34
NATIONAL GRAIN AND FEED ASSOCIATION 2014 ANNUAL COUNTRY ELEVATOR CONFERENCE INDIANAPOLIS, INDIANA TOPIC: US RAIL SHIPPER SERVICE ISSUES THOMAS BRUGMAN USRAILSHIPPER.COM
NATIONAL GRAIN AND FEED ASSOCIATION
2014 ANNUAL COUNTRY ELEVATOR CONFERENCE
INDIANAPOLIS, INDIANA
TOPIC: US RAIL SHIPPER SERVICE ISSUES
THOMAS BRUGMAN USRAILSHIPPER.COM
FIRST ISSUE: LEGAL RESTRICTIONS ON YOUR
SPEAKER
APPLICABLE FEDERAL STATUTES (2)
1 YEAR RESTRICTIONS
2 YEAR RESTRICTIONS
FOREVER RESTRICTIONS
2
SENSITIVE TOPICS TO AVOID
•STB FORMAL ACTIVITIES
•POSSIBLE STB ACTIONS WITH INVOLVEMENT
•CONFIDENTIAL INFORMAL ACTIVITIES
•ANYTHING THAT WOULD SUGGEST INFLUENCING THE BOARD
3
SO, AFTER ALL THAT…
What can shippers having service or other problems realistically expect from
the STB in terms of addressing their concerns?
4
SURFACE TRANSPORTATION BOARD
SHIPPERS HAVE THE OPTION OF: •FORMAL COMPLAINTS
•INFORMAL COMPLAINTS
•ARBITRATION & MEDIATION
•VISITS OR MEETINGS
•SENATE – CONGRESSIONAL - STATE
•LETTERS FROM CONGRESS OR STATE 5
WHAT ROLE CAN THE STB’S RAIL CUSTOMER AND PUBLIC
ASSISTANCE OFFICE PLAY?
•CONFIDENTIAL •INFORMAL •GET ANSWERS •COST EFFECTIVE •BEST FOR SERVICE ISSUES •RATES – NOT SO GOOD •EASY TO USE •SUCCESS RATE
6
OTHER AVENUES OPEN TO SHIPPERS
•CONGRESS •STATE GOVERNMENTS •BE HEARD •SILENCE IS INTERPRETED AS CONCURRANCE
7
SHIPPERS ARE PRECEIVING A LOSS OF SERVICE QUALITY FROM
SEVERAL OF THEIR RAILROADS
•WHAT IS CAUSING IT?
•WHAT HAS TO CHANGE TO IMPROVE THE SITUATION?
•HOW LONG WILL IT LAST?
8
14
16
18
20
22
24
26
28
30
10
/4/2
013
10
/18
/201
3
11
/1/2
013
11
/15
/201
3
11
/29
/201
3
12
/13
/201
3
12
/27
/201
3
1/1
0/2
014
1/2
4/2
014
2/7
/20
14
2/2
1/2
014
3/7
/20
14
3/2
1/2
014
4/4
/20
14
4/1
8/2
014
5/2
/20
14
5/1
6/2
014
5/3
0/2
014
6/1
3/2
014
6/2
7/2
014
7/1
1/2
014
7/2
5/2
014
8/8
/20
14
8/2
2/2
014
9/5
/20
14
9/1
9/2
014
10
/3/2
014
10
/17
/201
4
10
/31
/201
4
11
/14
/201
4
11
/28
/201
4
BNSF CN CPR CSX KCS NS UP
ALL CLASS ONE RAILROADS TRAIN SPEEDS OCT 2013 TO PRESENT
SOURCE: Public Data AR/RPM and CPR.CA
AV
ER
AG
E T
RA
IN S
PE
ED
IN
MP
H
9
15
20
25
30
35
40
10
/4/2
013
10
/18
/201
3
11
/1/2
013
11
/15
/201
3
11
/29
/201
3
12
/13
/201
3
12
/27
/201
3
1/1
0/2
014
1/2
4/2
014
2/7
/20
14
2/2
1/2
014
3/7
/20
14
3/2
1/2
014
4/4
/20
14
4/1
8/2
014
5/2
/20
14
5/1
6/2
014
5/3
0/2
014
6/1
3/2
014
6/2
7/2
014
7/1
1/2
014
