United States Rail Service Issues and United States Rail Service Issues-Grain, 49560-49563 [2014-19856]

Download as PDF mstockstill on DSK4VPTVN1PROD with NOTICES 49560 Federal Register / Vol. 79, No. 162 / Thursday, August 21, 2014 / Notices subsidiary of CSXT. The transaction involves the merger of LDRT with and into CSXT with CSXT being the surviving corporation. Applicants state the purpose of the transaction is to simplify the corporate structure, and reduce overhead costs and duplication, by eliminating one corporation while retaining the same assets to serve customers. CSXT will obtain certain other savings as a result of this transaction. Unless stayed, the exemption will be effective on September 4, 2014 (30 days after the verified notice was filed). Applicants state that CSXT intends to merge LDRT into CSXT on or after September 5, 2014. This is a transaction within a corporate family of the type specifically exempted from prior review and approval under 49 CFR 1180.2(d)(3). Applicants state that the transaction will not result in adverse changes in service levels, significant operational changes, or any change in the competitive balance with carriers outside the corporate family. Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. As a condition to the use of this exemption, any employees adversely affected by this transaction will be protected by the conditions set forth in New York Dock Railway— Control—Brooklyn Eastern District Terminal, 360 I.C.C. 60 (1979). If the notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the exemption. Petitions for stay must be filed no later than August 28, 2014 (at least seven days before the exemption becomes effective). An original and 10 copies of all pleadings, referring to Docket No. FD 35849, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001. In addition, one copy of each pleading must be served on Louis E. Gitomer, Law Offices of Louis E. Gitomer, 600 Baltimore Avenue, Suite 301, Towson, MD 21204. Board decisions and notices are available on our Web site at ‘‘WWW.STB.DOT.GOV.’’ Decided: August 18, 2014. VerDate Mar<15>2010 17:18 Aug 20, 2014 Jkt 232001 By the Board, Rachel D. Campbell, Director, Office of Proceedings. Raina S. White, Clearance Clerk. [FR Doc. 2014–19870 Filed 8–20–14; 8:45 am] BILLING CODE 4915–01–P 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. 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. 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 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 ‘‘EFILING’’ 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, SUMMARY: 1 These proceedings are not considered. A single decision is being issued for administrative convenience. PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 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 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 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. 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). E:\FR\FM\21AUN1.SGM 21AUN1 Federal Register / Vol. 79, No. 162 / Thursday, August 21, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES requested certain additional reporting data from the two railroads. 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 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 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 ‘‘ELibrary,’’ 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). VerDate Mar<15>2010 17:18 Aug 20, 2014 Jkt 232001 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 BNSFdirect unit train service. CP moved 2636 fertilizer carloads over the six week reporting period. 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). 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 6 U.S. Rail Serv. Issues, EP 724 (Sub-No. 1), slip op. at 1 (STB served Apr. 15, 2014). 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). 9 BNSF Status Report, Attach. C, U.S. Rail Serv. Issues—Grain, EP 724 (Sub-No. 2) (filed Aug. 8, 2014). PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 49561 and has reallocated resources to improve its service performance.10 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. 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, 10 BNSF Hr’g Ex. 19, U.S. Rail Serv. Issues— Grain, EP 724 (filed Apr. 10, 2014). 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 (SubNo. 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). 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. E:\FR\FM\21AUN1.SGM 21AUN1 49562 Federal Register / Vol. 79, No. 162 / Thursday, August 21, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES 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. 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 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). VerDate Mar<15>2010 17:18 Aug 20, 2014 Jkt 232001 to three miles per hour, on a year-overyear 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. 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. 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 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). PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 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. E:\FR\FM\21AUN1.SGM 21AUN1 Federal Register / Vol. 79, No. 162 / Thursday, August 21, 2014 / Notices 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] mstockstill on DSK4VPTVN1PROD with NOTICES BILLING CODE 4915–01–P VerDate Mar<15>2010 17:18 Aug 20, 2014 Jkt 232001 PO 00000 Frm 00073 Fmt 4703 Sfmt 9990 49563 E:\FR\FM\21AUN1.SGM 21AUN1

Agencies

[Federal Register Volume 79, Number 162 (Thursday, August 21, 2014)]
[Notices]
[Pages 49560-49563]
From the Federal Register Online via the Government Printing 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 
---------------------------------------------------------------------------
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.

[[Page 49563]]

    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