STB seeks assurances on rails’ ability to handle US harvest season

Inquiry comes ahead of National Grain Car Council’s annual meeting

The Surface Transportation Board is seeking details on how the Class I railroads expect to meet rail demand during the fall harvest season.

In a letter sent to all seven Class I railroads last week, the board asked the railroads to provide information on how the railroads expect to meet market demand for grain and grain products and plan to maintain network flows along key corridors.

The timing of the letter comes as the National Grain Car Council (NGCC), a group organized by STB and consisting of representatives from Class I and short line railroads, grain shippers and private railcar providers, will have its annual meeting Thursday in Kansas City, Missouri.

The railroads have come under fire this year for service disruptions. As a result, the board asked the Class I railroads to submit weekly reports detailing headcount levels for train and engine crews and data documenting service data such as the on-time performance of railcars arriving at their final destinations. Four U.S. Class I railroads — BNSF (NYSE: BRK.B), Union Pacific (NYSE: UNP), CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC) — have also been providing biweekly status reports and communicating with board staff on a regular basis.

The railroads have responded by taking measures such as hiring more train crews and seeking to improve network fluidity to the West Coast. This includes BNSF’s temporary embargo for certain California-bound traffic, which will end Sept. 4.

“The board is particularly interested in your reports related to your preparedness to meet the demands of the fall harvest as it begins to ramp up in September and extends through the turn of the year,” said the board’s letter dated last Thursday. “As you know, in light of current challenges affecting the four largest Class I railroads, the board is concerned about the Class I railroads’ ability to meet grain shipping needs and is highly focused on whether railroads will have sufficient crew, locomotive, equipment and capacity resources along key corridors supporting domestic and international markets. 

“For these reasons, the board looks forward to the reports of the NGCC railroad members, especially as they relate to their readiness posture in comparison to past years. At the same time, the board is very interested in the views of NGCC’s shipper, short line and railcar industry members on these issues,” the letter continued.

According to STB, grain shipments represent about 10% of rail shipments annually when measured by tonnage. 

STB had previously requested “fall peak letters” from the Class I railroads in previous years asking for the railroads’ operational plans for the last several months of the year. But that practice ended in August 2016 because there was “no longer a highly conspicuous peak season” and because STB started collecting weekly service metrics data in 2014.

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.