Posts Tagged ‘U.S. Surface Transportation Board’

Primus Nominated for another STB Term

June 24, 2022

Robert E. Primus will be renominated by the Biden administration for a five-year term on the U.S. Surface Transportation board.

A Democrat, Primus, was nominated in July 2020 by the Trump administration and confirmed by the Senate in January 2021 to fill the unexpired term of Deb Miller that was to end Dec. 31, 2022.

Senate confirmation of the second Primus nomination would mean his term would run through Dec. 31, 2027. By law STB members are limited to no more than two five-year terms.

Before joining the STB, Primus worked as a congressional staff member.

The STB has five members with the current makeup being three Democrats and two Republicans.

Other Board members and the dates that their terms expire include Chairman Martin J. Oberman, Dec. 31, 2023; Patrick J. Fuchs, Jan. 17, 2024; Karen J. Hedlund, Dec. 31, 2025, and Michelle A. Schultz, Jan. 11, 2026. Fuchs and Schultz are Republican members of the board.

In an unrelated announcement, Oberman said he has appointed with the approval of the Board, Mai Dinh to serve as Director of the Office of Proceedings.

She will oversees the development of the public record in proceedings before the agency and manages the office’s legal and administrative sections.

Dinh most recently served as assistant general counsel with the U.S. Department of Agriculture, where she led the legal team advising the Agricultural Marketing Service.

She has administrative law experience through previous positions at the Department of Homeland Security, Federal Election Commission, and National Indian Gaming Commission. 

STB Wants More Detail in Service Recovery Plans

June 15, 2022

Federal regulators have ordered four Class 1 railroads to submit more detailed plans to resolve freight service issues that have plagued the industry in the past year.

The order applies to Norfolk Southern, CSX, BNSF and Union Pacific.

In particular, the U.S. Transportation Board has ordered the carriers to correct what regulators see as deficiencies in the service recovery plans all four carriers submitted last month.

The board is also ordering the railroads to provide more information on their actions to improve service and communications with customers, as well as more detailed information on what they’re doing to hire more workers in order to provide more reliable rail service.

For example, STB members were dissatisfied with the plans submitted by NS and UP because they failed to include six-month targets for achieving performance goals.

“Unfortunately, these four carriers submitted plans that were perfunctory and lacked the level of detail that was mandated by the board’s order,” STB officials said in a statement. “The plans generally omitted important information needed to assure the board and rail industry stakeholders that the largest railroads are addressing their deficiencies and have a clear and measurable trajectory for doing so.”

The STB’s statement said the recovery plans need additional information which the STB order has laid out.

The service recovery plans were ordered on May 6 and came shortly after a two days of hearing in late April on shipper complaints of poor rail service.

The STB’s original order said the service recovery plans were to describe remedial initiatives and promote a clearer vantage point into operating conditions on the rail network.

CSX, CN Call Off Sale of Canadian Route

June 14, 2022

The sale of a CSX line to Canada to Canadian National has been called off.

The line between Montreal and Syracuse, New York, was to have been merged into CN’s Bessemer & Lake subsidiary.

Although the sale received approval from the U.S. Surface Transportation Board in April 2020, regulators also imposed a number of conditions on the sale that the two Class 1 railroads were unwilling to accept or able to work around.

Chief among them was a requirement that a clause CSX had insisted upon in the sale agreement that CN would be unable to negotiate direct interchange agreements with the Finger Lakes Railway and the New York, Susquehanna & Western in the Syracuse region.

The STB twice extended the deadline for CSX and CN to reach a new sale agreement but they were unable to do so and asked the STB to reconsider their original deal.

Regulators refused and CN sued the STB in federal court in April 2021. With the sale now having been called off, CN has sought and received approval from the court to dismiss its lawsuit.

Data Shows Decline of Class 1 Freight Service

June 10, 2022

An analysis by Trains magazine of data recently submitted by four Class 1 rail systems to the U.S. Surface Transportation Board found that all of them have seen their on-time delivery performance plummet since May 2019.

Before the pandemic, CSX, Norfolk Southern, Union Pacific and BNSF averaged an 85 percent on-time delivery rate but during the last week of May that had fallen to 67 percent.

The STB considers a shipment to be on time if it arrives at its destination within 24 hours of the projected delivery time given the shipper.

However, the Trains report cautioned that railroads often create trip plans for individual shipments that are tighter than the STB standard.

It also said comparing the performance of railroads against each other can be misleading because of variance in how each carrier collects information and calculates on-time performance and such performance metrics as terminal dwell time and average train speed.

The railroad industry has largely blamed shortages of operating crews for the service issues they have experienced in the past year.

