Posts Tagged ‘Midwest Association of Rail Shippers’

STB Head Wants More Rail Competition

July 14, 2021

Class 1 Railroads got an ear full on Tuesday from U.S. Surface Transportation Board Chairman Martin J. Oberman who suggested the carriers are shirking their obligations as common carriers due to pressure from Wall Street investors.

Speaking to the Midwest Association of Rail Shippers, Oberman called for more competition in the industry and is in agreement with an executive order issued last week by President Joseph Biden directing federal agencies to limit the dominance of large corporations.

 “There are just many, many parts of the country . . . where there’s just not real effective competition among rail carriers,” Oberman said.

In regards to railroads, the STB head said he sees a less robust freight rail system due to job cuts related to the implementation of Precision Scheduled Railroading.

Oberman also said that some commodities moved by rail have suffered due to Wall Street pressure for ever-lower operating ratios.

“While everybody applauds efficiency — and I do — I am concerned that we may well have stripped our resources down too far to keep our national rail network as healthy as it needs to be to rebuild the economy,” Oberman said.

He acknowledged that railroad did well in moving traffic as the economy rebounded from a recession last spring triggered by the COVID-19 pandemic.

Oberman and other STB members will be weighing these and other concerns in upcoming merger cases involving Canadian National acquiring Kansas City Southern, CSX buying Pan Am Railways, and a bid by Watco to buy CN’s former Wisconsin Central branch lines in Wisconsin and Michigan.

Amtrak’s relationships with its host railroads also are on the docket in a pair of cases, including involving Federal Railroad Administration mandated on-time performance standards.

Shipper Meeting Canceled Due to Pandemic

April 22, 2020

The COVID-19 pandemic has claimed another shippers meeting.

The Midwest Association of Rail Shippers will not hold its meeting as scheduled on July 20-21 in Lake Geneva, Wisconsin.

“This was not an easy decision,” MARS president Stefan Loeb said in a message to association members. “We understand our members enjoy and appreciate the education and networking opportunities the meeting offers as much as we enjoy hosting the event.

The next MARS meeting is planned for January 2021.

Earlier the National Association of Rail Shippers canceled its annual meeting that had been set for May in Kansas City.

PTC Seen as Springboard into Autonomous Trains

January 17, 2020

Think of autonomous railroad operation and what come to your mind is a train without a conductor or engineer operated instead by a computer.

That’s not quite, though, what one railroad CEO has in mind when he talks about automated trains.

Speaking to the Midwest Association of Rail Shippers meeting in suburban Chicago this week, Kansas City Southern CEO Patrick Ottensmeyer said autonomous operation does not mean driverless trains.

Rather he views it as using “technology to dramatically improve and increase capacity.”

Ottensmeyer didn’t say what technology KCS is pursuing to create that capacity, but indicated that positive train control is part of it.

“Positive train control has provided a good springboard,” he said. “We all probably would have done it differently if it had been left up to us, but it is a good springboard to moving further down that path toward an autonomous rail network.”

Increased use of autonomous technology, he said, would improve consistency and reliability of service, while also increasing capacity.

“The old-fashioned way of spending billions of dollars on track and ties and ballast is not the right path,” Ottensmeyer said.

Ottensmeyer said KCS remains focused on meeting the PTC mandate for interoperability, which “is not going to be a layup by any stretch of the imagination.”

PSR Dominates Shippers Meeting Presentations

July 26, 2019

Precision scheduled railroading was a major topic of discussion at the recent meeting of the Midwest Association of Rail Shippers where one short line railroad executive called for the Class 1 railroads that are implementing the model to do more collaboration with their short line partners.

Eric Jakubowski, the vice president and chief operating officer of Anocostia Rail Holdings, which owns six short lines, said short line railroads could hold equipment that the Class 1 railroads don’t want on their networks.

Jakubowski said that although PSR is the art of keeping operations simple, reliable and predictable, some Class Is have not yet created door-to-door trip plans.

“Some touch points are not under discussion,” Jakubowski said.

PSR will not necessarily create traffic growth for short line railroads, but Jakubowski does believe it will prompt real-time decision making at the local level.