7/2
5/2
014
8/8
/20
14
8/2
2/2
014
9/5
/20
14
9/1
9/2
014
10
/3/2
014
10
/17
/201
4
10
/31
/201
4
11
/14
/201
4
11
/28
/201
4
Intermodal Manifest Multilevel Coal Unit Grain Unit All Trains
BNSF TRAIN SPEEDS OCTOBER 2013 TO PRESENT
SOURCE: Public Data AAR/RPM.COM
AV
ERA
GE
TRA
IN S
PEE
D IN
MP
H
10
14
16
18
20
22
24
26
28
30
3210
/4/2
013
10
/18
/201
3
11
/1/2
013
11
/15
/201
3
11
/29
/201
3
12
/13
/201
3
12
/27
/201
3
1/1
0/2
014
1/2
4/2
014
2/7
/20
14
2/2
1/2
014
3/7
/20
14
3/2
1/2
014
4/4
/20
14
4/1
8/2
014
5/2
/20
14
5/1
6/2
014
5/3
0/2
014
6/1
3/2
014
6/2
7/2
014
7/1
1/2
014
7/2
5/2
014
8/8
/20
14
8/2
2/2
014
9/5
/20
14
9/1
9/2
014
10
/3/2
014
10
/17
/201
4
10
/31
/201
4
11
/14
/201
4
11
/28
/201
4
Intermodal Manifest Multilevel Coal Unit Grain Unit All Trains
NS TRAIN SPEEDS OCTOBER 2013 TO PRESENT
SOURCE: Public Data AAR/RPM.COM
AV
ER
AG
E T
RA
IN S
PE
ED
IN
MP
H
11
0
5
10
15
20
25
30
35
4010
/4/2
013
10
/18
/201
3
11
/1/2
013
11
/15
/201
3
11
/29
/201
3
12
/13
/201
3
12
/27
/201
3
1/1
0/2
014
1/2
4/2
014
2/7
/20
14
2/2
1/2
014
3/7
/20
14
3/2
1/2
014
4/4
/20
14
4/1
8/2
014
5/2
/20
14
5/1
6/2
014
5/3
0/2
014
6/1
3/2
014
6/2
7/2
014
7/1
1/2
014
7/2
5/2
014
8/8
/20
14
8/2
2/2
014
9/5
/20
14
9/1
9/2
014
10
/3/2
014
10
/17
/201
4
10
/31
/201
4
11
/14
/201
4
11
/28
/201
4
BNSF CN CPR CSX KCS NS UP
ALL CLASS ONE RAILROADS TERMINAL DWELL OCT 2013 TO PRESENT
SOURCE: Public Data AAR/RPM and CPR.CA
AV
ER
AG
E F
RE
IGH
T C
AR
DW
EL
L I
N H
OU
RS
12
40000
60000
80000
100000
120000
140000
160000
180000
200000
220000
240000
260000
280000
3000001/3
1/2
014
2/1
4/2
014
2/2
8/2
014
3/1
4/2
014
3/2
8/2
014
4/1
1/2
014
4/2
5/2
014
5/9
/20
14
5/2
3/2
014
6/6
/20
14
6/2
0/2
014
7/4
/20
14
7/1
8/2
014
8/1
/20
14
8/1
5/2
014
8/2
9/2
014
9/1
2/2
014
9/2
6/2
014
10
/10
/201
4
10
/24
/201
4
11
/7/2
014
11
/21
/201
4
BNSF CN CPR CSX KCS NS UP
ALL CLASS ONE RAILROADS CARS-ON-LINE OCT 2013 TO PRESENT
SOURCE: Public Data AAR/RPM and CPR.CA
NU
MB
ER
OF
CA
RS
ON
LIN
E
13
0
10
20
30
40
50
60
70
8010
/4/2
013
10
/18
/201
3
11
/1/2
013
11
/15
/201
3
11
/29
/201
3
12
/13
/201
3
12
/27
/201
3
1/1
0/2
014
1/2
4/2
014
2/7
/20
14
2/2
1/2
014
3/7
/20
14
3/2
1/2
014
4/4
/20
14
4/1
8/2
014
5/2
/20
14
5/1
6/2
014
5/3
0/2
014
6/1
3/2
014
6/2
7/2
014
7/1
1/2
014
7/2
5/2
014
8/8
/20
14
8/2
2/2
014
9/5
/20
14
9/1
9/2
014
10
/3/2
014
10
/17
/201
