Univar Solutions, National Association of Chemical Distributors (NACD) member, testified before the Surface Transportation Board (STB) on the increased use of embargoes by freight rail companies. This hearing comes after Union Pacific dramatically increased the use of embargoes from five in 2017 to more than 1,000 in 2022, according to STB data.
“The railroads need to address the underlying issues of their deteriorating product, and not habitually reach for the embargo lever,” testified Robert McRae, Univar Solutions vice president of Transportation. “The effects of embargoes are far reaching, impacting not only the railroad itself, but all its stakeholders, including shippers and the other railroads too. That domino effect paralyzes everyone.”
“Without better collaboration and communication, without transparent acknowledgement of these realities, without acting in the next few weeks, and without an equal bargaining position, Mr. Chairman, and board members, we will all be right back here in a few months talking about these very same issues, their impacts, and what we should do about them,” concluded McRae.
The chemical industry is one of the largest customers of freight rail in both volume and revenue, and many NACD members rely heavily on railroads to ensure the timely shipment of products used in nearly every industry in the United States. NACD says the railroads’ use of precision scheduled railroading (PSR) in recent years has led to a significant decline in service and an insufficient workforce.
“It’s no secret rail service has been inadequate and unreliable for years,” said Eric R. Byer, NACD president and CEO. “It’s unacceptable that rail companies continue to use a system that causes nationwide service disruptions, and leads to dwindling numbers of rail workers, particularly amid ongoing supply chain challenges. NACD applauds the STB for intervening, and attempting to hold these companies accountable to these unfair business models. We also commend Rob, and the rest of the Univar Solutions team, for serving as a voice to the freight rail shippers impacted daily by these practices.”
Robert McRae’s full testimony before the STB can be read here.