Because of supply chain problems with U.S. railways, the distribution of diesel, gasoline, and especially a diesel additive that limits emissions from highway trucks, could decline and cause prices for fuel to rise more than they have, and lead to shortages and higher prices for many consumer products delivered by 18-wheelers nationwide, said Pilot Flying J CEO Shameek Konar in testimony before the Surface Transportation Board.
“The current situation is untenable,” said Konar in his Apr. 27 testimony, which was largely ignored by the liberal media. Under the worst-case scenario, he added, it “would be an absolute catastrophe,” and “equal to removing 10% of the trucks from the road today.”
The Pilot Flying J company, which Konar oversees, serves about 70,000 truckers and one million other customers every day at its 750-plus travel centers, the largest number of travel centers in the U.S. Pilot is the 7th largest privately held company in the U.S. and employs 28,000 people.
As Konar testified, Pilot currently accounts “for approximately 20% of the country’s highway, or as we call it, over-the-road diesel supply, 20% — as well as 30% of the diesel exhaust fluid supply, also known as DEF.”
Every 18-wheel diesel truck built after 2010 must use DEF to keep its emissions within federal standards. If a truck wants to stay on the road, it must use about seven gallons of DEF every time it fills up on diesel. DEF is vital to the U.S. trucking industry, which delivers so many products to stores across the country.
However, “Pilot is facing a threat of severe reduction in rail service allocations,” testified Konar. “For Pilot, the service-reduction allocations are being imposed by the Union Pacific Railroad. On April 13, we were informed by the Union Pacific that we were required to reduce shipments [on rail] by 26%. In subsequent conversations we were asked to reduce them even further by 50% or face embargoes.”
“[A] 26% to 50% reduction in our allocations will have substantial consequences for the markets,” he said.
Pilot has 23 rail-served facilities that make the DEF, he explained. The Union Pacific (UP) trains delivers the raw product, which Pilot then makes into DEF, and then distributes by truck to its retail locations where truckers can obtain it. Union Pacific delivers about 45% of the material used by Pilot to make the special additive.
“Pilot operates the largest or one of the largest DEF supply networks in the country,” said Konar. “Of the 300 million gallons of DEF that Pilot supplies to the industry every year, 74% is moved by rail. Union Pacific’s restrictions [from 26% to 50%] will prevent Pilot from keeping many markets ade…