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Chairman Pileggi Represents League before STB on CSX Rail Service

After a two-week delay caused by Hurricane Irma, a “listening session” called by the Surface Transportation Board took place Wednesday, October 11, with shippers providing example after example of CSX Railway service problems causing plant shutdowns and raising shipping costs.

NITL Chair Mary Pileggi, Executive Director Jennifer Hedrick, and General Counsel Karyn Booth attended the hearing, and Pileggi submitted comments on behalf of League members. The comments criticized CSX for failing to notify its customers of forthcoming operational changes and to coordinate those changes with its customers. The comments also noted that CSX will probably suffer little for its actions because it operates in “an oligopoly with many captive customers” rather than “a market that is robustly competitive”—a reference to the competitive switching rulemaking (EP 711) that is languishing before the STB.

CSX CEO Hunter Harrison addressed the Board and the session’s attendees, strongly defending his company’s strategy of “precision scheduled railroading” and attributing the service delays primarily to employees failing to implement the plan properly. The STB’s two commissioners, Acting Chair Ann Begeman and Vice Chair Deb Miller, asked Harrison questions during his hour-long remarks, including questions about his failure to participate in an industry work group that is collaborating on ways to help address Chicago rail traffic issues.

Read more information about the listening session here. Testimony from all session participants will be posted on the STB website in Docket EP 742.

NITL Shares Concerns about Ports’ Clean Air Plan

An ambitious plan to further reduce greenhouse gas emissions at two of the busiest ports in the United States could add billions of dollars in supply chain costs and make the ports less attractive to shippers and cargo owners, according to the National Industrial Transportation League.

In a letter to the environmental directors of the Port of Long Beach and the Port of Los Angeles, the League joined with roughly 70 other associations in expressing concern that a Clean Air Action Plan drafted by the ports, while “laudable and well intentioned,” will reduce the competitiveness of the ports and further erode their share of freight commerce.

“While the ports and stakeholders must continue to build upon the successes achieved so far, we
are significantly concerned with several aspects of the Draft Clean Air Action Plan Update,” the letter states. “These include the lack of information with respect to the commercial availability of specified technologies, the uncertainty of the draft plan’s cost, the absence of any analysis regarding the ports’ future competitiveness, the exclusion of certain technologies and fuels, and the lack of a cost benefit analysis on the air quality benefits that would result from this program. Ironically, these are issues which are identified within the report, but for the most part deemed unimportant.”

The action plan, announced by port officials on July 19, proposes short- and long-term strategies to further reduce air pollution from port-related sources and ultimately achieve zero emissions for trucks and terminal equipment. Although they have made great strides in reducing pollution in recent years, the ports are the largest source of smog-forming pollution in Southern California.

FMC to Hold Hearings on Port Fees

The Federal Maritime Commission has agreed to hold public hearings on a petition signed by NITL and several other groups that seeks to clarify when and why ocean freight lines and terminal operators can assess demurrage, detention, and per diem charges when ports are congested or otherwise inaccessible.

In December 2016, the League and 25 other trade associations—known collectively as the Coalition for Fair Port Practices—filed a petition with the FMC asking the agency to initiate a rulemaking proceeding “to clarify what constitutes `just and reasonable rules and practices’ with respect to the assessment of demurrage, detention, and per diem charges by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible.”

Today, the FMC met in open session to receive updates on supply chain innovation teams, London International Shipping Week, and the agreement review process. The commission then went into closed session for a briefing about the many comments submitted in response to the coalition’s petition. The commission agreed that, given the wide range of port business practices disclosed by the comments, a public hearing was indicated.

“We are delighted to see the FMC’s consideration of the petition brought forth by the Coalition for Fair Port Practices, and are especially pleased to see that the agency will hold hearings to hear directly from affected stakeholders,” said NITL Executive Director Jennifer Hedrick. “NITL is joined in the coalition by over 20 associations, collectively representing hundreds of shippers and transportation providers who seek fair detention and demurrage practices at our nation’s ports. We look forward to working with the FMC and others to pursue workable resolutions to issues that have created penalties for beneficial cargo owners due to delays and disruptions outside of their control.”

