The National Grain and Feed Association estimates that the losses to the grain industry will exceed $100 million in the first quarter of 2022.
Recently the Surface Transportation Board (STB) suggested short-term measures to address these issues, but many shippers believe these measures aren’t enough.
“Today, because of precision scheduled railroading (PSR) and the focus on improving operating ratio, railroads are struggling to handle increased volume as well as network disruptions,” says Ken Sherman, president of IntelliTrans.
“Many in the rail business blame the pandemic and staff reductions, but in the five years before the pandemic, rail providers reduced their operational staffing by 25 to 43 percent. The results have been very impactful. The railroads have cut so much from their operating budgets via labour reductions and idling locomotives that the industry has reached critical service challenges.”
Tackling tough questions
Last week the STB considered several short-term measures for rail service improvements.
“The board, the railroads and rail’s stakeholders are under pressure to tackle tough questions that could more comprehensively affect how the railroads run their operations. These questions also touch on freight rail’s long-term health, and viability in a transportation sector bent on an automated future.”
The US Transportation secretary, Pete Buttigieg, said: “There is no single step available to deliver ideal freight rail service overnight. The federal infrastructure law enacted last year is a historic opportunity to transform both freight and passenger rail for the better.”
However, the answers to the problems are just as complex as the problems. The STB wants to require Class 1 railroads to submit rail service improvement plans that include the headcount needed and anticipated recovery timelines.
“Shippers can’t offload significant portions of their rail transport shipments to the trucking industry because the volumes are just staggering,” said Brian Cupp, director of operations, IntelliTrans.
“Plus, roads would become too clogged, trucks are less environmentally friendly, and securing truck capacity in the current tight market can be more expensive.”