[Federal Register Volume 79, Number 162 (Thursday, August 21, 2014)]
[Notices]
[Pages 49560-49563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-19856]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[Docket No. EP 724; Docket No. EP 724 (Sub-No. 2) 1]
United States Rail Service Issues and United States Rail Service
Issues--Grain
AGENCY: Surface Transportation Board, DOT.
ACTION: Notice of public hearing.
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SUMMARY: The Surface Transportation Board (Board) will hold a public
field hearing on September 4, 2014, at the Hilton Garden Inn in Fargo,
N.D., to provide interested persons the opportunity to report on
service problems in the United States rail network, to hear from rail
industry executives on their efforts to address service problems, and
to discuss additional options to improve service.
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\1\ These proceedings are not considered. A single decision is
being issued for administrative convenience.
DATES: The hearing will be held on September 4, 2014, beginning at 8:00
a.m. at the Hilton Garden Inn located at 4351 17th Avenue South, Fargo,
N.D. The hearing will be open for public observation. Any person
wishing to speak at the hearing shall file with the Board a notice of
intent to participate, identifying the party and the proposed speaker,
no later than August 25, 2014. The notices are not required to be
served on the parties of record; they will be posted to the Board's Web
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site when they are filed.
ADDRESSES: All notices may be submitted either via the Board's e-filing
format or in the traditional paper format. Any person using e-filing
should attach a document and otherwise comply with the instructions at
the ``E-FILING'' link on the Board's Web site at ``www.stb.dot.gov.''
Any person submitting a notice in the traditional paper format should
send an original and 10 copies of the filing to: Surface Transportation
Board, Attn: Docket No. EP 724, 395 E Street SW., Washington, DC 20423-
0001.
Copies of the notices will be posted to the Board's Web site and
will be available for viewing and self-copying in the Board's Public
Docket Room, Suite 131. Copies of the notices will also be available
(for a fee) by contacting the Board's Chief Records Officer at (202)
245-0238 or 395 E Street SW., Washington, DC 20423-0001.
FOR FURTHER INFORMATION CONTACT: Valerie Quinn at (202) 245-0382.
Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at (800) 877-8339.
SUPPLEMENTARY INFORMATION: The Board has been closely monitoring the
rail industry's performance since service problems began to emerge last
year, and has taken a number of actions, both formal and informal to
address those problems. The Board's Office of Public Assistance,
Governmental Affairs and Compliance (OPAGAC) has been working with rail
carriers to address and correct service issues as they arise.
Representatives of OPAGAC have held numerous meetings and conference
calls with affected parties to better understand the specific problems
shippers are facing, and to help facilitate a quick resolution whenever
possible. OPAGAC's outreach has included confidential, one-on-one
meetings with affected stakeholders in Fargo, N.D., Sioux Falls, S.D.,
Bloomington, Minn., and Malta, Mont. OPAGAC also held one-on-one
meetings at the National Coal Transportation Association meeting in
Hilton Head, S.C., and the North American Rail Shippers Association
meeting in San Francisco, Cal.\2\
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\2\ The Board's upcoming hearing is not intended to replace the
informal and confidential process facilitated by OPAGAC, and
shippers and railroads are encouraged to continue communicating
through that office.
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Earlier this year, the Board Members wrote to BNSF Railway Company
(BNSF) and Canadian Pacific Railway Company (CP) \3\ to express their
concerns that poor service was negatively affecting agricultural, coal,
passenger, and other traffic. At the Board's request, senior management
representatives of BNSF and CP have met individually with Board Members
on a number of occasions, and the Board
[[Page 49561]]
requested certain additional reporting data from the two railroads.
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\3\ See Letter from Daniel R. Elliott III, Chairman, and Ann D.
Begeman, Vice Chairman, STB, to Carl Ice, President and Chief Exec.
