U.S. grain shippers are asking federal regulators to press the Class I railroads to relieve “significant” service disruptions throughout the national rail network.
In a letter to the Surface Transportation Board, the National Grain and Feed Association (NGFA) said at least one of the group’s members had spent $3 million on secondary freight because the member didn’t have the animal feed it would otherwise receive from a rail shipment. Another member said it had to stop selling feed because there was a lack of rail crews for a loaded train that was sitting at origin, or at the place where a shipment loads.
“NGFA’s preference is to seek commercial solutions between individual rail customers and their rail carriers. However, the service issues that our member companies are raising indicate that the problem is a network problem affecting entire regions of the country,” NGFA President and CEO Michael J. Seyfert wrote in the Thursday letter. The association, which consists of more than 1,000 grain, feed, processing, exporting and other grain-related companies, pointed specifically to service issues on Union Pacific (NYSE: UNP), BNSF (NYSE: BRK.B) and Norfolk Southern (NYSE: NSC).
The association said loaded trains have been sitting at origin and have been unable to be moved by the railroads, while at destination points, members have had to shut down mills or cut off sales because they have run out of grain while awaiting deliveries.
NGFA attributed the rail service disruptions to decisions “to overly adopt certain principles of precision scheduled railroading [PSR],” which in turn has led to significant reductions in train crew staffing. PSR is an operational model that most of the Class I railroads have adopted as a way to streamline operations.
“The ability to recover when normal rail operations are stressed has decreased significantly in the era of precision scheduled railroading and reduced crews, and rail customers and our nation’s supply chains are negatively impacted,” Seyfert said. “Current rail service indicates rail customers are not being adequately served, and NGFA feels forced to ask STB to step in.”
The group asked STB to request plans from the three carriers detailing how they will restore service to “an acceptable level,” as well as require them to provide weekly rail service updates to the board. NGFA also wants the board to ask rail carriers to provide annual service assurance plans.
The railroads acknowledge the service issues plaguing the network. At a March 16 investor conference, NS said it expects rail service to improve in the second half of 2022 as newly recruited employees hired in the spring will be able to support service needs in the fall.
“We are going to restore service. That’s our number one priority,” said NS CEO Alan Shaw, adding that the hiring of crew members has been happening at a “robust” pace.
UP told FreightWaves, “We are committed to supporting our customers and moving forward together amid the ongoing supply chain and labor challenges, which we are actively working to address.”
In a Friday service update, BNSF said it has undertaken an “aggressive program” starting three weeks ago to address service performance, which has been hampered by frequent extreme weather as well as pandemic-induced global supply chain disruptions. These two factors resulted in reduced productivity and excess railcar delivery.
“After implementing our service recovery program three weeks ago, we are making incremental progress in addressing elevated railcar inventory levels, reduced velocity and resource imbalances with freight volumes,” BNSF said. The railroad had been experiencing service interruptions particularly in Southern California along the Southern Transcon route through the Southwest and into the central Plains.
“While we are generating some positive results, despite some challenges from widespread severe weather earlier this week, reducing active car inventory will require a sustained collaborative effort among various groups to generate improved network fluidity,” BNSF said.
BNSF also said more locomotives have been deployed to the active fleet, and crew availability has risen significantly after the implementation of BNSF’s new attendance policy.
The railroad also has 300 employees in crew training, with additional classes planned throughout the year. It plans to provide weekly updates to customers on its service recovery.