Chemical Shippers See No Meaningful Improvements in Rail Freight Service

The American Chemistry Council last week said that efforts by Class 1 railroads to improve their freight service have yet to yield any “meaningful service improvements.”

The trade group said it reached that conclusion after surveying its members. It shared results of that survey with the U.S. Surface Transportation Board.

Nearly half of the respondents (46 percent) said that during July “rail delays/service challenges had gotten worse since the fourth quarter of 2021.”

Just 7 percent of respondents said service has improved. When the ACC asked the same question of its members in March, 39 percent said service has worsened.

In the most recent survey, 90 percent of respondents said they had experienced “longer transit times for rail service” while 66 percent reported having experienced missed switches, 64 percent said they had experienced reduced service days, 59 percent said they had incurred increased demurrage charges and 59 percent said they had seen increased rates.

NS Lauded for Locomotive Efficiency

The American Chemistry Council and online news service Environment Finance have recognized Norfolk Southern for improving locomotive efficiency.

The railroad was given the 2022 Responsible Care Energy Efficiency Award for its initiatives to improve energy usage.

A news release said NS reported that its locomotive fuel efficiency program includes “using more alternative fuels, retiring less energy-efficient locomotives and applying locomotive energy management systems.”

This has resulted in a 7 percent reduction in fuel use, which saved 47 million gallons of fuel and avoided more than 470,000 metric tons of greenhouse gas emissions in the past two years.

CSX Says It Has Improved Service for Chemical Shippers

In a letter to the U.S. Surface Transportation Board CSX said it has improved service for chemical and fertilizer shippers.

Arthur Adams Jr., senior vice president of sales and marketing, said CSX has sought the views of those shippers and followed up on their concerns.

In the letter dated July 20, Adams said most shippers did not indicate they had issues with CSX service “and we continue to work directly with those who expressed concerns.”

Adams also said CSX is hiring workers and has made operational adjustments to bypass congested areas and is working with interchange partners to make gateways more fluid.

The letter came in response to a complaint lodged by the The American Chemistry Council, which asked the STB to put CSX under additional oversight due to what one of its members called an “operations meltdown.”

Chemical shippers said they have had service problems with CSX in the Gulf Coast and Southeast, particularly Atlanta; Mobile, Alabama; Jacksonville, Florida; and New Orleans.

The issues identified by the shippers included lengthy delays, cars delivered in bunches, cars dwelling for a week or more, and local service failures.

Several shippers have complained about reductions in local service.

Adams acknowledged that CSX needs to do more but its recent STB metrics show the average number of chemical and fertilizer cars held over 48 hours have been cut nearly in half since the first quarter.

NS Joins Operation Clean Sweep

Norfolk Southern said it has joined Operation Clean Sweep in seeking to eliminate pollution caused by micro plastics being released into marine ecosystems.

The carrier signed on to a pledge created by the American Chemistry Council and Plastics Industry Association as part of an international program that provides guidance for companies to help reduce plastics pollution.

In a news release, NS said its chief marketing officer, Alan Shaw, signed the pledge on its behalf and thus joined several of its shippers in seeking to raise awareness for the environmental concern.

“As part of the pledge, Norfolk Southern will work to achieve zero loss of plastic resin into the environment,” Shaw said in a statement.

“We are developing an extensive education campaign to raise awareness among our employees and we will increase our scrutiny to make sure the hopper cars we transport are properly secured and sealed.”

Chemical Group Recognizes CSX

The American Chemistry Council has recognized CSX for its health, safety, security and environmental policies and protocols.

In a news release, CSX said it received Responsible Care Management certification from the ACC.

CSX said that to qualify for the certification independent auditors reviewed the carrier’s public safety, health and environment management system to ensure its effectiveness and compliance with the ACC’s responsible care standards.

The ACC first awarded certification to CSX more than 20 years ago.

NS Gets Chemical Shippers Award

Norfolk Southern has been awarded the Responsible Care^® Partner of the Year Award for Class 1 railroads by the American Chemistry Council.