Officer, BNSF Ry. Co. (Feb. 5, 2014) (on file with the Board),
available at http://stb.dot.gov (open tab at ``E-Library,'' select
``Correspondence,'' select ``Fall Peak Letters,'' follow ``02/05/
2014'' hyperlink, and select the ``.pdf'' icon); Letter from Daniel
R. Elliott III, Chairman, and Ann D. Begeman, Vice Chairman, STB, to
E. Hunter Harrison, Chief Exec. Officer and Dir., Canadian Pac. Ry.
Co. (Mar. 6, 2014) (on file with the Board), available at http://stb.dot.gov (open tab at ``E-Library,'' select ``Correspondence,''
select ``Fall Peak Letters,'' follow ``03/06/2014'' hyperlink, and
select the ``.pdf'' icon).
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On April 10, 2014, the Board held a public hearing at its offices
in Washington, DC, to address service problems affecting the United
States rail network. Because service problems for many commodities have
been particularly acute on the systems of CP and BNSF, the Board
directed representatives of those carriers to testify at the April 10
hearing. During the hearing, representatives of the railroad industry
described several factors that contributed to the deterioration of rail
service, including strained track capacity, unexpected volume growth,
crew and personnel shortages, lack of locomotives, severe weather, and
congestion at major gateways, in particular, Chicago, Ill. CP's
President and Chief Operating Officer estimated that CP's service would
be restored to normal in four to six weeks ``if everyone does their
part.'' \4\ BNSF committed to moving last year's crop prior to the fall
harvest.\5\
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\4\ Hr'g Tr., at 253, U.S. Rail Serv. Issues, EP 724 (Apr. 10,
2014).
\5\ Letter from Carl R. Ice, President and Chief Exec. Officer,
BNSF Ry. Co., to Daniel Elliott, Chairman, Ann Begeman, Vice
Chairman, and Debra Miller, Comm'r, STB (May 7, 2014), at 2,
available at http://stb.dot.gov (open tab at ``E-Library,'' select
``Correspondence,'' select ``Fall Peak Letters,'' follow ``05/07/
2014'' hyperlink, and select the ``.pdf'' icon); Letter from Carl R.
Ice, President and Chief Exec. Officer, BNSF Ry. Co., to Daniel
Elliott, Chairman, Ann Begeman, Vice Chairman, and Debra Miller,
Comm'r, STB (June 4, 2014), at 2, available at http://stb.dot.gov
(open tab at ``E-Library,'' select ``Correspondence,'' select ``Fall
Peak Letters,'' follow ``06/04/2014'' hyperlink, and select the
``.pdf'' icon).
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A large number of shippers representing many different commodities
expressed concerns about service during the hearing. Farmers and
representatives of agricultural producers expressed concern about the
negative effects of delayed fertilizer deliveries, backlogged grain car
orders, and delayed shipments of loaded grain cars. Reported impacts
resulting from these delays include little to no storage capacity at
many grain elevators, risks of stored grain spoiling, lost sales,
financial loss related to underutilization of shuttle trains, penalties
incurred by grain shippers for products not delivered on time, buyers
shifting to foreign suppliers, and damage to the reputation of the
United States agricultural industry. Representatives of other
industries described supply chain disruptions in shipments of coal,
chemicals, feed, sugar, and paper, among other commodities. Amtrak's
Vice President for Operations described the serious effects that rail
network congestion and delays have on passenger service.
In response to testimony about delayed and curtailed fertilizer
deliveries and the severe impact such delays would pose for spring
planting, on April 15, 2014, the Board directed CP and BNSF to provide
their plans to ensure delivery of fertilizer shipments,\6\ and to
provide status reports regarding such deliveries over a six week
period. The Board understands that fertilizer deliveries largely met
demand for spring planting in a timely manner. Among other steps, BNSF
added cars to the existing fertilizer service fleet and allowed
locomotives to remain with fertilizer trains during loading and
unloading to reduce potential delays and provide expedited turn around
service at origin and destination. In this way, over the six week
reporting period, BNSF moved 56 trainloads of fertilizer (ranging from
65-85 cars) in BNSF-direct unit train service. CP moved 2636 fertilizer
carloads over the six week reporting period.