As the average speed of trains has fallen, that has created congestion, which in turn has led to the need for more crews and locomotives.

The problems intensify because new crews and motive power are out of place from where they are needed.

CSX reported its overall on-time performance since May 2019 has slid from 96 percent to 85 percent.

The carrier said the most current figures show carload traffic posted a 66 percent on time rate whereas intermodal shipments were 95 percent on time.

Norfolk Southern said that for the 12 months ending in April 2020, its overall on time figure was 87 percent. It has since fallen to 52 percent.

The report can be read at https://www.trains.com/trn/news-reviews/news-wire/data-reported-to-federal-regulators-reveal-extent-of-deterioration-in-rail-service/

CSX Completes Merger with Pan Am Railways

June 1, 2022

CSX completed its takeover of Pan Am Railways on Wednesday.

The New England-based regional railroad became a fallen flag at 12:01 a.m., six weeks after the U.S. Surface Transportation approved the merger.

The merger extends CSX farther into New England. The deal involves merging six railway companies into CSX and grants trackage rights to other carriers on lines of four other railroads, including CSX, Providence & Worcester, Boston & Maine, and Pan Am Southern.

Norfolk Southern gains a new route to move intermodal and automobile trains from Voorheesville, New Yori, to Ayer, Massachusetts.

The Pittsburg & Shawmut Railroad, a subsidiary of Genesee & Wyoming that does business as the Berkshire & Eastern Railroad, will replace Springfield Terminal as the operator of Pan Am Southern.

Federal regulators established a five-year oversight period to monitor the effectiveness of the various conditions they imposed on the merger.

Class 1s Tell STB Service Recovery Plans

May 23, 2022

Four Class 1 railroads have filed with the U.S. Surface Transportation Board their plans to improve their freight service.

All of them said they have hired and are training new conductors as the carriers seek to return their service to more normal levels.

The carriers have been saying for months that crew shortages have hindered their ability to meet the expectations of their shippers.

The recovery plans were recently ordered by the STB following hearings in late April focusing on service issues the railroads have been having.

Regulators also directed the railroads to provide more information regarding their performance metrics, including local spot and pull performance as well as on-time performance within 24 hours of the original estimated time of arrival for carloads and intermodal trains.

In its six-page plan, CSX said it expects to return to 2019 service levels by the end of the year and has set a goal of 80 percent on-time performance for merchandise traffic.

Currently, CSX merchandise traffic has a 69 percent on-time rate while intermodal has been above 95 percent.

CSX said its local spot and pull performance was 83 percent for the week ending May 13.

It also said another goal is to increase average train speed by 7 percent and reduce terminal dwell by 10 percent over the next six months.

 “CSX’s service recovery focus is primarily on conductor hiring and resolving crew shortage issues in certain locations on the network,” the carrier wrote. “Adding more [motive] power to through trains would not improve service performance for CSX.”

Norfolk Southern submitted a seven-page plan that expressed uncertainty about being able to return to 2019 service levels within the next six months.

Currently, NS said, its on-time rate for merchandise traffic is 48 percent. The plan said that such things as average train speed, terminal dwell time, local service performance, and on-time performance are affected by a multitude of factors. Therefore, setting any targets or making any forecasts would be “speculative at best.”

“Where trains are not meeting expected schedules, Norfolk Southern has relaxed certain energy management tools and Norfolk Southern will continue to do so where appropriate and where it would have a positive impact on network fluidity,” NS wrote.

STB Member Downplays Direct Action

May 16, 2022

The U.S. Surface Transportation wants to see the railroad industry solve its own problems rather than have regulators dictate solutions to them a Board member said last week.

Speaking to the North American Rail Shippers Conference, Patrick Fuchs said STB members are moving toward “transparency and public accountability” rather than direct action.

Although Fuchs said regulators do not want to intervene he also emphasized that they expect the railroad industry to solve its service problems.

“To the Board, carriers are clearly in the best positions to identify and implement steps to improve service,” Fuchs said.

“When the Board has considered intervention, it has been careful to clearly establish that whatever intervention can’t negatively affect other shippers, and that limitation may prevent its use in some cases.

“We want to keep the focus on the carriers, the carriers’ ideas for service recovery, and public accountability from everyone in this room.”

Regulators held two days of hearings in late April into the service issues that Class 1 railroads have experienced in the past year.

Those hearings were triggered by an avalanche of complaints the STB received from shippers about poor rail service.

Since the hearings were held the STB had required Class I railroads to provide performance information over the next six months. It directed BNSF, CSX, Norfolk Southern and Union Pacific to create service recovery plans.

