The Surface Transportation Board (STB) has asked the Class I railroads through a series of recent letters to keep in close touch with regulators as the U.S. economy recovers, fall peak approaches and port congestion and chassis availability clog the supply chain.
Specifically, the board is asking the Class I railroads to provide their long-term plans in hiring as well as continue to provide information on demurrage and accessorial charges.
Last Thursday, STB Chairman Marty Oberman sent a letter addressed to the CEOs of all seven Class I railroads to provide the board with service updates as the U.S. undergoes an economic recovery following the COVID-19 pandemic.
In particular, Oberman wanted to know what the railroads are doing to provide sufficient operating personnel available to ensure network resilience and reliability, especially in light of the downward trend in rail headcount in recent years. He also asked the railroads about their plans to ensure adequate equipment availability.
This request comes amid reports from shippers about “subpar” performance, including missed switches, railcar delays at intermediate yards and interchanges, extended out-of-route movements and prolonged dwell time for some unit train traffic, according to Oberman. The board has also heard about delayed train arrivals and disruptions to container availability at select intermodal facilities, which has caused delayed train arrivals and disruptions to container availability, he said.
As a result of these concerns, STB is asking for long-term plans for hiring; information on regions where there might be current or anticipated workforce challenges and how the railroads plan to address those challenges; and updates on the railroads’ preparedness to meet future demand. These updates should include the availability of train crew, yard and maintenance employees, including time frames for furloughed or new workers, and the availability of equipment resources, including plans for stored locomotives and railcars.
“I recognize that these rail service challenges, at least to some extent, have been related to workforce reductions resulting from COVID-19 cases, quarantines and furloughs based on the temporary decline in demand and the resultant adjustments made by railroads in nearly every facet of their businesses,” Oberman said. “But I am also concerned by the extent to which these service issues may be related to or exacerbated by a broader trend of rail labor reductions that has been occurring over the past several years.”
He continued, “It is important to note that the concerns raised by rail customers do not necessarily apply in equal force to each railroad or in every area of the country, but the interconnected nature of our rail system, and the immense importance of the rail industry to our economic recovery, necessitate outreach to each Class I railroad.”
In a separate letter dated Thursday, STB admonished the Association of American Railroads (AAR) for not addressing congestion issues and concerns about chassis availability raised by an April 14 letter from the Greater Memphis Chamber. The chamber had contacted the board about supply chain disruption at intermodal facilities in greater Memphis, Tennessee. But AAR weighed in, the trade group instead opted to discuss STB’s regulatory authority over these issues, according to Oberman.
“Instead of a legal and policy argument about perceived limits on the board’s ability to address the significant problems facing the shipping public, what was called for from AAR was a constructive response to the essence of the letter from the Memphis Chamber, which sought amelioration of what appear to be serious congestion and chassis shortages in the Memphis area,” Oberman said. “Thus, once AAR decided to weigh in, it would have been appropriate and helpful for it to have focused its response on practical solutions to the reported congestion and shortage issues and how interested stakeholders can work together, or continue to work together, to solve the problems raised by the Memphis Chamber.”
He continued, “If AAR can still be helpful in this area, I would much appreciate the association’s suggestions and input, in keeping with its historical role of working collaboratively to improve the efficiency, reliability and safety of the nation’s freight rail network.”
STB has asked the Class I railroads in the past to supply information on how they planned to handle the fall peak season.
Continue sending data on demurrage and accessorial charges
In another letter to the Class I railroads dated Friday, STB asked the railroad CEOs to continue to provide quarterly information about information coming from demurrage and accessorial charges. The information remains pertinent as shippers add volume back to the freight rail network as the economy rebounds post pandemic.
STB first sought this information in December 2018, and the information has enabled the board to monitor trends in revenues related to demurrage and accessorial charges.
“In light of the board’s close oversight of Class I railroad rules and practices related to demurrage and accessorial charges, including our policy statement and final rules related to warehouseman liability and minimum requirements for demurrage bills, it is important for us to continue to receive quarterly updates on these revenue streams,” Oberman said in a Friday release.
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