4
10
/31
/201
4
11
/14
/201
4
11
/28
/201
4
BNSF Galesburg, IL BNSF Northtown, MN CN Markham Yard, IL CP Chicago, IL
CP St Paul, MN CSX Chicago, IL CSX Cincinnati, OH CSX Selkirk, NY
NS Bellevue, OH NS Conway, PA NS Elkhart, IN UP Chicago (Proviso), IL
UP North Platte East, NE UP North Platte West, NE
CHICAGO CENTRIC YARD DWELL TIMES OCT 2013 TO PRESENT
SOURCE: Public Data AAR/RPM and CPR.CA
AV
ER
AG
E H
OU
RS
YA
RD
DW
EL
L
14
COMMON CARRIER OBLIGATION
• LEGALLY – SERVICE UPON REASONABLE REQUEST
• REALITY – SIGNIFICANTLY DILUTED BY EXEMPTIONS, AND PAST DECISIONS
• RAILROADS CAN PILE ON COSTS TO INHIBIT REQUESTS FOR SERVICE
15
REGIONAL DUOPOLIES
•FAIT ACCOMPLI •ON THE VERGE OF NATIONAL DUOPOLY
•WSTB WILL TRY TO MAKE IT HAPPEN •NO ONE CAN PREDICT HOW THE STB WOULD TREAT SUCH AN APPLICATION
16
COMPOSITION OF THE BOARD
•BOARD MEMBERS PAST AND PRESENT HAVE BEEN DEDICATED, HARDWORKING PEOPLE
•CURRENT APPOINTEES PRIDE THEMSELVES ON BEING FAIR AND BALANCED
•STATUTES AND PAST DECISIONS UNFORTUNATELY PLACE THE BURDEN OF PROOF ON SHIPPERS
•NO ONE CAN PREDICT HOW ANY BOARD MEMBER WILL SEE A PARTICULAR ISSUE
17
CONGRESS
•IS CONGRESS A DEAD END? •ROCKEFELLER-THUNE RAIL BILL •PAST POWER OF THE FARM LOBBY
•ECONOMIC IMPACT OF POOR RAIL SERVICE ON AGRICULTURE
18
THE FUTURE
•GRAIN PRODUCING STATES NEED TO EXPLORE GRAIN CAR OWNERSHIP TO ASSIST SHIPPERS
•MERGER MAY OFFER WIDER MARKET ACCESS, BUT CAR SUPPLY POLICIES AND COMMON CARRIER OBLIGATION MATTERS WILL BECOME EVEN MORE IMPORTANT
•SMALLER GRAIN SHIPPERS NEED TO BE TREATED FAIRLY WITH LARGER SHIPPERS
19
STRATEGIES FOR SHIPPERS
•KEEP THE PRESSURE ON CONGRESS TO LEGISLATE CHANGES
•CHANGE LEGISLATIVE MARCHING ORDERS FOR THE BOARD
•MAKE THE BOARD MORE PROACTIVE AND LESS REACTIVE
•INCREASE PAY FOR BOARD MEMBERS AND STAFF
•END TERM LIMITS FOR BOARD MEMBERS •THE IMPORTANCE OF RAILROAD DATA
20
THANK YOU FOR LISTENING
• THOMAS BRUGMAN
• INDEPENDENT CONSULTANT
• WEBSITE: USRAILSHIPPER.COM
• CONTACT: 540 798-5856
21
NGFA 2014 Country Elevator Conference
Jon Samson
Executive Director
Agricultural and Food Transporters Conference
of the American Trucking Associations (ATA)
23
Founded in 1995, is the national
organization representing motor
carrier and allied members of the
American Trucking Associations
(ATA) on critical issues affecting
agricultural commodity and food
transportation.
