WASHINGTON (March 8, 2022) — In testimony to Congress, the American Chemistry Council’s President and CEO, Chris Jahn, called on lawmakers to support policy reforms that will help the Surface Transportation Board (STB) address the impacts of consolidation and operational changes within the freight rail industry.
“The railroad industry of today looks very different than it did in the 1980s when key STB policies were adopted,” said Jahn. “Many of these policies have not been updated despite major changes in the rail industry.”
The hearing was held by the U.S. House Committee on Transportation and Infrastructure to get the perspectives of rail stakeholders as Congress considers legislation to reauthorize the STB.
What’s at Stake
Jahn pointed out that the chemical industry is one the largest customers of freight rail – both by volume and revenue. And on course to be an even bigger customer.
“With announced investments of more than $200 billion and over 350 chemical manufacturing projects in the U.S. – companies will need to transport 200,000 additional railcar shipments per year by 2030,” he explained. “Shipments that are important to every segment of the economy and the nation’s supply chain.”
Why Action is Needed
Jahn explained that many ACC members - and other rail customers - do not have access to competitive transportation options, which makes them dependent on the STB to address unreasonable rates or service failures.
“Massive consolidation within the rail industry has driven sharp price increases for shipping goods by rail,” he pointed out. “In fact, the STB’s most recent analysis shows that since 2004, real rates - adjusted for inflation - have increased by 30%. Far outpacing the rate of inflation and increases in long-haul trucking rates over the same period.”
He went on to describe how dramatic operational changes following the implementation of Precision Scheduled Railroading have harmed many companies through additional costs and service problems.
What the STB Must Do
Jahn commended the Board for recognizing that new polices are needed, and he called on the STB to finalize several key reforms currently under consideration. Specifically, he expressed support for making changes to restrictions on reciprocal switching, adopting Final Offer Rate Review and collecting more meaningful data on service performance.
How Congress can Help
Jahn concluded his testimony by asking members of the committee to consider several recommendations when reauthorizing the STB:
• Ensure the Board has adequate funding and staff to keep pace with changes to the rail network
• Create a better process for collecting more accurate data on rail rates
• Provide meaningful remedies for rail service failures
