WASHINGTON, Jan. 28, 2015 – Problems in the U.S. rail industry saw plenty of action last year after crippling Midwest grain transportation, and efforts to hold the system in check look to continue into the new Congress.

The Senate Committee on Commerce, Science, and Transportation held a hearing Wednesday to focus on the safety aspect of the rail system, but the issue of agricultural transportation continues to play a key role in considerations for the industry.

Last year, shippers complained about issues with late arrivals of rail cars, and rail companies were still working to clear grain from the 2013 crop as the 2014  harvest was about to begin in the upper Midwest. The backlog eventually forced the Surface Transportation Board – the federal entity tasked with regulation of the rail system – to demand weekly reports addressing progress on addressing the crisis.

In his opening statement, committee Chairman John Thune, R-S.D., said upcoming safety deadlines shouldn’t cause issues within the rail system.

"While safety can and should be improved, we certainly do not need to build in system-wide delays and congestion like we have witnessed during the past year and a half,” Thune said. “Delays, burdensome regulations, and failing infrastructure disrupt our nation’s economy and cost jobs.” 

Chris Jahn, president of The Fertilizer Institute, was on hand to testify about the critical nature of fertilizer delivery, nearly all of which is carried out by the rail system. He encouraged the committee to enforce policies “that will promote greater competition between railroads and improve the efficiency and effectiveness of the STB” and stressed the necessity for reliable rail service for his industry. 

"The delivery of fertilizer products in a timely manner is critical to farmers," Jahn said in his testimony, adding that there are “potential consequences for food security and the environment” if fertilizer isn’t shipped in time for proper application.

The committee’s chief safety concern was the timeline for implementation of Positive Train Control, mandated by Congress in the Rail Safety Improvement Act of 2008. PTC is the use of advanced technologies to automatically slow or stop a train before collisions, derailments or accidents caused by trains moving through a track switch left in the wrong position or down track undergoing maintenance.

Members of the rail industry said PTC would be expensive and take a great deal of time to install for use on over 60,000 miles of track subject to the mandate. According to the Association of American Railroads, the cost of developing and installing PTC is expected to top $10 billion.

Frank Lonegro, vice president of service design with CSX Transportation, Inc., a Jacksonville, Florida, rail and intermodal company with about 21,000 miles of track in 23 states, told the committee that rail companies basically had to start from scratch to create the technology necessary for PTC. He said many companies are still a long way from finishing the job.

Under the congressional mandate, PTC is supposed to be in place across the entire rail system by the end of 2015, but Lonegro said he would be “very surprised” if any railroad is able to meet the deadline. He added that a more realistic deadline would probably be 2020. Many witnesses and senators alike agreed that the timeline will have to be changed.

“Everyone knows that Congress is probably going to probably adjust this deadline,” Sen. Claire McCaskill, D-Mo., said at the hearing. “I would like there to be a more realistic target for the deadline which gives us time to try to work this out.”

Jahn said while he understands the need for companies to invest time and money to comply with a congressional mandate, he would still like to see “more focus on the ag space.” He noted the progress in tackling the railcar backlog in 2014 demonstrated in the reports required by the STB.

“It’s interesting how effective sunshine and transparency can be in terms of motivating productivity,” Jahn said. “In 2014, we were very close to very peak carload volume, and everybody expects growth again this year . . . that’s why we’re supportive of efforts to try to address that ahead of time rather than after the fact.”

In a call with reporters after the hearing, Thune also stated his intentions to reintroduce a bill aimed at reforming the STB “in the not too distant future.” The bill was introduced in September by then committee chair Jay Rockefeller, D-W.Va., and Thune as ranking member. The bill was designed to change internal processes of the STB to make the board more proactive and address issues “before they become a crisis.”


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