Page 5 - ILMA Compoundings - September 2021

BOARD OF DIRECTORS
President Barbara A. Bellanti
Chuck Decker Battenfeld Grease &
American Oil & Oil Corporation of N.Y.
Supply International, LLC
Richard Camper LETTER FROM THE CEO
Treasurer Pacific Precision
Michael Damiani Formulators Inc.
Radco Industries, Inc.
James Carroll
Secretary Schaeffer Manufacturing Co.
Ann Ball Freight Rail Prices on the
CIMCOOL Industrial Dave Croghan
Products LLC Maxum Petroleum
Immediate Past President Catharine T. Golden Wrong Track
Barbara Kudis Etna Products, Inc.
Allegheny Petroleum Frank H. Hamilton III
Products Co. South Atlantic Services, Inc.
Greg Julian t ILMA ReEngage, supply chain issues dominated the discussions.
Advanced Lubrication Members shared that difficulties involved not only their access to prod-
Specialties
John Lorimor Aucts but also the ability to move products to customers. We heard a lot
Aerospace Lubrication Inc. about the truck driver shortage, which continues to plague companies big and
Kent Morris small. But at the time, there was little talk about rail — until now.
Pinnacle Oil, Inc.
David Richards For years, freight rail promoted itself as the efficient, cost-effective alternative
RichardsApex, Inc. to trucking. But a new report prepared for the Rail Customer Coalition (RCC),
Michael Skuratovich of which ILMA is a member, has found that freight rail rates have increased at
Eastern Oil Co.
unprecedented levels. The report, titled Economic Analysis: Consolidation and
STAFF Increasing Freight Rail Rates, shows that from 2004 to 2019, real inflation-
Chief Executive Officer Director of Marketing adjusted rates increased 43%, while real railroad costs increased by only 8%.
Holly Alfano Amber Lopez
While we have been wringing our hands about the truck driver shortage,
Associate Director Accounting Manager
Martha F. Jolkovski Margaret Smith “rates for the largest U.S. railroads have jumped more than twice as fast as
Director of General Counsel inflation and rates for long-haul trucking,” the report says.
Communications Jeffrey L. Leiter
Caitlin Jacobs The RCC report makes a strong case that consolidation of the industry has
Associate Counsel
Director of Member Matthew Levetown resulted in rates that could be considered noncompetitive by regulators at the
Engagement
Tim Mack Communications Intern Surface Transportation Board (STB).
Paige Dow
“Freight rail pricing trends have picked up a considerable head of steam over
EDITORIAL, DESIGN the past 15 years,” said Jay Roman, president of Escalation Consultants, which
Contributing Editor Designer conducted the study. “The data is clear: Noncompetitive pricing has become the
Caitlin Jacobs Mark St. Amand
norm, not the exception. Rail customers continue to pay a substantial price for
THE YGS GROUP the consolidation of railroads’ market power.”
Senior Managing Editor Copy Editor In addition to the heavy rate increases, shippers have suffered poor service. The
Sam Hoffmeister Amanda Holahan
Content & Copy Director Account Manager transition to “precision railroading” has been called out by House Transportation
Craig Lauer Max Lalwani Committee Chair Peter DeFazio, who shared reports from committee hearings
MEDIA SALES and STB meetings in a recent article in Fortune. He noted that shippers reported
President Advertising Account “disruptive changes to operating plans and service schedules; degradation of
Jack Davidson Executive service, such as delays due to insufficient locomotive power and lack of crews; and
Jeryl Parade
Vice President jeryl.parade@theYGSgroup.com unreasonable charges, such as increases in demurrage and accessorial fees.”
Serena L. Spiezio
The RCC is calling on the STB to evaluate the impact of additional mergers
INDEPENDENT LUBRICANT and to consider the impact on freight rail rates. ILMA continues to work with
MANUFACTURERS ASSOCIATION
the RCC to encourage STB to consider reforms that are more suited to today’s
675 North Washington Street, Suite 275, Alexandria, VA 22314
Phone: 703-684-5574 • Fax: 703-836-8503 • www.ilma.org economy, including market-based rate reviews.
Editorial, Design, Media Sales, & Printed by The YGS Group Freight rates are incorporated into the cost of every product. Price increases
800-501-9571 • www.theygsgroup.com drive inflation, and it’s the American consumer at the end of the chain. It’s just
Compoundings (USPS 003-447) is published monthly by the
Independent Lubricant Manufacturers Association, one more threat to economic recovery.
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