Railway Age August Digital Edition by Railway Age

August 201 8

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WINTER PREPAREDNESS

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August 2017 // Railway Age 1

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JUNE 2018 AUGUST 2018

16 FEATURES

Class I Focus: BNSF

Locomotive Fueling

Ready for a roaring economy

BNSF raises the bar

Winter Prep How to beat extreme cold

Book Review

Mechanical Focus: Wheels Improving a railroad basic

Krebs, Barriger III: Two icons

Passenger Focus: HSR Finally, some optimism

DEPARTMENTS 4 6 8 44 44 44 45 46 47 47

Industry Indicators Industry Outlook Market People 100 Years Ago Meetings

NEWS/COLUMNS 2 10 15 48

From the Editor Update Watching Washington Financial Edge

Products Classified Professional Directory Advertising Index

On the Cover: BNSF’s high-tech fueling facility at Hauser, Idaho. Photo: Bruce E. Kelly

Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 55 Broad St., 26th Fl., New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 219, No. 8. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number of copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print and/or Digital versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2016 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-2219195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, P.O. Box 3135 Northbrook, IL. 600653135, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital).

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August 2018 // Railway Age 1

FROM THE EDITOR

AILWAY GE Subscriptions: 800-895-4389

The Gift of Gobbledygook

have a question for all you beleagured corporate communications people charged with writing press releases. Are you being fed the nonsense language you are directed to disseminate? If you’re flummoxed by having to foist fancy corporate non-speak on frazzled editors like me, take heart. I understand your predicament. It’s not your fault the English language is mired in euphemisms. I thought I’d translate a few fractured phrases that recently invaded my inbox: • “In his new role, he will be responsible for developing, implementing and overseeing our strategic agenda.” • “He’s going to figure out what we should do next.” • “This includes facilitating strategy design and overseeing the execution of key initiatives supporting the strategy.” • “He’s going to make sure that what we do next is what he tells us to do.” • “He brings tremendous technology and innovation expertise to a role that is critical to the company.” • “He’s a really smart guy. We need him.” • “He will provide the necessary mix of tech savvy and business acumen to lead our strategy development and execution, creating long-term value for all of our stakeholders.” • “He’s so smart that he’s going to make a lot of money for us.” • “He served in a variety of leadership

roles, including responsibility for the application systems and architectures for the entire company. ” • “He was in charge of our computers and fixed them when they crashed.” • “The company will commence a comprehensive search to identify his successor, including seeking internal and external candidates.” • “We’ll look around the office for a replacement, and if no one here is good enough, we’ll hire a headhunter.” I leave you now to ponder all this gobbledygook (“speech or writing that is complicated and difficult to understand”— Merriam-Webster Dictionary) with these words from Sir Humphrey Appleby, of the 1970s British comedy Yes Prime Minister: “Some people must wait where other people cannot see the people who are waiting. People who arrive before other people must wait where they cannot see the people who arrive after them being admitted before them. People who come in from outside must wait where they cannot see the people from inside coming in to tell you what the people from outside have come to see you about. People who arrive when you are with people they are not supposed to know you have seen must wait somewhere until the people who are not supposed to have seen you have seen you.” Exactly!

WILLIAM C. VANTUONO Editor-in-Chief

Railway Age, descended from the American Rail-Road Journal (1832) and the Western Railroad Gazette (1856) and published under its present name since 1876, is indexed by the Business Periodicals Index and the Engineering Index Service. Name registered in U.S. Patent Office and Trade Mark Office in Canada. Now indexed in ABI/Inform. Change of address should reach us six weeks in advance of next issue date. Send both old and new addresses with address label to Subscription Department, Railway Age, PO Box 3135, Northbrook, IL 60062-2620, or call toll free (800) 895-4389, or (402) 346-4740. Post Office will not forward copies unless you provide extra postage. Photocopy rights: Where necessary, permission is granted by the copyright owner for the libraries and others registered with the Copyright Clearance Center (CCC) to photocopy articles herein for the flat fee of $2.00 per copy of each article. Payment should be sent directly to CCC. Copying for other than personal or internal reference use without the express permission of Simmons-Boardman Publishing Corp. is prohibited. Address requests for permission on bulk orders to the Circulation Director. Railway Age welcomes the submission of unsolicited manuscripts and photographs. However, the publishers will not be responsible for safekeeping or return of such material. Member of:

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Editorial and Executive Offices Simmons-Boardman Publishing Corp. 55 Broad Street, 26th Fl. New York, NY 10004 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com ARTHUR J. McGINNIS, Jr. President and Chairman JONATHAN CHALON Publisher jchalon@sbpub.com WILLIAM C. VANTUONO Editor-in-Chief wvantuono@sbpub.com STUART CHIRLS Senior Editor schirls@sbpub.com Contributing Editors: Roy H. Blanchard, Jim Blaze, Alfred E. Fazio, Bruce E. Kelly, Ron Lindsey, Ryan McWilliams, David Nahass, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Art Director: Nicole Cassano Graphic Designer: Aleza Leinwand Corporate Production Director: Mary Conyers Digital Ad Operations Associate: Kevin Fuhrmann Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney Western Offices 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman mischa@sbpub.com Assistant Editor: Kyra Senese ksenese@sbpub.com International Offices 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors: David Briginshaw, db@railjournal.co.uk Keith Barrow, kb@railjournal.co.uk Kevin Smith, ks@railjournal.co.uk David Burroughs, dburroughs@railjournal.co.uk Customer Service: 800-895-4389 Reprints: PARS International Corp. 253 West 35th Street 7th Floor New York, NY 10001 212-221-9595; fax 212-221-9195 curt.ciesinski@parsintl.com

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Industry Indicators Growing Pains as Railroads Recover Like trying to push an elephant through a garden hose. That’s what the Class I railroads are doing as they wrestle with delays and bottlenecks across key segments of the North American network. Carriers continue to hire (see Employment, this page), take locomotives out of storage and unveil capital plans designed to expand capacity. But the historic reluctance of railroads to move forward with projects during the lean years (when lighter traffic would better accommodate construction) means that they will have to be creative to manage growing carload volumes. Some rather odd help: Canadian railroads reported zero trailers carried in June.

