A coalition of farm and food industry groups is appealing to the Surface Transportation Board to take several steps that the organizations say could lower rail rates and ease shipping backlogs.
The board is holding a special two-day hearing next Tuesday and Wednesday on issues plaguing ag shippers. Executives with all six of the Class I railroads are scheduled to testify along with a wide range of groups representing the food and agriculture sector.
"The current inability of several Class I carriers to provide reliable rail service to their customers is impacting farmgate commodity prices and elevating food prices for consumers. Neither of these outcomes is beneficial for individual Americans and the U.S. economy,” members of the Agricultural Transportation Working Group say in a letter to the board.
The letter praises the board for agreeing to accept public comments on a petition that calls for allowing rail customers to penalize railroads for inefficient use of private railcars. The petition was filed by the North America Freight Car Association, National Grain and Feed Association, Chlorine Institute and the National Oilseed Processors Association.
The letter also calls for additional data reporting by rail lines and urges the board to finalize a proposed rule that would allow shippers that are served by a single railroad to request bids from a nearby competing railroad, a practice known as competitive switching.
President Joe Biden last year signed an executive order asking the STB to consider finalizing the competitive switching rule, which was originally issued in 2016. Under the rule, if a shipper opted for the second railroad, the first railroad would have to move the shipper's goods to the second carrier's line. The shipper would pay the cost of getting access to the second line.
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Additionally, the ag coalition says railroads should be required to develop annual rail service assurance plans that would allow the board and “industry stakeholders to conduct annual assessments of intended service versus actual service.”
The 33 groups that signed the letter include commodity organizations, the American Farm Bureau Federation, National Farmers Union, Consumer Brands Association, National Grain and Feed Association, North American Meat Institute and North American Millers' Association.
The Association of American Railroads says the shipping problems are due to an ongoing labor shortage but that companies are making progress in hiring.
According to USDA, grain train speeds are down 6% from a year ago, while grain origin dwell times are up 22%. The number of grain cars that haven’t moved in over 48 hours has increased 32% year over year, and the number of unfilled shipper orders for empty cars has increased 101%.
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