Surface Transportation Board Chairman Ann Begeman this month sent a pair of letters to two Class I railroads, questioning the lack of reciprocity in Union Pacific Railroad’s (UP) recent tariff changes and alerting the Norfolk Southern Corp. that the agency’s staff will expect to engage in weekly conference calls to monitor the rail carrier’s implementation of aspects of a “precision scheduled railroading” operating plan.
In a Nov. 20 letter to UP, Begeman urged the railroad to review tariff changes it announced on Nov. 1 (and which are scheduled to take effect Jan. 1) “from the standpoint of commercial fairness.” In the letter, she voiced concern that UP’s tariff revisions “lack appropriate reciprocity,’ and cited as an example UP’s announced policy of assessing a charge against a customer if it is unable to pick up or deliver a railcar to a customer’s facility because of an action of the customer, while not providing reciprocal treatment for delays in delivering or pulling railcars through actions attributed to the UP. “In this situation, it would seem appropriate for UP to offer the customer some type of credit or accommodation in return,” she wrote. “After all, UP is expecting many customers to modify their own operations, at their time and expense, to accommodate UP’s new (precision schedule railroading) operating plan.”
In a Nov. 27 response, UP Executive Vice President for Marketing and Sales Kenny Rocker contended that the railroad’s tariffs “are fair, balanced and reciprocal in nature.” But the only specific reciprocity cited in Rocker’s response was that UP will give customers two offsetting credits for the railroad’s operating failures under its standard demurrage program if it is responsible for not picking up or delivering a car.
Meanwhile, in a Nov. 27 letter to NS Chairman, President and Chief Executive Officer James Squires, Begeman said the staff of STB’s Rail Customer and Public Assistance Office will expect to engage in weekly conference calls with the railroad’s senior management to keep the agency “fully informed” as the NS in 2019 begins implementing its version of “precision scheduled railroad” operating principles developed by the late E. Hunter Harrison, who previously implemented the concept at the Illinois Central, Canadian National, Canadian Pacific and finally at the CSX Railroad. Begeman noted the severe service disruptions that had occurred following CSX’s implementation of precision scheduled railroading, which necessitated such weekly conference call updates, and noted that the Board was implementing such monitoring of UP as it implements its version of the operating plan next year.
Begeman also took the opportunity to question Squires about NS’s recent tariff and accessorial charge announcement, which also takes effect Jan. 1, and urged the railroad to “evaluate its proposed changes from the standpoint of commercial fairness.” The NS had not yet responded to the STB letter by the time of publication of this edition of the NGFA Newsletter.