Railroad employment, Class I linehaul carriers, JUNE 2018 (% change from JUNE 2017)

Total employees: 147,282 % change from JUNE 2017: -0.90%

Transportation (train and engine) 61,787 (2.81%)

TRAFFIC ORIGINATED CARLOADS

MAJOR U.S. RAILROADS by Commodity

JUNE ’18

JUNE’17

% CHANGE

Grain Farm Products ex. Grain Grain Mill Products Food products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber and Wood Products Pulp and Paper Products Metallic Ores Coke Primary Metal Products Iron & Steel Scrap Motor Vehicles & Parts Crushed Stone, Sand, & Gravel Nonmetallic Minerals Stone, Clay & Glass Products Waste & Nonferrous Scrap All Other Carloads

93,970 3,180 39,729 23,134 129,354 44,993 336,918 4,586 14,544 23,229 26,506 16,900 40,070 15,993 68,677 109,106 15,319 33,301 15,493 25,767

89,455 3,312 36,840 23,301 124,746 37,582 346,314 4,911 14,094 22,629 24,118 16,866 37,358 15,036 68,440 101,830 18,871 32,163 16,111 25,694

5.0% -4.0% 7.8% -0.7% 3.7% 19.7% -2.7% -6.6% 3.2% 2.7% 9.9% 0.2% 7.1% 6.4% 0.3% 7.1% -18.8% 3.5% -3.8% 0.3%

1,080,769

1,059,671

2.0%

334,511

313,583

6.7%

1,415,280

1,373,254

3.1%

Total U.S. CarLoadS

Executives, Officials, and Staff Assistants 8,388 (-3.58%)

CANADIAN RAILROADS

Professional and Administrative 11,998 (-5.42%)

COMBINED U.S./CANADA RR

Maintenance-of-Way and Structures 32,716 (-3.90%) Maintenance of Equipment and Stores 26,799 (-1.84%) Transportation (other than train & engine) 5,594 (-3.63%) Source: Surface Transportation Board

FOR EMPLOYMENT, THE PAST IS PROLOGUE It’s a good time to be working on the railroad as employment figures strengthen while the Class I’s continue in hiring mode. But the year-on-year reductions speak to a serious lesson that most railroad management seems to forget: Cut in lean times, and pay the price during a recovery, especially where train crews are concerned. Some carriers have recalled all but a handful of furloughed employees, but finding suitable hires and then training them means it will be some time before staffing has normalized.

4 Railway Age // August 2018

FIVE WEEKS ENDING JUNE 30, 2018

total carloads

Intermodal

FIVE WEEKS ENDING JUNE 30, 2018

MAJOR U.S. RAILROADS by Commodity Trailers Containers TOTAL UNITS

JUNE ’18

JUNE’17

% CHANGE

105,935 1,054,038 1,159,973

85,232 1,006,052 1,091,284

24.3% 4.8% 6.3%

0 278,377 278,377

3,625 266,320 269,945

-100% 4.5% 3.1%

105,935 1,332,415

88,857 1,272,372

19.2% 4.7%

2,853,630

2,734,483

4.4%

CANADIAN RAILROADS Trailers Containers TOTAL UNITS

COMBINED U.S./CANADA RR Trailers Containers

TOTAL COMBINED UNITS

Source: Monthly Railroad Traffic, Association of American Railroads

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TOTAL U.S./CANADIAN CARLOADS, JUNE 2018 VS. JUNE 2017

1,415,280 JUNE 2018

AILWAY GE

1,373,254 JUNE 2017

Short Line And Regional Traffic Index CARLOADS

by Commodity

ORIGINATED JUNE ’18

ORIGINATED JUNE ’17

% CHANGE

46,019 22,484 30,192 10,013 23,613 6,499 9,402 2,659 17,959 10,291 1,982 2,162 17,503 13,459 46,255 9,509 95,594

44,706 27,678 29,320 10,861 24,707 6,513 9,954 3,044 16,624 10,193 1,969 2,133 16,829 13,801 45,260 10,388 86,872

2.9% -18.8% 3.0% -7.8% -4.4% 0.2% -5.5% -12.6% 8.0% 1.0% 0.7% 1.4% 4.0% -2.5% 2.2% -8.5% 10.0%

Chemicals Coal Crushed Stone, Sand & Gravel Food and Kindred Products Grain Grain Mill Products Lumber and Wood Products Metallic Ores Metals and Products Motor Vehicles and Equipment Nonmetallic Minerals Petroleum Products Pulp, Paper and Allied Products Stone, Clay and Glass Products Trailers / Containers Waste and Scrap Materials All Other Carloads

average weekly U.S. Rail Carloads: all commodities (not seasonally adjusted) 280,000 2018

270,000 260,000

ARE YOU A RAILROAD OR SUPPLIER SEARCHING FOR JOB CANDIDATES?

