part I and provides 
examples illustrating them in Appendix A.
    \14\ Under the proposed part 1145, the petitioner would need to 
be a shipper or receiver. Part 1147 of the Board's regulations also 
allows other rail carriers to petition for prescription of 
reciprocal switching agreement. Here, however, because application 
of the performance standards pertains to customer specific 
information, the Board proposes to limit eligible petitioners to 
shippers and receivers.
    \15\ The Board seeks public comment on whether such 
prescriptions should include a minimum level of switching service 
and, if so, whether the Board should establish a separate and 
specific penalty structure to be imposed on carriers that do not 
meet that level of service.
---------------------------------------------------------------------------

(1) Performance Standards

    The following performance standards would measure certain aspects 
of service by a Class I rail carrier or, for purposes of the industry 
spot and pull standard, an affiliated company that serves the relevant 
terminal area. These performance standards are to be uniform standards 
that employ terms that are defined by the Board, for consistent 
application across Class I rail carriers and their affiliated 
companies.
(a) Service Reliability: Original Estimated Time of Arrival
    The service reliability standard would measure a Class I rail 
carrier's success in delivering a shipment near its OETA, i.e., the 
estimated time of arrival that the rail carrier provided when the 
shipper tendered the bill of lading for shipment.\16\ The original 
estimated time of arrival would be compared to when the car was 
delivered to the designated destination.\17\ Application of the service 
reliability standard would be based on all shipments over a given lane 
\18\ over 12 consecutive weeks. The service reliability standard would 
thus promote the completion of line hauls near the original estimated 
time of arrival.\19\ The on-time completion of line hauls allows the 
shipper to conduct its operations on a timely basis while permitting 
effective coordination between rail service and other modes of 
transportation.
---------------------------------------------------------------------------

    \16\ A shipper's tender of a bill of lading notifies the rail 
carrier that a shipment is ready for service. It is at that point 
that the rail carrier must provide the original estimated time of 
arrival, regardless of whether the carrier has physical possession 
of the shipment. Some rail carriers use the term ``original trip 
plan'' instead of the term ``original estimated time of arrival.'' 
For the sake of consistency and clarity, we would use only the term 
``original estimated time of arrival'' (or OETA), as defined herein, 
for purposes of part 1145. In Docket No. EP 770 (Sub-No. 1), the 
Board refers to this standard as ``trip plan compliance'' or TPC.
    \17\ Delivery occurs when the shipment actually arrives at the 
designated destination (meaning the final destination as specified 
in the bill of lading or, in the case of a joint-line movement, the 
interchange where the shipment is transferred to the interline 
carrier or its affiliate) or is constructively placed (meaning 
placed at a local yard that is convenient to the designated 
destination). For purposes of part 1145, constructive placement of a 
shipment at a local yard constitutes delivery only when (1) the 
recipient has the option, by prior agreement between the rail 
carrier and the customer, to have the rail carrier hold the shipment 
pending the recipient's request for delivery to the designated 
destination and the recipient has not yet requested delivery or (2) 
the recipient is unable to accept delivery at the designated 
destination.
    \18\ For purposes of part 1145, a lane is determined by the 
point of origin and the designated destination as well as by the 
commodity. Shipments of the same commodity that have the same point 
of origin and the same designated destination are deemed to travel 
over the same lane. This is the case without regard to which 
route(s) the rail carrier uses to move the shipments from origin to 
destination. In the case of an interline movement, the designated 
destination is the designated interchange.
    \19\ The Board also discussed original estimated time of arrival 
as part of a rulemaking on demurrage billing. There, the Board found 
that use of original estimated time of arrival, as a means to 
identify when a rail carrier provided inadequate spacing between 
shipments, does not constitute a guarantee of delivery by the 
original estimated time of arrival. See Demurrage Billing 
Requirements, EP 759, slip op. at 18 (STB served Apr. 6, 2021). 
Here, as well, use of original estimated time of arrival does not 
constitute a guarantee. A guarantee might give a customer a cause of 
action against the rail carrier, whereas the prescription of a 
reciprocal switching agreement, based on a poor success rate 
relative to the original estimated time of arrival, is directed 
toward protecting the public interest in adequate rail service. Use 
of the original estimated time of arrival, as the basis for 
prescribing a reciprocal switching agreement, at the same time 
reflects the reasonable expectation that, when a Class I rail 
carrier or its affiliated company provides an original estimated 
time of arrival for a line haul, the carrier will customarily 
deliver freight in a manner consistent with that original estimated 
time of arrival. As discussed below, the industry spot and pull 
standard similarly reflects the reasonable expectation that a Class 
I rail carrier or its affiliated company would perform local service 
during the planned service window.
---------------------------------------------------------------------------

    As a starting point for possible percentages in the service 
reliability standard, the Board notes that in Docket No. EP 770 (Sub-
No. 1) it directed BNSF, CSXT, NSR, and UP to provide an indicator and 
target for trip plan compliance (TPC) as well as weekly data measuring 
manifest service, unit trains, and intermodal traffic placed at 
destination 24 hours past OETA. Urgent Issues in Freight Rail Serv.--
R.R. Reporting, EP 770 (Sub-No. 1), slip op. at 4-6, item 7 (STB served 
May 6, 2022).\20\ Although the carriers refer to the TPC indicator by 
different names and measure performance in different ways, these four 
carriers reported the below initial TPC metrics for manifest traffic 
(the largest category of non-intermodal traffic), initial six-month 
performance targets, and one-year performance targets.
---------------------------------------------------------------------------

    \20\ The Board notes that PRFBA suggested in another docket that 
the railroads should also provide on-time performance metrics based 
on their car trip plans, allowing a 24-hour delivery window, PRFBA 
Reply 4, Feb. 17, 2022, First Mile/Last Mile Serv., EP 767.

   Table 1--Weekly Percentage of Manifest Service Railcars Placed Within 24 Hours of Original Arrival Estimate
----------------------------------------------------------------------------------------------------------------
                                                                Initial        Initial 6-month        1-Year
                     Class I railroad                       performance (05/     performance       performance
                                                           13/2022) \21\ (%)   target \22\ (%)   target \23\ (%)
----------------------------------------------------------------------------------------------------------------
BNSF.....................................................               54.1                 63               65
CSXT.....................................................                 69                 80               82
NSR......................................................                 48                 61               82
UP.......................................................                 63                 70               70
----------------------------------------------------------------------------------------------------------------

    While the Board recognizes that these figures are system averages, 
each of the four carriers required to submit service recovery plans has 
acknowledged that their service fell short of public expectations or 
needs during the time when the carriers reported their initial 
performance levels. The Board finds that the carriers' performance 
levels during this challenged time are a reasonable starting point for 
setting standards for inadequate service and, as such, has used these 
levels to formulate

[[Page 63904]]

proposals for potential performance standards under part 1145.
---------------------------------------------------------------------------

    \21\ See NSR Performance Data at Row 163, May 18, 2022, Urgent 
Issues in Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1); UP 
Performance Data at Row 182, May 18, 2022, Urgent Issues in Freight 
Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1); BNSF Performance 
Data at Row 163, May 18, 2022, Urgent Issues in Freight Rail Serv.--
R.R. Reporting, EP 770 (Sub-No. 1); CSXT Performance Data at Row 
163, May 18, 2022, Urgent Issues in Freight Rail Serv.--R.R. 
Reporting, EP 770 (Sub-No. 1).
    \22\ See Urgent Issues in Freight Rail Serv.--R.R. Reporting, EP 
770 (Sub-No. 1), slip op. at 5, 8, 11, 13 (STB served Oct. 28, 
2022).
    \23\ See Urgent Issues in Freight Rail Serv.--R.R. Reporting, EP 
770 (Sub-No. 1), slip op. at 3-6 (STB served May 2, 2023).
---------------------------------------------------------------------------

    One potential performance standard for part 1145 would be to ensure 
that at least 60% of shipments arrive within 24 hours of the OETA. This 
percentage falls near the average manifest traffic performance levels 
that the largest carriers themselves regarded as not meeting public 
expectations (among other problems) and thus would serve as a useful 
indicator of adverse effects on the public interest.
    Another approach would be to set the success rate at 60% in 
delivering a shipment within 24 hours after the OETA during the first 
year following the effective date of the proposed part 1145. After the 
first year, the success rate would increase to 70% in delivering a 
shipment within 24 hours after the OETA. The Board seeks comment on 
whether, if it chooses this approach, the performance standard should 
be increased to an even higher level after the second year. By phasing 
in a higher success rate over time, the Board would be providing the 
Class I carriers with time to increase their work forces and other 
resources, as necessary, and/or modify their operations in order to 
meet the performance standards--the primary cause for poor service 
cited by the railroads during the Board's Urgent Issues proceeding was 
staff shortages. Indeed, one of the principal purposes of this proposed 
rule is to incentivize carriers to provide shippers with more reliable 
service.
    The Board seeks comment on which approach to adopt. Stakeholders 
are also invited to comment more generally on the appropriate success 
rate for service reliability, including whether the proposed success 
rates would reflect the public need for adequate rail service and how 
use of the proposed success rates would affect the rail network. 
Shippers and receivers are further invited (1) to comment on how the 
proposed success rates would affect both their business operations and 
the likelihood that the shipper or receiver would file a petition under 
part 1145, and (2) to submit estimates as to what percentage of 
shippers (or traffic) overall is likely to be affected by the Board's 
proposal. In particular, the Board seeks comment on whether the 
standard should initially be higher than 60% and on whether it should 
escalate the standard after an additional period of time to higher than 
70%--e.g., to 75%--if it adopts an escalating standard for the success 
rate. The Board also specifically seeks comment on the grace period 
(i.e., the proposed 24-hour window past the OETA), whether that should 
be increased or decreased (e.g., 0 or 48 hours), and--if it should 
change--what is the appropriate success rate associated with the 
suggested grace period.
    Types of service. The Board proposes to apply the service 
reliability (OETA) standard only to shipments that are moving in 
manifest service, not to unit trains. In the Board's experience, 
deliveries of unit trains do not give rise to the same type of concerns 
with respect to meeting OETA. Nevertheless, the Board seeks comments on 
whether the better approach would be to apply the same or similar 
service reliability standard to unit trains as applied to manifest 
traffic.\24\
---------------------------------------------------------------------------

    \24\ It is the Board's understanding that unit trains run on 
trip plans that are based strictly on the expected running times for 
that type of train in each of the crew districts between origin and 
destination. Trip plans for unit trains therefore are not 
constructed in the same manner as trip plans for manifest traffic 
(less-than-trainload shipments). Due to operational differences, the 
arrival day or time of a unit train may not be the most critical 
performance measure, and measuring a carrier's success in 
maintaining the velocity of a unit train over time would be a more 
effective measure than OETA. As indicated above, the Board seeks 
comments on this issue.
---------------------------------------------------------------------------

    For manifest traffic, the on-time success rate in the service 
reliability (OETA) standard would refer to the percentage of shipments 
delivered to the agreed-upon destination within the applicable number 
of hours after the OETA. Upon request by the customer, to allow the 
customer to calculate readily whether the incumbent rail carrier met 
the service reliability standard, the incumbent carrier must give the 
customer, in a machine-readable format, the OETA for each shipment and 
a timestamp of when the shipment was delivered to the agreed-upon 
destination.
    For movements involving more than one rail carrier, the destination 
for the originating rail carrier would be considered the interchange 
location with the subsequent railroad. The reliability standard in part 
1145 would measure the originating carrier's success in delivering the 
shipment to that interchange location by the OETA that the originating 
carrier provided when the shipper tendered the bill of lading. The 
reliability standard in part 1145 would separately apply to a 
subsequent rail carrier as to its portion of the trip, when the 
subsequent carrier or its affiliated company moved the shipment to its 
final destination in a terminal area. The subsequent carrier must issue 
an OETA to the shipper when the carrier receives the shipment at the 
interchange location, that is, when the subsequent carrier acknowledges 
physical receipt and control of the shipment. The Board may look to 
applicable interchange rules between carriers as to when this has 
occurred.\25\
---------------------------------------------------------------------------

