Press Releases

Freight Rail’s Role in Overcoming Supply Chain Challenges Highlighted at Hearing

Washington, D.C., May 11, 2023 | Justin Harclerode (202) 225-9446
f t # e

Today, freight rail industry representatives and stakeholders testified at a hearing on the rail industry’s role in overcoming supply chain challenges.

Today’s hearing was led by Railroads, Pipelines, and Hazardous Materials Subcommittee Troy Nehls (R-TX), whose opening remarks can be found here. Following up on the first hearing of the 118th Congress, the Committee is continuing to focus on ongoing supply chain challenges throughout the transportation sector, with the goal of identifying potential legislative solutions.

In addition to the February 1, 2023, full Committee hearing, the Coast Guard and Maritime Transportation Subcommittee held a hearing on maritime transportation supply chain issues on March 28, 2023. Yesterday, the Highways and Transit Subcommittee also held a hearing focused on the trucking industry’s role in overcoming supply chain challenges.

American Short Line and Regional Railroad Association (ASLRRA) President and CEO Chuck Baker discussed ensuring that the Consolidated Rail Infrastructure and Safety Improvements (CRISI) program focuses on improving safety and bottlenecks, the critical role of developing Automatic Track Inspection (ATI) technology, as well as measures to enhance the rail workforce and provide needed permitting reforms. Baker testimony highlights:

  • “Federal funding opportunities like the Consolidated Rail Infrastructure and Safety Improvements (CRISI) grant program provide short lines with an opportunity to meet these challenges. As the Infrastructure Investment and Jobs Act (IIJA) is implemented and its critical resources are made available, we encourage both the Biden Administration and Congress to prioritize funding for the many projects for small freight railroads that improve safety AND reduce supply chain bottlenecks.”
  • “Technology development and best practice implementation have led to safety improvements over time, but some of those developments, such as Automated Track Inspection (ATI), still require permitting or waivers which are not always forthcoming. Congress should support the railroads’ move towards ATI rather than letting the FRA mandate the use of potentially outdated manual inspections in all circumstances. This would free up scarce time and personnel resources and improve the supply chain.”
  • “Last year, Representative Rick Crawford (R-AR) introduced the Retirees to Rail Act, H.R.8608. The bill would temporarily permit retired railroad employees to render compensated services to an employer without a suspension or deduction of the retired railroad employee's retirement annuity. “Railroads sometimes need to be able to quickly add railroaders into the network while new employees are being trained. This legislation would allow railroads to rehire experienced railroad retirement recipients without the Railroad Retirement Board suspending the payment of their annuity, which the current law requires. This action would benefit the supply chain.”
  • “In a concern that is far broader than just the rail industry, short lines believe that widespread permitting reform is important for the continued economic growth of the United States. It is simply too time-consuming and burdensome to get projects done. Whether the projects are new renewable energy installations, major rail terminals, or sometimes even relatively simple track upgrades, a disjointed permitting process is a major hindrance.”

Association of American Railroads (AAR) President and CEO Ian Jefferies addressed the need to encourage the use of innovative technologies, properly implement streamlining reforms in the Infrastructure Investment and Jobs Act (IIJA), and more. Jefferies testimony highlights:

  • “For railroads, their biggest supply chain challenge in 2021 and 2022 was the inability of many rail customers to effectively process the flow of traffic, especially intermodal containers, into and out of rail terminals. This is problematic because rail terminals are focused on throughput; they are neither designed for, nor physically capable of, long-term storage of substantial amounts of freight. If rail terminals are not able to move freight out, trains back up on mainlines and soon impact rail operations hundreds (and potentially thousands) of miles away.”
  • “In March 2023, Class I freight railroad employment was up 7.5 percent (nearly 8,500 employees) over January 2022 and is at its highest level since April 2020. Train and engine (T&E) employment (the locomotive engineers and conductors who operate trains) was 11.5 percent (nearly 5,300 employees) higher in March 2023 than in January 2022. March 2023 was also the 14th straight month in which total T&E employment grew. Railroads are confident they will continue successfully recruiting the next generation of railroad workers to meet the nation’s rail freight demand.”
  • “Policymakers should also ensure proposals do not ‘lock in’ existing technologies; encourage the use of innovative technologies to enhance safety and efficiency; are based on performance-based standards; and avoid undermining railroads’ ongoing efforts to collaborate with stakeholders to keep the national rail network fluid.”
  • “Congress should ensure that environmental regulations do not unduly inhibit the expansion, development, or construction of rail facilities that would meet supply chain needs and rail customers’ freight transportation demand. Railroads appreciate that Congress included project permitting provisions in the IIJA. If properly implemented, these reforms could help ensure that federal dollars and railroads’ investments for infrastructure projects go farther and unnecessary delays will be minimized. Unfortunately, railroads are finding that unnecessary permitting delays continue to impede rail projects. The industry respectfully urges Congress to continue to address this issue and the Biden Administration to follow Congressional intent on recent and future statutory streamlining efforts.”

Reason Foundation Senior Transportation Policy Analyst Marc Scribner testified on the data behind certain rail safety measures, the benefits of ATI technology, and the danger of federal regulation’s jeopardizing the development of new technologies that could enhance the competitiveness of the industry. Scribner testimony highlights:

  • “The benefits of automated track inspection (ATI) include more reliable defect detection, more robust maintenance data analysis and planning, redeployment of visual inspectors to higher-need areas and for infrastructure that cannot be inspected by ATI equipment, reduced human exposure to safety hazards in the field, and reduced delays to trains in revenue service. While it has long acknowledged the benefits of ATI, the Federal Railroad Administration (FRA), since 2021, has reversed course by denying multiple ATI waiver requests. The Committee’s ongoing investigation will hopefully yield answers as to what motivated FRA’s reversal, but continued oversight from both Congress and the courts is necessary to ensure FRA has not abandoned its rail safety mission.”
  • “Arbitrary labor requirements would also reduce the incentive of rail carriers to invest in and deploy automation technologies necessary to compete with increasingly automated trucking in the years ahead, which could produce a variety of economic, safety, and environmental impacts. In 2016, when the Federal Railroad Administration (FRA) first proposed a minimum crew-size regulation, it conceded that ‘FRA cannot provide reliable or conclusive statistical data to suggest whether one-person crew operations are generally safer or less safe than multiple-person crew operations.’”
  • “Like the 2016 notice of proposed rulemaking (NPRM), FRA concedes in its latest NPRM from July 2022 that it does not possess ‘any meaningful data’ to support the conclusion that two-person train crews are safer or that one-person crews are less safe.”

American Chemistry Council (ACC) President and CEO Chris Jahn highlighted the need for railroads to have the incentives to help prevent future supply chain issues. Jahn testimony highlights:

  • “RCC [Rail Customer Coalition] members have faced unprecedented challenges over the past several years, including service failures, rising costs, and even the threat of a catastrophic shutdown of the entire rail network. Railroads have made progress and recovered from the worst of the crisis. But rail service problems continue to disrupt supply chains and inflate prices for consumers.”
  • “Overall, nearly all companies (93%) say supply chain and freight transportation disruptions are impacting their US manufacturing operations. Two-thirds noted improvements in the second half of 2022.”
f t # e