Railroad service metrics final effective date is extended by STB

Last week, the United States Department of Transportation’s Surface Transportation Board (STB) said it will extend the effective date of its final rule regarding railroad service metrics.

The rule, entitled “United States Rail Service Issues–Data Collection,” was issued late last year and requires all Class I railroads, as well as the Chicago Transportation Coordination Office, through its Class I members, to report certain service performance metrics to the STB on a weekly, semiannual, and occasional basis. And it was termed an “outgrowth” of the STB’s response to various rail service issues that began in late 2013, due to harsh winter weather, and continued into 2014.

This subsequently led to the STB calling on the Class I railroads in October 2014 to publicly report certain service-related data on a interim basis, including: average train speed, average terminal dwell time, cars online, dwell time at origin, and coal and agricultural loading statistics.

The STB said it is “extending the effective date of the final rule in response to a memorandum issued on January 20 by Reince Priebus, Chief of Staff to President Trump, which instructs the heads of executive departments and agencies to postpone various regulatory initiatives to allow time for further review. The new effective date of the final rule will be March 21, 2017, with the first reports to be filed by Class I railroads on March 29, 2017. Class I railroads are expected to continue to reporting under the Board’s Interim data order until March 23, 2017.”

STB said in December that a major objective of this rulemaking is to facilitate its monitoring of current service conditions in the rail industry and to identify trends or aberrations that could indicate service problems. And another benefit it cited was that shippers and other stakeholders will now have access to the reported data to assist in their business decisions and supply chain planning, coupled with providing the STB with reference points for measuring an individual railroad against its past performance.

During the period during which this rule was being developed, the STB said shippers were calling for “more granular” data requests, including corridor specific performance and a broader array or commodities, whereas the railroads, conversely, were looking to limit and narrow the proposed requests. And the STB said it adopted what it called a middle ground, calling for data that will let it more effectively monitor rail service performance, along with tailoring the requests to information that railroads currently collect as part of their internal data runs.

In a 2014 STB hearing in Fargo, North Dakota focused on rail service issues, the STB said that many rail shippers expressed concerns about the lack of publicly available rail service metrics and requested access to certain performance data from the railroads to help them better understand the scope, magnitude, and impact of the current service problems. The data collected pursuant to this order will give the Board and interested parties a better real-time understanding of the current rail service issues.

And the STB added that at the hearing that “stakeholders expressed a need for greater industry-wide transparency with regard to rail service, noting that “[S]hippers assert that performance metrics are important for rail users to plan logistics, minimize economic harm to operations and revenues, assist with business planning, and to better serve their own customers during the service-recovery period. Shippers have also stated that information would bring transparency regarding the extent to which the railroads are improving and resolving the ongoing service issues.”

The Association of American Railroads (AAR) was somewhat skeptical about the impact of the STB’s decision to require weekly service metrics when commenting on it in 2015.

“Since 1999, railroads have on a weekly basis voluntarily provided the STB and the public with railroad performance measures on terminal dwell time, velocity and cars online,” said the AAR’s President and CEO Ed Hamberger. “It is unclear how the increased reporting requirements in today’s order will in any way lead to improved service.”

The AAR’s top executive added that railroads are investing and hiring at an accelerated pace to provide the capacity needed to meet growing demand as traffic continues to rebound to pre-recession levels.”

A railroad stakeholder told LM that these weekly service metrics reporting is not a huge deal for shippers or the Class I carriers.

“Getting timely, accurate data that is useful in the short-term may be a bit of a challenge, but otherwise I think it’s not a bad thing to have available,” he said. “The key will be in how the information is reported…is it consistent across all carriers, for example and how is it calculated.  It will likely take a while to work out bugs and anomalies, of course.”

And he added that he does not think the notion of more frequent reporting is necessarily a bad thing, aside from the additional workload it imposes. 

“Generic reporting gives you a general impression of what is going on, but every shipper and consignee has different expectations and needs (e.g., the attributes of unit coal train performance are different from chemical tanks, plastic resin covered hoppers and intermodal boxes, as they are from each other),” he said. “Real-time visibility and performance management tailored to each customer Supply Chain should be the end-game.  That goes beyond the reach of CLM messaging to a GPS-based type of reporting.  The technology exists.  What is needed is the corporate will on the part of customers and carriers to devise an economically feasible, industry-wide solution. If you need a knee replacement, you can put a brace on it and walk with a cane or you can bite the bullet and do the surgery.  The band-aid approach just puts off the inevitable.”