250,000 2017

240,000

2016

230,000 220,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Data are average weekly originations for each month, are not seasonally adjusted, do not include intermodal, and do not include the U.S. operations of CN and CP. Source: AAR

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Visit http://bit.ly/railjobs To place a job posting, contact: Jeanine Acquart 212-620-7211 jacquart@sbpub.com

August 2018 // Railway Age 5 RA_JobBoard_1/3Vertical.indd 1

8/17/17 10:59 AM

Industry Outlook

Encouraging Signs From MARS Crude by rail is set for growth over the next 18 months, while frac sand could begin to moderate in the second half of 2018 as the shift to Permian sands intensifies, according to a report from the Midwest Association of Rail Shippers (MARS) conference prepared by Cowen and Co. Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl. “Ongoing market strength continued to be the main thread across the presentations, tempered only by trade policy concerns,” noted Seidl. “We believe that the railroads will show notable earnings improvement this year.” “The state of freight remains strong across modes, with some attendees at the MARS conference unable to recall a time quite like this,” said Seidl. “The commentary was consistent with what we have seen in rail volumes. Total North American Class I traffic is up 6.2% quarter-to-date, year-over-year as of July 14. This is an acceleration from the second quarter’s roughly 4% year-over-year increase, which was in turn double the 2% growth registered in first-quarter 2018. “If there was any other less-than-stellar takeaway beside trade policy concerns, it was frac sand-related. One energy expert believes frac sand shipments on rail may have 6 Railway Age // August 2018

reached a peak in 2Q18 as the shift from Northern White to Permian Brown should accelerate. He identified 11 Permian mines already in production and seven others that have been announced but not yet in production. He projects local sand could become the majority of the Permian supply by late this year, with further share growth in 2019 and 2020. The need for Northern sands, however, is unlikely to go away any time in the foreseeable future, albeit at declining rates. We are not too concerned about this phenomenon, given strength in many traffic categories and expected growth in others, including CBR.” U.S. crude production is at record levels, with 35% fewer rigs than the 2014 peak. “With no major pipeline projects possible until late 2019 (barring any delays), rail should play a bigger role in the movement of the commodity over the next 18 months,” Seidl noted. “That said, the potential could be limited by network congestion and existing infrastructure. The railroads, already enjoying the ability to be freight-selective in this robust environment, are likely to think hard before making significant investments in their CBR franchises if a big part of the demand is viewed as a stopgap measure until more pipeline capacity comes on line.”

CN Executive Vice President and Chief Marketing Officer JeanJacques Ruest, a 22-year veteran of the railroad who has been serving as Interim President and Chief Executive Officer since March 5, 2018, has been appointed President and CEO, effective immediately. Ruest has also been appointed to CN’s Board of Directors. Ruest, 63, was name EVP and Chief Marketing Officer in January 2010. As CMO, he had responsibility for providing the strategic direction and leadership for CN’s Sales, Marketing and CN Supply Chain Solutions groups. Ruest joined CN in 1996 as Vice President, Petroleum and Chemicals. He was appointed Vice President, Industrial Products in 2003; Vice-President, Marketing in 2004; and Senior Vice President, Marketing in June 2006. Prior to this, he worked for 16 years at a major international chemical company. “I am proud to be a CN railroader, and honored and humbled by the Board’s confidence in me and the entire leadership team,” said Ruest. “CN’s leadership team and I are committed to re-establishing best-inclass operational excellence on a sustainable basis; to growing the value of the company, and to building the CN brand. We will do so by investing in human capital, efficient and effective digitization, and infrastructure that will drive future growth..” Ruest holds a Masters in Business Administration in Marketing from HEC Montréal (Université de Montréal) and a Bachelor of Science degree in applied chemistry from Université de Sherbrooke. He also completed the executive program of the University of Michigan Business School, and CN’s Railroad MBA program. Ruest was appointed Interim President and CEO following Luc Jobin’s resignation in March. railwayage.com

Bruce E. Kelly

Ruest Rises to CN President and CEO

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Market First ACS-64 Rolling on SEPTA No. 901, the first of 15 Siemens ACS-64 electric locomotives delivered to Southeastern Pennsylvania Transportation Authority (SEPTA), made its inaugural run in revenue service on July 11. Built at Siemens’ plant in Sacramento, Calif., the new power will expand the SEPTA fleet while replacing eight aging locomotives, including the last remaining AEM-7 electric locomotives still running in the U.S. The new locomotives will initially be used with existing coaches and will eventually be paired with a new fleet of double-deck coaches on order from CRRC MA. SEPTA ordered an initial 13 locomotives in July 2015, with an option for five more.

NORTH AMERICA

GE Transportation will supply Chilean private transport provider FCAB (Ferrocarril de Antofagasta) with five C23EMP dieselelectric locomotives in 2019. The contract, which includes a parts, service and warranty agreement, is GE’s first contract with FCAB. The C23EMP, specially designed for FCAB, is a single-cab locomotive for light-axle-load operations, low clearances and narrowgauge track.

San Diego North County Transit District has ordered five new Tier 4-compliant Siemens Charger diesel-electric locomotives for service on Oceanside-San Diego Coaster regional/commuter trains. Groundbreaking was held for a $72.9 million grade separation project in Moorhead, Minn. The project will reconstruct and realign the intersection of SE Main Ave. and 20 St./21 St. to pass under new bridges that will carry BNSF and Otter Tail Valley Railroad tracks over the streets. The State of Minnesota contributed $48.3 million to the project; federal sources contributed $5.5 million; the city of Moorhead contributed $13.4 million; and BNSF contributed $5.7 million. The New York State Department of Transportation awarded $19 million toward construction of Central New York’s first Inland Port in DeWitt, N.Y. (in Onondaga County), to help move containerized freight between the Port of New York and New Jersey and the existing CSX terminal east of Syracuse, N.Y.

