U.S. regulator to meet next month with disgruntled railroad customers

[March 17, 2018]  By Eric M. Johnson

SEATTLE (Reuters) - The top U.S. railways regulator plans to hold a series of meetings with disgruntled shippers and other customers starting next month, after fresh complaints over service delays and higher costs from automotive and grain lobby groups.

The Surface Transportation Board's last major public hearing was in October and focused on service issues at the CSX Corp railroad. The new meetings signal the agency could be open to new paths to relieve shipper pain.

Reuters reported two weeks ago that a drive to cut costs and boost margins at CSX, Norfolk Southern Corp, and Union Pacific Corp was hurting some of America's largest rail customers. Still, Wall Street investors have applauded the cuts.

National Grain and Feed Association President Randall Gordon said on Friday he welcomed the news of next month's meetings.

Gordon told the STB in a letter on March 10 that Warren Buffett's BNSF Railway Co grain trains bound for the Pacific Northwest have been significantly delayed, and service in the Houston area was depleted by locomotive and crew shortages.

CSX delays, meanwhile, had forced oilseed plants to cut output and Norfolk Southern trains were sitting idle for up to a week at a time in the eastern United States, Gordon said.

He added that a Union Pacific train destined to leave Nebraska on March 1 had to wait at least five days for a locomotive.

Gordon also complained of "dramatically higher and in some cases new" penalties and fees by CSX and Norfolk Southern, some of which were first reported by Reuters.

The Alliance of Automobile Manufacturers - which represents BMW, Ford, General Motors and other automakers - told the STB in a letter earlier this week that vehicle deliveries had been delayed by a "serious shortage" of rail cars in February and March.

CSX and Norfolk Southern did not immediately respond to requests for comment and BNSF declined to comment. Union Pacific said it has increased resources to improve service and reduce congestion across its network.

The STB announced the upcoming meetings in a notice posted on its website Thursday, saying they would last through June. The agency said it wanted to hear whether current regulations that allow it to impose changes on a railroad to improve service go far enough.

"The Board is interested in exploring through informal discussions whether and how the agency's current directed service regulations need to be modified to offer a more meaningful path of relief," STB spokesman Dennis Watson said.

(Reporting by Eric M. Johnson in Seattle; Editing by Tom Brown)

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