US legislators urge rail agency to fix service woes

A bipartisan coalition of federal legislators has asked the US Surface Transportation Board (STB) to address flagging rail service that has curbed deliveries of fertilizer and other agricultural commodities this year.

More than 50 members of Congress signed onto a 29 June letter to STB, asking the railroad regulator to work to improve service for the agricultural sector.

The request comes as farmers gauge input requirements for post-harvest fertilizer applications later this year and pencil in expected volumes for next spring's crops. Prolonged rail service disruptions by major rail carriers could support higher costs for key inputs.

"We must ensure critical commodities reach essential industries and workers, such as America's farmers, who are essential to feeding our nation and the world," the letter said. "Food is a national security issue, and we must treat it as such."

Industry advocacy group The Fertilizer Institute (TFI) applauded the letter, adding that "skeleton crews" and railroad-led initiatives, such as the precision scheduled railroading operating model, have hampered fertilizer shipping and potentially lead to production delays. The model calls for increased efficiency to drive higher volume, creating a reduced need for crews and equipment.

"With the world leaning on US farmers now more than ever before to feed our growing population, we must ensure strong yields and our food security," TFI chief executive Corey Rosenbusch said on 30 June. "Fertilizer must reach farmers in a timely manner and crop harvests also need to get to their destinations, including the kitchen table."

Domestic fertilizer distributors grappled with slowing rail service during the industry's peak demand cycle, which began in the spring when farmers planted key principal row crops and applied fertilizer. Delays have hampered crop production at a time global grain output is threatened by the ongoing war in Ukraine and various US restrictions on imported fertilizers.

US railroad Union Pacific (UP) instructed fertilizer manufacturer CF Industries in mid-April to reduce its shipments by 20pc, which delayed urea and UAN deliveries prior to the key spring application period. CF said in an April statement that customer orders with rail transportation already arranged would likely face delays, and UP would not accept new rail shipments for the foreseeable future.

The four largest US railroad companies subsequently came under immense criticism this year for eroding service, underpinned by inconsistent and unreliable deliveries, which spurred an STB hearing on 26-27 April. Detailed recovery plans from each company point to a potentially slow return to pre-pandemic levels.

The legislators' letters said that if UP "continues down this path and other carriers follow suit, it will reduce crop production at a time when our nation and the world can least afford it."

More than half of US fertilizer is transported by rail, and shipment restrictions can limit supplies and raise farmer costs, according to TFI. US farmers this season already face an estimated 7pc rise in total input expenditures, with fertilizer costs expected to average 12pc higher compared with 2021, according to the US Department of Agriculture.

Fertilizer affordability concerns defined the 2021-22 season, which ended on 30 June, and cost woes will likely extend through the first half of the 2022-23 season if deteriorating rail service leads to higher input costs and food prices.

"By placing onerous restrictions on shippers without customer consultation, Class I carriers may run the risk of jeopardizing family run farms and increasing the cost of food for consumers," the letter said.

By Connor Hyde