Fuchs agreed with assertions made by the carriers that their service issues stem in part from crew shortages.

“And there is also no doubt that when a railroad is rapidly adjusting its operating plans in the midst of congestion, adding additional complications from the government, which is not on the ground, could be counterproductive,” he said.

STB to Requires Class 1s to Report More Data

May 7, 2022

The U.S. Surface Transportation Board this week issued a regulation with eight parts that will require Class 1 railroads to provide more comprehensive performance and employment information.

The Board voted unanimously in favor of the rule, which largely is targeted at BNSF, CSX, Norfolk Southern and Union Pacific.

The carriers will be required to create by May 20 service recovery plans that are to be followed up with biweekly conference calls with STB staff.

The rule will be in effect for the next six months.

In its decision, the Board cited problems with rail freight service brought out in hearings it held in late April. It also said the rule is aimed at providing “industry-wide transparency, accountability, and improvements in rail service.”

All Class I railroads are being directed to submit weekly performance data and monthly employment data.

The information being sought by the STB included weekly average terminal dwell times, measured in hours, for each carrier’s 11th through 20th largest terminals.

Railroads are also directed to provide the weekly average number of train starts per day.

There are requirements to report on rail cars in storage, the number of cars in service with no mileage, the number of rail cars in service with the weekly average number of car-miles per day, and the aggregate number of car-miles per week.

Other information to be reported includes information on re-crews, the percentage of scheduled spots and pulls that were fulfilled, the weekly average number of local trains cancelled per day, the aggregate number of local trains cancelled per week, and the percentage of cars constructively or actually placed at destination within 24 hours of the original estimated time of arrival.

Railway Age columnist Frank Wilner described the reporting requirements as an effort to prompt carriers to solve their service problems on their own, beginning with transparency.

In a statement the Association of American Railroads said it was studying the STB’s rule but said its members will continue to work through the service problems they acknowledged having.

STB Proposes Making Reporting Data a Rule

May 1, 2022

The U.S. Surface Transportation Board is proposing making permanent the voluntary practice of data reporting by Class I carriers.

The carriers report the information about tare weight, and loss and damage through the Association of American Railroads. The data is used by the STB’s Uniform Railroad Costing System.

In a news release, the STB said its proposed new rule would give Class I carriers a choice of whether to provide tare weight and L&D data through AAR or file the data individually.

Comments on the proposed rule due by June 13 with replies due by June 2.

They’re ‘Mad as Hell’ But Are Going to Have to Take it a Little Bit Longer

May 1, 2022

As I read the various accounts of the two days of hearings conducted by the U.S. Surface Transportation Board last week about the shoddy service that Class 1 railroads have been giving their customers, I thought about Howard Beale, the fictional television evening news anchor in the 1976 black comedy drama Network.

One of the most iconic moments in Network occurs when Beale tells his viewers, “I’m as mad as hell and I’m not going to take it anymore.”

That prompts thousands of them to go to a window of their home and shout the phrase to no one in particular. It might have made them feel better in the moment, but did little, if anything, to address the underlying causes of their frustration and anger.

A lot of shippers and railroad workers channeled their inner Howard Beale during the STB hearings.

Although none of them used the “mad as hell” phrasing while addressing the STB, many were just that although more in control of their emotions than was Beale.

Another Beale rant perhaps best summarized the likely outcome of the hearings.

Beale, whose rants had led to his being given his own TV show in front of a live audience, tells viewers that television is an illusion that promotes fantasies that can never be realized.

Many, if not most, of those who testified before the STB have their own fantasies that are unlikely to be realized. That is not to say that bits of pieces of them won’t come to fruition.

The STB hearings served two primary purposes. They were a forum for shippers and others to vent about how Class 1 railroads are behaving these days.

Shippers told tales of woe about how poor and unreliable service has adversely affected their own businesses. Some warned of severe effects to the U.S. economy if things don’t improve.

The STB hearings provided validation for those concerns even as there was widespread agreement that there are no easy and quick fixes to railroad service problems.

The second purpose of the hearings was an opportunity for those who testified to push their pet agendas.

Shippers want more regulation of the railroad industry, particularly in the realm of rate regulation.

Unions want to preserve jobs, which have vanished at a precipitous rate as Class 1 railroads have furloughed thousands in the name of operating more efficiently. Railroad workers also want relief from increasingly restrictive attendance policies such as the controversial Hi Viz scheme implemented by BNSF earlier this year.

The railroads want to preserve the status quo, which has enabled them to make handsome profits, but they also want one-person crews.

CSX CEO James Foote implored regulators to allow railroads to operate with one person crews.