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\6\ U.S. Rail Serv. Issues, EP 724 (Sub-No. 1), slip op. at 1
(STB served Apr. 15, 2014).
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The Board has continued to monitor CP's and BNSF's progress in
moving the 2013 crop. Recognizing the limited time until the next
harvest, the large quantities of grain that remained to be moved, and
the Board's concerns about the railroads' paths towards meeting their
respective commitments, on June 20, 2014, the Board directed CP and
BNSF to provide and/or update their respective plans to reduce the
backlog of unfilled grain car orders, to resolve grain car delays,\7\
and to provide weekly status reports regarding the transportation of
grain \8\ on their networks (for CP, on its United States network).
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\7\ U.S. Rail Serv. Issues--Grain, EP 724 (Sub-No. 2), slip op.
at 3 (STB served June 20, 2014).
\8\ For purposes of this order, the term ``grain'' shall refer
to, and include the following Standard Transportation Commodity
Codes: 01131 (barley), 01132 (corn), 01133 (oats), 01135 (rye),
01136 (sorghum grains), 01137 (wheat), 01139 (grain, not elsewhere
classified), 01144 (soybeans), 01341 (beans, dry), 01342 (peas,
dry), and 01343 (cowpeas, lentils, or lupines).
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BNSF has made considerable documented progress in reducing not only
the number of backlogged orders, but also the average number of days
late for such orders. Most of BNSF's remaining backlogged orders are
now less than 20 days late, and the majority of those orders are less
than 10 days late.\9\ BNSF has also committed to a substantial
infrastructure investment and has reallocated resources to improve its
service performance.\10\
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\9\ BNSF Status Report, Attach. C, U.S. Rail Serv. Issues--
Grain, EP 724 (Sub-No. 2) (filed Aug. 8, 2014).
\10\ BNSF Hr'g Ex. 19, U.S. Rail Serv. Issues--Grain, EP 724
(filed Apr. 10, 2014).
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CP's reporting does not substantiate similar progress. A sizeable
backlog remains on CP's system, and CP does not appear to be making
sufficient progress towards eliminating the backlog based on its status
reports.\11\ This problem is compounded by the fact that, according to
CP, the actual size of the backlog is indeterminate.\12\ CP's average
days late metric, reported either in weeks or days, also has not
improved.\13\ The data suggests that CP will not be able to clear the
backlog prior to this year's harvest, which has already started for
some commodities in some regions. In addition, the data raises concerns
for the Board regarding whether CP's interchange with the Rapid City,
Pierre & Eastern Railroad, Inc. (RCP&E) has been fluid and reliable
enough to reduce the grain car backlog on RCP&E's South Dakota railroad
line, which CP owned until recently. RCP&E became the new operator of
the western portion of the Dakota, Minnesota & Eastern Railroad sold by
CP through an agreement executed May 31, 2014.\14\ RCP&E is now the
primary carrier for much of South Dakota's grain, and relies heavily on
CP for locomotive power, cars, interchanges, and through service for
its customers.
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\11\ CP Status Report, App. 1, U.S. Rail Serv. Issues--Grain, EP
724 (Sub-No. 2) (filed Aug. 8, 2014).
\12\ CP Status Report, U.S. Rail Serv. Issues--Grain, EP 724
(Sub-No. 2) (filed June 27, 2014); CP Status Report, U.S. Rail Serv.
Issues--Grain, EP 724 (Sub-No. 2) (filed July 7, 2014) (stating that
under CP's unique grain car request system, the number of car
requests is not an accurate measure for demand because a customer
can make unlimited car requests, which are reported as
``unconstrained orders'' and are considerably higher than what CP
estimates to be its actual backlog).