    \25\ The Board would not expect for a gap to arise because the 
time of interchange of a shipment, whether that time is immediately 
accepted or agreed to by the receiving railroad or, rather, is 
settled after a dispute between the carriers, is the same for both 
carriers.
---------------------------------------------------------------------------

    Lanes. The service reliability standard generally would apply 
individually to each lane of traffic to/from the petitioner's facility. 
Nonetheless, in certain circumstances, the Board would prescribe a 
reciprocal switching agreement that governs multiple lanes of traffic 
to/from the petitioner's facility, each of which has practical physical 
access to only one Class I carrier that could serve that lane, when (1) 
the average of the incumbent rail carrier's success rates for the 
relevant lanes falls below the applicable performance standard, (2) the 
Board determines that a prescription would be practical and efficient 
only when the prescription governs all of those lanes; and (3) the 
petition meets all other conditions to a prescription. The petitioner 
could choose which lanes to/from its facility to include in determining 
the incumbent rail carrier's average success rate.
    For example, suppose that the Board adopts a minimum threshold of 
OETA + 24 hours below 60% and a shipper has a lane to Destination A and 
a lane to Destination B. During a 12-week period the 10-car shipment to 
Destination A has an on-time success rate of 50% and the five-car 
shipment to Destination B has an on-time success rate of 61%. The 
average of the 15 cars falls below the on-time success rate threshold 
of 60% during the 12-week period. If the switch would only be 
practicable and efficient if all cars shipped to Destination A and B 
were switched to the alternate carrier, and all other requirements were 
satisfied, the shipper could argue that cars for both destinations 
should be switched even though traffic moving to Destination B is above 
the proposed service standard.

[[Page 63905]]

(b) Service Consistency: Transit Time
    The service consistency standard would measure a rail carrier's 
success in maintaining, over time, the carrier's efficiency in moving a 
shipment through the rail system. As discussed below, the service 
consistency standard would also apply separately to the return of empty 
private and shipper-leased railcars. For a loaded car, the service 
consistency standard would be based on the average transit time for 
shipments over the relevant lane during a 12-week period, where transit 
time is the time between the shipper's tender of the bill of lading and 
the rail carrier's delivery of the shipment at the agreed-upon 
destination. The relevant point of origin and destination and the 
relevant time stamps would be the same as for purposes of the service 
reliability (OETA) standard. Transit time would not include time spent 
loading or unloading a shipment.
    A rail carrier's compliance with the service consistency standard 
would be determined by comparing (A) the average transit time for 
shipment over a period of 12 consecutive weeks to (B) the average 
transit time for the same shipment over the same 12-week period during 
the previous year. As with the service reliability standard, the 
Board's inquiry under the service consistency standard would extend to 
any consecutive period of 12 weeks. Significant deteriorations in 
transit time impair shippers' interests as well as the public interest 
by creating longer lag times in getting products to market and/or in 
businesses' receipt of needed resources and/or empty cars.
    Based on its understanding of the rail network and available 
data,\26\ the Board proposes that, for loaded manifest cars and loaded 
unit trains, a petitioner would need to demonstrate that the average 
transit time for a shipment increased by either 20 or 25% (to be 
determined in the final rule) over the average transit time for the 
same 12-week period during the previous year. Deliveries of empty 
system cars and empty private cars could also result in the 
prescription of a reciprocal switching agreement for the corresponding 
outgoing traffic. The Board specifically seeks comment on what level of 
increase in transit time should be the standard and whether the Board 
should adopt a different standard that also captures prolonged transit 
time problems, to the extent any such service inadequacy would not also 
be identified by poor performance under the OETA or ISP metrics.
---------------------------------------------------------------------------

    \26\ At the April 2022 hearing in Docket No. EP 770, several 
shippers testified about the burdens associated with increased 
transit times. See, e.g., Hr'g Tr. 73:7-13, Apr. 26, 2022, Urgent 
Issues in Freight Rail Serv., EP 770 (Brock Lautenschlager 
testifying that rail service deterioration since the fourth quarter 
of 2021 resulted in a 15% increase in transit time for Cargill's 
private fleet); Hr'g Tr. 364:18 to 367:15, Apr. 26, 2022, Urgent 
Issues in Freight Rail Serv., EP 770 (David Burchett testifying that 
increased transit days resulting from rail service issues ``has had 
a huge financial impact'' on Molson Coors); Hr'g Tr. 551:6-8, Apr. 
27, 2022, Urgent Issues in Freight Rail Serv., EP 770 (Ross Corthell 
of the National Industrial Transportation League testifying that 
``transit times in the first quarter this year have increased by 15 
percent over pre-pandemic levels due to crew and power shortages''); 
Hr'g Tr. 558:12-18, Apr. 27, 2022, Urgent Issues in Freight Rail 
Serv., EP 770 (Julie Landry of Government Affairs for the American 
Forest and Paper Association testifying that, since the fourth 
quarter of 2020, one member company ``experienced significant 
deterioration in rail service'' including transit times that 
increased by six days and variability of transit that made it 
``impossible for shippers to plan their business'').
---------------------------------------------------------------------------

    Multi-Carrier Moves and Lanes. For the transit time standard, 
multi-carrier movements and lanes would be treated the same as under 
the service reliability standard. For multi-carrier movements, the 
destination for the upstream carrier would be treated as the 
interchange location with the subsequent railroad. In addition, as with 
the service reliability standard, the Board could in certain 
circumstances prescribe a reciprocal switching agreement for multiple 
lanes based on the average success rates in maintaining transit times.
    Empties. The Board proposes to apply the service consistency 
standard to deliveries of empty private and shipper-leased railcars. If 
a rail carrier failed to meet the service consistency standard in 
delivering empty private and shipper-leased cars, and if all other 
conditions to a prescription are met, the Board would prescribe a 
reciprocal switching agreement that would govern the customer's 
outgoing traffic from the point at which the cars were to be delivered. 
While proposing to apply the service consistency standard to deliveries 
of empty private and shipper-leased railcars, the Board seeks comment 
on whether there would be data available to accommodate that 
application.
(c) Inadequate Local Service: Industry Spot and Pull
    The third performance standard--ISP--would measure a rail carrier's 
success in performing local deliveries (``spots'') and pick-ups 
(``pulls'') of loaded railcars and unloaded private or shipper-leased 
railcars during the planned service window. As noted above, the need 
for the industry spot and pull standard arises because, in many cases, 
the arrival time for a line haul means that the shipment has been 
constructively placed, without the shipment having actually arrived at 
the designated destination. For this reason, ``last mile'' performance 
would not necessarily be reflected in determining compliance with the 
service reliability standard under part 1145. The ISP standard would 
serve to determine the adequacy of rail service in those cases.\27\
---------------------------------------------------------------------------

    \27\ The Board recognizes that, if it were to prescribe a 
reciprocal switching agreement based on the incumbent rail carrier's 
failure to meet the ISP standard, the incumbent rail carrier would 
continue to provide local service to the petitioner; the 
prescription of a reciprocal switching agreement would simply 
facilitate alternate line-haul service to the petitioner. While that 
remedy might serve as an incentive for the incumbent rail carrier to 
provide adequate local service, the Board is considering whether the 
prescription of terminal trackage rights under 49 U.S.C. 11102(a) 
would be a more appropriate remedy for failure to meet the ISP 
standard. Upon the prescription of terminal trackage rights, the 
incumbent rail carrier would be replaced in providing local service, 
whereas under a reciprocal switching agreement the carrier could be 
replaced in providing line-haul service. The Board seeks comment on 
whether it should provide for the prescription of terminal trackage 
rights for failure to meet the ISP standard, either in place of a 
separate path to a prescription of a reciprocal switching agreement 
in those circumstances or as an additional path that would be open 
to the petitioner.
---------------------------------------------------------------------------

    Under part 1145, a rail carrier would fail the ISP standard if the 
carrier had a success rate of less than 80%, over a period of 12 
consecutive weeks, in performing local deliveries and pick-ups during 
the planned service window. The success rate would compare (A) the 
number of planned service windows during which the carrier successfully 
completed the requested placements or pick ups to (B) the number of 
planned service windows for which the shipper or receiver, by the 
applicable cut-off time, requested a placement or pick-up. The carrier 
would be deemed to have missed the planned service window if the 
carrier did not pick up or place all of the cars requested by the 
shipper or receiver by the applicable cut-off time. This would include 
situations in which the carrier has ``embargoed'' the shipper or 
receiver as a result of congestion or other fluidity issues on the 
carrier's network, which results in reduced service to the shipper or 
receiver.\28\ The Board proposes the 80% standard informed by data 
submitted in Docket No. EP 770 (Sub-No. 1). Although the carriers refer 
to industry spot and pull

[[Page 63906]]

indicators by different names (e.g., Local Operating Plan Adherence or 
LOPA) and measure performance in different ways, these four carriers 
first reported ISP metrics and interim targets for manifest traffic as 
follows:
---------------------------------------------------------------------------

    \28\ The Board notes that certain misses caused by embargoes 
would be covered by various affirmative defensives, discussed infra 
(e.g., extraordinary circumstances such as floods, a bridge 
collapse, etc.). To be clear, as it pertains to the Board's other 
authorities, the Board will not determine the legality of an embargo 
based on whether a railroad qualifies for an affirmative defense.

                                          Table 2--Industry Spot & Pull
----------------------------------------------------------------------------------------------------------------
                                                                       Initial performance
             Measure                       Class I railroad            (system) 05/13/2022    Interim target 30
                                                                              29 (%)                 (%)
----------------------------------------------------------------------------------------------------------------
Local Service Performance.......  BNSF..............................                   88.2                   91
FMLM............................  CSXT..............................                   83.0                   87
Local Operating Plan Adherence..  NSR...............................                   74.1                   78
FMLM............................  UP................................                   91.0                   91
----------------------------------------------------------------------------------------------------------------

    While the Board recognizes that these figures are system averages, 
each of the four carriers that were required to submit service recovery 
plans have acknowledged that their service fell short of expectations 
during the time when the carriers reported their initial performance 
levels. As such, these averages are a reasonable starting point for 
setting standards for poor or inadequate local service. Evidence from 
Docket No. EP 767 also indicates that ISP around this level can 
adversely affect a shipper.\31\ As with the service reliability 
standard, however, the Board requests stakeholders and shippers/
receivers to provide evidence and comment on the appropriateness of 
this percentage and whether it should be higher or lower.
---------------------------------------------------------------------------

