A bipartisan group of U.S. senators representing major agricultural and energy-producing states is demanding that the Surface Transportation Board take action on inadequate freight rail service.
A Monday letter addressed to STB Chairman Marty Oberman comes as four U.S. Class I railroads submit details to the board about what service metrics they will provide over the next six months (see below). It also follows a recent hearing by the U.S. House Subcommittee on Railroads, Pipelines and Hazardous Materials in which Oberman and the board fielded questions about how STB plans to address deteriorating service.
“We are very concerned over the significant rail service disruptions occurring throughout the U.S. freight rail network. Reports from rail customers, including our manufacturers, farmers, ranchers and energy producers, indicate reliable rail service is not being provided in many situations. Similarly, shippers have little recourse or alternative options to get their goods to market,” the letter said, adding that some producers have had to curtail or temporarily stop production because of lengthy delays or unpredictable service.
The letter noted the role that domestic production of agricultural and energy products has in responding to global demand, especially in light of recent geopolitical tensions.
“American industries rely heavily on freight rail to get commodities, parts, and products to market, not just in the U.S. but also globally. Rail transportation plays an integral role in our supply chain, and consistent service is vital to preventing further disruptions across the network. It is also critical for mitigating global food insecurity,” the letter said.
“If these problems persist into summer and fall, significant portions of the world’s breadbasket could be cut off from assisting those most in need, yielding waste rather than solutions. The same applies to the transport of critical energy supplies in high demand across the United States and the globe. Each day, the refining and electricity sectors rely on rail to provide shipments of fuel sources from all across the continent. At a time when global demands are high, domestic supplies must not be constrained by these hurdles and shortcomings.”
The letter also references shippers’ testimony about delays and congestion, provided to STB last month as part of an ongoing proceeding to address service disruptions.
Signing the letter were Sens. Tammy Baldwin, D-Wisc.; Sherrod Brown, D-Ohio; Shelley Moore Capito, R-W.Va.; Kevin Cramer, R-N.D.; Mike Crapo, R-Idaho; Tammy Duckworth, D-Ill.; Joni Ernst, R-Iowa; Chuck Grassley, R-Iowa; John Hoeven, R-N.D.; Mark Kelly, D-Ariz.; John Kennedy, R-La.; Amy Klobuchar, D-Minn.; Joe Manchin, D-W.Va.; Roger Marshall, R-Kan.; Patty Murray, D-Wash.; Jim Risch, R-Idaho; Mike Rounds. R-S.D.; Marco Rubio, R-Fla.; and Tina Smith, D-Minn.
STB held a two-day hearing in late April to get shippers’, unions’ and the railroads’ views on the reasons for the disruptions. Since that hearing, it has charged BNSF (NYSE: BRK.B), Union Pacific (NYSE: UNP), CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC) to submit status reports and participate in regularly scheduled calls to update STB staff on service improvements.
4 Class I railroads describe service metrics they will provide to STB
The congressional scrutiny comes as the four Class I railroads submitted reports to STB last week describing the parameters of the service metrics that they will provide to the board for the next six months, starting in June.
Data that the railroads will report includes company iterations of systemwide velocity or train velocity, terminal dwell, on-time performance, and adherence to local operating plans. They might also include trip plan compliance, train starts, average number of trains canceled per day, recrew rates and the average time trains are held. The board is asking for 36 months of historical data as well.
The railroads’ reports also update the board on service improvements in April and May.
The railroads’ assessments of whether they expect to fully restore service in the next six months were mixed.
NS said it is taking significant action to improve service through aggressive hiring and the implementation of a new operating plan, saying that returning service metrics to 2019 levels will depend largely on the success of its hiring initiatives.
“Norfolk Southern’s goal is to restore service to 2019 levels. It is uncertain whether Norfolk Southern will achieve that goal within six months. At the outset, Norfolk Southern notes that each of these key service performance indicators is impacted by a multitude of factors, which make any ‘target’ or ‘forecast’ speculative at best,” NS said. Outside factors include market demand, customers’ actions, weather events and unanticipated track outages, among others.
“With the implementation of TOP|SPG [NS’ new operating plan], Norfolk Southern expects that operations and train productivity will change and will impact the key service performance indicators and any targets reported herein,” NS said.
In contrast, CSX said in its Friday filing that “as the crew situation normalizes, CSX expects that its service will be restored to pre-pandemic levels and continue to show progress thereafter.”
Both BNSF and UP provided updates on existing operations although they didn’t provide an anticipated timeline for when rail service would be fully restored.
“We acknowledge that our service has not met our customers’ expectations in recent months, and we are committed to doing the necessary work to restore our service and help our customers and the economy grow,” BNSF said. “As part of that commitment, we implemented a service recovery plan and in our customer communications have identified the specific actions we planned to take and our expectations around how those would drive our return to our historic service levels.”
BNSF also said it doesn’t intend “to systematically suspend” its fuel conservation program. STB questioned BNSF during April’s hearing on whether the fuel conservation program slowed trains and contributed to network congestion.
“In providing service to our customers, BNSF strives to achieve an appropriate balance of velocity and sustainability, and there has proven to be little velocity value to suspending our fuel conservation program. The speed at which a train traverses the line of road between two terminals is rarely a substantial factor limiting the transit time of a customer’s shipment,” BNSF said.
“Further, BNSF evaluates the way it operates the network from a full system perspective; and running all trains a little faster along the road and bunching them up at terminals would do more harm to service performance than good and would also unnecessarily mitigate the positive environmental outcomes created by our fuel efficiency programs. While BNSF has previously and will occasionally on a prospective basis suspend aspects of our fuel conservation program where a specific need to do so arises, a systematic suspension of our program would not improve our service performance, and thus we do not intend to suspend our program.”