\13\ Compare CP Status Report, App. 1, U.S. Rail Serv Issues--
Grain, EP 724 (Sub-No. 2) (filed Aug. 1, 2014) with CP Status
Report, at Annex 1, U.S. Rail Serv. Issues--Grain, EP 724 (Sub-No.
2) (filed June 27, 2014).
\14\ RCP&E Consummation Notice, Rapid City, Pierre & E. R.R.--
Acquis. & Operation Exemption Including Interchange Commitment--
Dakota, Minn. & E. R.R., FD 35799 (filed June 2, 2014).
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In addition, the U.S. Department of Agriculture has forecasted that
the harvest for the 2014-2015 season will be at above average or record
levels for many grains,\15\ meaning that the volume of grain that needs
to be shipped by rail will again be above average over the coming
months. As the new harvest ramps up, storage space at many elevators
reportedly is already unavailable or very limited. As a result,
[[Page 49562]]
some farmers are being forced to store grain on-site in bins, bags, or
on the ground, or to truck grain to distant elevators. The Board
remains very concerned about rail service to the agricultural industry
going forward, particularly in the Midwest and central Northern region
of the rail network.
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\15\ U.S. Dep't of Agric., World Agric. Supply & Demand
Estimates 1-5 (Aug. 12, 2014), http://www.usda.gov/oce/commodity/wasde/latest.pdf.
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Because of these ongoing concerns, the Board will direct CP and
BNSF to provide additional information in their weekly status reports
in Docket No. EP 724 (Sub-No. 2). The Board will direct CP to state in
its weekly status reports the number of locomotives moving outbound
from the RCP&E system onto CP's system and the number of locomotives
moving inbound to the RCP&E system from CP. The Board will also direct
CP to provide, together with its weekly status report due on August 22,
2014: (1) A plan to ensure that RCP&E can maintain locomotive resources
on the RCP&E system sufficient to support outbound train movements, and
in particular to work through backlogged grain shipments; and (2) an
updated plan to reduce CP's backlog of unfilled grain car orders and
resolve grain car delays on its United States network, including its
timeline for doing so. In order to better track BNSF's progress with
regard to grain shuttle transportation, the Board will direct BNSF to
include in its weekly status reports its plan versus performance for
grain shuttle trips, by region, updated to reflect the previous four
weeks.
With regard to more general system metrics, based on information
obtained since the hearing, it appears that the same issues continue to
hinder the industry's recovery, and key measures of overall rail
performance are not improving. Despite the concerted efforts of several
carriers to acquire additional locomotives, expedite infrastructure
improvement, augment personnel, and better coordinate seasonal
maintenance, these key measures have not shown sustained improvement.
Publicly available key metrics \16\ such as system average train speed,
dwell time at major terminals, and cars online reflect an industry that
is still struggling to provide rail service at acceptable levels.
System-wide train speeds are lower on average for most Class I carriers
by two to three miles per hour, on a year-over-year comparison, and
significantly slower than during periods of peak performance in the
past. Dwell times at major terminals for most Class I railroads are up
on average between three and five hours, reflecting congestion at major
yards and slower interchanges. The number of cars online also remains
elevated over previous years, reflecting not only growing demand for
service, but also operational inefficiencies.
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\16\ See Railroad Performance Measures, http://www.railroadpm.org (for each participating railroad's individual
performance measures, click the railroad's name under ``Performance
Reports'' and then click the ``View 53 Week History'' tab) (last
updated Aug. 6, 2014) (reporting data for the four most recent weeks
and historical comparisons of previous month versus year-over-year
quarterly average).
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The Board continues to receive reports from coal-fired utilities,
ethanol manufacturers, propane shippers, and others about growing cycle
times, unreliable service, and the potential impact on rail shippers
and receivers.\17\ For example, utility coal shippers have reported
increased cycle times and irregular delivery of unit trains, which, in
some instances, have severely strained stockpile inventories. Some
coal-fired plants have incurred significant costs by purchasing
replacement power from the grid, or reducing their generation. Coal-
fired plants have also expressed concerns over their ability to rebuild
stockpiles and manage inventory going forward.