    \29\ See NSR Performance Data at Row 78, May 18, 2022, Urgent 
Issues in Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1); UP 
Performance Data at Row 97, May 18, 2022, Urgent Issues in Freight 
Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1); BNSF Performance 
Data at Row 78, May 18, 2022, Urgent Issues in Freight Rail Serv.--
R.R. Reporting, EP 770 (Sub-No. 1); CSXT Performance Data at Row 78, 
May 18, 2022, Urgent Issues in Freight Rail Serv.--R.R. Reporting, 
EP 770 (Sub-No. 1).
    \30\ See NSR Interim Update, Dec. 2, 2022, Urgent Issues in 
Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1); UP Amended 
Serv. Recovery Plan, June 3, 2022, Urgent Issues in Freight Rail 
Serv.--R.R. Reporting, EP 770 (Sub-No. 1); BNSF Interim Updates, May 
5, 2023, Urgent Issues in Freight Rail Serv.--R.R. Reporting, EP 770 
(Sub-No. 1); CSXT Interim Update, Dec. 2, 2022, Urgent Issues in 
Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1).
    \31\ As noted by one shipper in Docket No. EP 767:
    By CSXT's own measure, it is performing at only a 76% switch 
rate versus its schedule and 87% car accuracy. It starts to impact 
the plant when the numbers get below 80% of switches performed. 
Moreover, GMI has rarely received its Saturday switch over the last 
six months. CSXT has explained this poor service is occurring due to 
crew shortages. Like at the Ohio plant, this poor service has caused 
production interruptions and labor utilization issues from the lack 
of ingredients due to poor switching service. GMI estimates this 
poor service can result in at least $200,000 per day in damages, 
conservatively.
    PRFBA Opening Comments 18, Dec. 17, 2021, First Mile/Last Mile 
Serv., EP 767.
---------------------------------------------------------------------------

    For purposes of the ISP standard under part 1145, a rail carrier 
would be deemed to provide local service during the planned service 
window if (1) the shipper or receiver ordered a shipment to be placed 
or picked up before the cut-off time for that service window, and (2) 
the carrier provided the requested service during that window.
    As an example, in the case where a rail carrier offers a service 
window for a customer on Monday, Wednesday, and Friday, the ISP ratio 
would be as follows during a twelve-week period, depending on the fact 
pattern (i.e., type of misses):
    (1) Customer requested service by the cut-off time for 36 service 
windows over a 12-week period and received the requested service during 
30 of those 36 windows. The resulting ISP ratio is 83.3% (30/36).
    (2) Customer requested service by the cut-off time for 36 service 
windows over a 12-week period, and for 28 of those windows, received 
service during the requested window. On two occasions, the carrier 
provided service during a different window, a day later than the 
requested window. The resulting ISP ratio is 77.8% (28/36).
    (3) Customer requested service by the cut-off time for 36 service 
windows over a 12-week period and each time received service on the 
same day as requested. But, on ten of those occasions, the service was 
provided outside of the 12 hours that, for purpose of part 1145, 
constitute a service window. The resulting ISP ratio is 72.2% (26/36).
    (4) Customer requested service by the cut-off time for 36 service 
windows over a 12-week period and received placements of the requested 
shipments during each of those windows. But, during 10 of the 36 
planned service windows, the carrier failed to pull cars as requested 
by the customer. The resulting ISP ratio is again 72.2% (26/36).
    In applying the ISP standard, the Board proposes to use a 
standardized service window of 12 hours (the maximum duration that a 
crew is allowed to work), starting from the relevant serving crew's 
scheduled on-duty time. However, the Board is concerned that a carrier 
could change the scheduled on-duty time on short notice and thereby 
evade the impact of the ISP standard. The Board therefore seeks comment 
from stakeholders on whether a carrier should be required to provide 
notice before changing the serving crew's schedule on-duty time--at 
least for the purposes of regulatory measurement--and, if so, how much 
notice should be required. In addition, the Board seeks to avoid any 
implication or encouragement that a carrier with a service window 
shorter than 12 hours ought to expand its window. The carrier would 
receive no regulatory advantage for doing so, and nothing in this 
proposal would prohibit a carrier from maintaining one window for its 
business purposes and another for the purposes of regulatory 
measurement. Nonetheless, considering the administrative overlap, the 
Board seeks comment on whether a standardized window would create 
adverse regulatory incentives and, if so, how best to avoid or minimize 
any adverse incentives.
    As an alternative to using a standard, 12-hour service window, the 
Board seeks comment on whether it should use the service window that 
the rail carrier specified according to the carrier's established 
protocol, subject to two considerations. As noted, the Board is 
concerned that a carrier could change its service window on short 
notice and thereby evade the impact of the ISP standard. The Board 
therefore seeks comment from stakeholders on whether a carrier should 
be required to provide notice before changing a service window and, if 
so, how much notice should be required. The Board is also concerned 
that a carrier could unreasonably expand the duration of a service 
window as a means to evade meaningful measurement under the ISP 
standard. Accordingly, under the alternative to using a standard, 12-
hour service window, the Board would use the window specified by the 
carrier not to exceed 12 hours in duration; under

[[Page 63907]]

this approach, a carrier would be deemed to perform local service 
within the relevant period only if the carrier performed the service 
within the window specified by the carrier according to its customary 
established protocol, provided that the window did not exceed 12 hours 
(the maximum duration that a crew is allowed to work). Although this 
approach would allow up to a 12-hour window for purposes of part 1145, 
this approach would not constitute permission or encouragement for 
carriers to adjust their service window operating protocols in the 
ordinary course of business up to 12 hours, if their normal protocol 
has been a shorter window.
    A job that was canceled/annulled by the carrier would be counted as 
a miss in calculating compliance with the ISP standard, as none of the 
requested work would have been completed, unless another crew completed 
the requested work within the original window. A placement would not be 
considered completed if the customer does not have working access to 
the placed shipment. A miss not caused by the incumbent railroad would 
not be counted against it. The burden is on the carrier to provide the 
reason for the miss and prove that the miss was not caused by the 
carrier.
    If a carrier unilaterally chooses to reduce the frequency of the 
local work that it makes available to a customer, based on 
considerations other than a commensurate drop in customer demand, then 
the standard would become 90% for a period of one year.\32\ The test 
for applying this increased standard would look at the number of 
service windows that the carrier regularly makes available; the intent 
is not to create disincentives for carriers to accommodate shippers' 
needs by offering more frequent service windows during periods of 
seasonal or unusual demand by the shipper. A party may bring evidence 
and argument as to whether such circumstances invalidate use of the 
higher 90% ISP standard. Stakeholders are invited to comment on this 
exception and whether a reduction in the frequency of local work by the 
carrier should provide the basis for prescribing a reciprocal switching 
agreement regardless of the carrier's success rate in performing local 
service.
---------------------------------------------------------------------------

    \32\ If a case were filed alleging a failure to meet the 90% 
standard, the railroad would have the burden of showing that there 
were shipper/receiver projections, sound economic reasoning, or 
historical evidence that justify the expectation that there would be 
a decrease in demand.
---------------------------------------------------------------------------

(2) Practical Physical Access to Only One Class I Carrier

    To obtain prescription of a reciprocal switching agreement under 
part 1145, the petitioner would need to show that, for the lane of 
traffic that is the subject of the petition, the shipper or receiver 
has practical physical access to only one Class I rail carrier that 
could serve that lane. Consistent with what the Board noted when 
adopting parts 1146 and 1147, the Board expects, as a general rule, 
that there would be little benefit from prescribing reciprocal 
switching agreements for petitioners that have practical physical 
access to another Class I carrier that is capable of handling their 
service needs. Expedited Relief for Serv. Inadequacies, 3 S.T.B. at 
978. Although the Board's regulations do not foreclose a prescription 
under part 1146 or 1147 if the petitioner can already reach another 
Class I carrier, in case neither of those carriers is providing 
adequate service, the Board proposes here to require the petitioner to 
show that, for the lane that is (or lanes that are) the subject of the 
petition, the petitioner has practical physical access to only one 
Class I carrier that could serve that lane. A clear standard provides 
more certainty to a shipper or receiver considering whether to file a 
petition for relief.
    For purposes of part 1145, ``practical physical access'' refers to 
a feasible shipping opportunity on a rail carrier, whether directly or 
through that carrier's affiliated company. A petitioner could have 
practical physical access to more than one Class I carrier (for the 
lane of traffic that is the subject of the petition) by any of several 
means. First, a petitioner could have practical physical access to more 
than one Class I carrier if the petitioner's facility is served 
directly by multiple Class I carriers or their affiliated companies, 
each of which could serve the relevant lane of traffic. Second, a 
petitioner could have practical physical access to more than one Class 
I carrier by virtue of an existing reciprocal switching arrangement 
that governs shipping to/from the shipper's facility. Third, a 
petitioner could have practical physical access to more than one Class 
I carrier by virtue of other types of arrangements, such as terminal 
trackage rights or a contract between a local rail carrier and an 
alternate rail carrier. The Board would consider these and other 
circumstances on a case-by-case basis.
    In assessing whether a petitioner has practical physical access to 
more than one Class I carrier, the Board would consider independently 
the lanes at issue in the shipper's or receiver's petition, even if 
other lanes at the facility had practical physical access to another 
carrier. For example, if an existing reciprocal switching arrangement 
provides for switching for only one of several lanes at the shipper's 
facility, the Board would not regard the shipper as having practical 
physical access for the closed lanes. The shipper would be eligible to 
seek a prescription for any of those closed lanes (or for multiple 
closed lanes, as discussed above) notwithstanding that one lane at the 
shipper's facility was open.
    The Board would also consider limitations that are part of an 
existing arrangement. For example, if an existing reciprocal switching 
arrangement provides for the switching of shipments on behalf of a 
shipper--but only for shipments between the shipper's facility and 
another location that the incumbent carrier does not serve--the Board 
would not regard the arrangement as establishing practical physical 
access to more than one Class I carrier for purposes of a prescription 
under part 1145. The shipper would be eligible to seek a prescription 
under part 1145 notwithstanding that the shipper's facility was already 
open to switching for purposes that were irrelevant to the shipper's 
petition. The foregoing is just one example; there could be other 
limitations that would preclude an existing arrangement from providing 
practical physical access to more than one Class I carrier for purposes 
of part 1145. The Board would evaluate limitations on a case-by-case 
basis.
    The Board proposes that a petitioner could establish a prima facie 
showing by submitting a verified statement from an appropriate official 
attesting that it does not have practical physical access to more than 
one Class I carrier, taking into account the potential types of 
practical physical access described above. See Mkt. Dominance 
Streamlined Approach, EP 756, slip op. at 17 (STB served Aug. 3, 2020).
    The Board proposes to limit prescriptions under part 1145 to 
situations in which the incumbent carrier is a Class I carrier or, for 
purposes of the industry spot and pull standard, an affiliated company 
that serves the relevant terminal area. The service data the Board has 
been examining in Docket No. EP 770 (Sub-No. 1) has been focused on 
Class I carriers. The Board has not received as many informal or formal 
complaints about smaller carriers. Moreover, data collection may be 
more burdensome for Class II and Class III carriers, as they have not 
been submitting service-related data to the Board under performance 
metrics dockets, such as Docket Nos. EP

[[Page 63908]]

724 (Sub-No. 4) and EP 770 (Sub-No. 1). Nevertheless, the Board seeks 
comment from stakeholders on whether its new part 1145 should be 
broadened to include Class II and Class III carriers who are providing 
inadequate service.