8 Railway Age // August 2018

The Massachusetts Department of Transportation announced five grants totaling more than $1.8 million as part of the Industrial Rail Access Program (IRAP). The IRAP program aims to improve rail and freight access, economic opportunity and job growth, officials said. IRAP is described as “a competitive, state-funded public/ private partnership (P3) program that supplies financial aid to eligible applicants to invest in industry-based rail infrastructure access improvement projects.” State funding for the five projects is set to be matched by more than $2.4 million in private funds. Grants to railroads, rail shippers and municipalities “that identify a public benefit gained through improved rail transportation use” are provided through IRAP, officials said. Santa Clara Valley Transportation Authority and the Transit Oriented Development Program are issuing three new Requests for Proposals (RFPs) to the real estate development community to alleviate congestion in the area and create a stable revenue source for SCVTA. The agency’s Joint Development Program establishes which SCVTA-owned properties are suitable for development through a P3. railwayage.com

SEPTA

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Update

now fully autonomous

ailroading entered a brave new world as a 100% autonomous heavy-haul freight train completed its initial run in Australia’s Pilbara region.

Global mining conglomerate Rio Tinto marked the first delivery of iron ore by an autonomous train as part of its $940 million AutoHaul™ program operating to its port facilities in Western Australia. Australia’s National Rail Safety Regulator approved driverless operations for AutoHaul™ on May 16, enabling the start of phased deployment of autonomous operation. On July 10, the train, hauled by three GE locomotives and carrying 28,000 metric tons of iron ore, traveled more than 175 miles from Rio Tinto’s Tom Price mine to the port of Cape Lambert without an engineer in the cab. Personnel at the company’s Operations Center in Perth, more than 900 miles away, monitored the train. “The safe first delivery of iron ore by an autonomous train is a key milestone for AutoHaul,” said Rio Tinto Iron Ore Managing Director Rail, Port & Core Services Ivan Vella. “The program will deliver the world’s first fully autonomous, long-distance, heavy-haul rail network, operating the world’s largest and longest 10 Railway Age // August 2018

robots. We will continue to ensure our autonomous trains operate safely in the Pilbara, where we record more than 5 million train-miles each year. We are working closely with engineers during this transition period to prepare them for new ways of working as a result of automation.” Locomotives carrying AutoHaul™ software are fitted with on-board cameras allowing for constant monitoring from the Operations Center. All public grade crossings on the network are equipped with closed-circuit cameras. Systems provider Ansaldo STS (a Hitachi Group company) says the successful completion of the first fully autonomous rail freight journey “is a major turning point for heavyhaul rail operators globally.” “One only need to refer to the degree of change that the introduction of driverless metros has had on mass transit operations in the passenger sector to gain insight into the potential impact that autonomous freight rail management solutions may have in the heavy freight and resources sector,” said Michele Fracchiolla, Ansaldo STS President – Freight. “This is an exciting and challenging time for transportation and infrastructure developers globally. The potential for continuous and fast-pace

Left to right: Ansaldo STS President – Freight Michele Fracchiolla, and Australia Delivery Manager Roslyn Stuart celebrate AutoHaul’s fully autonomous debut

change, supported at all levels by the Internet of Things (IoT), will lead to greater integration of systems. The span of autonomous practices will increase, and skill sets needed by our workforce will be modified.” AutoHaul™ is based on an internationalstandard digital radio-based signaling and train protection system that utilizes ATO (automatic train operation) and ETCS Level 2 (GoA4) to provide fully autonomous train operation. Executives from at least one Class I, Norfolk Southern, which has established an autonomous technology facility in Atlanta, have visited the Rio Tinto operation.

THIS IS AN EXCITING, CHALLENGING TIME FOR TRANSPORTATION GLOBALLY.” railwayage.com

Ansaldo STS

AutoHaul™

Update Railcar Orders, Backlog Soar: KeyBanc Analysis “We think improved tank car orders could reflect stronger CBR (crude by rail) economics due to higher crude prices and limited domestic takeaway capacity,” observed KeyBanc Capital Markets analyst Steve Barger. “Together, tank cars and covered hoppers accounted for about 80% of total orders in the second quarter, vs. about 65% in the first quarter.” Second-quarter 2018 tank car deliveries increased about 15% sequentially, and were up about 2% year-over-year. “Current tank car deliveries imply the industry has roughly 10.7 quarters of tank car backlog visibility at current production levels,” noted Barger. The tank car backlog increased to 24,154

cars vs. 16,506 in first-quarter 2018; the nontank-car backlog increased about 6% to 41,007, vs. first-quarter 2018’s 38,710. “On current deliveries, we think the backlog implies about five quarters of theoretical production visibility,” said Barger. “The industry backlog continues to trend toward a more ‘normalized’ concentration of car types, consisting of 37% tank cars, 18% small-cube covered hoppers, 11% mediumcube covered hoppers, and 16% large-cube covered hoppers.” The implied cancellation of 772 gondolas and medium-cube covered hoppers “could be cars from multi-year orders converting from low-demand to high-demand railcar types,” Barger emphasized.

