Volume 2, Issue 16
August 30, 2014
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Although port congestion on the West and East Coasts has gotten the bulk of media attention in recent months, concern also is growing about deteriorating rail service throughout North America.
In an Aug. 19 letter, Daniel Elliott, Chairman of the Surface Transportation Board, asked top executives of U.S. and Canadian Class 1 railroads as well as some short-line companies how they plan to deal with rail congestion issues this fall.
The STB also announced plans to examine the congestion issue at a public hearing scheduled for Sept. 4 in Fargo, ND.
In another development, Sen. John Thune (R-SD) succeeded in getting the board to require BNSF and Canadian Pacific to provide an expanded plan regarding its efforts to address the anticipated record grain harvest and cite grain shuttle-train performance by region “Stakeholders have raised recent concerns with the board about supply chain fluidity for coal, automobiles, ethanol and propane among other commodities,” Elliott said in his letter to the rail executives.
“Your response should include a description of how your company anticipates working with customers to avoid or mitigate critical shortfalls of commodities during periods of heavy rail congestion,” he added.
Intermodal service problems are a growing problem as well. Late this summer intermodal train speeds had declined by almost 10% from the same time last year. Carload volumes also are not only up, but they are substantially above pre-recession levels.
Not all of this can be pegged to shippers rushing to get goods through U.S. ports under the threat of a West Coast longshoremen’s strike, although that has been a contributing factor.
“Just about all major rail carload commodity groups are showing good gains. Essentially the system is maxed out,” explains Larry Gross,a senior consultant with FTR. “The rails are moving every carload and container that they can, given the crew and locomotive resources available.”