By Jeff Stagl, Managing Editor
Rail service and labor were common themes during several presentations at the Midwest Association of Rail Shippers summer meeting, which was held July 19 in Lake Geneva, Wisconsin.
Poor rail performance and the repercussions from it were cited many times. A presentation by Surface Transportation Board Member Patrick Fuchs focused on a regulatory aspect of the effects — the service recovery plans, progress reports and other data his federal agency required the Class Is to submit in May.
There was very little detail provided in those documents, so the STB demanded the Class Is provide supplemental service recovery plans in June. The supplemental documents were much more detailed, including such helpful information as expanded employment data, recovery goals and performance metrics in certain regions, Fuchs said.
“Some of the service numbers that we have collected are extraordinarily informative, a vast improvement to what we were previously collecting,” he said. “We should think about the types of information that are available to shippers that they can use in their ordinary course of business.”
Ardent Mills — which spends about $500 million annually on rail transportation — has noted slightly better service of late, said Jeff Zykowski, the flour miller’s VP of supply chain. Jeff StaglThe STB is focused on the quality of freight-rail service at the moment and how the board can hold the railroads more accountable through oversight, Fuchs added.
“This won’t be solved overnight,” he said. “[Going forward] shipper input will be essential to making things better.”
The STB’s Rail Customer and Public Assistance Program — which can handle questions about rates and other charges, car supply and service issues, damage claims and interchange issues — aims in part to help shippers address rail performance problems. The program offers railroads and shippers an informal and oftentimes faster way to resolve problems, Fuchs said.
Meanwhile, Ardent Mills Vice President of Supply Chain Jeff Zykowski said his firm has experienced rail-service problems — such as too much variability — for quite some time. Rail is important to the Denver-based flour milling company, which manages 45 facilities from coast to coast.
Ardent Mills spends about $500 million on rail transportation annually and ships 1,100 loads of finished goods from its facilities daily, said Zykowski.
“Rail is vitally important to us for raw materials to finished goods,” he said. “We have seen an improvement over the last six weeks or so with rail. It’s been better in the East than in the West.”
A big rail factor for Ardent Mills is Class I interchanges with short lines since many of the company’s facilities are served by small railroads. The railroads need to communicate more effectively, Zykowski said.
Labor is another key issue for Ardent Mills. Similar to railroads and other industries, the company is having a difficult time enlarging and maintaining its workforce, said Zykowski. Ardent Mills is “pulling out all the stops” to hire, such as by offering shifts that are only three hours long, he said.
“It’s hard to get people to work in flour mills. It can be very cold or very hot,” he said. “Lately, we can hire four people, but then lose six.”
Zykowski mentioned studies show industries worldwide will be short 80 million people by 2030.
Part of the ongoing labor headache is a high number of women and service workers who left their jobs when the pandemic started and haven’t come back, said FTR Chairman and CEO Eric Starks during his presentation, which was titled “Navigating an uncertain economy and turbulent supply chain.”
FTR Chairman and CEO Eric Starks on economic indicators: “We are confident there will not be a recession in the near term.” Jeff Stagl“Many families that had two earners now have only one,” Starks said.
Families and supply-chain stakeholders also are dealing with high fuel, food and other prices. Gas prices likely will remain high, Starks believes.
“We’d need to see something structurally happen for that to change,” he said.
The good news is U.S. manufacturing output is showing that underlying orders are growing at record levels due to pent-up replacement demand.
“With orders at this level, we are confident there will not be a recession in the near term,” said Starks.
Payroll employment is registering growth each month, but the number of open jobs is very high. What’s radically different now than several years ago is the job market is all about lifestyle, said Starks, adding that people care more about their home life than work life.