William C. Vantuono

FREIGHT CAR order, delivery and backlog statistics for second-quarter 2018 show that orders increased sequentially to 23,788 cars from 10,348 in first-quarter 2018, the largest quarterly figure since fourth-quarter 2014. Carbuilders delivered 13,071 units in the quarter, nearly identical to first-quarter 2018’s 13,098. The backlog stands at 65,161 railcars, up 18% from first-quarter 2018’s 55,216 cars. This implies “a net cancellation of 772 railcars, consisting primarily of gondolas and medium-cube covered hoppers,” according to market analysis conducted by KeyBanc Capital Markets. Industry book-to-bill came in at 1.8x, more than double first-quarter 2018’s 0.8x, and slightly higher than second-quarter 2017’s 1.7x. Respective book-to-bill for tank and nontank activity was 4.5x and 1.3x, vs. 1.1x and 0.7x, respectively, in first-quarter 2018. Second-quarter 2018’s orders for 23,788 cars were more than double first-quarter 2018’s, and about 35% higher than secondquarter 2017’s 17,665. Non-tank-car orders totaled 13,626 in the quarter vs. 8,119 in first-quarter 2018. Covered hoppers totaled 8,779, or 37% of total orders (6% below first-quarter 2018’s 43%), with large-cube covered hoppers representing the majority at 5,021 cars, vs. 2,211 in first-quarter 2018. Orders for midcube and small-cube covered hoppers were 3,210 and 548, respectively, vs. 845 and 1,416 cars, respectively, in first-quarter 2018. Orders for tank cars totaled 10,162 vs. firstquarter 2018’s 2,229.

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August 2018 // Railway Age 11

Update Siemens + Alstom: Shareholders Say “Yes”; EC “Concerned”

composed of 14 directors: Henri PoupartLafarge, Chairman and CEO; Yann Delabrière, Independent Lead Director; Candace K. Beinecke, Olivier Bouygues, Bi Yong Chungunco, Françoise Colpron, Clotilde Delbos, Gérard Hauser, Sylvie Kandé de Beaupuy and Klaus Mangold; Bouygues SA, represented by Philippe Marien; Géraldine Picaud, Baudouin Prot and Sylvie Rucar. The proportion of independent directors exceeds 64% and “parity continues to be respected,” Alstom officials said. Shareholders approved the future Board of Directors of the combined entity Siemens Alstom, which will include 11 directors, of which six are independent members and five are women: Roland Busch, Chairman; Yann Delabrière, Independent Vice Chairman;

Rail Sistem/Ting Chen

Alstom shareholders in July approved a proposal to merge two of the largest suppliers in the global rail industry. By a large majority, Alstom shareholders on July 17 approved more than 95% of the resolutions related to the proposed merger with Siemens Mobility, including its traction drives business. The transaction must be approved by the antitrust authorities; closing is anticipated to occur during first-half 2019. The shareholders’ meeting also served as an opportunity to discuss Alstom’s 2020 strategy, 2017-2018 fiscal year highlights and financial performance. Shareholders approved the renewal of Olivier Bouygues and Bi Yong Chungunco, and the appointment of Baudouin Prot and Clotilde Delbos, as directors. The Alstom Board of Directors is now

Clotilde Delbos; Sigmar H. Gabriel; Sylvie Kandé de Beaupuy; Janina Kugel; Henri Poupart-Lafarge, CEO; Baudouin Prot; Christina M. Stercken; Ralf P. Thomas; and Mariel von Schumann. Shareholders also approved the removal of double voting rights, allowing processes to revert to a former “one share, one vote” principle, officials said. Meanwhile, the European Commission (EC) has launched an “in-depth” investigation into the merger amid concerns that the combination may adversely affect competition in the signaling and rolling stock markets. The EC says the transaction could lead to “higher prices, fewer choices and less innovation due to reduced competitive pressure in rolling stock and signaling tenders.” The EC’s investigation follows a study into the merger’s potential impact within the European Economic Area and globally (excluding China, Japan and Korea). The EC argues that the merger would create an entity much larger than its nearest rivals and remove “a very strong competitor” from the market. Furthermore, the EC has found that the entry of significant new competitors into the EEA markets, including Chinese suppliers, appears “unlikely” to occur in the foreseeable future. The EC has until Nov. 21, 2018 to decide whether the merger is likely to have a detrimental impact on competition.

12 Railway Age // August 2018

railwayage.com

Update $100 Million Proposed for New York City Freight Rail is central to an ambitious plan to streamline freight infrastructure while reducing truck emissions and creating thousands of new jobs in New York City. The city would invest as much as $100 million in theb “Freight NYC” initiative in an effort to expand the use of rail and water to move food, building materials and other goods that are currently trucked in from outside the five boroughs. In Sunset Park, Brooklyn, the Economic Development Corporation wants to create a 500,000-square-foot distribution center on the site of the Brooklyn Army Terminal, adjacent to the New York New Jersey Rail carfloat hub. The EDC was to issue requests this month for proposals seeking private partners for development of the rail hub as well as a new air cargo center near John F. Kennedy International Airport in Queens. The multimodal plan will also pursue private participation in a $20-$30 million

The New York & Atlantic Railroad connects New York City to the national rail network, interchanging with CSX in Fresh Pond, Queens.

barge terminal on five acres of land owned by the city in Hunts Point, a major distribution crossroads for produce in the Bronx. Longer term, to take heavy trucks off city

PRODUCTS COUPLERS • Average life exceeds1.5 million cycles of AAR M-216 fatigue life testing

COUPLER COMPONENTS •Designed to fit all couplers & knuckles

roads, the plan envisions a series of small rail freight yards on a line through Brooklyn and Queens, where goods would be transloaded to smaller vehicles for final delivery.