(3) Other Matters

(a) Negotiations
    Similar to 49 CFR 1144.1, at least five business days prior to 
seeking the prescription of a reciprocal switching agreement, the 
petitioner that intends to initiate such action must first seek to 
engage in good faith negotiations to resolve its dispute with the 
incumbent carrier.
(b) Case Timeline and Alternate Carrier Service
    Simultaneous with its petition for relief, a shipper or receiver 
must file a motion for protective order. In its petition for relief, a 
shipper or receiver must confirm that it attempted good faith 
negotiations, identify the performance standard the railroad failed to 
meet over the requisite period of time, and provide evidence supporting 
its claim. The petitioner must also identify the potential alternate 
carrier and include both carriers' reciprocal switching publications. 
Additionally, it must serve its petition on the incumbent carrier, the 
alternate carrier, and the Federal Railroad Administration.
    A reply from the incumbent carrier is due 20 days after the 
petition for relief is filed, and a rebuttal from the petitioner may be 
filed 20 days after the incumbent carrier files its reply. The Board's 
target for issuing an order addressing the petition is 90 days after 
the petition is filed.
    Under section 11102(c)(1), the affected rail carriers are 
responsible for establishing the terms and conditions that apply to 
prescribed reciprocal switching agreement, including compensation, 
provided that the carriers establish those terms within a reasonable 
period. Here, the Board expects that 30 days would be a reasonable 
period for the carriers to reach agreement on compensation, 
particularly in light of the Board's indication below of the possible 
approaches to compensation that the Board would take. Part 1145 
therefore would provide for the carriers to reach agreement and to 
offer service under the prescribed agreement within 30 days of the 
prescription. The relevant location would also need to be included in 
the appropriate disclosure under 49 CFR part 1300. The carriers would 
have an additional 10 days after offering service to notify the Board 
that the agreement had taken effect. If the affected carriers could not 
agree on compensation within 30 days of the service of the 
prescription, then the affected rail carriers would be required (i) to 
offer service and (ii) to petition the Board to set compensation. As is 
the case with terminal trackage rights, a petition to the Board to set 
compensation is sufficient to allow service to begin while the 
compensation issues are pending. See S. Pac. Transp. Co. v. ICC, 736 
F.2d 708, 723-24 (D.C. Cir. 1984).
(c) Affirmative Defenses
    An incumbent rail carrier shall be deemed not to fail a performance 
standard under (1)(a), (1)(b), or (1)(c), above, if the carrier 
establishes an affirmative defense. If the incumbent carrier makes such 
a showing, the Board would not prescribe a reciprocal switching 
agreement. A carrier's intentional reduction or maintenance of its 
workforce at a level that itself causes workforce shortage, or, in the 
event of a workforce shortage, failure to use reasonable efforts to 
increase its workforce, would not, on its own, be considered a defense 
for failure to meet any performance standard. Similarly, a carrier's 
intentional reduction or maintenance of its power or car supply, or 
failure to use reasonable efforts to maintain its power or car supply, 
that itself causes a failure of any performance standard would not, on 
its own, be considered a defense. For any affirmative defense, the 
carrier would have the burden of proof. Affirmative defenses that do 
not fit within the categories below would be evaluated by the Board on 
a case-by-case basis. The Board seeks comment on what other affirmative 
defenses, if any, should be specified in the final rule.
    Extraordinary Circumstances. The Board would not prescribe a 
reciprocal switching agreement if the incumbent carrier demonstrates 
that its service levels were significantly affected by extraordinary 
circumstances beyond a carrier's control. The Board would consider 
extraordinary circumstances to be the type of events that permit a 
railroad to qualify for an emergency trackage rights exemption at 49 
CFR 1180.2(d)(9). See Pet. for Rulemaking--R.R. Consol. Proc. Exemption 
for Emergency Temp. Trackage Rts., EP 282 (Sub-No. 21) (STB served Nov. 
30, 2021). As explained in Docket No. EP 282 (Sub-No. 21), these events 
include unforeseen track outages stemming from natural disasters, 
severe weather events, flooding, accidents, derailments, and washouts. 
Id. at 6; Pet. for Rulemaking--R.R. Consol. Proc. Exemption for 
Emergency Temp. Trackage Rts., EP 282 (Sub-No. 21), slip op. at 5 (STB 
served May 28, 2021). The railroad must demonstrate that the event is 
the principal cause precipitating the service issue; the event cannot 
be non-causal (e.g., minor or tangential).
    Surprise Surge. The Board would not prescribe a reciprocal 
switching agreement if the incumbent rail carrier demonstrates that 
there was a surprise surge in the petitioner's traffic, meaning a 
significant increase in traffic to which the petitioner should have 
alerted the carrier but did not do so. For non-seasonal traffic, a 
surprise surge would occur when the shipper's traffic increased by 20% 
or more in 12 weeks, compared to the 12 weeks before that, and the 
shipper did not provide written notice to the railroad at least 12 
weeks before the surge. For seasonal traffic, such as agricultural 
shipments, applicable surges would be those where the petitioner's 
traffic increased 20% or more as compared to the same 12-week period 
during the previous year and where the shipper did not give written 
notice to the railroad of the surge at least 12 weeks before the 
increase occurred. The written notice shall clearly specify a 
reasonable estimate of the anticipated traffic.\33\ The Board seeks 
comment on whether 20% and the 12-week notice period are reasonable, 
and whether (and, if so, how) the Board should consider any history of 
the shipper notifying the carrier of surges that did not come to 
fruition.
---------------------------------------------------------------------------

    \33\ A shipper's notification of an anticipated surge does not 
necessarily entitle the shipper to receive that level of service.
---------------------------------------------------------------------------

    Highly Unusual Shipment Patterns. The Board would not prescribe a 
reciprocal switching agreement if the incumbent carrier demonstrates 
that the shipper's traffic during the relevant 12-week period exhibited 
a pattern that, for that shipper, was highly unusual. For example, a 
pattern might be considered highly unusual if a shipper projected 
traffic of 120 cars in a month and 30 cars per week, but the shipper 
had a plant outage for three weeks and then requested shipment of 120 
cars in a single week. What constitutes ``highly unusual'' would vary 
from case to case depending upon the characteristics of the traffic. A 
pattern could be highly unusual for this purpose even in the absence of 
a surprise surge as described above.
    Delays Caused by Dispatching Choices of a Third Party. The Board 
would not prescribe reciprocal switching if the incumbent carrier 
demonstrates that its failure to meet the relevant performance standard 
was caused by third-party dispatching. For

[[Page 63909]]

example, if a passenger rail entity controlling dispatching halted 
freight traffic for an extended time, and that delay caused the 
railroad to fail to meet the standard, the Board would not prescribe 
reciprocal switching.
(d) Practicability
    Because switching service (transfers between carriers) under a 
prescribed reciprocal switching agreement would occur within a terminal 
area, in the context of integrated operations or operations that could 
reasonably become integrated, there is reason to believe that those 
agreements would be practicable under section 11102(c). Should a 
legitimate practicability concern arise, however, the Board would 
consider whether the switching service could be provided without unduly 
impairing the rail carriers' operations. The Board would also consider 
an objection by the alternate rail carrier or incumbent rail carrier 
that the alternate rail carrier's provision of line-haul service to the 
petitioner would be infeasible or would unduly hamper the objecting 
rail carrier's ability to serve its existing customers. The objecting 
rail carrier would have the burden of proof of establishing 
infeasibility or undue impairment.
(e) Exempt Traffic
    The Board notes that some transportation that has been exempted 
from Board regulation pursuant to 49 U.S.C. 10502 could be subject to 
an order providing reciprocal switching under part 1145. The Board 
retains full jurisdiction to deal with exempted transportation, which 
includes considering whether service received by the petitioner prior 
to filing the petition meets the performance standards under this 
proposed part. This practice is consistent with Board precedent. 
Further, it is well established that the Board can revoke the exemption 
at any time, in whole or in part, under section 10502(d). Sanimax USA, 
LLC v. Union Pac. R.R., NOR 42171, slip op. at 4 (STB served Feb. 25, 
2022); Pyco Indus.--Alt. Rail Serv.--S. Plains Switching, FD 34889, 
slip op. at 5-6 (STB served Nov. 21, 2006); G&T Terminal Packaging Co. 
v. Consol. Rail Corp., 830 F.2d 1230, 1235 (3d Cir. 1987), cert. 
denied, 485 U.S. 988 (1988). The Board would do so to the extent 
required.
(f) Contract Traffic
    As to traffic that is the subject of a rail transportation contract 
under 49 U.S.C. 10709, section 10709(c)(1) generally prohibits 
challenges to a valid contract between a rail carrier and a shipper, as 
well as challenges to transportation performed pursuant to such a 
contract. 49 U.S.C. 10709(c)(1); see also H.B. Fuller Co. v. S. Pac. 
Transp. Co., 2 S.T.B. 550, 553 (1997) (the statute ``remove[s] 
transportation under a rail contract from any subsequent regulatory 
review''). The Board seeks comment on whether, and under what 
circumstances, the Board has the authority to consider reciprocal 
switching requests from shippers that have entered into a valid rail 
transportation contract with the incumbent carrier. While the Board 
welcomes comment on all legal and policy issues relevant to this 
question, the Board also specifically seeks comment on two issues.
    First, the Board seeks comment on whether the Board may consider 
the performance data described above, based on service that a carrier 
provided by contract, as the grounds for prescribing a reciprocal 
switching agreement that would become effective after the contract 
expired. The Board also seeks comment on whether the Board may require 
a carrier to provide performance metrics to a rail customer during the 
term of a contract upon that customer's request.
    Second, the Board seeks comment on when, prior to the expiration of 
a transportation contract between the shipper and the incumbent 
carrier, the Board may prescribe a reciprocal switching agreement that 
would not become effective until after the contract expires. The United 
States Court of Appeals for the District of Columbia Circuit, in 
applying statutory language in effect prior to the enactment of the ICC 
Termination Act of 1995, held in 1996 that the Board was not authorized 
to order a carrier to file a common carrier tariff ``more than a year 
before contract service was expected to end.'' Burlington N. R.R. v. 
STB (Burlington Northern), 75 F.3d 685, 687 (D.C. Cir. 1996) (examining 
former 49 U.S.C. 10762, which required that rail carrier tariffs be 
filed with the agency). The Board later indicated that it did not 
interpret Burlington Northern as preventing the Board ``from ordering 
the establishment of a rate that is needed within a matter of weeks'' 
rather than years. FMC Wyo. Corp. v. Union Pac. R.R., FD 33467, slip 
op. at 3 n.7 (STB served Dec. 16, 1997). Although Burlington Northern 
is not directly applicable here, given that it examined different 
statutory language and pertained to a different form of (and basis for) 
intervention, the Board seeks comment on what legal or policy issues 
should similarly be considered regarding the prescription of reciprocal 
switching prior to the expiration of a transportation contract that 
governs the traffic that would be switched even if the prescription 
would not become effective until after the expiration of the contract. 
Specifically, must the Board wait until the contract has actually 
expired before considering and ruling on a petition for prescription of 
reciprocal switching, or may the Board, prior to contract expiration, 
grant a prescription that would not go into effect until after 
expiration? If the latter, should the Board specify a maximum time 
period prior to contract expiration when petitions for prescription of 
a reciprocal switching agreement would be entertained?
(g) Compensation
    The Board seeks comments on two methodologies for setting fees 
under a prescribed reciprocal switching agreement under part 1145, if 
the affected rail carriers fail to reach agreement on compensation 
within a reasonable time.\34\ Both methodologies would reimburse the 
incumbent carrier for the cost of performing the switch, as determined 
by the carrier's embedded and variable costs of service. Reciprocal 
switching fees that allow the incumbent carrier to recover its cost of 
service are consistent with longstanding practices concerning switching 
fees. See, e.g., Increased Switching Charges at Kan. City, Mo.-Kan., 
344 I.C.C. 62 (1972). Because under this proposed part the Board would 
be prescribing reciprocal switching as a remedy for service failures, 
the Board finds it inappropriate to use a methodology that would allow 
the incumbent carrier to recover any lost profits for the line-haul 
portion of the movement being provided by the alternate carrier. Such a 
compensation methodology would be tantamount to rewarding the incumbent 
carrier for inadequate service.
---------------------------------------------------------------------------

