RFA: STB Proposal Helps, But More Work Needed to Address Rail Challenges

In comments submitted today to the Surface Transportation Board, the Renewable Fuels Association voiced its support for certain regulatory changes intended to expedite relief for rail service emergencies. However, RFA noted that more work is needed to resolve the current failures of the rail transportation system, which have had costly impacts on the U.S. ethanol industry and its customers.

“The U.S. railway system is clearly experiencing significant challenges, and recent service disruptions have had devastating effects on the ethanol industry,” said RFA President and CEO Geoff Cooper, noting that roughly 70% of the ethanol produced in the United States is shipped by rail. “These disruptions are hitting our nation’s ethanol producers and their customers hard, since railroads typically carry more than 370,000 carloads of ethanol each year. Now, more than ever, it is imperative that the railroads and STB take action to ensure the robust supply of lower-cost American-made ethanol safely and efficiently reaches fuel consumers in a timely manner.”

In its letter, RFA stated its support for STB’s proposal to modify petition requirements to make it easier for affected parties to seek relief and minimize logistical disruptions. However, RFA also noted that the modified timeline is still too long. “On-site storage for ethanol at a typical ethanol plant is less than one week’s production,” Cooper wrote. “Thus, trimming only a few days off of the petition process does not fully address emergency issues at facilities that could still be forced to shut down due to the lack of power to pull full cars or return empties.”

RFA agrees with STB that more “real-time” information is needed regarding dwell times, labor force, trains held, and other key service indicators. In its comments, RFA provided a summary of recent data showing the rapid deterioration of rail service for ethanol producers and shippers. RFA will continue to collect and analyze this data to track progress, Cooper said.

In its review of current rail service deficiencies, RFA noted that average terminal dwell times remain 32% above pre-pandemic times, and the average ethanol unit train dwell time is up 64%, compared to other unit trains at 25%. The average train speed for ethanol unit trains has decreased 14% since the start of 2020, and the rail industry shed 41,000 jobs between November 2018 and January 2022—more than one-fifth of industry employment.

RFA’s comments also urge STB to “ensure that appropriate attention is being paid to the disproportionate deterioration of service for manifest trains, which are utilized by many of our member companies to ship both ethanol and co-products.” For some railroads, the average number of manifest trains holding per day is more than 20 times greater than the number of unit trains holding.

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