The Class 1 railroads want to remove most conductors from aboard trains in favor of roving ground-based conductors who would be responsible for multiple trains within a defined territory.

“Let us run trains with one employee and this problem is solved,” Foote said in reference to operating crew shortages.

Staffing aboard trains is one of many points of conflict between unions and management in the current round of contract talks that have drug on since early 2020.

Aside from a handful of tense exchanges with STB members, the railroad executives who testified during the two days of hearings were the antithesis of Howard Beale.

They spoke in a measured and calm manner, acknowledging their service is lacking in quality, but did so only because they could not easily deny that.

The railroad executives took responsibility for the service woes but refused to blame them on their own behavior.

Repeatedly, the Class 1 executives said the service problems are occurring because of crew shortages that they insisted they are doing everything they can to address.

That is a standard strategy that companies under attack for poor performance rely upon. Concede nothing and blame external forces that you seek to frame as being largely beyond your control.

Examples of the latter include fallout from the COVID-19 pandemic and a tight labor market.

It is not as though these things haven’t played a role. It is just that they are not the only forces at work causing service issues.

None of the railroad executives acknowledged having given in to the pressure of Wall Street investors who have pushed railroads to cut costs in order to drive up profits.

The executives argued that the precision scheduled railroading model makes them more efficient and showed no inclination to jettison the practice of operating fewer and longer trains.

Another tactic the Class 1 railroads used during the hearings was to deny the severity of the problems identified by their adversaries. In some instances, the executives suggested some of what witnesses were saying was simply not true.

A lot of what witnesses said during the STB hearings should not be taken at face value. It is not as though the speakers were telling falsehoods, but they were not always giving a complete picture either.

It is true that some witnesses were more credible than others in giving a reasonably complete overview of the root causes of the service problems.

To get that complete picture you have to consider the totality of the testimony while taking into account that all speakers were promoting their self interests which at times are in conflict with the self interests of Class 1 railroad management.

Promulgating self interests often leads speakers to exaggerate threats to their well being and to understate the consequence of their own behavior.

Nothing that Class 1 railroads have done in adopting PSR makes them unique among North American corporations.

Chances are that all or nearly every shipper who complained about poor rail service also has engaged in the type of cost cutting and business decision making that Class 1 railroads have practiced.

Many, if not most, railroad shippers are publicly-held companies that also are subject to pressures from Wall Street investors.

One underlying problem is with shippers who can’t easily switch to other forms of transportation because they are moving bulk commodities that are most efficiently and/or less costly to move by rail than truck, water or air. Gettig good rail transportation can be a dilemma for shippers even in the best of circumstances.

Railroads know that even if you’ll never hear a Class 1 executive say it.

In an analysis published in advance of the STB hearings, Trains magazine columnist Bill Stephens argued that the service problems of recent months by Class 1 railroads are nothing new. He cited a litany of past service meltdowns caused by weather and other calamities that unfolded long before PSR became a thing.

A similar point was made by a Wall Street analyst who researches railroad performance. He told regulators that every so often good service deteriorates into poor service, particularly when the operating climate becomes less than ideal.

Could railroads be better prepared for service downturns? Yes. Will they be? Probably not if the cost of doing so is more than they want to spend on operations.

There is little the STB can do in the short term in response to what it heard during the two-day hearings other than offer sympathy and empathy to shippers and workers while taking railroad executives to task for some of the meaningless and vague promises they’ve made in the past year about improving their service.

There is a long list of actions the STB lacks the authority to take and/or is reluctant to take for legal, practical and philosophical reasons.

The STB is not going to order railroads to stop practicing PSR. It is not going to order railroads to stop furloughing workers, and it won’t be telling them how many workers to keep on their payrolls.

What the STB can and might do is issue emergency orders to railroads to move certain types of freight by whatever means possible.

Regulators can and might promulgate or change existing rules on such things as reciprocal switching. This is where the underlying pet agendas of the various parties come into play.

The witnesses were laying groundwork for what they hope are future regulatory changes. As the old adage says, don’t let a crisis go to waste.

STB member also can keep the spotlight shining directly on railroad executives and their actions.

Class 1 railroad executives are aware of these potential moves and oppose all of them. Railroad executives may not like all facets of the status quo, but for the most part it serves them well.

Presumably the service woes will eventually ease although some underlying problems are likely to linger. The carriers might make some changes in an effort to show they are doing something other than trying to hire and train additional workers.

In the short run, shippers and unionized railroad workers may be mad as hell, but they have little recourse but to continue taking it while seeking to achieve fantasies that are unlikely to come to pass, at least in the manner that they envision them. Howard Beale, it seems, was on to something.

Commentary by Craig Sanders