NGFA Tells Congress of Concerns Over Rail Capacity
    
    WASHINGTON – The National Grain and Feed Association (NGFA) voiced to Congress recently its “paramount concerns” over rail capacity constraints and their impacts on service predictability for agricultural shippers, particularly smaller firms.

    “The days of surplus rail capacity are over,” testified NGFA President Kendell W. Keith at a hearing conducted May 1 by the House Small Business Committee, chaired by Rep. Nydia Valazquez, D-N.Y.  “In the last four years, there have been growing signs that the rail industry is nearing its capacity limits, at least in some shipping corridors,” largely as a result of increased intermodal shipments, particularly for transporting manufactured goods imported from Pacific Rim nations.  

    Keith noted that rail carriers have responded by rationing rail transportation capacity, in part by increasing freight rates to levels intended to discourage the use of rail service.  The NGFA noted that average revenue-per-unit for agricultural shipments received by Class I rail carriers increased by a range of 27 percent to 52 percent over the last three years.  Further, with the exception of the BNSF Railway, the revenue-per-unit was greater for agricultural shipments than for the average of all other types of shipments.

    “While one cannot conclude with certainty that agricultural shippers are incurring generally higher freight rate increases…compared to other rail customers, it is a situation that should be monitored over a period of years to see if current trends continue and how increasing rail rates may affect rural communities and small businesses,” Keith said.