Ag Retail Industry Continues to Face Transportation Challenges

Railroad tracks (Undated) ( MGN )

America’s agriculture industry and its rural communities play an important role in our nation’s economy. An economically efficient and effective intermodal transportation system is important for the financial well-being of agribusinesses and rural communities throughout the United States. Congress and the administration need to support federal policies that build on the strengths of each mode of transportation. Such a system will enhance the competitiveness of the country in an increasingly global economy.

Rural Roads and Bridges
The roads and bridges that serve and connect the country’s rural areas face significant challenges, including inadequate capacity to handle growing levels of traffic and commerce, limited connectivity, the inability to adequately accommodate growing freight travel and deteriorated conditions. The nation’s rural roads and bridges have significant deficiencies because of underfunding. Nationally, 15% of the major rural roads have pavements rated in poor condition, and another 21% are rated in mediocre condition. Of the nation’s rural bridges, 10% are rated structurally deficient.

There is a need for an increase in federal transportation funding and a recognition of the unique needs that rural roads and bridges present to ensure they are eligible for federal grants and funding. State, local, rural and agricultural stakeholders should have the ability to prioritize federal funds, so they best meet the needs of their communities.

The U.S. inland waterways system provides the lowest-cost, most-fuel-efficient and environmentally friendly way to transport products. Exports of agricultural goods are an important part of our economy. They make up 20% of farm income and support more than 1 million jobs. Of U.S. agricultural exports, 72%—those valued at $128 billion—are waterborne, and every $1 billion in U.S. exports shipped through ports supports 15,000 U.S. jobs.

Our nation’s lock and dam systems are in urgent need of maintenance and modernization. Most locks and dams were built in the 1920s and ’30s and have far exceeded their 50-year design lifespan. In the past decade, there has been a 700% increase in unscheduled stoppages for repairs.

The inland waterways system currently benefits from a successful public-private partnership with commercial users paying 50% of the cost of inland waterway construction and major rehabilitation projects through a 29-cent-per-gallon diesel fuel tax paid into the Inland Waterways Trust Fund combined with matching federal funds. Commercial users are the only private entities that pay into this trust fund; however, the waterways system’s benefits are enjoyed by numerous others.

Surface Transportation Reauthorization
Agricultural retailers heavily depend on commercial drivers for “just-in-time” delivery of farm supplies and other essential products and services to their farm and ranch customers. Commercial truck traffic is a vital component to the nation’s economic prosperity. Our industry, like many others, is experiencing a growing driver shortage and higher shipping prices due to increased regulatory costs and burdens from hours of service (HOS) regulations and the electronic logging device (ELD) requirements that do not work for today’s agriculture industry. There is also a growing driver shortage due to retirements or departures to other industries due to increased regulations. The current gross vehicle weight (GVW) limit for federal interstate highways of 80,000 lbs. on five axles was established in 1982—prior to the standardization of antilock brakes and significant progress that has been made in vehicle safety and pavement technology. Due to outdated weight restrictions, more trucks hauling more than 80,000 lb. are traveling on local roads and less-than-ideal infrastructure.

Lack of Adequate Railroad Service and Competition
The U.S. agriculture industry also heavily depends on a healthy, efficient and competitive freight rail system that is essential to the nation’s economic growth. Rail service plays a critical role in distributing crop nutrient and crop protection materials. Since the Staggers Rail Act deregulated the railroads in 1980, freight rail has been consolidated to four major carriers. The Surface Transportation Board (STB) is an economic regulatory agency that Congress charged with the fundamental missions of resolving railroad rate and service disputes and reviewing proposed railroad mergers. Since 2001, rail rates have doubled due to a lack of competition and reliable freight rail service for many manufacturers, agricultural retailers, distributors, farmers and energy producers across the country. 

The railroads’ deregulation has resulted in abandoned rail service to smaller communities; unclear fee structures; increased costs; and unavailability of rate relief for many agricultural retailers and farmers, who heavily depend on the railroad system. If the railroads are left to operate in their present state, then the nation’s agricultural productivity will stall, and consumers will continue to be affected by increased food and energy costs. 

ARA supports practical regulatory reforms that would allow greater access to competitive freight rail service and help ensure the STB operates more efficiently and effectively for all stakeholders.

ARA Policy Solutions for Congress:

  • HOS Agricultural Exemption: ARA supports eliminating the HOS ag exemption’s planting and harvesting season provision. More than 30 states already have a year-round “planting and harvesting season” designation. Eliminating this provision ensures the HOS ag exemption is year-round for all states, and it promotes regulatory consistency and alleviates unnecessary regulatory burdens highlighted by the ELD mandate. ARA also supports expanding the current air mile radius from 150 to 300 following a Federal Motor Carrier Safety Administration (FMCSA) pilot program to collect safety data to address continued industry consolidation and driver shortages.
  • Short-Haul Operations: ARA supports expanding all short-haul operations exemptions to 150 air miles to ensure consistency between those applicable to CDL and non-CDL drivers. This common-sense reform would allow commercial drivers the ability to meet their customers’ needs and alleviate unnecessary burdens while maintaining safety on the nation’s roads and highways.
  • Drive Safe Act: ARA supports bipartisan legislation (H.R. 1374 / S. 569) to create an apprenticeship training program that allows for the legal operation of commercial motor vehicles (CMV) by CDL drivers between the ages of 18 to 20 in interstate commerce. For all contiguous 48 states, the age requirement for an individual to obtain a CDL and operate a CMV in intrastate commerce is 18 years old.
  • Truck Weights: ARA supports creating a voluntary program under which up to 10 states could opt in to allow 91,000-lb., six-axle, bridge-formula-compliant trucks on federal interstate highways within their borders and collect additional safety data regarding the GVW and axle configurations of Class-8 and Class-9 commercial vehicles involved in accidents resulting in any serious injuries or fatalities.
  • Inland Waterways Projects: Prioritize funding the backlog of 25 critical inland waterways projects, an $8.75 billion total federal investment.
  • Harbor Maintenance Trust Fund: ARA supports bipartisan legislation (H.R. 2440) authorizing the Harbor Maintenance Trust Fund’s current $9 billion surplus for dredging and waterway maintenance.
  • Surface Transportation Board: ARA supports continued oversight by the STB of the railroads and efforts to implement the necessary and long overdue reforms to address freight rate reform, regional monopoly power and excessive demurrage and accessorial charges.