Overview of Challenges for Trucking 24
Capacity issues
Safety
HOS
34 hr restart
30 min livestock exemption
Ag Exemption from HOS rules
Food (FSMA)
Other issues of importance
Upcoming Highway Bill
Key to success - Funding
Distribution of Tonnage by Mode: 2013 vs 2025
Source: U.S. Freight Transportation Forecast to 2025
2013 2025
Total Trucking: 69.1% Total Trucking: 71.4%
2012 Competitive Freight Among Truck and Rail Tonnage
Billions of Tons
Note: Maximum competitive
freight is less than 1 billion
tons in a total market (truck
and rail only) of 11.4 billion
tons, or less than 10%.
Competitive freight includes all
freight traveling at least 500
miles, but excludes coal
tonnage. There is a significant
amount of time definite freight
in this category that really isn’t
competitive, but it is included.
So in reality, the competitive
market is even smaller than
suggested here.
Trucks and Trains Compete on a Very Limited Basis
Sources: Commodity Flow Survey (US Census Bureau) and ATA
Capacity
Rail issues impact on trucking
Extra supply ≠ extra capacity
Size and Weight
88k lbs on 5 axles and 97k lbs on 6 axles
MAP-21 study delayed until 2015
Driver Shortage
Housing starts/construction
Driver pay
Hiring Vets – 100k in 2 years
27
Safety
HOS
Recent changes made in July 2013
34 restart provision (2 night rest periods) & 30 min rest break
34 hour changes being questioned in Congress
Included in Senate Approps
To be included IF Congress chooses Omnibus package
Livestock exemption to 30 min rest break
July 2013 – 90 day waiver
June 2014 – 1 year exemption for “livestock”
Extension likely
28
Agriculture exemption to HOS rule
Exemption within 150 air miles of farm, ranch, retail
or wholesale/distribution point
All commodities, livestock and farm supplies; prior to being
processed
Significant positive changes made in MAP-21
States must adopt and are allowed to modify rule (planting and
harvesting season)
29
Food Safety Modernization Act
Main focus – Sanitary transportation of human and
animal food (STF)
Broad coalition working with FDA
Key Concerns
Understated Cost estimates w/out the benefit
Use of “Adulteration” leading to increased cargo claims
Recordkeeping requirements
Crucial Messaging – Shipper communication with
carrier and receiver
30
Other Issues
ELD Mandate
FMCSA projecting October 2017
Minimum Insurance Requirements
ANPRM released on Thanksgiving
FMCSA looking to increase and index
Cargo Securement
Exception for agriculture products (tub, bins, bales, etc.)
Horse Trailer Ban
Proposed for any trailer with 2 or more levels
31
Highway Bill
Timing
Current extension expires May 2015
Funding
Increase in the fuel tax and index to inflation
ATA task force backs menu of other options
Indexing based on price, CPI
Per-barrel tax on oil
Annual “highway access fee”
32
Questions? 33
Contact Info 34
Jon Samson
American Trucking Associations
Agricultural and Food Transporters Conference
950 N. Glebe Road
Suite 210
Arlington, VA 22203
(703) 838 - 7955
