UPDATE 1-U.S. lawmakers fault rail sector for slow service, profits

Wed Sep 10, 2014 7:15pm EDT
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(Recasts throughout with details, quotes from hearing)

By Patrick Rucker

WASHINGTON, Sept 10 (Reuters) - U.S. rail operators must put investment ahead of profits to clear the way for grain, automotive and chemical shipments now clogging the tracks, lawmakers said at a congressional hearing Wednesday about the health of the rail grid.

Rail backups in the Midwest are particularly acute with farmers expected to harvest record large corn and soybean crops over the next two months and move much of that grain to market.

The rail sector has promised to spend $26 billion this year to improve service but Senator Jay Rockefeller, chairman of the Senate Commerce Committee, was not placated.

"You pretty much get what you want and stop what you want around here," said Rockefeller, a West Virginia Democrat in his final months in office. He accused the rail industry of having undue influence with Washington regulators and lawmakers.

"You are doing a great job for your shareholders. What about these folks?" Rockefeller said, referring to officials from the farm, auto and chemical industries who also testified at the hearing.

Automakers are spending tens of millions of dollars a month to avoid snarls on the tracks for their cargoes, said Shane Karr of the Alliance of Automobile Manufacturers.

Meanwhile, the massive grain harvest could exceed permanent storage bins by about 694 million bushels this harvest season, or about 3.5 percent of expected totals, said Arthur Neal, who analyzes market and transportation issues for the Department of Agriculture.   Continued...