Trade and shipper associations, individual importers and exporters, customs brokers, freight forwarders, logistics companies, trucking and drayage companies, ocean carriers, port authorities, marine terminal operators, and other stakeholders will be invited to testify at the hearings. Hearing details will be published as soon as arrangements are finalized.

Senate Committee Backs Action on Port Fees

A key Senate committee is asking the Federal Maritime Commission to give high priority to an NITL-backed effort to clarify when and why ocean freight lines and terminal operators can assess demurrage, detention, and per diem charges when ports are congested or otherwise inaccessible.

In December 2016, the League and 25 other trade associations—known collectively as the Coalition for Fair Port Practices—filed a petition with the FMC asking the agency to initiate a rulemaking proceeding “to clarify what constitutes `just and reasonable rules and practices’ with respect to the assessment of demurrage, detention, and per diem charges by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible.”

Yesterday, John Thune, chairman of the Senate Commerce, Science, and Transportation Committee, sent a letter to acting FMC Chairman Michael Khouri urging the commission to “prioritize” this issue and take actions as warranted.

“Agricultural producers, manufacturers, retailers, and transportation service providers have questioned the fairness of detention and demurrage charges in situations involving port congestion and other circumstances,” Thune wrote. “They assert that such charges have implications for one of the Commission’s critical responsibilities—to ensure a common carrier or marine terminal operator does not fail to establish, observe, and enforce just and reasonable regulations and practices when receiving, handling, storing, or delivering property.”

League Asks STB to Resume Rulemaking Proceedings

On August 31, NITL filed comments with the U.S. Surface Transportation Board urging the STB to resume its “normal process” for completing rulemaking proceedings. The comments were submitted in response to a petition filed by the Western Coal Traffic League asking the STB to terminate its regulatory freeze and move forward on four pending proceedings.

League Offers Ideas for Streamlining Regulations

NITL Executive Director Jennifer Hedrick participated in a “listening session” with the Surface Transportation Board’s Regulatory Reform Task Force on July 25. The purpose of the session was to hear stakeholders’ views on streamlining STB regulations. Hedrick presented recommendations to the task force on how to eliminate outdated or burdensome regulations. A number of shipper organizations were present, as were several railroads.

League Files Comments on Expediting Rail Rate Cases

Earlier this week, the League joined with the American Chemistry Council and the Fertilizer Institute in submitting comments to the Surface Transportation Board (STB) in response to proposed STB rules to expedite rail rate cases. These proposed rules were announced to League members in the April 7 issue of our weekly e-newsletter, The Notice.

While the League generally supports the STB’s attempt to expedite rail rate cases and especially stand-alone cost (SAC) cases, we believe the proposed rules will have a minimal impact because they do not address the most significant cause of delay: the nature of the SAC standard itself. For that reason, NITL requests that the STB develop alternatives to the SAC standard that are not so inherently complex, costly, and time-consuming. We also encourage the STB to—

  • offer proposals to expedite, if not standardize, the production of rail traffic data;
  • address the problems caused by the use of propriety software; and
  • prevent the evidentiary misalignment that has plagued all of the recent carload shipper SAC cases.

The proposed rules and comments on expediting rail rate cases are contained in STB Docket No. EP 733 (Ex Parte 733).

These filings are posted on the members section of the and members may access those at any time by logging in here.

League Joins Opposition to Container Tax Proposals

A group of nearly 100 organizations (including NITL) is opposing two proposals to levy taxes on cargo containers being processed through ports in Southern California.

In a letter to William Burke, the chairman of the South Coast Air Quality Management District in California, the organizations—representing manufacturers, farmers and agribusinesses, wholesalers, retailers, importers, exporters, distributors, and transportation and logistics providers—take issue with proposals to impose a tax of $35 per TEU (which would raise $385 million annually) and $100 per TEU (which would raise $1.1 billion each year).

