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10/20/2014



Rail News: Rail Industry Trends

Politicians address rail service problems, tank-car phase-out


U.S. Sens. Amy Klobuchar (D-Minn.) and Al Franken (D-Minn.), and Minnesota Gov. Mark Dayton last week sent a letter to Surface Transportation Board (STB) Chairman Dan Elliott stressing that rail delays are impacting many parts of the state's economy.

For example, Minnesota power companies are complaining that overloaded rails are slowing service for coal shipments and rail congestion is causing their power plants to run low on coal, the senators and Dayton wrote.

"We are hearing daily from captive shippers across the agricultural, mining and energy sectors who cannot move products to market or transshipment locations; cannot secure delivery of enough coal to run power plants; and are forced to find extremely uneconomic alternatives, which ultimately lead to higher costs and poorer outcomes for businesses and end-use consumers," they said in a press release.

Railroads have not provided "even minimally adequate levels of service" and the situation appears to be worsening, requiring federal action, the senators and Dayton claim. Railroad officials recently told state legislators that service is improving and will continue to get better in the coming years as they expand their networks and make other infrastructure improvements, they said.

Yet, farmers already have sustained more than $100 million in losses due to rail congestion, and are having a difficult time receiving fertilizer and other crop inputs via rail, the senators and Dayton claim.

Meanwhile, Sen. Heidi Heitkamp (D-N.D.) recently met with Canadian Pacific employees to discuss agriculture shipment delays across the state and the need for the railroad to get back on track with its grain shipments. Heitkamp stressed how how she has led efforts to address the backlog since February, and has pressured the STB, CP and BNSF Railway Co. to rectify the situation in a timely manner.

"North Dakota's farmers rely on consistent rail service to get their products to market so they can make a living and support their families. But the disappointing reality is that extreme backlogs have hurt our state’s farmers, unnecessarily costing them time and money," she said in a press release.

U.S. Sen. Charles Schumer (D-N.Y.) has targeted a key rail issue, as well. Because of recent efforts by several groups to extend the timeline for phasing out "DOT-111" tank cars, Schumer has called on the U.S. Department of Transportation (USDOT) to stick with the two-year phase-out it already proposed.

In July, the USDOT proposed a rule that would require railroads to phase out the tank cars within two years or retrofit the cars with thicker shells to prevent rupturing. However, organizations such as the American Petroleum Institute, American Fuel & Petrochemical Manufacturers and Association of American Railroads have recently proposed extending the phase-out timeline to up to 10 years, Schumer said in a press release issued last week.
 
"The proposed two-year phase-out is a common-sense and feasible solution that will help get these dangerous tank cars carrying highly-flammable crude oil through upstate New York and Hudson Valley communities off the tracks, and the USDOT must resist any effort to prolong the timeline," he said. "The two-year phase-out should be non-negotiable."



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