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\17\ See, e.g., Xcel Energy Comments, U.S. Rail Serv. Issues, EP
724 (filed July 31, 2014) (expressing concern over BNSF's ability to
delivery sufficient coal to Xcel Energy's electric generating
stations); Senator Grassley Letter, U.S. Rail Serv. Issues, EP 724
(filed July 25, 2014) (providing a communication from Dairyland
Power Cooperative regarding power plants in Wisconsin that are short
of fuel due to BNSF delivery issues); Senators Levin and Portman
Letter, U.S. Rail Serv. Issues, EP 724 (filed July 8, 2014)
(addressing impact of rail service problems on the auto industry);
Growth Energy Letter, U.S. Rail Serv. Issues, EP 724 (filed Aug. 14,
2014) (describing concerns over efficient delivery of ethanol by
rail across the country).
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Based on the foregoing, the Board is considering whether additional
steps may be necessary to facilitate the recovery of the rail system.
Under its governing statute, the Board has a range of available tools
that could be used for this purpose, depending on the scope and
magnitude of the ongoing service problems. Although the Board strongly
favors private sector resolutions, further regulatory action may be
warranted for expediting the overall recovery or alleviating
particularly intractable service failures. The Board is also aware that
any such action should not benefit one industry at the expense of
others, or spur unintended consequences.
As part of its efforts to address service issues, the Board will
hold a field hearing to discuss these issues with stakeholders from the
most severely impacted regions. The hearing will be held on September
4, 2014 beginning at 8:00 a.m., at the Hilton Garden Inn located at
4351 17th Avenue South, Fargo, N.D., to provide an opportunity for
interested persons to report on the status of rail service and to
discuss ways to remedy the current service problems. The Board will
direct executive-level officials from CP and BNSF to appear at the
hearing to discuss their ongoing and future efforts to improve service
on their railroads and to provide an estimated timeline for a return to
normal service levels. The Board particularly encourages impacted
shippers and/or shipper organizations to appear at the hearing to
discuss their service concerns and to comment on the railroads'
progress and plans. Also, given that the service disruptions have
hindered nearly all carriers, other Class I railroads and other
affected carriers are invited to appear at the hearing.
This decision will not significantly affect either the quality of
the human environment or the conservation of energy resources.
It is ordered:
1. A public hearing will be held on September 4, 2014 at 8:00 a.m.,
at the Hilton Garden Inn located at 4351 17th Avenue South, Fargo,
N.D., as described above.
2. CP and BNSF are directed to appear at the hearing.
3. By August 25, 2014, any person wishing to speak at the hearing
shall file with the Board a notice of intent to participate
(identifying the party and the proposed speaker). The notices of intent
to participate are not required to be served on the parties of record;
they will be posted to the Board's Web site when they are filed.
4. CP is directed to state in its weekly status reports in Docket
No. EP 724 (Sub-No. 2), the number of locomotives moving outbound from
the RCP&E system onto CP's system and the number of locomotives moving
inbound to the RCP&E system from CP.
5. CP is directed to provide with its weekly status report due on
August 22, 2014, a plan to ensure that RCP&E can maintain locomotive
resources on the RCP&E system sufficient to support outbound train
movements, and in particular to work through backlogged grain
shipments.
6. CP is directed to provide with its weekly status report due on
August 22, 2014, an updated plan to reduce its backlog of unfilled
grain car orders and resolve grain car delays on its United States
network, including its timeline for doing so.
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7. BNSF is directed to include in its weekly status reports in
Docket No. EP 724 (Sub-No. 2), its plan versus performance for grain
shuttle trips, by region, updated to reflect the previous four weeks.
8. This decision is effective on its service date.
Decided: August 18, 2014.
By the Board, Chairman Elliott, Vice Chairman Miller, and
Commissioner Begeman.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2014-19856 Filed 8-20-14; 8:45 am]
BILLING CODE 4915-01-P