STB to require Class I railroads to provide weekly rail service metrics reports

In light on various service-related freight railroad service issues, the Department of Transportation’s Surface Transportation Board (STB) recently announced it is now requiring Class I railroads to publicly file weekly data reports on service performance.

These weekly reports are slated to begin on October 22.

The STB said that this is being done “in an effort to promote industry-wide transparency, accountability, and improved service.” And it added that this directive comes on the heels of a recent September STB hearing in Fargo, North Dakota focused on rail service issues that began late last year.

At that hearing and others hosted by the STB, the STB said that many rail shippers expressed concerns about the lack of publicly available rail service metrics and requested access to certain performance data from the railroads to help them better understand the scope, magnitude, and impact of the current service problems. The data collected pursuant to this order will give the Board and interested parties a better real-time understanding of the current rail service issues.

And the STB added that at the September hearing “stakeholders expressed a need for greater industry-wide transparency with regard to rail service, noting that “[S]hippers assert that performance metrics are important for rail users to plan logistics, minimize economic harm to operations and revenues, assist with business planning, and to better serve their own customers during the service-recovery period. Shippers have also stated that information would bring transparency regarding the extent to which the railroads are improving and resolving the ongoing service issues.”  

These service issues stemmed from the harsh winter weather last year, with service capabilities slowly remaining on the mend.

“The one ongoing issue that persists from the winter is that we continue to experience substandard rail service…currently all rail on-time performance trails historical norms,” said Hub Group CEO Dave Yeager on his company’s second quarter earnings call.

Yeager pointed out that there are not any “quick fixes” for getting service back to ideal levels. He cited two areas that railroads are focusing on: increasing available resources and efficiency to route traffic, things which he said require hiring new crews, acquiring new locomotives where available and returning restored locomotives to service and accelerating increased in intermodal terminal capacity.

Other issues include a slowdown in train velocity and the ongoing challenges related to truck driver recruitment and retention, according to J.B. Hunt Transport Services Inc. President and CEO John Roberts.
The slower train velocity and ongoing service disruptions had a negative impact on train fluidity and resulted in a decrease in box turns and dray power utilization on an annual basis in the second quarter, Roberts explained.

The STB said it will require each Class I rail carrier to file the following on a weekly basis:
-system train speed by the following types of trains, intermodal, grain unit, coal unit, automotive unit, crude oil unit, ethanol unit, manifest, and all other;
-weekly average terminal dwell time, measured in hours, excluding cars on run-through trains, or cars that arrive at and depart from a terminal on the same through train, for that carrier’s system and its ten largest terminals in terms of railcar capacity;
-total cars on line by various car types for the reporting week, including box, covered hopper, gondola, intermodal, multilevel, open hopper, tank, and other;
-weekly average dwell time at origin for unit train shipments sorted by grain, coal, automotive, crude oil, ethanol, and all other train units;
-the weekly number of trains held short of destination or scheduled interchange for longer than six hours sorted by train type; and
-the weekly number of loaded and empty cars, stated separately, in revenue service that have not moved in (a) more than 120 hours, (b) more than 48 hours but less than or equal to 120 hours, among others

The Association of American Railroads (AAR) was somewhat skeptical about the impact of the STB’s decision to require weekly service metrics.

“We are examining the STB decision,” said AAR President and CEO Edward R. Hamberger in a statement.  “Since 1999, railroads have on a weekly basis voluntarily provided the STB and the public with railroad performance measures on terminal dwell time, velocity and cars online. It is unclear how the increased reporting requirements in today’s order will in any way lead to improved service.”

The AARs top executive added that railroads are investing and hiring at an accelerated pace to provide the capacity needed to meet growing demand as traffic continues to rebound to pre-recession levels.

Brooks Bentz, LM contributing editor and supply chain consultant, said these weekly service metrics reporting are not a huge deal for shippers or the Class I carriers.

“Getting timely, accurate data that is useful in the short-term may be a bit of a challenge, but otherwise I think it’s not a bad thing to have available,” he said. “The key will be in how the information is reported…is it consistent across all carriers, for example and how is it calculated.  It will likely take a while to work out bugs and anomalies, of course.”