Shippers concerned about rail service problems

The National Grain and Feed Association (NGFA) wishes to apprise the Surface Transportation Board (Board) of major concerns it has received regarding severe rail service problems and excessive charges involving Class I railroads that are being experienced by shippers and receivers of grains, oilseeds and processed grain products. There is a fundamental concern among rail customers that the underlying root cause of these service and accessorial charge-related issues is Class I railroads’ aggressive effort to reduce their operating ratios to impress Wall Street investors and shareholders. This, in turn, has resulted in the systemic shedding of resources by Class I carriers, including locomotives and crews, that has degraded service to unacceptable levels, and resulted in virtually non-existent surge capacity to meet rail customers’ needs. Conditions have failed to improve for several months, resulting in grain and grain product companies shifting their supply chains to just-in-time deliveries and increasing their reliance on costlier truck transportation just to get agricultural products moving. Automobile manufacturers are encountering similar issues.