Senators chide freight railroads on delays

Published 10:42 am Thursday, September 11, 2014

WASHINGTON — Senators and shippers complained Wednesday that widespread delays in freight rail shipments are hurting a wide array of industries and driving some companies out of business, and they expressed doubt that the railroad companies are doing all they can to fix the problem.

The delays, which escalated late last year and continued through the spring and summer, appear to be the result of too few rail cars and too much demand from shippers, officials representing the agriculture, auto and chemical industries told a hearing of the Senate Commerce, Science and Transportation Committee. Lawmakers displayed a photo of a giant mound of wheat standing in the open because North Dakota farmers can’t get a railroad company to ship it.

Shipping rates are 90 percent higher than they were in 2002, but service has drastically diminished, said Calvin Dooley, president of the American Chemistry Council.

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Edward Hamberger, the rail industry’s top lobbyist, said the industry is struggling to keep up with a sharp increase in freight rail demand created by the oil fracking boom in the Bakken region of North Dakota and two years of unusually bountiful harvests, and that the problem was acerbated by an unusually harsh winter. Railroads spent $26 billion last year on new track and other capital improvements, and that shipping rates are the same level they were in 1988 when adjusted for inflation, he said.

“This industry recognizes our customers aren’t getting the service to which they have become accustomed,” said Hamberger, president and CEO of the Association of American Railroads. “We didn’t see the surge in traffic coming; many of our customers didn’t either.”