Rail Customer Profile: National Mining Association

February 21, 2018

The National Mining Association (NMA) is the voice of America’s miners, representing the interests of more than 250 companies and organizations in the mining industry. NMA’s mission is to garner support for public policies that will help America fully and responsibly utilize its mineral and coal resources.

Having access to reliable, cost-effective freight rail transportation is essential to providing affordable electricity to American households, businesses, manufacturing facilities, transportation and communications systems, and services throughout the U.S.

Why is freight rail reform important to the mining industry?

Our industry relies heavily on freight rail to deliver the energy, metals and minerals to the American people and global markets. In fact, 70 percent of the coal mined in the United States is shipped by rail.

The competitiveness of domestic producers of coal, metal and mineral commodities is deeply impacted by the cost of transportation. In the case of coal, rail transportation costs will often exceed mining cost in certain regions.

As America’s population and economy expand, our need for electricity will continue to grow, and coal is projected to remain a workhorse fuel for power generation. The mining industry has taken great strides to increase efficiencies and minimize costs, but that only goes so far. Having access to competitively priced and reliable rail transportation is vital to supporting the operations of our members across the country.

What challenges are NMA members experiencing?

Many coal shippers that are captive to a single rail carrier have no competitive transportation options. The lack of competition has allowed mining companies to be subjected to unreasonably high freight rail rates and poor service. According to the U.S. Energy Information Administration, the cost of transporting coal by rail to power plants increased more than 60 percent between 2001 and 2014.

To make matters worse, the Surface Transportation Board (STB) is saddled with antiquated policies that leave it poorly equipped to resolve the growing rate and service issues that our members are experiencing. For example, the process for challenging rates has become so costly and difficult to navigate it actually creates a double jeopardy situation for shippers. When filing a rate case, shippers must be prepared to spend millions of dollars and wait years for a decision, which they are most likely to lose − all the while they are stuck paying unreasonable rates while their dispute languishes.

What needs to be done?

While the STB has started to pursue some common-sense solutions, they are unable to put those reforms in place with three of the five seats on the board still vacant.

NMA urges President Trump to appoint members to the STB who support long-overdue reforms that will increase competition and help get our economy back on the right track.

NMA members look forward to continuing their work with other rail shippers, and urge the Senate to swiftly confirm President Trump’s qualified, pro-reform STB nominees.