February 14, 2022

Mandated Reciprocal Switching May Cause More Railroad Worker Accidents and Casualties

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Reciprocal Switching

Agency: Surface Transportation Board

Comment Period Opens: December 28, 2021

Comment Period Closes: February 14, 2022

Comment Submitted: February 14, 2022

Docket No. EP 711 (Sub-No. 1)

The recent proposed regulation from the Surface Transportation Board (STB), which would mandate reciprocal switching on US railroads, raises several concerns. The most urgent issue raised by this proposal, and the focus of this comment, is the loss of safety that would likely occur were reciprocal switching to be mandated.

The Mercatus Center at George Mason University is dedicated to advancing knowledge about the impact of regulation on society. As part of its mission, the Mercatus Center conducts careful and independent analyses that employ contemporary economic scholarship to assess regulations and their effects on the economic opportunities and societal well-being of Americans.

As I wrote in 2017 (see the attached op-ed) when the STB first proposed a reciprocal switching mandate, this proposed action is “a textbook case for why [a regulatory impact analysis (RIA)] requirement is essential for sensible decisionmaking. An RIA provides crucial information necessary to make decisions about whether and how to regulate. A complete RIA includes evidence about the nature and cause of the problem regulators seek to solve, alternative possible solutions and the benefits and costs of these alternatives.”

A complete RIA would not only examine evidence on the nature of the problem that a regulation is proposed to address, but also consider alternative approaches to solving the problem and their costs and benefits. By moving forward without analyzing the costs and benefits of a rulemaking, an agency entertains several risks: regulating where intervention was unnecessary, creating a regulation that is ineffective at solving the problem, and swamping the benefits of a regulation with costs that were unintended or at least unconsidered.

This last category of regulatory risk concerns me the most. Reciprocal switching would presumably lead to more switching. Data from the Federal Railroad Administration clearly show that switching work is far more hazardous than normal operation of an over-the-road freight train. For Class I railroads, the casualty incident rate in 2019 was 2.79 per 200,000 hours of normal train operation, whereas the casualty incident rate was 7.55 per 200,000 hours of switching operations. In other words, switching was 2.70 times as hazardous to train crews. Accidents are more likely in switching operations as well, by a factor of 3.73. Switching operations were similarly more dangerous than normal operations in 2020—2.64 times greater for casualties and 3.42 times greater for accidents.

The STB does not appear to be considering the safety costs that more switching would entail, but the data are readily available. How much more switching would occur under this proposed rule? The STB’s own data show that, in 2019, 11,553,702 switching service hours were performed on Class I railroads, and 9,883,321 hours were performed in 2020. The average over those two years was therefore 10,718,511 hours.

If one assumes, for the sake of calculation, that the proposed rule would cause a 1 percent increase in switching hours and that the casualty and accident incident rates would be averages of the 2019 and 2020 rates (7.80 casualties per 200,000 hours of switching and 21.62 accidents per 200,000 hours of switching, respectively), then a 1 percent increase in switching hours would lead to 107,185 additional switching hours, which would, in turn, lead to 4.18 additional casualties and 11.59 additional accidents.

I cannot say whether the assumption of a 1 percent increase in switching hours is correct. However, a good RIA would likely consider a variety of assumptions about potential increases in switching hours, because the intent of the rule is to actually cause precisely that. There are safety costs to increasing switching, and those costs should be lined up against whatever benefits the STB thinks this rule would generate.

An RIA would also consider the long-term consequences of reciprocal switching. A study (attached) that I coauthored in 2016 with my late colleague Jerry Ellig shows a clear correlation between rate flexibility and railroad investment, which, in turn, tends to increase railroad safety. Reciprocal switching would likely work in the opposite direction, by discouraging investment, to the likely detriment of safety.

In conclusion, I urge the STB to reconsider this proposed rule. There are some obvious safety risks implied from the increased switching and some more subtle risks implied from decreased investment. From a safety standpoint, this action seems ill considered. An RIA would weigh the safety costs against some presumed societal benefits, but unless and until the STB engages in actual careful analysis of this rule, policymakers and citizens will be left in the dark.

Attachments 

Patrick A. McLaughlin, “Rail Regulation Highlights Need for Required Economic Analysis,” The Hill, October 4, 2017.

Jerry Ellig and Patrick A. McLaughlin, “The Regulatory Determinants of Railroad Safety,” Review of Industrial Organization 49, no. 2 (2016): 371–98.