Market Matters Blog

STB Ready to Decide on Permanent Rail Service Updates

By Mary Kennedy , DTN Basis Analyst
Pictured is a Norfolk Southern train. (Photo courtesy of nscorp.com)

Several groups took advantage of the Surface Transportation Board's waiver of its prohibition on ex parte communications to give their views on the board's proposed rules on railroad performance data reporting. The waiver allowed interested parties to schedule meetings with board staff to discuss the proposed rules instead of having to submit all comments to the board through public meetings and/or written records.

The STB first addressed the issue of performance data reporting on Oct. 8, 2014, when the board announced it was requiring all Class 1 railroads to publicly file weekly data reports to the STB to "promote industry-wide transparency, accountability and improvements in rail service."

DTN reported in January 2015 that on Dec. 30, 2014, the STB issued two decisions in regard to rail service issues and service issues-performance data. The first proposal would require new regulations of permanent weekly reporting by all Class 1 railroads and the Chicago Transportation Coordination Office (CTCO). The board also proposed to make the weekly rail service reports permanent, saying that collection of performance data on a weekly basis would allow continuity of the current reporting and improve their ability to "identify and help resolve future regional or national service disruptions more quickly, should they occur."

In a decision served Nov. 9, 2015, the Surface Transportation Board (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 rail service issues-performance data reporting. Parties were allowed seven days to submit written comments in response to the ex parte meeting summaries, with comments due by Dec. 23, 2015. Summaries of those meetings, which occurred between Nov. 19, 2015, and Dec. 7, 2015, and responses to the summaries can all be found at: http://goo.gl/…

Several groups submitted comments supporting permanent reporting requirements for railroads.

Jeffrey Sloan, senior director of regulatory and technical affairs for the American Chemistry Council (ACC), on Dec. 23 commented to the STB that, "ACC supports the board's proposed permanent reporting requirements. We also support several key changes suggested by stakeholders to improve the usefulness of the data."

"As noted in numerous meeting summaries, shippers and other stakeholders regularly use railroad service data to understand trends and conditions across the rail network. For example, shippers and receivers utilize the data to help predict equipment turns and forecast freight costs. While railroads individually make select metrics available, this data is not always consistent between railroads," noted the ACC.

The ACC concluded, "The STB's current reporting requirements provide much-needed standardization as well as timely and predictable reporting intervals. While the initial requirements were prompted by the severe service disruptions seen in the winter of 2013/2014, the timely reporting of standardized service metrics continues to provide significant benefits. It would make little sense to discontinue the program now."

The National Grain and Feed Association (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 a Dec. 23 comment to the STB, the 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."

RAIL INDUSTRY RESPONDS

In a Dec. 23 letter to the STB, Norfolk Southern objected to the call for "micro-level reporting requirements because they impose significant burdens on rail carriers without offsetting benefits to any rail shippers." Norfolk Southern (NS) believes that it would be "inappropriate for the board to require railroads to spend precious time and resources gathering and reporting data that shippers do not even intend to use, merely as a means of making this unused data more 'transparent' and making the railroads more 'accountable' for micro-level statistics that are just as likely to be caused by changes in the general demand for the reported commodity, shifts in sourcing or faulty shipper forecasts."

"System-wide metrics provide the most value and are a better approach than burdening the railroads and confusing rail service stakeholders by requiring the railroads to report data that are difficult to standardize and have marginal utility and minimal predictive value," added NS.

In their Nov. 20 meeting with the STB, the Association of American Railroads (AAR) told the STB that, the board should work backward from what it is going to do with the data to determine how it needs to collect the data. "When looking at train on-time arrival, it would be a challenge to define a 'train;' how is that definition useful and meaningful; how would the data be used? Coming to consensus is difficult and factors may change with circumstances. The railroads are not satisfied with the proposed definition of 'unit trains' because it is not consistent with how they define unit trains."

In their Dec. 23 comments to the STB, the 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." Finally, AAR requested that the board consider annual, rather than quarterly, reporting on infrastructure projects.

All that remains now is for the STB to make a final decision on this issue that has been on the table for nearly a year.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/SK)

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