National Grain and Feed says railroads need to file ag transportation contracts
June 09, 2014 | 06:37 PM
The National Grain and Feed Association today urged the Surface Transportation Board to reject a petition from rail carriers that they be exempted from the statutory requirement to file agricultural transportation contract summaries.
On May 12, Norfolk Southern Railway Company and CSX Transportation Inc. asked the STB to initiate a rulemaking to eliminate the current requirement to submit a summary of each contract for the transportation of “agricultural products . . . and products (derived) therefrom.”
But NGFA said the agriculture industry still needs the information provided in the summaries as “a meaningful protection to shippers against the abuse of market power by railroads.”
NGFA also noted that “the severe and widespread rail service disruptions dating to late last summer, which have raised questions as to rail carriers’ ability to meet their contract and common-carrier obligations to agricultural shippers.”
“It is clear that, despite the railroads’ best efforts, the current service and capacity issues will take some time to resolve,” the NGFA said. “The need for the information and transparency on railroad agricultural commodity contracting practices . . . is at least as great, if not greater, than in the past.”
NGFA noted that an estimated 20 to 25 percent of grain and oilseed traffic still moves under rail contract rates and said that the use of contracts may become more prevalent given “existing rail service deficiencies and the prospects that capacity challenges likely will persist for the foreseeable future as demand for energy, agricultural and other sectors for rail service continue to increase.”
On May 12, Norfolk Southern Railway Company and CSX Transportation Inc. asked the STB to initiate a rulemaking to eliminate the current requirement to submit a summary of each contract for the transportation of “agricultural products . . . and products (derived) therefrom.”
But NGFA said the agriculture industry still needs the information provided in the summaries as “a meaningful protection to shippers against the abuse of market power by railroads.”
NGFA also noted that “the severe and widespread rail service disruptions dating to late last summer, which have raised questions as to rail carriers’ ability to meet their contract and common-carrier obligations to agricultural shippers.”
“It is clear that, despite the railroads’ best efforts, the current service and capacity issues will take some time to resolve,” the NGFA said. “The need for the information and transparency on railroad agricultural commodity contracting practices . . . is at least as great, if not greater, than in the past.”
NGFA noted that an estimated 20 to 25 percent of grain and oilseed traffic still moves under rail contract rates and said that the use of contracts may become more prevalent given “existing rail service deficiencies and the prospects that capacity challenges likely will persist for the foreseeable future as demand for energy, agricultural and other sectors for rail service continue to increase.”
