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Farm Progress America, October 5, 2023Farm Progress America, October 5, 2023

Mike Pearson tells us about the state of the freight train industry in the USA.

October 5, 2023

Mike Pearson tells us about freight trains and how important they are to agriculture.

The railroad industry has been consolidating since the 1960's.

In 1980 , there were 40 freight train operators. In 2023, there are six.

Then when COVID happened, agricultural shippers like the National Grain and Feed Association petitioned the Surface Transportation Board due to a lack of competition in the industry and many agriculture companies only have access to one Class I railroad provider.

So a competitive alternative was discussed which is Reciprocal Switching. A grain elevator can petition the Surface Transportation Board and say "Railroad X isn't providing quality service" and I want Railroad Y to pickup and haul our grain."

However, Reciprocal Switching doesn't happen very often. In fact, no petitions have been filed for it since 1990.

The Surface Transportation Board feels if this is utilized by agriculture, it can provide predictability to transportation. It will in the end mean more railroads provide better maintenance to their locomotives and railroad cars. It would also mean that railroads need to maintain a minimal workforce and will provide better service.

This is not a final rule yet. The final rule by the Surface Transportation Board can be enacted as early as late November.

If someone wants to fight the rule, they can submit their opinion to the Surface Transportation Board.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, farm broadcaster and host of This Week in Agribusiness.

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