As multi-modal hubs, tank terminals work with partners in the rail, trucking, barge, maritime, and pipeline sectors to support complex supply chains for a wide variety of liquid commodities. ILTA shares the goal of helping supply chains become more efficient and cost-effective overall, and we recognise this as the ambition of Precision Scheduled Railroading (PSR). Unfortunately, in recent years, tank terminal facilities have been unfairly forced to shoulder increasing burdens as railroads have moved to implement PSR.
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We believe these inequities can be successfully addressed through a commitment by all parties, including the railroads, to greater transparency and accountability. Delays and processing errors of railcars enroute to destinations can have cascading consequences with profound impacts on shippers and receiving facilities. In the PSR era, it is common to have missed switches, partial switches or incorrectly performed switches, which have both immediate impacts and cascading ripple effects.
Over the last six years, the Class I railroads collectively have reduced their work force by 29% – that is about 45 000 employees cut from the payrolls. By trimming their workforce to such barebones levels, the railroads eliminated reserve capacity just prior to the labour challenges created by the COVID-19 pandemic and the Great Resignation. Notably, other transport sectors – trucking, barge, and maritime – have faced recent hiring and retention challenges and yet their service levels to tank terminals have not declined overall. The most plausible explanation is that the single-minded focus on PSR has eclipsed attention by the railroads on both the level of their service and the resilience of their systems.
Under PSR, railroads have not only cut staff, but also closed railyards and limited locomotive availability, leaving railroads with significantly reduced capacity to allow them to respond and ameliorate disruptions. ILTA members have also seen a decrease in last-mile services from railroads, including cessation of blocking and spotting of railcars without explanation for the changes in service. Railroads now report higher efficiencies and increased operating ratios when, in fact, they have merely shifted a portion of their operational burdens and costs to terminal operators and shippers.
At a recent hearing of the Surface Transportation Board (STB), ILTA expressed these concerns and requested the STB to require railroads to report quantifiable performance metrics. At the same hearing, several railroad representatives expressed the belief that PSR will yield useful results given more time for full implementation. ILTA believes that mandatory reporting of standardised performance metrics are essential to help the railroads, their partners, and their regulators to assess the ways that PSR is – and is not – working well. Useful metrics could include, for example, dates of services not delivered, missed switches, and instances of incomplete deliveries of rail cars.
We look forward to continuing the conversation with our railroad partners and other industry stakeholders to bring greater accountability, transparency, and increased functionality to our supply chain operations overall.