NSSGA: Freight rail issues severely impacting producers

The National Stone, Sand & Gravel Association is urging the Surface Transportation Board to take swift action on ongoing freight rail issues so infrastructure materials can be delivered on time. Photo: miflippo/iStock / Getty Images Plus/Getty Images

The National Stone, Sand & Gravel Association (NSSGA) reports that aggregate producers are currently experiencing a variety of issues with freight rail, including service that is cut, poor or increasingly slow.

NSSGA presents a number of specifics in a letter submitted to the Surface Transportation Board (STB) by president and CEO Michael Johnson on behalf of his organization, noting that poor and declining rail service and unwarranted price increases for aggregate shippers are delaying and increasing costs for infrastructure projects.

“The recent Infrastructure Investment & Jobs Act has only increased the demand for product to update our crumbling infrastructure,” Johnson says. “The poor and deteriorating service faced by freight rail shippers has critically put a strain on companies to successfully supply customers and build projects around the country. This is unacceptable, not just for our members but for our entire country, as this is a crisis that creates a ripple effect that will harm the livelihoods of all Americans.”

The details

The STB is holding a hearing this week and accepting comments on the issue, NSSGA says. In its letter to the STB, NSSGA says railroads are cutting service in some instances from four or five days a week to two. And the changes are being made despite agreements being in place for four or five days of service.

“The railroads make these service changes with little advanced notice, and these changes are not the result of a ‘negotiation’ between the railroad and the aggregate shipper – the railroad unilaterally announces a change in service, with limited advance notice,” Johnson writes in the letter to the STB. “The reduction in service is a consistent story that our members report.”

Additionally, NSSGA says some producers are finding railroads are not providing sufficient power to support the size of trains. Poor rail service has also generated longer-than-planned transit times, NSSGA says, creating a need for more railcars.

Producers also say scheduled service is increasingly inconsistent.

“For example, a member (of NSSGA) reported that its agreed switching days are Tuesdays and Thursdays,” Johnson writes. “However, the railroad that services the facility does not comply with its agreement and comes whenever it chooses, without notice and without consistency from week to week (e.g., it may come on Monday, or it may come Wednesday and Saturday). We have heard similar complaints from multiple members. The impact that the railroads’ failure to move empty and loaded cars pursuant to a schedule – missing scheduled service and seemingly providing service randomly – causes facility disruption and temporary shutdowns.”

NSSGA is also hearing from members that railroads are picking “winners” and “losers” in the marketplace by deciding which of two competitors’ cars to move.

“The railroad’s decision making on which of two competitors to favor with service is not transparent,” Johnson writes. “From the perspective of the aggregate company that didn’t get service, the railroad arbitrarily decided to favor its competitor.”

NSSGA proposes several potential steps to alleviate the many issues.

“For example, NSSGA supports expanded availability of reciprocal switching and the Surface Transportation Board (STB) efforts of data collection on first mile/last mile movement with transparency and metrics,” Johnson says.