In an early June opinion piece published by Supply Chain Drive the chair and vice-chair of the Food and Beverage Issue Alliance each weighed in on the need for updated and improved rail service to provide better food security. The story is posted in its entirety at https://www.supplychaindive.com/news/rail-service-problems-stb-opinion/624659/.
The story, ‘Stronger rail oversight needed as decaying service threatens food security,’ carried the bylines of Robb MacKie, president and CEO of the American Bakers Association, and John Bode, president and CEO of the Corn Refiners Association. MacKie chairs the FBIA and Bode is vice-chair.
The story said, “As we enter the third year of the pandemic, new, related impacts keep coming. Even before Russia’s invasion of Ukraine delivered the greatest shock to commodity markets since 1973, world supplies of energy, metals and agricultural commodities were at an 18-year low. And while the lockdown in Shanghai was lifted June 1, the two-month shutdown of the world’s busiest container port is expected to exacerbate delays and congestion.”
And it continued, “In this highly stressed condition of supply chains, old weaknesses are causing major problems — and the rail industry is doing little to amend it. Reductions in service are causing major rail service failures, particularly to their numerous ‘captive shippers’ who have no competitive alternative. Over the years, unreliable access to rail cars has forced some major ingredient suppliers to acquire their own fleets of rail cars, adding cost that gets passed along to consumers.”
The two men said that as chair and vice-chair of the alliance, “which represents over 40 allied U.S.-based food and beverage trade associations across the supply chain,” they are concerned not only for the “economic standing of the industries we represent but also for the Americans who are seeing fewer products on store shelves.”
The story went on to cite the at-capacity production of U.S. corn starch, disrupted “at least twice this year when corn refineries were forced to temporarily shut down due to rail service failures. Corn refineries work 24 hours a day and seven days a week to process 15 percent of America’s corn crop into ingredients for hundreds of foods, pharmaceuticals, personal care products, and industrials as diverse as adhesives for construction and compostable plastics,” the story said.
And it added, “When railroads fail to show up to move loaded rail cars, the supply chain abruptly stops, sending shockwaves throughout the system. This causes disruption in downstream production facility operations that reverberates for months and adds significantly to costs.”Bottom of Form
The men noted that “America’s food and beverage industry has been tremendously successful at overcoming major challenges to keep the food supply flowing,” but at a cost, that “inevitably impacts consumers.”
From February 2021 to February 2022, they wrote “consumer food prices increased by nearly 8 percent,” which represents the largest price hike in one year since July 1981.
“The FBIA’s membership is represented across America’s supply chain, from agricultural processors to packaged goods to retail. A reliably efficient rail network is essential to our members’ operations that feed the country. Looking ahead, we need long-term responses that combat grave deficiencies in rail and port service,” they said. And they concluded, “Congress’ initial move to address ocean freight competitiveness is a great first step. But to truly break through, strong rail service oversight by the Surface Transportation Board is required. Affordable, accessible food simply can’t wait.”
