TFI tells Surface Transportation Board railroads need more focus on service and growth

HOUSTON (ICIS)–The Fertilizer Institute (TFI) told the US Surface Transportation Board (STB) in testimony on Tuesday that there is an ongoing need for the freight rail industry to shift its focus toward customer service and growth.

The industry group said the fertilizer segment has long relied on rail service for the efficient and safe transport of its products, but it has struggled with declining service quality, increasing rates and a lack of attention to customer needs.

“The fertilizer industry is heavily reliant on rail and cannot afford to see continued stagnation in freight rail service,” said Ryan Bowley, TFI vice president of government affairs.

“Unfortunately, we have seen freight volumes plateau, services decline and rates skyrocket.”

TFI said that their testimony comes at a pivotal time for the Class I railroads as the STB’s inquiry into the rail industry’s growth potential highlights a disturbing trend, which is that freight rail carloads have been in decline since 2008.

Trucking and other transportation sectors have consistently expanded their capacity.

At the same time that rail employment has dropped, and carloads have declined, rail rates have surged. TFI said between 2005 and 2017, rates for transporting critical farm inputs like anhydrous ammonia increased by over 200%.

It noted that such price hikes, combined with inconsistent service, have made it difficult for fertilizer companies to meet the just-in-time delivery demands of farmers across the country.

“These rising costs and service failures are particularly troubling for industries like ours, which depend on rail to move bulk products safely,” Bowley said.

“Our members regularly face delays, held shipments and escalating rates, often without any recourse. It is clear that a new approach is needed.”

TFI highlighted the need for the rail industry to pivot toward a customer-focused, growth-driven model that balances profitability with service quality as the industry’s adoption of Precision Scheduled Railroading has led to deep cuts in staff and equipment and adding to service issues.

The group did praise recent moves by the STB to increase oversight of rail service and pricing, including the implementation of faster emergency service orders.

It did stress the importance of additional reforms such as expanding access to reciprocal switching, a policy that would allow shippers to switch between competing rail carriers more easily.

“The rail industry should be actively competing for freight, not relying on captive customers to drive revenue. We need a system where railroads are not just collecting more revenue from a shrinking base but are growing their business by serving more customers with better service,” Bowley said.