Market Matters Blog

STB Issues Proposed Rule on Permanent Rail Service Updates

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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The Surface Transportation Board is proposing to establish new regulations requiring all Class I railroads and the Chicago Transportation Coordination Office through its Class 1 members, to report certain service performance metrics on a weekly basis. (DTN photo by Mary Kennedy)

Class I railroads will be required to provide weekly reports on their service performance under new rules proposed by the Surface Transportation Board (STB) late last month. The new requirements are aimed at preventing widespread rail service issues such as those in 2014 that affected numerous commodity shippers, including grain shippers.

On Friday, April 29, the STB issued a Supplemental Notice of Proposed Rulemaking (SNPR) for the establishment of weekly reporting of rail service performance data by the Class I railroads and the Chicago Transportation Coordination Office (CTCO). "Through this SNPR," the board stated, "it (STB) is proposing to establish new regulations requiring all Class I railroads and the CTCO, through its Class I members, to report certain service performance metrics on a weekly basis."

The push for more reporting began on Oct. 8, 2014, when, in response to service challenges affecting a broad cross-section of rail shippers, the STB ordered all Class I railroads and the Chicago Transportation Coordination Office, through its Class I members, to begin filing, on an interim basis, weekly reports containing "specific railroad performance data." Later, during a proceeding on Dec. 30, 2014, the board proposed making the weekly reporting requirements permanent.

In that proceeding, the board received 17 opening comments submitted by 35 parties and nine reply comments from 30 parties. A number of parties filed written comments requesting meetings with board staff to discuss the proposed rail service performance metrics.

In a decision served Nov. 9, 2015, the STB announced that it would "waive its ex parte prohibition for the limited purpose of permitting parties to have discussions with board staff so that the agency could develop a more complete record with regard (to) rail service issues-performance data reporting. Parties were allowed seven days to submit written comments in response to the ex parte meeting summaries."

In a Dec. 23, 2015, comment to the STB, the National Grain and Feed Association (NGFA) urged the board to proceed expeditiously by "issuing an updated proposal to require the weekly reporting of a standardized set of rail service performance metrics with sufficient detail and granularity to be useful to rail customers and the board itself to evaluate future service trends and anomalies."

The NGFA noted that, "rail service metrics can provide an early alert of impending service disruptions, allowing shippers and receivers critical additional time to mitigate the business harm and economic loss if and when those disruptions occur."

USDA also commented that "If reporting requirements had been in place before recent service challenges, the problems would have been identified sooner and the situation may have been less disruptive."

In its Dec. 23 comments to the STB, the Association of American Railroads (AAR) pointed out that railroad service is often a function of the amount of resources on hand to meet demand for transportation. "The amount of resources available is driven by forecasts that in large part originate with shippers. If those forecasts are not accurate, railroads will be challenged to keep their networks fluid. In such cases, railroad metrics will rise and fall, but they do not reveal anything about the causation of service problems or efforts to resolve them."

"Instead, the board's focus in this proceeding should be on monitoring the overall health of the rail network. For this purpose, the metrics published by the AAR are sufficient and many of the more granular metrics currently being collected by the board are unnecessary and create a distorted view of railroad operations," the AAR said.

Finally, AAR requested that the STB consider annual, rather than quarterly, reporting on infrastructure projects.

The STB reported in their April 29 decision that regulations being proposed in this SNPR reflect the board's analysis of comments and the productive discussions between staff and stakeholders. "The Board looks forward to receiving an additional round of opening and reply comments, due respectively May 31, 2016, and June 28, 2016, and intends to issue regulations shortly thereafter. In soliciting additional comments, the agency urges stakeholders to comment on the potential utility of each request, and to propose specific and detailed changes or modifications, if improvements can be made to a particular request."

In issuing the SNPR, STB Chairman Daniel R. Elliott III commented: "The railroads' reporting of service performance data on an interim basis has been very useful to the Board in monitoring the industry's recovery from the severe service downturn of 2013-2014. It also provides us with a near real-time perspective on the pulse of the industry, and benefits rail customers and other stakeholders in the same way. The rules proposed today will promote transparency going forward, and enhance the Board's ability to detect and respond to service issues."

The entire Docket No. EP 724 (Sub-No. 4) can be seen here:…

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