    \34\ In seeking comments on compensation under part 1145 as 
proposed herein, the Board notes that this iteration differs 
substantially from the proposal in the 2016 NPRM. Due to the 
substantial differences, many of the comments on compensation that 
were provided in response to the 2016 NPRM do not apply here. The 
Board seeks comments here only on compensation when (1) the 
prescribed reciprocal switching agreement facilitates the transfer 
of a shipment to an alternate rail carrier within a given terminal 
area, for the purpose of allowing the alternate carrier to provide 
line-haul service for that shipment; and (2) the basis for the 
prescription is the incumbent rail carrier's failure to provide 
adequate rail service. If comments on the 2016 NPRM are helpful in 
that particular regard, then the commenting party is encouraged to 
provide a brief summary of those comments.
---------------------------------------------------------------------------

    Cost of Service. One option is setting switching rates based on the 
cost-of-service approach that has been used in past cases on switching 
rates. Id. This approach could either use the ICC

[[Page 63910]]

Terminal Form F, 9-64, Formula for Use in Determining Rail Terminal 
Freight Service Costs (Sept. 1964), or the Board's Uniform Rail Costing 
System (URCS) to develop costs.
    SSW Compensation. Another option to set compensation for the non-
line-haul portion of the movement is adapting the Board's ``SSW 
Compensation'' methodology to reciprocal switching fees. See St. Louis 
SW Ry.--Trackage Rts. over Mo. Pac. R.R.--Kan. City to St. Louis, 1 
I.C.C.2d 776 (1984); St. Louis SW Ry.--Trackage Rts. over Mo. Pac. 
R.R.--Kan. City to St. Louis, 4 I.C.C.2d 668 (1987). Although SSW 
Compensation is used primarily in trackage rights cases where one rail 
carrier is actually operating over another rail carrier's lines, many 
of the principles that inform the methodology would apply in the 
reciprocal switching fee context as well. Thus, what the Board calls 
Rental Income in SSW Compensation would have an analogy in a directed 
switch in the form of Imputed Rental Income. The application of such 
methodology should not include any lost profit from the line-haul 
beyond the switching location.
(h) Term and Termination
    A prescription under part 1145 would ordinarily have a term of two 
years from the date on which reciprocal switching operations thereunder 
began; the incumbent rail carrier normally could seek a termination 
date that would fall no earlier than the two-year anniversary of the 
date on which reciprocal switching operations began.\35\ The Board 
could prescribe a minimum term longer than two years and up to four 
years if the petitioner demonstrated that the longer minimum term was 
necessary for the prescription to be practical given the petitioner's 
or alternate carrier's legitimate business needs.\36\ It is essential 
that the duration of a reciprocal switching order is sufficiently long 
to make alternative service feasible and reasonably attractive to 
potential alternate carriers. In all cases, the minimum term of the 
prescription would be stated in the Board's order granting the 
prescription. The Board seeks comment on whether a minimum term longer 
than two years and/or whether a maximum term longer than four years is 
necessary, across all prescriptions under part 1145, to make the 
proposed rule practicable and effective.
---------------------------------------------------------------------------

    \35\ The running of the two years is not tolled by disputes 
about compensation.
    \36\ For example, if the prescribed reciprocal switching 
agreement would pertain to a substantial volume of traffic, and if 
the alternate carrier needed to make investments to accept that 
traffic, then a longer minimum term might be appropriate to give the 
alternate carrier more opportunity to recover and earn a return on 
that investment. Significant volumes of traffic might require 
investment in physical plant, additional employees, and additional 
locomotive maintenance capability. The ramp-up time for any of these 
processes is approximately six months, after which, given a two-year 
term, the alternate carrier would have only 18 months to earn a 
return.
---------------------------------------------------------------------------

    The incumbent rail carrier may file a petition to terminate no more 
than 180 days and no less than 120 days before the end of the 
prescribed period.\37\ A reply to a petition to terminate shall be 
filed within 15 days of the petition, and a rebuttal may be filed 
within seven days after the reply. Subject to an appropriate protective 
order, the shipper/receiver has the right to access and examine the 
facts and data underlying a carrier's petition to terminate. If the 
Board does not act within 90 days from the close of briefing, the 
prescription automatically terminates at the end of the original term 
of the prescription; provided that, if the Board is unable to act 
within that time period due to extraordinary circumstances, the 
prescription would be automatically renewed for an additional 30 days 
from the end of the current term. In such cases, the Board would issue 
an order alerting the parties to the extraordinary circumstances and 
the renewal.
---------------------------------------------------------------------------

    \37\ Therefore, if the Board prescribed a four-year term, the 
window for petitioning to terminate the prescription would fall 
during the third year.
---------------------------------------------------------------------------

    The Board would grant a petition to terminate if the incumbent rail 
carrier demonstrated that, at the time of the incumbent rail carrier's 
petition, the incumbent rail carrier's service for similar traffic on 
average met whichever performance standard served as the justification 
for the prescription. ``Similar traffic'' is defined as the broad 
category type (e.g., manifest traffic) to or from the terminal area 
that is affected by the prescription.\38\ This requirement includes a 
demonstration by the incumbent carrier that it consistently has been 
able to meet, over the most recent 24-week period, the performance 
standards for similar traffic to or from the relevant terminal 
area.\39\ In addition to challenging a carrier's submitted performance 
data, the shipper/receiver or alternate carrier--during the pendency of 
the petition to terminate--may show that the petitioning carrier's 
service degraded below the relevant performance standard.
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    \38\ If a carrier has no such similar traffic, it may submit a 
comparison group of the same broad traffic type in the same 
geographic region.
    \39\ The Board would consider whether a failure to meet the 
performance standard for that 24-week period, or during the pendency 
of the petition, was due to conditions that were beyond the 
carrier's control and had been demonstrably resolved.
---------------------------------------------------------------------------

    For example, suppose the Board prescribes a reciprocal switching 
agreement because the incumbent railroad's reliability standard for 
certain manifest traffic from Yard X stood at 50%. During the period 
when termination petitions are permitted, the incumbent railroad files 
a petition to terminate in which it demonstrates that its average 
service reliability standard for manifest traffic from Yard X during 
the previous 24-week period is now 90%. Absent a successful reply by 
the shipper/receiver or alternate carrier, such as a showing that the 
incumbent railroad's service has deteriorated below the reliability 
standard during the pendency of the petition, the petition to terminate 
would be granted because the Board would have a basis to find that the 
shipper/receiver's traffic would achieve an acceptable reliability 
standard for the petitioner's traffic.
    In the event the incumbent carrier does not file a petition for 
termination no more than 180 days, and no less than 120 days before the 
end of the prescription period, or files such a petition and fails to 
sustain its burden of proof, the reciprocal switching prescription 
would automatically renew for the same period as the initial 
prescription. The Board seeks comment on whether, alternatively, the 
renewal should be for only an additional one year. The Board also seeks 
comment on whether a subsequent failure by the incumbent railroad 
within a specified time period, such as one year, following the 
termination of a prescribed reciprocal switching arrangement should 
result in a permanent reciprocal switching order.
    The Board emphasizes that the prescription of a reciprocal 
switching agreement does not prevent an incumbent rail carrier from 
competing to keep its traffic and attempting to win back the traffic by 
voluntary agreement of the petitioner during the prescription period by 
demonstrating that it will soon provide better service or offering the 
petitioner more favorable terms and conditions to win its business. 
Indeed, in addition to preventing service problems in the first place, 
the proposed rule intends to spur carrier improvement if it falls below 
these standards.

Part II: Data

    The new part 1145 would require Class I carriers to make data 
available to customers. Within seven days of a written request from a 
shipper or receiver, the incumbent rail carrier would be required to 
provide that

[[Page 63911]]

customer all relevant individualized performance records necessary to 
bring a case at the Board.\40\
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    \40\ The Board seeks comment whether it could require a carrier 
to disclose data about past service to a shipper or receiver when a 
different entity paid for the service. The Board likewise seeks 
comment whether it should give the entity that paid for the service 
the opportunity to seek confidential treatment of service data that 
a carrier provides to a shipper or receiver upon request.
---------------------------------------------------------------------------

    Specifically, the railroad would be required to record and--upon 
request by the shipper or receiver--provide to that customer all of the 
customer's data on traffic that was assigned OETAs and local service 
windows, along with the corresponding time stamps indicating 
performance. As in Demurrage Billing Requirements, EP 759, slip op. at 
3, the railroad must provide the petitioner with machine readable data, 
meaning ``data in an open format that can be easily processed by 
computer without human intervention while ensuring no semantic meaning 
is lost.'' Id. at 3 n.9. Stakeholders are invited to comment on what 
format and fields would be useful.
    Additionally, to assist the Board with general oversight and to 
facilitate implementation of part 1145, the Board proposes to make 
permanent the collection of certain data that is relevant to service 
reliability and inadequate local service and that is currently being 
collected on a temporary basis in Docket No. EP 770 (Sub-No. 1). See 
Urgent Issues in Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 
1), slip op. at 6 (STB served May 6, 2022) (items 5 and 7). The Board 
has found that this data is particularly helpful to understanding 
conditions on the rail network.\41\ The Board's permanent collection of 
this data under part 1145 would be adapted to the design of part 1145 
as follows. The Class I carriers would be required to provide to the 
Board on a weekly basis: (1) for shipments moving in manifest service, 
the percentage of shipments for that week that were delivered to the 
destination within 24 hours of OETA, out of all shipments in manifest 
service on the carrier's system during that week; \42\ and (2) for each 
of the carrier's operating divisions and for the carrier's overall 
system, the percentage of planned service windows during which the 
carrier successfully performed the requested local service, out of the 
total number of planned service windows on the relevant division or 
system for that week. Carriers would be required to collect and report 
this data using the terms that are defined in part 1145 and the 
associated provisions of 1145 on what constitutes a miss. As one 
example, a railroad would need to count as a miss a shipment that was 
not delivered within 24 hours of OETA as defined in part 1145. As a 
second example, a railroad would need to count as a miss a failure to 
provide local service on the planned-service window as defined in part 
1145.
---------------------------------------------------------------------------

    \41\ Furthermore, many rail users indicated at the April 2022 
hearing in Docket No. EP 770 that increased visibility into FMLM 
service and TPC data would be particularly useful. Urgent Issues in 
Freight Rail Serv.--R.R. Reporting, EP 770 (Sub-No. 1), slip op. at 
3 (STB served May 6, 2022).
    \42\ The Class I railroads would no longer need to report this 
data for intermodal traffic.
---------------------------------------------------------------------------

    The Board finds that the collection of this data would not be 
unduly burdensome, as carriers are already providing similar data to 
the Board and use such data in the ordinary course of business. The 
comments in Docket No. EP 767 indicate that some railroads already 
provide dashboards showing shipment-specific data. For example, NSR 
asserts that ``AccessNS and the Trax mobile application offer Norfolk 
Southern's customers real-time, easy access to first-mile/last-mile 
data regarding each of their shipments on the Norfolk Southern 
system.'' NSR Opening Comments 2, Dec. 17, 2021, First Mile/Last Mile 
Serv., EP 767.
    If this data reporting requirement were to become permanent, there 
would no longer be a need to collect that particular data on a 
temporary basis in Docket No. EP 770 (Sub-No. 1). The Board will defer 
any decisions on whether to extend the Docket No. EP 770 (Sub-No. 1) 
collection as to other data until the conclusion of this proceeding. 
Should the Board ultimately conclude that the data reporting that it 
proposes to make permanent here is sufficient for regulatory purposes, 
the Board expects that it would close Docket No. EP 770 (Sub-No. 1) 
following the expiration of the current temporary collection.
    Similarly, because the new part 1145 would address many first-mile/
last-mile issues, the Board will defer any further action in Docket No. 
EP 767 until the conclusion of this proceeding. In Docket No. EP 767, 
the Board sought comments exploring whether additional metrics to 
measure first-mile/last-mile service would be useful and what the 
associated burdens would be. The Board expects that comments in this 
proceeding regarding the proposed part 1145 will address similar 
issues, but with respect to the particular metrics proposed here.