“How these funds will be collected and what programs they would fund are ill defined, and any analysis on how such fees would impact local businesses and California’s ports as trade gateways is nonexistent,” the letter states. “The lack of analysis and lack of outreach to the trade community is troubling and discouraging. Past efforts have repeatedly failed due to the serious economic injury such a tax would cause California.”

Members Elect Pileggi to Chair NITL in 2017

Members of the National Industrial Transportation League (NITL) elected Mary Pileggi their new chairman on January 31 during the association’s annual business meeting.

Pileggi is sourcing and logistics manager for the fluoroproducts business of the Chemours Company, an independent, publicly held company formed in 2015 from the separation of the performance chemical businesses of DuPont. She manages global raw material purchasing and logistics interactions supporting the fluoropolymers and fluorochemical businesses of Chemours. She has more than 30 years of experience in logistics and previously worked for DuPont and for Consolidated Rail Corporation (Conrail).

Pileggi was elected chair of NITL at the association’s 2017 Transportation Summit in San Diego. The Summit brought together more than 150 leaders from highway, rail, and maritime freight transportation to discuss the challenges facing the transportation industry as well as issues around energy, the multi-generational workforce, and leadership.

In addition to Pileggi, NITL members elected the following professionals to the League’s Board of Directors:

  • Randy Brown (First Vice Chairman), Cargill
  • Thomas Jensen (Second Vice Chairman), UPS
  • Bruce Ridley (Third Vice Chairman), Packaging Corporation of America
  • Michael Regan (Treasurer), TranzAct Technologies
  • Erik Bohn, OMYA, Inc.
  • Gary Burns, LyondellBasel Industries
  • Sandra Dearden, Highroad Consulting
  • Matt Ehlinger, NCH Corporation
  • Robert Kemp, DRT Transportation
  • Richard Kloster, AllTranstek
  • Doug Kratzberg, ExxonMobil Chemical
  • Travis Krous, Nestle Purina Petcare
  • Chip Lidicker, CF Industries Sales
  • Todd Lindhorst, Jones-Hamilton Company
  • Bill Lovick, Georgia-Pacific
  • Meredith Neizer, Armada
  • Thomas Pellington, David J. Joseph Company
  • Don Pisano, Green Coffee Association
  • Curt Warfel, AkzoNobel Sourcing
  • Rick Webb, Watco Companies

The 2017 chairs of NITL’s modal committees are as follows:

  • Highway Transportation Committee: Jeff Tucker, Tucker Company Worldwide
  • Ocean Transportation Committee: Julie Alsup, International Paper
  • Rail Transportation Committee: Frank De Castro, Solvay Chemicals

League Files Reply Comments on Rail Switching

On January 13, the League joined with nine other trade groups in submitting reply comments to the Surface Transportation Board (STB) regarding the board’s proposed rule on competitive rail switching.

The 10 organizations, known collectively as the Shipper Coalition for Railroad Competition, represent thousands of companies that ship goods ranging from fertilizer to fruits and vegetables. In October 2016, the Shipper Coalition submitted opening comments in support of the STB’s proposed rule, which was published in July 2016. The Association of American Railroads (AAR) and individual Class I railroads, as well as the American Short Line and Regional Railroad Association (ASLRRA), also submitted opening comments, but in opposition to the STB’s proposed rule.

The Shipper Coalition’s reply comments responded to the opening comments submitted by the railroads and reiterated key points contained in the coalition’s opening comments.

“In these reply comments, the Shipper Coalition cuts sharply through the noise and obfuscation of the railroads’ comments and makes clear that change to the 1985 Switching Rule is badly needed, and that the board’s proposed switching rule is lawful, rational, justified, and workable,” the introduction to the reply comments states. “The Shipper Coalition also debunks the railroads’ exaggerated claims that the proposed rule will wreak havoc on the rail network and discourage investment, and summarily dispatches multiple inchoate attacks based on vagueness, environmental, labor, and constitutional grounds.”

An overview of the League’s activities pertaining to the STB’s competitive switching rule is here.