STB Adopts Emergency Service Rules Revision
Emergency service orders are “designed to preserve rail service where there has been a substantial rail service issue or failure that requires immediate relief,” according to the STB. “Under 49 U.S.C. 11123(a), the Board may issue an emergency service order when it determines that there exists ‘an emergency situation of such magnitude as to have substantial adverse effects on shippers, or on rail service in a region of the United States, or that a rail carrier … cannot transport the traffic offered to it in a manner that properly serves the public.’ When the Board determines that such a situation exists, it may: ‘(1) direct the handling, routing, and movement of the traffic of a rail carrier and its distribution over its own or other railroad lines; (2) require joint or common use of railroad facilities; (3) prescribe temporary through routes; [and] (4) give directions for—(A) preference or priority in transportation; (B) embargoes; or (C) movement of traffic under permits;’ or, when the service failure is caused by a cessation of service by Amtrak, direct the continuation of operations and related functions. 49 U.S.C. 11123(a). The Board may act on its own initiative or pursuant to a petition, and emergency service may be ordered summarily. … Board orders under 49 U.S.C. 11123 are subject to an initial time limit of 30 days, but they may be extended up to an additional 240 days if the Board finds that emergency conditions continue to exist.”
The STB on Jan. 24 reported that in recent years it “has heard informally from a broad range of stakeholders about inconsistent and unreliable rail service and issued two orders mandating service in urgent situations.” Stakeholder concerns, it said, “have included railroad crew shortages and inability to move trains, tight car supply and unfilled car orders, delays in transportation for carload and bulk traffic, increased origin dwell time for released unit trains, missed switches, and ineffective customer assistance.” As a result of these issues, the federal agency held an April 2022 hearing on current rail service problems impacting the network and the recovery efforts involving several Class I carriers. Additionally, the STB said in recent years its staff “held informal meetings with stakeholders who observed that the existing regulations governing expedited relief for service emergencies are inadequate and the process is too prolonged, resulting in the regulations being rarely used, even when shippers’ interests have been threatened with severe adverse consequences.” These service issues “have made clear the need for the Board to provide the opportunity for shippers to receive swift action, when warranted, to ensure that the nation’s freight rail traffic continues to move,” the STB reported.
The STB in April 22 issued a Notice of Proposed Rulemaking (NOPR) on amending its emergency service regulations. It proposed “to amend part 1146 by (1) modifying the procedures for parties seeking a Board order directing an incumbent carrier to take action to remedy a service emergency, (2) indicating that the Board may act on its own initiative to direct emergency service, (3) modifying the informational requirements for parties in emergency service proceedings, (4) shortening the filing deadlines in emergency service proceedings and establishing a timeframe for Board decisions, and (5) establishing an accelerated process for certain acute service emergencies.” It received 18 opening comments and five reply comments.
Among other processes, the final rule (download below) describes the procedures for petitioning the STB for expedited relief for service emergencies. The STB noted that the rule’s amendments “are not a substitute” for its ongoing consideration of whether to adopt the reciprocal switching rule changes proposed in the pending Reciprocal Switching for Inadequate Service, Docket No. EP 711 (Sub-No. 2).
“In my view, this revised approach to managing service emergencies is a long-needed reform that will help level the playing field for shippers where rail service failures have caused an acute and serious threat to their business, or when emergency relief is necessary to protect the public,” STB Chairman Martin Oberman said during the Jan. 24 announcement.
Stakeholder Response
“The final emergency service rules issued today [Jan. 24] demonstrate that the Board has closely studied and thoughtfully considered the comments of industry stakeholders,” NGFA said in a statement. “These changes will advance the efficiency of the U.S. rail system by enabling the Board to order temporary relief in emergencies more quickly and effectively and to more rapidly ensure that localized problems do not spread to other parts of the rail network, while also providing more certainty that acute issues can be resolved.”
The regulations for “expedited relief in service emergencies address several flaws and hurdles in previous emergency service order rules,” NGFA said. The reforms supported by the NGFA and included in the final rules are:
- “Removal of the requirement that a shipper’s petition for alternative rail service contains a commitment from another available railroad. ‘The Board has correctly concluded … that these requirements have posed a nearly insurmountable hurdle to rail shippers who are considering seeking this emergency relief for rail service failures,’ NGFA noted.”
- “A shortened process for petitions for emergency service orders and a date by which a Board decision can be expected. ‘In most cases, the Board can expect shippers to have attempted to exhaust all available commercial remedies prior to seeking Board intervention, often at significant cost to the shipper,’ NGFA stated. ‘Since an STB emergency service order is typically the “last resort” for a rail shipper before severe damage to its business and customers occurs, a short timeline for submitting the petition and rendering a decision is imperative.’”
- “An accelerated process to handle acute service emergencies presenting potential imminent harm and threatening potentially severe adverse consequences.”
- “A continuation of the policy to not include any bright-line prohibition on applying relief to contract traffic.”
On Jan. 25, the ACC released the following statement: “Yesterday, the Surface Transportation Board (STB) announced important changes that will help make it easier for freight rail customers to seek emergency relief for service failures. ACC strongly supports these reforms to enhance the utility of the Board’s emergency service orders. The new rules on Expedited Relief for Service Emergencies (STB Docket EP 762) streamline the process for the STB to direct a railroad to address a service failure or to provide a rail customer access to an alternative railroad. Importantly, the Board has established a separate, accelerated process to address situations when rail service failures threaten public health and safety, or would force a business closure or plant shutdown.”
Commented ACC Senior Director for Regulatory and Scientific Affairs Jeff Sloan: “Rail service failures have become all too common over the past decade and these reforms will provide a much-needed solution for addressing rail problems before they cause major disruptions to the nation’s supply chain. The Board’s current process for tackling rail service problems is too lengthy and burdensome to effectively address emergency situations. The new rules are not a solution for all, or even most, service problems, which is why we want to make it clear that the Board must take additional action to address long-standing and ongoing freight rail problems. Specifically, the STB must finalize its long-overdue reforms to its reciprocal switching rules, which can provide access to additional remedies for poor rail service.”
“Poor rail service—which is all too common—can negatively affect productivity throughout key sectors of the economy,” AFPM Vice President of Petrochemicals & Midstream Rob Benedict said in a Jan. 26 statement. “For refiners and petrochemical manufacturers, disruptions in rail service can have widespread impacts, including slowing production and forcing reductions in utilization. In extreme cases, perpetually late freight rail pickups and deliveries and reduced frequency of freight rail service can cause emergencies like temporary shutdowns.
“This final rule updates a once onerous process, allowing the Board to act more quickly to provide relief to shippers experiencing service-related emergencies. This rule will help to contain and resolve localized problems, such as production cuts and facility idling, so they do not have ripple effects to other parts of the network and, especially, to end consumers.
“AFPM appreciates the important role the STB plays in providing oversight of freight rail service and its impact on shippers. We believe competition is the greatest protection for consumers and will be the impetus for lasting service improvements. To that end, we welcome this action and also urge the Board to continue pursuing policies to reintroduce much-needed competition into rail markets—as they remain controlled by a limited number of major railroads against whom shippers have very little recourse.”