Oberman to ‘Big 4’: Recovery Plans ‘Woefully Deficient’

Written by William C. Vantuono, Editor-in-Chief
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STB Chair Marty Oberman and his fellow Board members didn’t take long to issue significantly upgraded reporting requirements. But apparently they’re not detailed enough.

The Surface Transportation Board on June 13 issued an order directing the “Big 4” Class I’s—BNSF, CSX, Norfolk Southern and Union Pacific—to correct what STB says is “deficiencies in their rail service recovery plans” filed in response to the Board’s May 6 order requiring them to “develop service recovery plans as a result of the severe service deficits presently permeating their rail networks.”

STB is also ordering these railroads “to provide additional information on their actions to improve service and communications with their customers as well as additional detailed information to demonstrate their monthly progress in increasing the size of their work forces to levels needed to provide reliable rail service. The service recovery plans, together with the additional requested information, are crucial components of the Board’s active monitoring of the nation’s freight rail industry and particularly the Board’s focused efforts to ensure that the large carriers overcome the significant service [problems] affecting many rail users and the public.”

On April 26 and April 27, 2022, the Board held a two-day public hearing, “Urgent Issues in Freight Rail Service,” on what it’s calling the “recent significant performance deterioration of the freight rail industry. At the hearing, the Board heard compelling testimony from shipper and labor witnesses about the severity and dire impacts of substandard rail performance, in addition to insights presented by U.S. Secretary of Transportation Pete Buttigieg and U.S. Deputy Secretary of Agriculture Jewel H. Bronaugh. The Board also heard testimony from BNSF, CSX, NS, and UP about the causes, extent and likely duration of service disruptions, and their remedial initiatives.”

The Board’s post-hearing order, “Urgent Issues in Freight Rail Service—Railroad Reporting” required the Big 4 to file service recovery plans “that would specifically describe their key remedial initiatives and promote a clearer vantage point into operating conditions on the rail network. Unfortunately, these four carriers submitted plans that were perfunctory and lacked the level of detail that was mandated by the Board’s order. The plans generally omitted important information needed to assure the Board and rail industry stakeholders that the largest railroads are addressing their deficiencies and have a clear and measurable trajectory for doing so. Of particular concern was the fact that UP and NS flatly refused to provide the six-month targets for achieving their performance goals explicitly required by the Board’s order. Because of the plans’ shortcomings, the Board finds it necessary to require the railroads to supplement their plans and provides explicit further instruction on the critical information they must include.”

“Freight rail is critical to our Nation’s economy, and we must ensure the railroads are doing everything within their means to transport commodities that are crucial to the public welfare, such as animal feed, food ingredients, fuel products and fertilizers, and critical chemicals,” said STB Chairman Martin Oberman. “We are in the middle of a rail service crisis, and the Board continues to receive reports about persistent, acute and dramatic problems in rail transportation, disrupting critical supply chains and shutting down companies. The freight rail industry is currently struggling to provide adequate rail service, yet the service recovery plans we received are woefully deficient and do not comport with the spirit or the letter of the Board’s order. The plans simply failed to instill confidence that the carriers have a serious approach to fixing a problem caused by their own lack of preparedness to respond to external shocks and fluctuations in demand, including especially short-sighted management of labor forces and other resources. While the railroads must always comply with Board orders, it is particularly disturbing that the railroads failed to comply with the order requiring them to file adequate service recovery plans. Under circumstances where service is not meeting customers’ needs, this is not too much to ask from highly sophisticated companies with important public responsibilities. I had expected a better response from the carriers to the Board’s previous order, and now with more explicit instructions, which should not have been needed, there will be no excuse for continued lack of compliance. UP’s May 20 response to the Board’s May 6 Order was by far the worst of all the carriers and reflected an attitude of indifference to the documented effects of its service deficiencies on its customers and of disregard for the Board’s statutory oversight of the freight rail industry.”

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