STB to hold rail service hearing this week

The Department of Transportation’s Surface Transportation Board (STB) said it will hold a hearing on Thursday, April 10 on recent railroad service issues, review proposed solutions to existing service problems, and also discuss additional options to improve service.

STB officials said that the STB has been “closely monitoring the rail industry’s performance metric and is concerned about service problems across the nation’s railroad network, particularly on the Canadian Pacific Railway Company (CP) and BNSF Railway Company (BNSF) company systems,” with STB members having written to and met with leadership at both companies to discuss the concerns.

And they added that the STB’s Office of Public Assistance, Governmental Affairs and Compliance has been working with affected parties to better understand the problems shippers are facing and to help facilitate service solutions.

The majority of these service issues stem from difficult winter weather conditions, which, after several years of record mildness has been beyond harsh, reducing train size and speed- and thus capacity, observed Tony Hatch, an independent railroad analyst, in a research note. Hatch added that recent service metrics, including velocity, have seen carriers active out west are suffering to some degree, with the impact lasting into the second quarter and perhaps longer. As an example, Hatch noted that BNSF saw a 16 percent velocity decline in the first quarter.

FTR Senior Consultant Larry Gross said that both carload and intermodal service in general has taken a hit because of the harsh winter weather in recent months.

“The problems actually started prior to the bad winter weather, with some spot issues on the intermodal network, notably on the BNSF Northern Tier line, which runs from the Pacific Northwest to Chicago and runs through the heart of the Bakken shale region, which is the main source of crude by rail activity,” said Gross. “There also has been a record harvest, with export grain moving to the Pacific North West, making BNSF’s Northern Tier line pretty clogged and that has some ripple effects throughout the BNSF system. Intermodal networks in the Chicago area also took a hit with the weather, with train speeds down and terminals clogged and reliability definitely suffered, as did trucking. Now it is a question of how fast the rails can recover and this is also true on the carload side, with train speeds down and yard dwell times way up right now.”