Environmental Review

    The proposal of part 1145 is categorically excluded from 
environmental review under 49 CFR 1105.6(c).

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, 
generally requires a description and analysis of new rules that would 
have a significant economic impact on a substantial number of small 
entities. In drafting a rule, an agency is required to: (1) assess the 
effect that its regulation will have on small entities; (2) analyze 
effective alternatives that may minimize a regulation's impact; and (3) 
make the analysis available for public comment. Sections 601-604. In 
its notice of proposed rulemaking, the agency must either include an 
initial regulatory flexibility analysis, section 603(a), or certify 
that the proposed rule would not have a ``significant impact on a 
substantial number of small entities,'' section 605(b). The impact must 
be a direct impact on small entities ``whose conduct is circumscribed 
or mandated'' by the proposed rule. White Eagle Coop. Ass'n v. Conner, 
553 F.3d 467, 480 (7th Cir. 2009).
    The regulations proposed here are directed at Class I railroads and 
their affiliated companies. As such, the regulations would not impact a 
substantial number of small entities.\43\ Accordingly, pursuant to 5 
U.S.C. 605(b), the Board certifies that the regulations proposed herein 
would not have a significant economic impact on a substantial number of 
small entities within the meaning of the RFA. A copy of this decision 
will be served upon the Chief Counsel for Advocacy, Office of Advocacy, 
U.S. Small Business Administration.
---------------------------------------------------------------------------

    \43\ For the purpose of RFA analysis for rail carriers subject 
to the Board's jurisdiction, the Board defines a ``small business'' 
as only including those rail carriers classified as Class III rail 
carriers under 49 CFR 1201.1-1. See Small Entity Size Standards 
Under the Regul. Flexibility Act, EP 719 (STB served June 30, 2016). 
Class III rail carriers have annual operating revenues of $46.3 
million or less in 2022 dollars. Class II rail carriers have annual 
operating revenues of less than $1.03 billion but more than $46.3 
million in 2022 dollars. The Board calculates the revenue deflator 
factor annually and publishes the railroad revenue thresholds in 
decisions and on its website. 49 CFR 1201.1-1; Indexing the Annual 
Operating Revenues of R.Rs., EP 748 (STB served June 29, 2023).
---------------------------------------------------------------------------

Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act, 44 U.S.C. 3501-3521, 
Office of Management and Budget (OMB) regulations at 5 CFR 
1320.8(d)(3), and Appendix B, the Board seeks comments about the impact 
of the proposed rules regarding: (1) whether the collection of 
information, as set forth in the proposed rule and further described in 
Appendix B, is necessary for the proper performance of the functions of 
the

[[Page 63912]]

Board, including whether the collection has practical utility; (2) the 
accuracy of the Board's burden estimates; (3) ways to enhance the 
quality, utility, and clarity of the information collected; and (4) 
ways to minimize the burden of the collection of information on the 
respondents, including the use of automated collection techniques or 
other forms of information technology, when appropriate.
    The reporting of the data under 49 CFR part 1145 would be 
standardized. The reporting requirement would require an initial hourly 
burden for the initial programing as well as the weekly report output 
and submission (section 1145.8(b)). The petition seeking prescription 
of a reciprocal switching agreement (section 1145.5) and the petition 
seeking termination (section 1145.7) would be necessary to implement 
part 1145. Section 1145.8(a) will provide for Class I rail carriers to 
provide individualized service data to terminal-area shippers or 
receivers upon request.
    The Board anticipates that the requirement for the Class I carriers 
to make updates to their internal data collections methodology to 
standardize and harmonize it with the Board's requirements for the 
proposed reporting would add an estimated cumulative total one-time 
hour burden of 480 hours across all six Class I railroads. The weekly 
reports are estimated to require an annual hour burden of approximately 
2,564 hours, and the petitions to initiate and terminate the process 
are estimated to require approximately 800 hours. Requests for 
individualized service data by terminal-area shippers or receivers are 
estimated to require approximately 36 hours.
    The Board welcomes comment on the estimates of actual time of its 
proposed collections requirements for Class I carriers and petitioners 
seeking reciprocal switching agreements, as detailed below in Appendix 
B. The proposed rules will be submitted to OMB for review as required 
under 44 U.S.C. 3507(d) and 5 CFR 1320.11. Comments received by the 
Board regarding the information collection will also be forwarded to 
OMB for its review when the final rule is published.
    It is ordered.
    1. The Board proposes to amend its regulations as set forth in this 
decision. Notice of the proposed rule will be published in the Federal 
Register.
    2. Comments are due by October 23, 2023. Reply comments are due by 
November 21, 2023.
    3. A copy of this decision will be served upon the Chief Counsel 
for Advocacy, Office of Advocacy, U.S. Small Business Administration.
    4. Docket No. EP 711 (Sub-No. 1) is discontinued.
    5. This decision is effective on its date of service.
    Decided: September 5, 2023.
    By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and 
Schultz. Board Member Primus concurred with a separate expression.
-----------------------------------------------------------------------
Board Member Primus, concurring:
    Today's NPRM sets forth a promising new way to institute reciprocal 
switching when it is ``practicable and in the public interest.'' 49 
U.S.C. 11102(c). This proposal appears to be an improvement over the 
2016 NPRM's application of the public interest prong, and I look 
forward to the development of a comment record on it.
    I also eagerly anticipate the Board's action to improve access to 
the statute's other prong, addressing reciprocal switching that is 
``necessary to provide competitive rail service.'' Id. Rail customers 
have interpreted the standard in 49 CFR 1144.2--under which a 
reciprocal switching order requires a determination that it is 
``necessary to remedy or prevent an act that is contrary to the 
competition policies of 49 U.S.C. 10101 or is otherwise 
anticompetitive''--as setting an unrealistically high bar. See 2016 
NPRM, EP 711 (Sub-No. 1) et al., slip op. at 8. As a result, no 
petitions for reciprocal switching have been filed for many years, 
despite rail customers' expressions of concern about competition. Id. 
The Board should act soon to ensure that reciprocal switching is 
available for competitive access to the extent authorized by the 
language of the statute.

List of Subjects in 49 CFR 1145

    Common carrier, Freight, Railroads, Rates and fares, Reporting and 
recordkeeping requirements, and Shipping.

Jeffrey Herzig,
Clearance Clerk.

0
For the reasons set forth in the preamble, the Surface Transportation 
Board proposes to amend title 49, chapter X, of the Code of Federal 
Regulations by adding part 1145 to read as follows:

PART 1145--RECIPROCAL SWITCHING FOR INADEQUATE SERVICE

Sec.
1145.1 Definitions
1145.2 Performance standards
1145.3 Affirmative defenses
1145.4 Negotiations
1145.5 Procedures
1145.6 Prescription
1145.7 Termination
1145.8 Data

    Authority: 49 U.S.C. 1321 and 11102.


Sec.  1145.1  Definitions.

    The following definitions apply to part 1145:
    Affiliated companies has the same meaning as ``affiliated 
companies'' in Definition 5 of the Uniform System of Accounts (49 CFR 
part 1201, subpart A).
    Cut-off time means the deadline for requesting service during a 
service window, as determined in accordance with the rail carrier's 
established protocol.
    Delivery means when a shipment is actually placed at a designated 
destination or is constructively placed at a local yard that is 
convenient to the designated destination. In the case of shipments at 
interchange locations, a shipment is deemed to be delivered when the 
receiving carrier acknowledges receipt of a shipment. For purposes 
hereof, constructive placement of a shipment at a local yard 
constitutes delivery only when:
    (1) The recipient has the option, by prior agreement between the 
rail carrier and the customer, to have the rail carrier hold the 
shipment pending the recipient's request for delivery to the designated 
destination and the recipient has not yet requested delivery; or
    (2) The recipient is unable to accept delivery at the designated 
destination.
    Designated destination means the final destination as specified in 
the bill of lading or, in the case of a joint-line movement, the 
interchange where the shipment is transferred to the interline carrier, 
its agent, or affiliated company.
    Incumbent rail carrier means a Class I rail carrier that currently 
provides line-haul service to the petitioner to or from the point of 
origin or final destination that would be covered by the proposed 
reciprocal switching agreement.
    Lane means a shipment's point of origin and designated destination. 
Shipments of the same commodity that have the same point of origin and 
the same designated destination are deemed to travel over the same 
lane, regardless of which route(s) the rail carrier uses to move the 
shipments from origin to destination. In the case of an interline 
movement, the designated destination is the designated interchange.
    Manifest traffic means shipments that move in carload or non-unit 
train service.
    Original estimated time of arrival or OETA means the estimated time 
of arrival that the incumbent rail carrier

[[Page 63913]]

provides when the shipper tenders the bill of lading or when the 
incumbent rail carrier receives the shipment from an interline carrier.
    Petitioner means a shipper or a receiver that files a petition 
hereunder for prescription of a reciprocal switching agreement.
    Planned service window means a service window for which the shipper 
or receiver requested local service, provided that the shipper or 
receiver made its request by the cut-off time for that window.
    Practical physical access means a feasible line-haul option on a 
rail carrier, including but not limited to: direct physical access to 
that carrier or its affiliated company; an existing switching 
arrangement between an incumbent rail carrier and another rail carrier; 
terminal trackage rights; or contractual arrangement between a local 
rail carrier and a line-haul carrier.
    Receipt of a shipment means when the preceding rail carrier 
provides a time stamp or rail tracking message that the shipment has 
been delivered to the interchange.
    Reciprocal switching agreement means an agreement for the transfer 
of rail shipments between one Class I rail carrier or its affiliated 
company and another Class I rail carrier or its affiliated company 
within the terminal area in which the rail shipment begins or ends its 
rail journey. Service under a reciprocal switching agreement may 
involve one or more intermediate transfers to and from yards within the 
terminal area.

Alternative 1-A

    Service window means a window during which the incumbent rail 
carrier offers to perform local service (placements and/or pick-ups of 
rail shipments) at a shipper's or receiver's facility. A service window 
must be made available by a rail carrier with reasonable advance notice 
to the shipper or receiver and in accordance with the carrier's 
established protocol. For purposes of this part, a service window is 12 
hours in duration, beginning at the start of the work shift for the 
crew that will perform the local service, without regard to whether the 
incumbent rail carrier specified a longer or shorter service window.

