ARLINGTON, Va., Oct. 12, 2017 — The National Grain and Feed Association (NGFA) on Oct. 11 told the Surface Transportation Board (STB) about continuing shortcomings by CSX Transportation Inc. (CSXT) to provide reliable, consistent and predictable rail service to a significant number of NGFA-member companies that operate on the carrier’s lines.
Further, NGFA recommended that the agency require the railroad to submit a detailed service recovery plan containing specific, meaningful service-improvement metrics and timetable for restoring service to acceptable levels.
NGFA was one of 24 organizations and companies testifying at a day-long public listening session conducted by the STB on issues related to CSXT’s service performance. Each of the witnesses documented continuing incidents of unpredictable, inconsistent service and a lack of adequate notice and ongoing communications by CSXT with its customers.
NGFA President Randy Gordon told the STB that NGFA-member grain handlers, feed manufacturers, flour millers, corn refiners and grain processors continue to consistently report CSXT service failures, as well as failures of the rail company’s personnel to respond to inquiries from rail customers.
“Receiving consistent, predictable rail service and obtaining ongoing, accurate information from a carrier are essential for agricultural rail shippers and receivers to operate efficiently,” Gordon said. “Prior to July of this year, CSXT generally met those needs. However, our members report neither is occurring today.”
While some NGFA-member companies reported incremental improvement in CSXT’s service in recent weeks, Gordon noted that the NGFA continues to receive numerous reports that trains still typically are arriving four, to as many as seven or more, days behind schedule.
“This unpredictability and inconsistency obviously disrupts both logistics and supply chain planning,” he said.
NGFA said the net result of these CSXT service disruptions has been additional freight costs for truck movements; lost sales of commodities and ingredients; changes to supply chain and customer relationships; reduced operating efficiency at processing plants, flour and feed mills – some of which now are operating at 70 to 80 percent of capacity because of the lack of inbound supply; and economic losses incurred by rail car lessees and those operating private car fleets.
“Combined, these amount to literally millions of dollars of additional shipping costs and lost earnings to our industry,” Gordon said.
The NGFA recommended the Board require CSXT to report several additional and more revealing rail service performance metrics to help narrow the “disconnect” that currently exists between what the railroad is reporting to the Board versus what is being experienced by individual facilities. As an example, NGFA cited CSXT data on dwell time, train speeds and transit times that do not reflect the number of days it takes for CSX to pull a train after it’s been loaded and sitting at a facility. Likewise, CSX is not reporting the days that emptied rail cars sit at a destination facility waiting to be pulled.
Gordon said CSXT’s service failures in 2017 also have undermined its obligation under federal law to provide service upon reasonable request, and, therefore, the rail company’s actions call for more robust oversight by the Board until the harm is alleviated.
“We believe the seriousness of CSXT’s service failures warrants the Board requiring CSXT to develop and submit a specific service recovery plan to restore service in a manner that complies with federal law,” he said. “Respectfully, the jury is still out on whether CSXT’s new operating plan, as currently envisioned, will be sufficient to restore service to acceptable levels that meet its statutory common-carrier obligation, or result in a substantially ‘lower bar’ for service performance.”
More details about NGFA’s recommendations to the Board, as well as a litany of service-related problems with CSXT can be found in Gordon’s testimony.
The NGFA, established in 1896, consists of more than 1,050 grain, feed, processing, exporting and other grain-related companies that operate more than 7,000 facilities and handle more than 70 percent of all U.S. grains and oilseeds. Its membership includes grain elevators; feed and feed ingredient manufacturers; biofuels companies; grain and oilseed processors and millers; exporters; livestock and poultry integrators; and associated firms that provide goods and services to the nation’s grain, feed and processing industry. The NGFA also consists of 29 affiliated State and Regional Grain and Feed Associations, and has strategic alliances with Pet Food Institute and North American Export Grain Association.