NGFA, ag groups outline several proposals to improve rail service admin April 22, 2022

NGFA, ag groups outline several proposals to improve rail service

ARLINGTON, Va., April 22, 2022 – In an April 21 letter to the Surface Transportation Board (STB), the National Grain and Feed Association (NGFA) and 32 other members of the Agricultural Transportation Working Group outlined several measures the Board can take to address rail service problems and prevent future service failures of the magnitude currently being experienced across the country.

“The current inability of several Class I carriers to provide reliable rail service to their customers is impacting farmgate commodity prices and elevating food prices for consumers,” the letter noted. “Future service challenges can be deterred, or even prevented, through increased competition, and by implementing financial incentives for railroads to perform more efficiently utilizing the same concepts that railroads use to incentivize their customers to be more efficient.”

The groups commended the Board’s recent decision to accept public comments on a petition to allow rail customers to levy financial penalties on railroads for their inefficient use of private railcars, which make up many of the cars that haul agricultural commodities. The Board also should explore other ways to incentivize the Class I railroads to provide more reliable service for carrier-provided railcars, the letter stated. 

The Board also should finalize a rulemaking on reciprocal switching rules, which would allow shippers served by a single railroad to request bids from a nearby competing railroad.
Rail service also can improve through additional data reporting and by the Board developing guidance on its expectations for rail carriers in meeting their statutory obligation to provide service upon reasonable request, the groups said. 

Finally, some rail service challenges can be forestalled by requiring all the Class I railroads to develop annual rail service assurance plans. 

“These plans would provide a basis for the Board and industry stakeholders to conduct annual assessments of intended service versus actual service, and to identify and address potential issues that otherwise may result in future service problems,” the letter noted. 

NGFA and Agricultural Transportation Working Group members noted that the food and agricultural sector contributes $1.1 trillion to the U.S. gross domestic product and supports more than 22 million U.S. jobs, according to data from the U.S. Department of Commerce and U.S. Department of Agriculture.

“Reliable and cost-competitive railroad freight service is essential because U.S. agricultural producers and agribusinesses compete in the global market for agricultural products ranging from raw commodities to value-added products, such as meat, poultry, dairy, cotton and biofuels,” the groups stated. 

View the full letter here

The NGFA, established in 1896, consists of grain, feed, processing, exporting and other grain-related companies that operate more than 8,000 facilities handling 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 consists of 27 affiliated State and Regional Grain and Feed Associations, is co-located and has a strategic alliance with North American Export Grain Association, and a strategic alliance with Pet Food Institute.