In a news release, the carrier said the award was for an exemplary performance and safety record in transporting chemicals.

NS was one of the three companies and the only freight railroad to receive the award, which is given to companies involved in the distribution, transportation, storage, use, treatment, disposal, and sales and marketing of chemicals.

Since 1996, NS has participated in the voluntary Responsible Care Partner program, which is the chemical industry’s environmental, health, safety and security performance initiative.

As a program participant, NS must achieve third-party certification of its business management systems every three years, which includes reviews of the railroad’s safety, environmental stewardship and security.

“Our partnership with the council and its member shippers represents a strong commitment across business sectors to ensure the safety and security of our employees, communities and environment while delivering the quality service that our customers expect,” said NS Executive Vice President and Chief Operating Officer Mike Wheeler in a statement.

CSX Shipper Complaints to STB Dropping

Even as some CSX shippers continue to be disgruntled with the service they are receiving, other railroad customers are either finding their service satisfactory or have given up complaining about it.

The U.S. Surface Transportation Board said that shipper complaints about CSX service have dropped and an STB member attributes that to improved service.

Acting STB Chairman Ann Begeman made that observation in a letter sent to the American Chemistry Council, saying the Board has received “very few calls” regarding CSX service in the past few weeks

The Chemistry Council had earlier this week released findings of a survey of its members that many of them still are receiving inconsistent service, forcing some to curtail production and/or rely more on truck transportation.

CSX CEO James M. Foote met with Begeman on Feb. 1 to discuss CSX service matters and the Board has indicated it will continue to review weekly reports the carriers has been filing since last August.

However, the STB may modify its oversight as soon as April. The STB ramped up its oversight of CSX after service issues became rampant last summer after the railroad moved to the precision scheduled railroading operating model.

The STB might be willing to roll back some of the reporting on performance metrics that it has required of CSX since last summer.

In her letter to the Chemical trade group, Begeman urged shippers who have experienced problems to contact the STB so the problems can be addressed.

Chemical Industry Critical of CSX Service

A chemical industry trade group told the U.S. Surface Transportation Board last week that its members continue to experience significant service disruptions on CSX.

In a letter to the STB, Cal Dooley, CEO of the American Chemistry Council, said that companies have in the past two months been forced to curtail production or divert shipments to truck in order to prevent shutdowns.

“While many companies report that service had improved since the summer/fall of last year, it is clear that service is still not where it needs to be,” Dooley wrote.

The letter to the STB was based on a survey the trade group conducted of its members in December and January.

Dooley said that some members have seen improvements since last summer but overall service has not returned to normal.

“While CSX’s January 13 letter to the Board notes ‘a remarkable rate of positive change’ and cites selected service metrics that exceed 2016 levels, few benefits of CSX’s operational changes have actually been realized by its customers,” Dooley wrote. “In fact, the vast majority of ACC member responses indicate that current CSX service is worse than it was prior to the implementation of precision railroading.”

Dooley said that many of his group’s members fear that paying more for less reflects a “new normal” for CSX service.

Examples of shoddy service cited in the letter included a Midwest plant reducing production  by 90 percent due to erratic deliveries of raw material.

Another company said it shifted to trucks to prevent plant shutdowns in the Northeast due to a bad weather and CSX delays.

A Southeastern company said local switching delays and route changes have increased transit times by four or five days.

In a related vein, a Northeast shipper said a shipment that normally takes 10 days took 55 days due to multiple delays on CSX.

Another shipper said loaded cars have sat in yards for a week or more while some said they have seen reduced local service and higher car demurrage and switching fees.

CSX has been arguing for the past year that once it works out its operating changes that shippers will benefit from faster and more reliable service.

In response to the chemical association letter, CSX said in a statement that it “consistently strives to meet customer expectations and we believe that concerns about our service can best be resolved on a customer-by-customer basis and by focusing on a customer’s individual needs.”

The statement also restated a report that railroad made to the STB recently that cited five consecutive months of improvement in train velocity and dwell time.