The Surface Transportation Board wants four U.S. Class I railroads to continue reporting additional service metrics for the next six months as they seek to further improve service.
STB’s order, signed by all five board members, calls for the collection of weekly data from the four railroads, new service targets they expect to meet by May 2023 and the collection of monthly employment data. The railroads should also provide any modifications they have made to service recovery plans or indicate whether they don’t intend to make any changes.
The board had asked BNSF (NYSE: BRK.B), Union Pacific (NYSE: UNP), CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC) in May to submit service recovery plans as well as regular service progress reports for the next six months detailing terminal dwell, train starts and recrews, among other metrics.
STB’s collection of this data came in response to complaints from shippers and others that rail service had deteriorated in the first half of 2022 due in part to pandemic-related absences. There was also concern that the railroads had cut their ranks too deeply in response to the COVID-19 pandemic and precision scheduled railroading, a method used to streamline operations, and when market demand bounced back, the railroads didn’t have enough capacity and crews to handle the additional volumes.
In issuing its order, the board observed that the four railroads “appear unlikely” to achieve all their targets for service improvement by the end of the temporary reporting period and also that the railroads have yet to return service to pre-pandemic 2019 levels. The board also acknowledged the railroads’ argument that the restoration of service takes time.
“The most recent data show that the four carriers are currently meeting some of their six-month targets for service improvement, and many key performance indicators are trending in a positive direction,” STB said in a Friday news release. “However, the data continues to validate the anecdotal information that continues to be reported to the board regarding significant service issues. Key performance indicators, such as velocity, terminal dwell, first-mile/last-mile (FMLM) service (i.e., industry spot and pull), operating inventory and trip plan compliance show that railroad operations remain challenged generally, and particularly when compared to pre-pandemic 2019 levels. Accordingly, continued monitoring is needed.”
STB also noted that while not all Class I railroads are experiencing service problems to the same degree, issues can quickly spread since the rail system is an interconnected network.
“The board finds that it must continue to monitor the four carriers’ service performance and hiring efforts through current and upcoming challenges, such as the fall harvest and the holiday season,” STB said in its order. “The coming months will be a critical time for the four carriers to demonstrate resilience in the context of these additional challenges.”
The order details the targets that each of the railroads outlined for itself, as well as the progress each has made toward those. The measurement of that progress is based on the service metrics data that the railroads have submitted to STB.
In response to STB’s announcement, Jeff Sloan of the American Chemistry Council applauded the board’s decision to extend the data collection. Sloan said the data is valuable because it provides insights on on-time performance and local service delivery.
“Continued oversight is needed because the board has concluded that the four largest carriers are unlikely to achieve all of their six-month targets for service improvement, and performance remains below the same period in 2019,” said Sloan, who serves as the ACC’s senior director of regulatory and technical affairs.
He added that to reach the roots of the railroads’ service issues, the STB should adopt rules that tackle the ones that arise at the first mile and last mile.
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