Shippers Vent About Adverse Effects of PSR

Shippers grumbled about the effects of the precision scheduled railroading operating model at a forum sponsored last week by a congressional committee, saying they are bearing the brunt of the effects of work force cuts and poor service.

The event was sponsored by the U.S. House of Representatives’ Subcommittee on Railroads, Pipelines, and Hazardous Materials.

No railroads that practice PSR were invited to participate.

Many of the shippers were critical of poor communication on the part of the railroads to explain operations changes.

“A combination of poor service and rising costs over the last few years is not only unacceptable — it falls in the category of unimaginable,” said Mike Amick, a senior vice president at International Paper.
Although the boxcars used by his company may arrive at a local yard on time, cuts in local service means delivery of those cars to the mills is often delayed.

“So the cars are close enough to touch but we can’t really reach them or access them,” he said adding that creates bottlenecks at mills that operate 24 hours a day.

Some shippers acknowledged that railroads need to become more efficient and that increases in profits could be used to fund investment in the rail network.

But they said that PSR in practice has rewarded investors to the detriment of customer service.

Echoing the comments of Amick, Ross Corthell, vice president of transportation at Packaging Corp. of America and head of the National Industrial Transportation League’s rail freight committee, said under the PSR model Class 1 railroads do well in measuring the performance of their road trains, but not local service.

“This is where railroads do a horrific job,” he said. “They’re very unpredictable, they make resource planning at our facilities almost impossible, and yet they don’t measure that service at all.”

Corthell said at one of my company’s mills, the railroad serving it missed scheduled switches 22 percent of the time with the carrier’s local showing up up at any hour of the day.

“Precision Scheduled Railroading is anything but precise at origin and destination,” he said.

Shippers who use unit trains said they also have seen shoddy service.

“They may claim that PSR improves service but our experience, and that of many other shippers, has been the opposite,” said Emily Regis, fuels resource administrator the Arizona Electric Power Cooperative, which also has plants in California and New Mexico.

She said the round-trip transit times from a coal mine to a New Mexico power plant used to average three to four days, but has doubled amid what Regis said are PSR-related power and crew shortages.

U.S. Rep. Dan Lipinski (D-Illinois) said he convened the shipper forum as a follow-up to the U.S. Surface Transportation Board’s demurrage and accessorial hearing.

Lipinski said no one disputes that the Staggers [deregulation] Act of 1980 has been successful, but companies need cost-effective and reliable rail service to compete in the global economy.

Some of the disputes over service are an outgrowth of effort by railroads to use demurrage and accessorial charges as a carrot and stick approach to prompt shippers to turn over rail cars more quickly. The railroads say that will reduce congestion and result in better service.

The practices, the railroads content, are designed to customer behavior and not generate additional revenue.

But shippers counter that these charges are one-sided, unavoidable, and lack reciprocity when a railroad doesn’t provide service as scheduled.

Shippers also said that demurrage bills are often riddled with errors and challenging them is burdensome.

“The entire burden of proof is on the shipper to prove the railroad’s invoice is inaccurate,” said Randall Gordon, head of the National Grain and Feed Association.

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