On Dec. 17, ISRI submitted comments to the Surface Transportation Board (STB) in response to its notice regarding First-Mile/Last-Mile (FMLM) service issues. The Board’s original notice sought comments from shippers, carriers, and the public on issues regarding FMLM service that are not currently being reported to the STB.
FMLM service refers to the movement of railcars between a local railroad serving yard and a shipper or receiver facility. Local trains serve customers near the yard, spotting (placing for loading or unloading) inbound cars and pulling—picking up—outbound cars from each customer facility. “Essentially it’s looking at what happens when the car leaves the initial facility and the final leg of the journey, when the car drops off the cargo to the customer,” explains Billy Johnson, ISRI’s chief lobbyist.
When asked about the FMLM issue in a survey, ISRI members reported a variety of problems, “including missed switches, reduced service days, mismatches between car orders and car deliveries, and extended dwell times at local facilities,” ISRI notes in its comments. Many members reported the service problems were primarily from Class I railroad service, but some noted they had similar issues with shortline railroads.
ISRI argues the FMLM service issues became more prevalent since the implementation of Precision Scheduled Railroading (PSR) in 2019. Many North American Class I railroads have used PSR to streamline operations. The PSR model shifted focus from moving entire trains to moving cars. Trains are always moving, and cars are picked up on schedule, regardless of train length. Shippers feel the pinch. “Instead of giving 5-7 days to load the cars [the railroads] give very short periods—sometimes just overnight,” Johnson says.
ISRI argues that PSR sacrificed FMLM service performance and has gotten worse since the onset of the COVID-19 pandemic, “which has exacerbated workforce issues in the rail industry, like other industries.” Since the recycling industry typically plans production, operations, and infrastructure around railroad service days and railcar orders, poor FMLM service has hurt recyclers. When railroads don’t provide switches on scheduled times or don’t deliver the number of cars ordered, recyclers incur significant inefficiencies and costs.
ISRI notes recyclers’ processing operations depend on timely receipt of materials. If recyclers don’t get the materials they need on time, then they may not be able to meet their committed shipping deadlines, which could lead to cancellation of orders.
Because FMLM doesn’t provide consistent service, the recycling industry has difficulty managing labor at processing facilities, ISRI notes in its comments. “When ISRI members cannot predict when a railroad will provide switching in its facility, it is impossible for both the member and its customers to plan an efficient labor shift.” These issues have caused difficult financial impacts on ISRI members, the association argues. If railroads don’t provide consistent and reliable service, purchase orders may get cancelled, and recycling companies will lose revenue.
ISRI argued that members can’t easily addresses these problems with railroads either in their contracts or to in long-term solutions agreeable to both parties. “Many ISRI members are captive to one railroad at their facilities,” the association notes. “This creates significant challenges for ISRI members to address their FMLM service issues in their contracts due to a lack of negotiating leverage.”
Some members have gone to railroads directly with concerns through customer service or local train masters. While the railroads sometimes act, ISRI notes these solutions aren’t usually long-term. “The FMLM service issues often reoccur in the next cycle,” ISRI argues. “Further with the lack of adequate public data regarding FMLM service issues, rail customers are disadvantaged to advance discussions with the railroads.”
ISRI urges the STB to require railroads to more accurately report their FMLM service performance to make it easier for shippers to identify potential challenges and plan accordingly. “Reporting will provide significant benefits for both the Board and rail customers and will likely lead to improvements in the overall FMLM service performance of the railroads,” the association explains. ISRI notes reporting will help the STB and customers modify overall service performance, allow rail customers to better align expectations of local switches and car deliveries, and hold railroads accountable for service problems. The service reporting requirements, “should be objective, standardized, and able to display an accurate picture of the FMLM service performance of the railroads,” ISRI argues.
ISRI says the STB should require reporting of these metrics:
- Switch completion percentage, the percentage of switches a customer facility receives during a week in comparison to the switches the railroad identified for a customer facility;
- Car delivery percentage, the percentage of the number of cars delivered to a rail customer’s facility against the number of cars ordered by the rail customer;
- On-time delivery percentage; and
- Monthly turns per car, the number of cycle turns (loaded to end customer, and empty back to reloading point).
Ensuring efficient FMLM service is vital for recyclers and has a positive ripple effect through other industries including manufacturing. “Without recyclers you don’t have manufacturing,” Johnson says. “Without recycled commodities you’re not making enough steel and aluminum, and you wouldn’t be able to fulfill President Joe Biden’s recently signed infrastructure package. Recycled materials are essential to the economy and environment. Without recycling, you don’t have sustainability or the necessary materials that today’s manufacturing rely on.”