“PSR is foundational, and I do think it will create capacity,” he said.

Seven of the nine speakers addressing the conference, which was held in Lake Geneva, Wisconsin, discussed PSR heavily in their remarks.

That included Norfolk Southern CEO James Squires, who touted PSR as helping to improve service consistency and reliability, and create more capacity for business growth.

“For NS, PSR is something we do with our customers and not to our customers,” he said. “It’s a platform for growth.”

Squires said that NS through its TOP21 operating plan is implementing PSR cautiously and methodically.

“We’re not doing the ‘chainsaw method,’ to have at it and just make it work. That can be disruptive for customers,” said Squires. “We are taking time to improve service.”

Matthew Wallin, GATX Corporation vice president of structured finance, said PSR could affect car ownership percentages by lowering the railroads’ share of car ownership while increasing the percentage for rail-car lessors.

Wallin also said that PSR also could negatively impact the number of high-mileage cars in fleets, such as centerbeams, intermodal cars and box cars.
He said that will make it a challenge for car leasing companies to to maintain the diversity of its fleet across car types and commodities.

U.S. Surface Transportation Board Vice Chairman Patrick Fuchs said his agency is engaged with the railroads that use PSR by making weekly calls to receive operational metric updates.

“We aren’t making any sweeping statements about PSR,” he said. “We’re in oversight mode now, closely monitoring it and looking for feedback from shippers.”

From a shipper’s perspective, PSR isn’t very precise when it comes to the first and last mile at an origin and destination, causing inconsistent transit times, while box-car management is challenging at best, said Bruce Ridley, senior vice president of environmental health and safety and operational services for Packaging Corporation of America.

“Railroads need to make the first and last mile a priority, but they aren’t measuring it, so it’s not a priority,” said Ridley.

Ridley said another issue is that Class 1 railroads have fewer fewer customer service representatives and not all of them are familiar with new processes and changes brought on by PSR.

Rob Cook, senior manager of rail operations at Bunge North America, said his company is coping with PSR by acquiring more cars to cover transit time variations.

“Railroads want to run a tight pipeline, but they don’t know what that looks like. It’s all unknowns,” Cook said. “What’s the new normal with a fleet? We’re trying to stay consistent in the new normal.”

But he said that Class 1 railroads are getting better at PSR and viewing it as an opportunity to reduce car fleets and improve transit times.

Gail Wernette, manager of rail rates at Nutrien, said assessorial charges have become an issue with PSR. The charges cover such services as diversions, reconsignments and car storage.

“Railroads are not so good at paying or tracking assessorial charges. That causes friction,” Wernette said.

Wernette said  unit trains are not considered favorably by PSR. “Shippers can get 65-car trains but if they want 120-car trains, “not many [railroads] will listen to you,” he said.

Wernette said his company is not opposed to PSR but it wants to give feedback as the operating model is implemented.

Squires Pleased with NS PSR Implementation Thus Far

July 17, 2019

Norfolk Southern CEO James Squares told a conference recently that implementation of the NS version of precision scheduled railroading is going well.

Speaking to the Midwest Association of Rail Shippers, Squires said the operating plan, known as TOP21, has seen a seamless transition for most shippers.

“More than 80 percent of carloads in our merchandise network have different trip plans” compared with before the new operations plan.

Squires said that has enabled NS to to do more with less and he wishes the carrier has gone to PSR sooner.

NS had the benefit, Squires said, of observing PSR being implemented at other railroads and therefore was able to learn from the experiences of those carriers so it could “do PSR right, do it our way.”

Squires said freight cars on line are down 18 percent, shipment consistency is improved by 71 percent, terminal dwell times are down 39 percent and customer volumes are up 77 percent for customers served six days a week or more.

NS now needs 30,000 fewer freight cars than it needed in 2018. Squires said the resulting car surplus could be used to support traffic growth, which he expects to occur in the second half of the year.

In the past six month, NS has mothballed more than 600 locomotives.

The carrier is reviewing its demurrage policy after receiving shipper customer complaints.