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December 15, 2022: Shippers Feel Railroads Aren’t Meeting Common Carrier Obligation

Photo By : Jim Allen from FreightWaves

The Surface Transportation Board held a two day hearing last week to discuss why Union Pacific’s use of embargoes increased drastically over the past five years. During the hearing shippers explained that due to the embargoes imposed by Class 1 railroads, limited freight options, and other service issues they feel the railroads are not meeting the common carrier obligation. The regulations state the common carrier obligation binds railroads to carry freight, provided that the tendered agreement has reasonable terms and conditions.
Don Boostra, a business director at Canadian company Chemtrade Logistics, said “To answer ‘do I think they’re fulfilling the common carrier obligation with embargoes?’ No, I don’t think they are. I don’t know the solution. I’m not going to try to tell them how to run their railroad, but it sure seems to me when we have industries like ours and others that are trying to grow and capacity’s going down, that no, I don’t believe they’re fulfilling their obligation.”
Gregory Twist, the senior VP of transportation for Ag Processing Inc., added: “I echo the comments. I do not feel that they’re fulfilling the common carrier obligation. I think it’s been explained to us that a large amount of the service issues relate to lack of labor or lack of power. And I can see embargoes having a place in unexpected things, like a surge in traffic or a weather event or something else like that. But this seems like it’s a capacity issue.”
Rob McRae, vice president of transportation for Univar Solutions added “I’ve been doing this for just over 20 years myself, both as a shipper and as a carrier. I have never seen it this bad. And if we don’t do something about it, it will continue to get worse.”

Shippers tell STB railroads aren’t fulfilling common carrier obligation

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