Rail Service Problems: Politicians Pile It On

A group of politicians from both sides of Washington’s great divide have joined the parade of people and organizations professing before the Surface Transportation Board the perils of poor railroad service, painting the carriers and PSR as a prime accelerant of U.S. economic problems, everything from inflation to high fuel prices to undernourished cows.

There’s no denying that the railroads are experiencing serious service problems (not “issues,” because one solves problems, not issues). A possible perversion of Precision Scheduled Railroading—which as Hunter Harrison envisioned it is not about operating three-mile-long trains, slashing the workforce and deep-sixing power and rolling stock, all to curry favor with Wall Street, reward short-term-focused shareholders and find the Holy Grail, a sub-60% OR—is part of the problem. And as Jim Blaze recently opined, service metrics on some Class I carriers stink, and overall, Class I railroads are not increasing market share and growing traffic, instead posting record profits based on rate increases, fuel surcharges, cost-cutting and other methods. Also, as Frank Wilner recently noted, the STB may not be immune from undue political influence.

Let’s face it, folks: Has anything ever been immune from political influence, which is largely driven by the desire to pad one’s pockets and retain or increase power, rather than aspire to the greater good of society? This applies to people and corporations, which, of course, are run by people (duh!). Congress has been described to me as a “Parliament of whores, all on the stroll trolling for more PAC dollars in exchange for letters to the STB. The letters receive a polite reply and get filed. It’s the game of numbers, a sound of fury signifying nothing.”

So I wonder, is the “bipartisan” letter below based on a sincere desire to help one’s fellow human being, or secure more PAC dollars for re-election campaigns? I find it rather odd (or not) that Republicans and Democrats can come together to excoriate our railroads, but can’t agree on how to reduce gun violence and mass shootings, like the one that occurred on May 24 in Texas, snuffing out the lives of innocent children. 

The letter to the STB is signed by Senators Kevin Cramer (R-N.Dak.), Tammy Baldwin (D-Wisc.), Shelley Moore Capito (R-W.Va.), Chuck Grassley (R-Iowa), Sherrod Brown (D-Ohio), Mike Rounds (R-S.Dak.), Patty Murray (D-Wash), Marco Rubio (R-Fla.), Tammy Duckworth (D-Ill.), Mike Crapo (R-Idaho), Jim Risch (R-Idaho), Tina Smith (D-Minn.), Mark Kelly (D-Ariz.), John Hoeven (R-N.Dak.), John Kennedy (R-La.), Joe Manchin (D-W.Va), Roger Marshall (R-Kan.) and Amy Klobuchar (D-Minn.). No doubt, there are some sincere folks in this bunch, but I can’t tell you which ones they are.

Here it is. I suggest you read it with a skeptical eye, bearing in mind that it will “receive a polite reply and get filed”:

Dear Chairman Oberman:

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. 

In some instances, rail service problems have forced producers to curtail or temporarily stop production altogether. Further accounts of lengthy delays and unpredictable service paint a troubling picture of the conditions our nation’s commerce currently faces.

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. 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. 

We appreciate your holding a hearing last month on Urgent Issues in Freight Rail Service and the Board’s continued attention on the issue by requiring Class I railroads to submit service recovery plans as well as provide additional data and regular progress reports on rail service, operations, and employment. We are particularly concerned by service issues raised by rail customers and labor organizations, including: 

• Agricultural producers and grain shippers have been unable to get empty railcars, leading to significant delays in delivering commodities. In particular, such delays have caused flour and feed mills to temporarily cease operations, cutting off sales to customers. As a result, livestock operations have been forced to ration feed or find alternative feed options, putting the well-being of livestock at risk. In addition, at grain export destinations, vessels must wait to be loaded due to delayed train delivery. ^[1]
• Energy producers may need to curtail production due to the consistently delayed arrival of railcars, citing delays of roughly two weeks;^[2]
• Energy producers and manufacturers may need to reduce the number of railcars on the network, in some instances by up to forty percent, or face embargoes from the railroads;^[3] and 
• Missed switching of railcars and reduced service days can force manufacturers to use additional railcars to maintain the same level of business, leading to increased costs for the shipper and further strain on the rail network overall.^[4]

Given the impact of these rail service disruptions, STB’s oversight role is more critical now than ever. As railroads work to address existing challenges through service restoration plans, we urge the STB to examine all constructive options towards ensuring reliable, consistent rail service is available to shippers across the U.S. rail network.

^[1] Surface Transportation Board, Hearing on Urgent Issues in Freight Rail Service, Docket No. EP 770. (2022) (Testimony of Michael Seyfert, National Grain and Feed Association).

^[1] Surface Transportation Board, Hearing on Urgent Issues in Freight Rail Service, Docket No. EP 770. (2022) (Testimony of Chris Bliley, Growth Energy).

^[1] Surface Transportation Board, Hearing on Urgent Issues in Freight Rail Service, Docket No. EP 770. (2022) (Testimony of Rob Benedict, American Fuel and Petrochemical Manufacturers).

^[1] Surface Transportation Board, Hearing on Urgent Issues in Freight Rail Service, Docket No. EP 770. (2022) (Testimony of Chris Jahn, American Chemistry Council).

Are we having fun yet? The discussion will continue (in civil terms, of course) at our virtual Rail Insights conference on June 23. Be sure to sign up, and have your questions ready!