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STB Makes Final Decision on Weekly Rail Service Reports

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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This was a common scene during the rail service problems in 2013-14. On Nov. 30, 2016, the STB made the long-awaited final decision on weekly service performance reporting by the railroads. (DTN photo by Mary Kennedy)

It took two years, but on Nov. 30, 2016, after seeking a large amount of public input via electronic transmissions and face-to-face meetings, the Surface Transportation Board (STB) adopted a final rule to establish new regulations on weekly data reports regarding railroad service performance.

The new rule requires all Class I railroads and the Chicago Transportation Coordination Office (CTCO), through its Class I members, to report certain service performance metrics on a weekly, semiannual and occasional basis. The rule is effective on Jan. 29, 2017. The initial reporting date encompassing the new regulations will be Feb. 8, 2017.

The original order became a requirement in October 2014 in response to the 2013-14 rail service backlogs, after the board held two public hearings to allow interested people to report on service problems and to hear from rail industry executives on plans to address rail service problems. During and after these hearings, parties expressed concerns about the lack of publicly available information related to rail service and requested access to performance data from the railroads to better understand the scope, magnitude and impact of the service issues, as well as the underlying causes and the prospects for recovery.

Based on these concerns and to better understand railroad operating conditions, the board issued an order on Oct. 8, 2014, requiring all Class I railroads and the Class I railroad members of the CTCO to file weekly reports containing specific service performance data. For more history on the original order, and the STB quest to make the order permanent, here is a link to my March 9, 2015, blog: https://goo.gl/…

The primary purpose of the final Nov. 30 rulemaking was to develop a set of performance data that will allow the STB to monitor current service conditions in the industry and to "identify trends or aberrations," which may indicate problems.

"The cumulative data will give the board reference points for measuring an individual railroad against its past performance," said the STB in the 33-page decision. "A corollary benefit is that shippers and other stakeholders will have access to the reported data to assist in their business decisions and supply-chain planning. At the same time, the board has sought to make sure that any rule adopted regarding service data results in the collection of information that will be useful to the agency and its stakeholders. The board believes that the final rule adopted is an appropriate balance of considerations that will provide helpful information to both the agency and the public."

The STB said it believes that the long-term utility of the data collection in the final rule outweighs the additional burden placed on the rail industry. Here is a link to the entire Nov. 30, 2016, decision: https://goo.gl/…

INDUSTRY REACTIONS TO FINAL DECISION

U.S. Sen. John Thune, R-S.D., chairman of the Senate Committee on Commerce, Science, and Transportation, issued a statement in a press release on Nov. 30 on the STB final rule. Thune authored a major rail reform package that was approved last year by the Commerce Committee, which has jurisdiction over the nation's freight rail industry, as well as the full Senate. Thune's bill, the STB Reauthorization Act of 2015, was the first legislative reform of the agency since its creation and was signed into law in December 2015.

"Today's decision by the STB is a win for farmers, fertilizer suppliers, and other rail shippers in South Dakota and around the United States," Thune stated in the release. "These common-sense performance reporting requirements will bring greater transparency to the industry, which will in turn help everyone in the supply chain -- from the producer all the way to the consumer. Greater transparency will also help identify future rail disruptions and mitigate any potential impact to the industry or the economy."

Randy Gordon, National Grain and Feed Association (NGFA) president, said in a press release on the NGFA website that, "STB roundly rejected arguments by the Association of American Railroads (AAR) that the rail service reporting requirements were unnecessary for improving rail service and, if required, should be limited and only be high-level system-wide macro data already reported to the AAR by individual Class I carriers."

Instead, the agency said that having access to rail service performance data will allow the STB as well as shippers and other stakeholders to more quickly identify and react to service issues, all of which advance the congressional national rail transportation policy," added Gordon.

"In its final rule, the STB adopted the NGFA's recommendation that carriers operating grain shuttles be required to report their average train trips per month for both their system and for key destination regions -- which should provide more information on service performance in major traffic corridors," Gordon said. "Further, the STB adopted the NGFA's recommendation that Class I railroads be required to report their specific definitions of unit trains, which can vary from one carrier to another, and to update those definitions if they change."

AAR CALLS FOR FREEZE ON ALL MAJOR RULEMAKINGS BY STB

On Nov. 17, a few weeks before the STB final decision on weekly performance reporting, the Association of American Railroads (AAR) President and CEO Edward R. Hamberger called for a halt on all rulemaking by the STB. The head of the freight rail industry's main trade organization said in the press release posted on the AAR website: "STB should defer a handful of widely panned regulatory proposals, most notably forced access, until the U.S. Senate confirms a full slate of board members appointed by President-elect Donald J. Trump. Such a pause is in line with Trump's call for a temporary moratorium on all new regulation and a full review of both proposed and existing rules, as well as the process in which rules are made."

When Congress reauthorized the STB in 2015 for the first time since its creation, it expanded the board from three members to five. President-elect Trump will nominate three new members next year, which are subject to Senate confirmation.

"The policy landscape in Washington, D.C., dramatically shifted on Election Day, and as such, the freight rail industry believes the STB should suspend its misguided quest to reregulate freight rail," Hamberger said. "Now is not the time for midnight regulations, let alone the enactment of the unfounded proposals currently arising from the STB that will surely fail to meet the rigorous examination promised by future leaders."

"The bottom line, Hamberger said, "is that great uncertainty is looming not just over the freight rail industry, but the entire economy. Now is not the time for regulators to jam through rules and inject even more government-induced uncertainty."

Here is a link to the full AAR Nov. 11 press release: https://goo.gl/…

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

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/BAS)