F Superior O RPerformance

AAR M-216 E AND F KNUCKLES • Averaged over ONE MILLION fatigue life cycles during testing

HOSE ASSEMBLIES & FREIGHT CAR HARDWARE •Machine made for consistent strength and quality

*NEW* COUPLER MOUNTED BRACKETS

HEAVY DUTY YOKES •Design improvements increased fatigue life up to ten times

RUN-A-ROUND HOSE •Bypass air line problems without moving car to a siding

Stuart Chirls

•Over 90% UDE* reduction reported in the field

1968 - 2018 *Undesired Emergencies

railwayage.com

Celebrating

Years

Phone: (800) 792-0500 | www.stratoinc.com August 2018 // Railway Age 13

Update Streamlining Chicago’s Rail Network

service that halted the flow of goods in and out of the state and interrupted passenger service, entails 70 rail and highway infrastructure improvement projects. So far, 29 projects have been completed and $2 billion has been spent or funded primarily through railroad and government partnerships. The U.S. Department of Transportation recommended that 26 projects receive a total of $1.54 billion in federal support as part of the FY2018 Infrastructure for Rebuilding America (INFRA) grant program.

CREATE

Officials in the Windy City are well along in unwinding the nation’s most complicated railroad labyrinth. Chicago’s rail network sees about 1,300 freight and passenger trains pass through the city on any given day, and planned work aims to simplify traffic for all of those trains. The $4.4 billion Chicago Region Environmental and Transportation Efficiency (CREATE) Program, which began in 2003, when transportation officials came together to put an end to bottlenecks in

Illinois DOT was recommended for a $132 million award for a group of projects known as the 75th Street Corridor Improvements and Argo Connections. IDOT has also awarded $49 million in Competitive Freight grant funding to the CREATE program, which state representatives said will allow for the start of construction on the 75th Street Corridor and Columbus Avenue improvement projects. The $474 million 75th Street Corridor Improvement Project is the largest project within the CREATE program and is intended to relieve congestion by separating freight and passenger rail lines to eliminate bottlenecks, cut down on freight and passenger service delays and reduce locomotive idling. When completed, the CREATE program is expected to generate $31.5 billion in the region during the next three decades. Officials also estimate that the program will enable the region to handle up to 50,000 more freight trains per year by 2051.

14 Railway Age // August 2018

railwayage.com

Watching Washington

NEC Infrastructure: Unification by Separation

uman life is measured in scores of years, stars in billions of miles, the national debt in trillions of dollars—all remarkably miniscule numbers compared to the petabytes of data (numbers containing 15 zeroes) generated by artificial intelligence in our increasingly knowledge-based society. Harvesting, arranging, interpreting and putting to productive use the insights of “Big Data”—predictive analytics—is the work of sophisticated computer technology and advanced employee skills grounded in academic disciplines of science, technology, engineering and mathematics. Examples are cameras whose billions of lines of computer code support facial recognition technology, driverless vehicles, and railroads that increasingly rely on predictive analytics to power safer and more efficient operations and maintenance. Joseph H. Boardman, the second-longestserving Amtrak president (2008-2016), Federal Railroad Administrator (20052008), the longest-serving New York State Department of Transportation Commissioner (1997-2005), now retired, perceives another role for predictive analytics— supporting a unified, customer-centric, multi-modal (air, highway, rail) passenger service on the Northeast Corridor (NEC). The NEC may be the most valuable unbroken longitudinal right-of-way in America. Fully electrified, it stretches some 460 miles between Washington, D.C., and Boston. The NEC passes through four of America’s 10 largest metropolitan areas, has the potential to directly serve eight of

460

The nec stretches some

miles between washington, d.c., and boston

railwayage.com

the nation’s busiest airports, is within an hour’s distance of almost 60 million people, and hosts some 7,500 commuter and 1,200 Amtrak trains daily that on any weekday collectively carry some 800,000 passengers. The NEC, with minor exceptions, is under the care, custody and control of Amtrak, whose 900-year federally held sweetheart mortgage excuses it from principal and interest payments. Dollars to dispatch trains as well as to maintain, rehabilitate and improve the track structure and signaling are obtained from user charges paid by eight separate commuter agencies operating over the NEC, from Amtrak’s own fare collections, and from cash subsidies granted Amtrak by state and local governments. It’s not enough. The Northeast Corridor Commission, an 18-member agency created by Congress in 2008 “to improve coordination of the NEC,” calls the NEC “capacity constrained,” beset with deferred maintenance and obsolescence, and in need of almost $60 billion to restore it to a “state of good repair” and fund overdue expansion and improvements. With dozens of bridges and tunnels— some dating to the Civil War—and signal systems installed during the Great Depression, NEC train delays caused by infrastructure failures, maintenance issues and speed restrictions are endemic. Boardman’s vision is to transform the silo management structure—by which each commuter agency and Amtrak operate largely independent of each other—into a unified regional transportation system to include highway and aviation partners. First, he would separate train operations from infrastructure operation, creating an open-access NEC architecture allowing currently geographically constrained commuter operators—and perhaps new private-sector competitors—to expand the reach of individual trains and their frequency. The NEC also would be expanded by acquiring state-owned commuter assets. For sure, it’s a Brobdingnagian challenge, but Boardman says the NEC “already is an Internet of Things—trains, stations, signals, sensors, software—receptive to data-driven innovation and cooperation, transforming currently disjointed regional

amtrak lacks the resources to renew and grow the nec.” transportation into a customer-centric, interconnected, more flexible and transparent intermodal people-moving network whose schedules, pricing and real-time performance would be accessible through a smartphone application.” Budget-challenged Amtrak, says Boardman, lacks the resources to renew and expand the NEC, and is incapable of nonrail development, which “needs to be done by development people.” Awaiting congressional hearings is the AIRNet-21 concept whereby a private-sector management organization would lease the NEC and self-finance expansion and renewal, earning a profit through commercial development and assessment of statutorily regulated market-based user charges on intercity and commuter operators. “Public- and private-sector ideas abound,” but the key for the NEC, Boardman says, “is to lay down and maintain a safe, zero-defect, in-the-ground infrastructure, managed by using the opportunities that Big Data provides—and teamed with separate, but coordinated, train operating companies to meet commuter, intercity and express services in the busiest rail corridor in the Western Hemisphere.”

