U.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation, will convene a full committee field hearing titled “Freight Rail Reform: Implementation of the Surface Transportation Board Reauthorization Act of 2015” on Thursday, August 11, 2016, at 1:30 p.m. CT/2:30 p.m. ET in Sioux Falls, S.D….
“In a competitive market, an influx of demand would be met by an influx of increased supply (in this case new capacity), but as previously indicated, to many in the shipper community, it seems as though supply is very slow in coming in the rail sector. The Class I railroads tout large investments in capacity, but for many in the shipper community, it is difficult to sort out what is actually new capacity for existing shippers (such as automotive) versus maintenance of existing service or service for new shippers.”
– Shane Karr, Vice President of Federal Government Affairs, Alliance of Automobile Manufacturers. Testimony before the United States Senate Committee on Commerce, Science, and Transportation Freight Rail Service: Improving the Performance of America’s Rail System, September 23, 2014.
“As 2014 began to unfold AECC started seeing slower average turnaround time (ATT) and lower throughput of coal to its power plants. AECC experienced ATT increases of as much as 30 percent and coal inventories drop by up to 50 percent. At one point an AECC plant had just 16 days of coal inventory.”
– Testimony submitted by the National Rural Electric Cooperatives Association to the United States Senate Committee on Commerce, Science, and Transportation Freight Rail Service: Improving the Performance of America’s Rail System, September 23, 2014.
“Since 2010, Dakota Gasification has seen drastic increases in transit times to all products. The most extreme example is the tar oil movements to Bayport, Texas. Cycle times have jumped from 30 days last September for a cycle time on those cars to more than 50 days. That’s just in one year or a little less. And so, because of that, we are shipping only 60 percent of our contract to Bayport, Texas. These delays have resulted in more than $17 million in lost revenue since July of 2013. We’ve also contracted, for $3 million, to lease an additional — a hundred additional railcars to allow us to meet those demands.”
– Steve Tomac, Senior Legislative Representative for Basin Electric Power Cooperative testifying on behalf of Basin subsidiary, Dakota Gasification Company. Testimony at Surface Transportation Board Hearing “United States Rail Service Issues, Fargo, SD, September 4, 2014.
“In 1980, when the Staggers Act was passed, there were 26 Class I railroads in the United States. Today there are seven, and four of those carry 90 percent of the traffic in the United States. Two of those are dominant east of the Mississippi River and two of them west of the Mississippi. And so those are the dimensions of the issue here.”
– Mr. F. Edmond Johnston, III, Sustainability Manager, DuPont Corp. Testimony at hearing titled “Perspectives from Users of the Nation’s Freight System’ before the House Transportation & Infrastructure Committee Panel on 21st Century Freight Transportation, October 1, 2013.
“The rail industry’s growth makes this an important period for a thorough examination of rail economic regulatory policy. Many of the agency’s longstanding policies were adopted decades ago when the rail industry was struggling to stay alive. Now that the industry is both financially healthier and restructured with far fewer large railroads, I believe the Board should continue the process I started to examine its core policies to ensure that they fit today’s modern rail industry and meet the goals that Congress laid out for the agency. Throughout this inquiry, the Board must fulfill the mandate we received from Congress – balancing the 15 Rail Transportation Policy factors in the Interstate Commerce Act in a manner that serves the public.”
– Mr. Daniel R. Elliott, Former Chair, Surface Transportation Board. Submitted Written Testimony at the Senate Commerce, Science & Transportation Committee Nomination Hearting to Serve on the Surface Transportation Board (Reappointment), May 6, 2015.
“I’ve been told by several railroads that they haven’t had a failure because no coal plant has run out of coal. But, to the utility, it is a failure. It is inadequate service if he has to manage the coal pile and, in doing so, either go out on the grid, pay more money at the bus bar from what he would have at his own bus bar — or, I’m sorry, on the grid; or he has to have more expensive natural gas, if he has that capability. But not everyone has that capability. For some people, either it’s coal or nothing. And it also affects grid reliability…”
– Tom Canter, executive director of the National Coal Transportation Association. Testimony at Surface Transportation Board Hearing “United States Rail Service Issues, Fargo, SD, September 4, 2014.
“Surface Transportation Board reauthorization is a good thing. The board, the ability to communicate one another and having a broader base of board is this common sense in today’s day and age. And build to investigate issues without a formal complaint would help shippers. In conclusion, we’re not asking for government regulation, we’re not asking for preferential treatment for grain. We want to make sure that we’re not marginalized, but we need all the stakeholders, the commercials, the railroads, the government, farmers, to extend with the crossroads, identifying action plan to decide how they’re going to measure that plan, assess the measurements and move forward from there.”
– Jerry Cope. Vice President of Marketing, Dakota Mill & Grain, Inc. on behalf of the National Grain and Feed Association. Testimony at Surface Transportation Board Hearing “United States Rail Service Issues, Fargo, SD, September 4, 2014.
“Insuring that the STB has the resources it needs to carry out its statutory mandates is important to our members and rail shippers generally.”
– National Industrial Transportation League President Bruce Carlton, in September 12, 2014 press release endorsing S. 2777, The Surface Transportation Board Reauthorization Act of 2014.
“The current state of rail competition in North Carolina fundamentally undermines our ability to compete in the global shipping marketplace and to adequately serve the needs of shippers seeking to transport goods to, from or through North Carolina […] limiting the market opportunities for both imports and exports a foundation of our State’s economy. […] This translates into jobs lost for North Carolinians and into higher costs for our state’s businesses to move goods and serve customers.”
– Jim Trogdon, P.E., Chief Operating Officer, North Carolina Department of Transportation, written testimony to the Surface Transportation Board, June 22¬-23, 2011.
“SunBelt is a perfect example of how the lack of competition for captive shippers allows railroads to impose onerous rates and terms. Norfolk Southern has increased the tariff rate by 817% over the original contract rate established in 1997. For comparison, the consumer price index has increased only 40% over this same time period.”
– John L. McIntosh, Senior Vice President, Operations, Olin Corporation written testimony to the Surface Transportation Board, June 22¬-23, 2011.
“For those shippers captive to the railroads, including many coal mines, their market value and ability to earn revenue are completely dependent on the railroad. However, given the monopoly position allowed railroads in many areas of the country, combined with the absence of mechanisms to timely address instances of anticompetitive service shortcomings or price gouging, the railroads have no meaningful incentive to take action to resolve such problems. This state of affairs is undermining the ability of companies like Southern Coal to successfully compete in the marketplace, both domestically and abroad.”
– J Kevin Buster, Southern Coal Corporation, written comments submitted to the Surface Transportation Board, April 12, 2011.
President Donald J. Trump has appointed Ann Begeman to serve as Acting Chairman of the Surface Transportation Board. Ms. Begeman is currently serving a second, five-year term as a Member of the Board following her recent nomination by President Barack Obama on December 7, 2016, and her unanimous confirmation by the U.S. Senate on December 9, 2016.
“New appointees to the STB should have an understanding of the challenges shippers face and seek to ensure balance in the regulatory environment so that freight rail service can be efficient and reliable and rates can be competitive.”
On December 7th, the STB entered into a Memorandum of Understanding (MOU) with the Canadian Transportation Agency (CTA). This agreement is a MOU of Understanding to facilitate information sharing between the agencies.
On December 9th, the STB announced vacancies on its Railroad-Shipper Transportation Advisory Council (RSTAC) and is seeking nominations for (1) a representative of a small shipper; and (2) a representative for a Class I railroad.
Early this morning by unanimous consent, the Senate approved Begeman’s nomination to a second five-year term on the STB. Begeman was first appointed to the STB in 2011.