Alternative 1-B

    Service window means a window during which the incumbent rail 
carrier offers to perform local service (placements and/or pick-ups of 
rail shipments) at a shipper's or receiver's facility. A service window 
must be made available by a rail carrier with reasonable advance notice 
to the shipper or receiver and in accordance with the carrier's 
established protocol. For purposes of this part, a service window is 
the time specified according to the carrier's established protocol, not 
to exceed 12 hours, in duration, beginning at the start of the work 
shift for the crew that will perform the local service, without regard 
to whether the incumbent rail carrier specified a longer or shorter 
service window.
    Shipment means a loaded railcar that is designated in a bill of 
lading.
    Similar traffic means traffic that is of the same broad type 
(manifest traffic or unit train) as the traffic that is governed by a 
prescribed reciprocal switching agreement, and is transported by the 
incumbent rail carrier or its affiliated company to or from the 
terminal area in which transfers occur under the prescribed reciprocal 
switching agreement.
    Terminal area means a commercially cohesive area in which two or 
more railroads engage in the local collection, classification, and 
distribution of rail shipments for purposes of line-haul service. A 
terminal area is characterized by multiple points of loading/unloading 
and yards for such local collection, classification, and distribution. 
A terminal area (as opposed to main-line track) must contain and cannot 
extend significantly beyond recognized terminal facilities, such as 
freight or classification yards. A point of origin or final destination 
on the rail system is not suitable for a prescribed switching 
arrangement if the point is not integrated into or, using existing 
facilities, reasonably cannot be integrated into the incumbent rail 
carrier's terminal-area operation.
    Time of arrival means the time that a shipment is delivered to the 
designated destination.
    Transit time means the time between a rail carrier's receipt of a 
shipment, upon either the tender of the bill of lading to that rail 
carrier or the rail carrier's receipt of the shipment from an interline 
carrier and the rail carrier's delivery of that shipment to the agreed-
upon destination. Transit time does not include time spent loading and 
unloading cars.


Sec.  1145.2  Performance standards.

    The performance standards in this section apply only to petitions 
for prescription of a reciprocal switching agreement under this part.
    (a) Service reliability (original estimated time of arrival). The 
service reliability standard applies to shipments that travel as 
manifest traffic. The service reliability standard measures a rail 
carrier's success in delivering a shipment from its original or 
interchange location to the designated destination by the original 
estimated time of arrival, accounting for the applicable grace period. 
Determination of a rail carrier's compliance with the service 
reliability standard is based on all shipments from the same original 
or interchange location to the same designated destination over a 
period of 12 consecutive weeks. A rail carrier meets the service 
reliability standard when A/B ratio is greater than 60%, where A is the 
number of shipments that are delivered within 24 hours of the original 
estimated time of arrival, and B is the total number of shipments. This 
ratio will increase to 70% after [DATE ONE YEAR AFTER EFFECTIVE DATE OF 
FINAL RULE].

Alternative 2-A

    (b) Service consistency (transit time). The service consistency 
standard applies to shipments in the form of a unit train and to 
shipments that travel as manifest traffic. The service consistency 
standard measures a rail carrier's success over time in maintaining the 
transit time for a shipment. A rail carrier meets the service 
consistency standard when A is no more than 20% longer than B, where A 
is the average transit time for all shipments from the same location to 
the same designated destination over a period of 12 consecutive weeks, 
and B is the average transit time for all shipments from the same 
location to the same designated destination over the same 12-week 
period during the previous year.

Alternative 2-B

    (b) Service consistency (transit time). The service consistency 
standard applies to shipments in the form of a unit train and to 
shipments that travel as manifest traffic. The service consistency 
standard measures a rail carrier's success over time in maintaining the 
transit time for a shipment. A rail carrier meets the service 
consistency standard when A is no more than 25% longer than B, where A 
is the average transit time for all shipments from the same location to 
the same designated destination over a period of 12 consecutive weeks, 
and B is the average transit time for all shipments from the same 
location to the same designated destination over the same 12-week 
period during the previous year.
    (c) Lanes. (1) Except as provided in paragraph (c)(2) of this 
section, compliance with the performance standards in paragraphs (a) 
and (b) of

[[Page 63914]]

this section is determined separately for each lane of traffic to or 
from the petitioner's facility. Shipments of the same commodity from 
the same point of origin to the same designated destination are deemed 
to travel over the same lane, without regard to the route between the 
point of origin and designated destination. In the case of an interline 
movement, the designated destination is the designated interchange.
    (2) The Board shall prescribe a reciprocal switching agreement that 
governs shipments to or from multiple lanes to or from the petitioner's 
facility if all the conditions in this paragraph (c)(2) are met.
    (i) Each of the included lanes had practical physical access to 
only one Class I carrier that could serve that lane.
    (ii) The incumbent rail carrier's average success rate for those 
lanes fails to meet a performance standard.
    (iii) The Board determines that the prescribed agreement would be 
practical and efficient only when the agreement governed shipments to 
or from all of those lanes.
    (iv) The petition meets other conditions to a prescription under 
this part.
    (3) For purposes of paragraph (c)(2) of this section, the 
petitioner may choose which lanes of traffic to or from its facility to 
include in demonstrating the incumbent rail carrier's average success 
rate, including lanes of different commodities and/or lanes with 
different points of origin or designated destination.

Alternative 3-A

    (d) Empty railcars.
    (1) For private or shipper-leased railcars, a rail carrier fails to 
meet the service consistency standard in paragraph (b) of this section 
if the rail carrier's average transit time for delivering empty cars to 
a designated destination over a 12-week period increases by more than 
20% compared to average transit time for delivering empty cars to the 
same designated destination during the same 12-week period during the 
previous year.

Alternative 3-B

    (1) For private or shipper-leased railcars, a rail carrier fails to 
meet the service consistency standard in paragraph (b) of this section 
if the rail carrier's average transit time for delivering empty cars to 
a designated destination over a 12-week period increases by more than 
25% compared to average transit time for delivering empty cars to the 
same designated destination during the same 12-week period during the 
previous year.
    (2) A rail carrier's failure to meet a performance standard as 
provided in this paragraph (d) provides the basis for prescribing a 
reciprocal switching agreement that governs both the delivery of the 
empty cars and the delivery of the associated shipments of loaded cars.
    (e) Industry spot and pull. The industry spot and pull standard 
measures a rail carrier's success in performing local placements 
(``spots'') and pick-ups (``pulls'') of loaded railcars and unloaded 
private or shipper-leased railcars at a shipper's or receiver's 
facility during the planned service window.
    (1) A rail carrier meets the industry spot and pull standard if, 
over a period of 12 consecutive weeks, the carrier has a success rate 
of 80% or more in performing requested spots and pulls within the 
planned service window, as determined based on the total number of 
planned service windows during that 12-week period. If a rail carrier 
cancels a service window other than at the shipper's or receiver's 
request, that window is included as a failure in calculating compliance 
with the industry spot and pull standard. Failure to spot 
constructively placed cars that have been ordered in by the cut-off 
time for a planned service window results in a missed service window.
    (2) If a rail carrier reduces the frequency of its local service to 
a shipper's or receiver's facility, and if that reduction is not based 
on a commensurate reduction in customer demand, then the industry spot 
and pull standard increases to a success rate of 90% for one year.


Sec.  1145.3  Affirmative defenses.

    An incumbent rail carrier shall be deemed not to fail a performance 
standard in Sec.  1145.2 if any of the conditions described in this 
section is met. The Board will also consider, on a case-by-case basis, 
affirmative defenses that are not specified in this section.
    (a) The rail carrier experiences extraordinary circumstances beyond 
the carrier's control, including but not limited to unforeseen track 
outages stemming from natural disasters, severe weather events, 
flooding, accidents, derailments, and washouts. A carrier's intentional 
reduction or maintenance of its workforce at a level that itself causes 
workforce shortage, or, in the event of a workforce shortage, failure 
to use reasonable efforts to increase its workforce, would not, on its 
own, be considered a defense for failure to meet any performance 
standard. A carrier's intentional reduction or maintenance of its power 
or car supply, or failure to use reasonable efforts to maintain its 
power or car supply, that itself causes a failure of any performance 
standard would not, on its own, be considered a defense.
    (b) The petitioner's traffic increases by 20% or more during the 
12-week period in question, as compared to the preceding 12 weeks (for 
non-seasonal traffic) or the same 12 weeks during the previous year 
(for seasonal traffic such as agricultural shipments), where the 
petitioner failed to notify the incumbent rail carrier at least 12 
weeks prior to the increase.
    (c) There are highly unusual shipments by the shipper during any 
week of the 12-week period in question. For example, a pattern might be 
considered highly unusual if a shipper projected traffic of 120 cars in 
a month and 30 cars per week, but the shipper had a plant outage for 
three weeks and then requested shipment of 120 cars in a single week.
    (d) The incumbent rail carrier's failure to meet the performance 
standard is due to the dispatching choices of a third party.


Sec.  1145.4  Negotiations.

    At least five days prior to petitioning for prescription of a 
reciprocal switching agreement hereunder, the petitioner must seek to 
engage in good faith negotiations to resolve its dispute with the 
incumbent rail carrier.


Sec.  1145.5  Procedures.

    (a) If a petitioner believes that a rail carrier providing it 
service failed to meet a performance standard described in section 
1145.2, it may file a petition for prescription of a reciprocal 
switching agreement.
    (b) The petition must include the information and documents 
described in this paragraph (b).
    (1) Confirmation that the petitioner attempted good faith 
negotiations as required by Sec.  1145.4, identify the performance 
standard the railroad failed to meet over the requisite period of time, 
and provide evidence supporting its claim.
    (2) Switching publications of the incumbent rail carrier and the 
potential alternate carrier.
    (3) A motion for a protective order that would govern the 
disclosure of data that the rail carrier provided to the petitioner 
under this part.
    (c) The petition must have been served on the incumbent rail 
carrier, the alternate rail carrier, and the Federal Railroad 
Administration.
    (d) A reply to a petition is due within 20 days of a completed 
petition.

[[Page 63915]]

    (e) A rebuttal may be filed within 20 days after a reply to a 
petition.
    (f) The Board will endeavor to issue a decision on a petition 
within 90 days from the date of the completed petition.


Sec.  1145.6  Prescription.

    (a) The Board will prescribe a reciprocal switching agreement under 
this part if all the conditions in this paragraph (a) are met.
    (1) For the lane of traffic that is the subject of the petition, 
the petitioner has practical physical access to only one Class I 
carrier that could serve that lane.
    (2) The petitioner demonstrates that the incumbent rail carrier 
failed to meet one or more of the performance standards in Sec.  1145.2 
with regards to its shipment.
    (3) The incumbent rail carrier fails to demonstrate an affirmative 
defense as provided in Sec.  1145.3.
    (b) Notwithstanding paragraph (a) of this section, the Board will 
not prescribe a reciprocal switching agreement if the incumbent rail 
carrier or alternate rail carrier demonstrates that: switching service 
under the agreement, i.e., the process of transferring the shipment 
between carriers within the terminal area, could not be provided 
without unduly impairing either rail carrier's operations; or the 
alternate rail carrier's provision of line-haul service to the 
petitioner would be infeasible or would unduly hamper the incumbent 
rail carrier or the alternate rail carrier's ability to serve its 
existing customers. If the incumbent rail carrier and alternate rail 
carrier have an existing reciprocal switching arrangement in a terminal 
area in which the petitioner's traffic is currently served, the 
proposed operation is presumed to be operationally feasible, and the 
incumbent rail carrier will bear a heavy burden of establishing why the 
proposed operation should not qualify for a reciprocal switching 
agreement.
    (c) In prescribing a reciprocal switching agreement, the Board 
shall prescribe a term of service of two years, provided that the Board 
may prescribe a longer term of service of up to four years if the 
petitioner demonstrates that the longer minimum term is necessary for 
the prescription to be practical given the petitioner's or alternate 
carrier's legitimate business needs.
    (d) Upon the Board's prescription of a reciprocal switching 
agreement under this part, the affected rail carriers must: set the 
terms of the agreement and offer service thereunder within 30 days of 
service of the prescription; include, in the appropriate disclosure 
under 49 CFR part 1300, the location of the petitioner's facility, 
indicating that the location is open to reciprocal switching, and the 
applicable terms and price; and notify the Board within 10 days of when 
the carriers offered service that the agreement has taken effect.
    (e) If the affected carriers cannot agree on compensation within 30 
days of the service of the prescription, then the affected rail 
carriers must offer service and petition the Board to set compensation.


