American Chemistry Council (ACC) CEO Chris Jahn told Congress that the industry group’s members continue to report rail-service problems, including one company that couldn’t make 30 shipments in the first quarter of 2023 due to a lack of service, according to a copy of his written testimony.
A rail crew shortage has led to frequent missed switches at both production facilities and customer sites, said Jahn before a House subcommittee on May 11.
Jahn highlighted several actions that Congress should take to address issues with rail service. They include:
- Minimum service delivery standards that hold railroads accountable for service failures
- Improved data comparisons on rail rates in competing markets to help the Surface Transportation Board (STB) meet a mandate to ensure “reasonable” rates
- Protect shippers against excessive demurrage charges due to shipping delays. Jahn noted that shippers own about 73% of railcars in service today, but they still pay a premium to the railroads when railcars aren’t moving due to delays. He called on Congress to assess demurrage and accessorial charges on freight railroads for privately owned railcars.
- Provide better access to the STB. “Congress should direct the STB to eliminate outdated exemptions and allow shippers to seek review of unreasonable rates and unreliable service for shipping of certain products such as automobiles, food, building materials and metals.”
- Ensure the STB has adequate funding and staff to complete its work.
Jahn noted that addressing these issues is critical to securing the nation’s supply chain.
“Quite simply – if we want to make more things in America rather than in places like China, we must manufacture and move more chemicals in America,” Jahn said. “For that to happen we must fix our nation’s transportation supply chain and make it stronger than ever.”
Jahn noted that railroads have made some progress and recovered from some of the pandemic related issues as demand has eased. However, he explained that many rail service problems continue to negatively impact ACC members.
In ACC’s latest supply chain survey, 30% of companies said rail service problems were worse in the second half of last year, and more than three-fourths reported worse service than the experienced before the pandemic.
“Congress must exercise its oversight and encourage the Board to address freight rail issues and complete proceedings in a timely manner,” Jahn said in his written testimony. “Congress Congress must also act on freight rail reform.”