FRANK N. WILNER Contributing Editor August 2018 // Railway Age 15

BNSF

t a time when the “less is more” strategy to managing a railroad has proven disastrous for some carriers, BNSF Railway has shown that the “build it and they will come” model can often play out better in the long run. Especially if the building is done with robust but responsible investment over time, and regardless of whether “they” (shippers) are a bit late in coming or are already lined up at the door. Failure to update motive power and expand fixed plant in the leaner years can mean business lost when traffic comes roaring back, and blips like the rise and fall of crude by rail and other commodities can be cyclical. (BNSF’s movement of CBR to the Pacific Northwest, by the way, remains near peak levels, as does its shipment of export coal through Canadian ports.) Investing steadily the past two decades put BNSF in a leading position to handle the rise in customer demand that’s recently spiked to record levels. That’s not to say BNSF is completely free from moments of congestion. System chokepoints still exist, such as the single-tracked bridge over Lake Pend Oreille outside Sandpoint, Idaho, which BNSF plans to resolve with a second, parallel bridge. Horsepower and manpower have been in short supply, with some 200 locomotives being returned from storage and five-figure hiring bonuses being dangled in front of prospective new employees. And a Dallas-Forth Worth intermodal hub became so overwhelmed by a 20% increase in volume that BNSF is expanding track there and adding more than 1,000 new parking slots. Numerically Out in Front In the U.S., freight railroads on average saw carloads increase 3% in 2017, with intermodal up nearly 4%. BNSF trended slightly higher, its carloads in 2017 up 4.7% and its intermodal up 5.5%. In the first half of 2018, total U.S. carload growth slowed to 1.3%, but intermodal edged upward to 6%. As of mid-2018, BNSF’s carloads rose 4.5% and its

16 Railway Age // August 2018

intermodal 5.4%. Total operating revenues for BNSF in 2017 exceeded $21 billion, an 8% increase over 2016. First-quarter 2018 showed BNSF on track for an 8% revenue rise over 2017. BNSF says it reached an all-time weekly volume record of nearly 220,000 units during Q4 2017. In Q2 2018, BNSF President and Chief Executive Carl Ice said, “Total volume moved by the railroad represents a historic high level for this time of year as we exceeded 200,000 units for the fifth consecutive week, and eight out of the past nine weeks.” Severe winter conditions “impacted velocity and fluidity on portions of our primary route between the Pacific Northwest and the Midwest,” Ice noted. However, “Our overall dwell has decreased year-to-date by more than 7% compared to the same period in 2017.” Intermodal is a key sector in current freight rail growth. A June 2018 report in the Journal of Commerce said, “In the long term, intermodal faces a considerable challenge from technology. The primary draw of the service is price. Intermodal is cheap, especially now as soaring truck rates are causing inflation-conscious shippers to closely manage their transportation costs. But technology is driving efficiencies into the trucking industry and closing the delta between the two modes.” Recent years have seen increased competition for intermodal between the Pacific Northwest and the East Coast, as well as from the PNW to Texas, not just between railroads and trucks, but between BNSF and chief rival Union Pacific. Todd Carter, V.P.-Domestic Intermodal at BNSF, says, “We continue to focus on market opportunities as they arise. As demand continues to increase with the population in Texas, we will continue to look for ways to serve that growing market. Our volumes across intermodal service lanes continue to rise to meet demand, including routes connecting us to the eastern part of the U.S.” Much of that intermodal growth has been centered around agricultural products. Has California’s recurring drought caused any

All Photos: Bruce E. Kelly

Continuous capex helped position BNSF for historic business levels.

railwayage.com

BNSF

ready for a

roaring economy By Bruce E. Kelly, Contributing Editor

Grain and intermodal trains pass at Kootenai Falls, Montana. railwayage.com

August 2018 // Railway Age 17

BNSF International containers ride BNSF through the Kootenai River Canyon between Katka and Crossport, Idaho.

shift in loadings of perishables traffic into new growing regions elsewhere? Carter says, “We move produce to market from Arizona, California, the Pacific Northwest and Mexico. Each of those regions has a different growing season and produces different fruits and vegetables, and we move produce from each of those regions as it ripens. Since California is no longer facing severe drought conditions, the produce movements we make today are not out of the norm.” Other business is being courted by BNSF through its Premier Parks, Sites and Transload program. Colby Tanner, AVPEconomic Development at BNSF, describes the program as “our strategic approach to address the increasing demand for customer site locations based on population growth and market demand.” One such site is Logistics Center Hudson, a 430-acre property BNSF is developing northeast of Denver. Tanner says, “BNSF’s Logistics Centers focus on offering direct rail service in multi-customer and multi-commodity business parks. What distinguishes Logistics Centers from private business parks is that BNSF invests directly in development of the facilities to create sites in underserviced, strategic and primarily end-user markets. These facilities can serve manifest and/or unit train customers.” 18 Railway Age // August 2018