Sec.  1145.7  Termination.

    (a) A prescription hereunder automatically renews at the end of the 
term established under Sec.  1145.6(c), unless the Board grants a 
petition by the incumbent rail carrier to terminate the prescription. 
Automatic renewal is for the same term as the original term of the 
prescription.
    (b) The Board will grant a petition to terminate a prescription if 
the incumbent rail carrier demonstrates that, for a consecutive 24-week 
period prior to the filing of the petition to terminate, the incumbent 
rail carrier's service for similar traffic on average met the 
performance standard that provided the basis for the prescription. This 
requirement includes a demonstration by the incumbent carrier that it 
consistently has been able to meet, over the most recent 24-week 
period, the performance standards for similar traffic to or from the 
relevant terminal area.
    (c) The incumbent rail carrier may submit a petition to terminate a 
prescription not more than 180 days and not less than 120 days before 
the end of the current term of the prescription. In the event the 
incumbent carrier does not file a petition for termination no more than 
180 days, but no less than 120 days, before the end of the prescription 
period or files such a petition and fails to sustain its burden of 
proof, the reciprocal switching prescription would automatically renew 
for the same period as the initial prescription.
    (d) A reply to a petition to terminate is due within 15 days of the 
petition.
    (e) A rebuttal may be filed within seven days of the filing of the 
reply.
    (f) The Board will endeavor to issue a decision on a petition to 
terminate within 90 days from the close of briefing. If the Board does 
not act within 90 days, the prescription automatically terminates at 
the end of the original term of the prescription; provided that, if the 
Board does not issue a decision due to extraordinary circumstances, as 
determined by the Board, the prescription is automatically renewed for 
30 days from the end of the current term. When there are extraordinary 
circumstances, the Board will issue an order alerting the parties that 
it will not issue a decision within 90 days.


Sec.  1145.8  Data.

    (a) Within seven days of a written request from a shipper or 
receiver, the incumbent rail carrier shall provide that customer all 
relevant individualized performance records necessary to file a 
petition under Sec.  1145.5 with the Board.
    (b) All Class I carriers shall report to the Board on a weekly 
basis, in a manner and form determined by the Board, data that shows: 
the percentage of shipments on the carrier's system that moved in 
manifest service and that were delivered within 24 hours of OETA, out 
of all shipments on the carrier's system that moved in manifest service 
during that week; and, for each of the carrier's operating divisions 
and for the carrier's overall system, the percentage of planned service 
windows during which the carrier successfully performed the requested 
local service, out of the total number of planned service windows on 
the relevant division or system for that week, all within the meaning 
of this part.

    Note:  The following appendices A and B will not appear in the 
Code of Federal Regulations.

Appendix A

Tables and Illustrations

1. Overview of Part 1145

----------------------------------------------------------------------------------------------------------------
       Performance standard                Focus          Measure of success        Effect of prescription
----------------------------------------------------------------------------------------------------------------
Service Reliability (OETA) Sec.    Success in            [60] [70]% success   Access to alternate line haul
 1145.2(a).                         delivering            in delivering        carrier.
                                    shipments near the    shipments within
                                    OETA.                 24 hours after
                                                          OETA, measured
                                                          over a 12-week
                                                          period.
Service Consistency (Transit       Success in            Maintains velocity   Access to alternate line haul
 Time) Sec.   1145.2(b).            maintaining the       over a lane          carrier.
                                    average velocity of   without a
                                    shipments over a      deterioration of
                                    lane from one year    more than [20]
                                    to the next.          [25]%, as measured
                                                          over a 12-week
                                                          period.
Industry Spot and Pull (ISP) Sec.  Success in            80% success in       Access to alternate line haul
   1145.2(e).                       performing local      performing local     carrier.
                                    service during the    service during the
                                    planned service       planned service
                                    window.               window, measured
                                                          over a 12-week
                                                          period.
----------------------------------------------------------------------------------------------------------------


[[Page 63916]]

2. Service Reliability (Original Estimated Time of Arrival)--Sec.  
1145.2(a)

Option 1

    A rail carrier fails to meet the service reliability standard 
when A/B is less than 60%, where:
    A = the number of shipments over a lane during a 12-week period 
that are delivered within 24 hours after the OETA and
    B = the total number of shipments over the same lane during the 
same 12-week period.

Option 2

    The same as Option 1, except that A/B is less than 60% during 
the first year after enactment of part 1145 and less than 70% after 
the end of the first year.

Illustration

    Over a 12-week period, a carrier moves a total of 23 shipments 
(each a loaded car) over a given lane. The cars are shipped and 
delivered in four groups as shown below, with each group delivered 
on a different day during the summer. Here, A (successful shipments) 
equals 12 and B (total shipments) equals 23, resulting in a service 
reliability ratio (A/B) of 52%. The carrier fails to meet the 
service reliability standard.

----------------------------------------------------------------------------------------------------------------
                                                                    Difference
                 OETA                           Delivery             from OETA      Successful         Total
                                                                      (hours)        shipments       shipments
----------------------------------------------------------------------------------------------------------------
8/25/23, 20:24........................  8/27/23, 8:24...........             +36               0               5
7/25/23, 18:19........................  7/27/23, 21:55..........           +51.6               0               6
6/25/23, 12:19........................  6/26/23, 6:19...........             +18               2               2
7/26/23, 7:01.........................  7/25/23, 6:01...........             -25              10              10
                                                                                          A = 12          B = 23
----------------------------------------------------------------------------------------------------------------

3. Service Consistency (Transit Time)--Sec.  1145.2(b)

    A rail carrier fails to meet the service consistency standard 
when an increase from B to A is more than [20] [25]%, where:
    A = the average transit time for all shipments over a lane 
during a 12-week period and
    B = the average transit time for all shipments over the same 
lane during the same 12-week period during the prior calendar year.

Illustration 1

    The average transit time during the period complained of is 13 
days. The average transit time for the historical reference period 
is 11 days. Here, A equals 13 and B equals 11. The increase from B 
to A is two days, which is 18% of B. The carrier meets the service 
consistency standard.

Illustration 2

    The average transit time during the period complained is 13 
days. The average transit time for the historical reference period 
is 10 days. Here, A equals 13 and B equals 10. The increase from B 
to A is three days, which is 30% of B. The carrier fails to meet the 
service consistency standard.

4. Industry Spot and Pull (ISP)--Sec.  1145.2(e)

    A rail carrier fails to meet the industry spot and pull standard 
when A/B is less than 80%, where:
    A = the number of planned service windows over a 12-week period 
during which the carrier performed the requested local service and
    B = the total number of planned service windows over the same 
12-week period.
    For this purpose, a ``planned service window'' is a day for 
which the customer requested local service by the applicable cut-off 
time. A planned service window is 12 hours from the start of the 
work shift of the crew that is to perform the local service.

Illustration

    The customer submits a timely request for local service on 14 
occasions over a twelve-week period. On four of those occasions, the 
carrier fails to perform all of the requested local service during 
the planned service window, that is, within 12 hours of the start of 
the relevant crew's work shift. Here, A equals 10 and B equals 14, 
resulting in an ISP ratio (A/B) of 71%. The carrier fails to meet 
the ISP standard.

Appendix B

Information Collection Under the Paperwork Reduction Act

    Title: Reciprocal Switching Agreements.
    OMB Control Number: 2140-00XX.
    STB Form Number: None.
    Type of Review: New Information Collection.
    Summary: As part of its continuing effort to reduce paperwork 
burdens, and as required by the Paperwork Reduction Act of 1995, 44 
U.S.C. 3501-3521 (PRA), the Surface Transportation Board (Board) 
gives notice that it is requesting from the Office of Management and 
Budget (OMB) approval (1) to collect certain service data from Class 
I rail carriers, (2) to provide for Class I rail carriers to provide 
individualized service data to terminal-area shippers or receivers 
upon request, (3) to provide for those shippers and receivers to 
file petitions for the prescription of a reciprocal switching 
agreement in a case of inadequate rail service, and (4) to provide 
for the affected rail carrier to petition to terminate a 
prescription.
    Respondents: Class I railroads and terminal-area shippers and 
receivers.
    Number of Respondents: Six Class I railroads for weekly 
reporting and one shipper, receiver, or carrier for each 
individualized request or petition.
    Estimated Time per Response: The estimated time is set forth in 
the table below.
    Frequency: Weekly and on occasion.
    Total Burden Hours (annually including all respondents): The 
total hour burdens are set forth in the table below.

                               Table--Total Estimated Burden Hours for Respondents
----------------------------------------------------------------------------------------------------------------
                                                         Estimated
                    Type of filing                       hours per      Number of     Estimated    Total burden
                                                          response     respondents    frequency        hours
----------------------------------------------------------------------------------------------------------------
One-time update to data collection software to                   80               6            1             480
 standardize with the Board's data definition for
 service reliability and industry spot and pull.......
Weekly reporting on service reliability and industry              4               6           52           1,248
 spot and pull (new 49 CFR 1145.8(b)).................
Occasional request and response to request for                    3              12            1              36
 individualized service data (new 49 CFR 1145.8(a))...
Petition for Prescription of a Reciprocal Switching             140               5            1             700
 Agreement (new 49 CFR 1145.5)........................
Petition to Terminate Prescription of a Reciprocal               50               2            1             100
 Switching Agreement (new 49 CFR 1145.7)..............
                                                       ---------------------------------------------------------

[[Page 63917]]

 
    Total Burden Hours................................  ...........  ..............  ...........           2,564
----------------------------------------------------------------------------------------------------------------

    Total ``Non-Hour Burden'' Cost: There are no non-hourly burdens, 
as the reports will be submitted electronically.
    Needs and Uses: A reciprocal switching agreement provides for 
the transfer of a rail shipment between Class I rail carriers or 
their affiliated companies within the terminal area in which the 
shipment begins or ends its journey on the rail system. An agreement 
facilitates line-haul service by a rail carrier that serves the 
terminal area, other than the rail carrier on whose tracks the 
shipment begins or ends its journey. Several years ago, the Board 
began to consider new regulations to require rail carriers to enter 
into reciprocal switching agreements. Those proposed regulations 
were never promulgated. Due to subsequent developments in the rail 
sector, including the emergence of service problems as a critical 
and ongoing issue, the Board is now considering a new set of 
regulations to prescribe reciprocal switching agreements in cases of 
inadequate rail service.
    The newly proposed regulations would allow for terminal-area 
shippers or receivers to seek the prescription of a reciprocal 
switching agreement when service to them fails to meet certain 
objective performance standards. The standards reflect what the 
Board believes to be the minimal level of rail service that is 
compatible with the public need, considering shippers and receivers' 
need for reliable, predictable, and efficient rail service as well 
as rail carriers' need for a certain degree of operating 
flexibility. When an incumbent rail carrier's service fails to meet 
the performance standards, and when other conditions to a 
prescription are met (including the absence of a valid affirmative 
defense), the Board will consider if it would be in the public 
interest to allow access to an alternate rail carrier through 
prescription of a reciprocal switching agreement. To facilitate 
implementation of the new regulations, the Board proposes to require 
weekly reporting of certain service data by Class I carriers and to 
grant shippers and receivers the right to receive their own 
individualized service data from a Class I carrier. The proposed 
reporting and submissions are necessary to the purposes of the 
proposed regulation and therefore to enable the Board to implement 
its statutory authority in this important area.
[FR Doc. 2023-19543 Filed 9-15-23; 8:45 am]
BILLING CODE 4915-01-P