Reported by Mary Kennedy for Progressive Farmer.
Over 25 rail-shipper groups, representing all industries using rail cars to ship products, and all rail-worker unions gave the Surface Transportation Board (STB) no-holds-barred testimonies during the Urgent Issues in Freight Rail Service hearings April 26 and 27 at the STB’s headquarters in Washington, D.C. The four Class I railroads in the hot seat were the BNSF Railway Company, CSX Transportation, Inc., Norfolk Southern Railway Company and Union Pacific Railroad Company. They also presented testimonies during the hearings.
In the April 7 notice of the hearing, STB Board Chairman Martin Oberman said, “This hearing is not just about where we are but also about where we are going. The Board expects the railroads to explain the actions they will take to fix these issues. The Board will also consider stakeholder views on how it can use its authority — including measures to address emergencies, increase transparency, and promote reliable service — to ameliorate problems on the network.”
The two-day hearing started off with testimony from Secretary of Transportation Pete Buttigieg. He noted in his testimony that the agriculture industry is being “significantly impacted by the railroad’s service delays, especially when it comes to obtaining the necessary amount of fertilizer and chemicals that are critical for the growing season.” Buttigieg also asked the STB to expand its current data collection to require improvement plans from railroads. He asked the railroads to invest more in the rail workforce since “turnover is still far above normal levels.”
“The fact that the secretary is here this morning indicates the seriousness of the problems that have instigated this hearing,” Oberman said. Oberman noted that Buttigieg was the first secretary of transportation to testify before the STB in more than 20 years.
The first shipper group to speak was led by Mike Seyfert, president and CEO of the National Grain and Feed Organization. Seyfert noted NGFA consists of more than 1,000 grain, feed, processing, exporting and other grain-related companies operating more than 8,000 facilities. “Its membership includes grain elevators; feed and feed ingredient manufacturers; biofuels companies; grain and oilseed processors and millers; exporters; livestock and poultry integrators, and associated firms that provide goods and services to the nation’s grain, feed, and processing industry,” said Seyfert.
Seyfert reminded the STB that in a March 24 letter to Chairman Oberman, the NGFA wrote t their preference was “to seek commercial solutions between individual rail customers and their rail carriers.” Seyfert said, “However, the recent rail service challenges impacting entire regions of the country have led us to the board to seek help.”
“We are aware of origin grain elevators being restricted on their loadouts because loaded trains are occupying their rail sidings,” said Seyfert. “There are instances of origin grain elevators needing to turn away grain sales from farmers because they are full. Some NGFA member companies have put grain on the ground to keep taking deliveries from producers. Feed mills and integrated livestock and poultry operations have experienced instances in which trains have not arrived and scheduled feed deliveries have been unable to be made to producers.”
Seyfert noted, “When NGFA members cannot load a train because a crew is out with COVID, they will be charged demurrage by the rail line, and if they cannot unload a train due to COVID, they will pay demurrage and face the risk of penalties or loss of contracts with their own customer.”
“However, if the railroad cannot deliver or move a train due to COVID — or any other reason — NGFA members cannot charge and are not entitled to any demurrage from the railroad,” Seyfert added.
NGFA estimates the combined costs to the grain industry due to lost revenues and additional freight expenses in the first quarter of 2022 at more than $100 million. “Depending on the market position of the grain industry participant, these extra transportation costs are either borne by the participant, reflected in the grain basis paid to the farmer, or passed onto the consumer,” Seyfert noted.
The NGFA recommended to the STB that they expedite the additional first mile, last mile data reporting requirements and add trip-plan reporting. NGFA said they also recommend requiring reports to the STB and directly to individual shippers; explaining this data would help shippers and receivers more efficiently plan operations and more accurately gauge when contingency plans are needed.
Seyfert ended his testimony by saying he “recognizes these are not challenges with easy answers, and there is not a single, individual tool in the toolbox that can solve them all. We encourage the STB to use all the tools available to you to improve service. If there are tools you need that you do not have, we encourage you to make that known to the Congress and the appropriate committees of jurisdiction.”
RAIL LABOR UNIONS TESTIFY
Greg Regan, president of Transportation Trades Department, AFL-CIO (TTD), told the STB the employees represented by TTD-affiliated unions are on the front lines of the freight rail network and have been sounding the alarm on the state of the rail industry for years.
“As members of the board are aware, the deployment of Precision Scheduled Railroading (PSR) has resulted in fundamental changes to how freight rail operates, and with what capacity and reliability it can deliver service,” said Regan. “At the core of the PSR ethos is deep cuts to its workforce.
PSR railroads endeavor to operate with such minimal headcount as to frequently imperil their own ability to operate and maintain their business.
“Despite the claims made by the Class I carriers, it is simply impossible to provide an equivalent level of service after eliminating a third of the workforce in less than a decade. These cuts have guaranteed that adequate crews will be unavailable, that equipment and infrastructure will not be adequately maintained and that critical inspections will be deferred. TTD categorically rejects the absurd claim that the hard work of those 45,000 employees had no demonstrable impact on the quality of service offered by Class I railroads.”
Regan added, “While the elimination of jobs across all crafts of the freight rail network has undoubtedly contributed to operational breakdowns and service degradation, TTD notes that a number of shippers have specifically cited a lack of available crews as a major component of reduced service quality. Railroads have long engaged in a concerted effort to cut headcount to the absolute bone. They have created a degraded safety culture that has driven away long-time employees, and in many cases second or third-generation railroaders, who have chosen to walk away from what were ‘jobs for life’ in previous generations.”
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