Where is the Growth? Here’s how BNSF responded to a series of questions on traffic growth and capex programs: RAILWAY AGE: Traffic levels on BNSF during the first months of 2018 looked more like the end-of-year, post-harvest, preChristmas traffic rush known as “fall peak.” What do you attribute this to? BNSF: The continued strength of the economy. As the economy grows, we have the opportunity to grow with it. Thanks to our investments, we are positioned to grow with our customers. RA: Which specific segments of the BNSF system are seeing the most growth in terms of carloads or average trains per day? BNSF: We saw first-quarter growth in consumer products, industrial products and agricultural products, while our coal volumes declined as anticipated. Our gains were most pronounced in agricultural products. Most of the rest of our business is growing, however, reflecting continued improvement in both the consumer and the industrial economies. We’re seeing broad growth across industrial commodities including sand, steel, taconite, chemicals, plastics and lumber. As a result, we achieved an all-time first-quarter volume record of 2.6 million units in 2018, beating the prior record set in 2006.

RA: Of your $3.4 billion capex plan for 2018, $500 million is scheduled for “expansion and efficiency projects.” Where are your biggest capacity improvements taking place this year? BNSF: Our capital plan allows us to maintain the railroad in the best condition that it has ever been and to expand capacity at key locations on our network where we anticipate further growth. In New Mexico, a two-year project began this year to add 10 miles of third main line along the Southern Transcon route. Through Amarillo, Tex., crews are installing a four-mile stretch of fourth main line. On the Needles Subdivision in Southern California, two projects will add additional capacity, including stretches of triple and quadruple main line. In Washington, we plan to install new double track along the Spokane Subdivision between Hauser, Idaho, and Spokane, as well as between Washougal and Mt. Pleasant on the Fallbridge Subdivision. Two bridge replacement projects are also slated to begin this year in Home Valley and North Bonneville, Wash. RA: BNSF has recalled some 95% of its 5,000 train and engine service employees who were furloughed since 2016, and plans to hire 2,000 more in 2018. Is it becoming more difficult to attract and retain new people for the demanding work and lifestyle railwayage.com

EST. 1983 COMMITTED TO INNOVATION

BNSF the infrastructure to handle that growth. RA: In a discussion at the American Short Line and Regional Railroad Association annual meeting in April, BNSF Executive Chairman Matt Rose alluded to Positive Train Control (PTC) being a possible precursor to automated or un-manned train operation. However, Rose said, “… that is not our focus.” How much longer until a North American carrier tests crewless freight trains? BNSF: We can’t speak for all the other railroads. However, BNSF is not looking at un-manned train operations.

Intermodal off BNSF partner MRL (right) waits at Sandpoint, Idaho, for intermodal off BNSF’s Hi Line from Chicago.

that train and engine service entails? BNSF: With 4% unemployment nationally and local rates in some locations as low as 2.8%, hiring has become more difficult. This year, we expect to fill more than 3,500 hourly positions across our network in areas including our transportation, engineering, dispatching and mechanical crafts. RA: BNSF received high marks—ranked No. 2 among U.S. railroads in 2017—for its on-time handling of Amtrak trains. Considering the record levels of traffic you’ve been carrying, how difficult is it to balance passenger trains with the scheduling needs of your own freight business? BNSF: To ensure passenger rail service is able to fulfill its commitment to its customers, we have to constantly communicate both within BNSF between our field operations and the Network Operations Center, and between our NOC and the Amtrak operations center in Wilmington, Del. RA: In January, Warren Buffett (chairman and CEO of BNSF parent BerkshireHathaway) expressed his disinterest in investing in crypotcurrencies such as Bitcoin. In February, BNSF became the first Class I railroad to join the Blockchain in Transport Alliance (BiTA), which is described as a coalition to develop a “distributed ledger” used by all members of a supply chain. Blockchain technology is said to be the birthplace of Bitcoin. Has BNSF entered a logistics partnership where cryptocurrency transactions can take place? 20 Railway Age // August 2018

BNSF: We are not exploring the use of Bitcoin or any other cryptocurrencies. Our blockchain initiatives are focused in other areas such as shipment tracking, provenance and asset management. Blockchain technology has the potential to bring significant change to several aspects of the freight transportation industry, specifically how freight shipments are tracked and how paperwork is handled between freight providers. As new technology develops, we believe it’s important to understand that technology and whether or not it has application to improve the supply chain. RA: Energy companies have been unsuccessful in their attempts to build new export facilities for coal or crude along the U.S. West Coast. Exports of Powder River Basin coal through Canadian ports edged up slightly in 2017. What does BNSF’s role in the future of conveying low-sulfur coal to foreign markets look like if terminal capacity remains at its current state? BNSF: While coal markets in general are declining, BNSF pursues opportunities as they arise and has gained some market share. If we are going to remain competitive as a supply chain, we also need public and government support for permitting new infrastructure development in the U.S. Permitting serves a good purpose, but it is a process that is too easily leveraged as a tool for those wanting to delay or stop a project. If we expect the economy to continue to grow, we must be able to build

Reaching for PTC, and Beyond In late 2017, BNSF completed installation of all federally mandated PTC infrastructure across more than 11,500 miles of its system. Hundreds of trains are now handled each day under PTC. BNSF President and CEO Carl Ice tells Railway Age, “The first and foremost purpose of PTC is improving safety. Over the coming years, we believe that we will be able to build upon PTC to gain additional efficiency and productivity in train operations.” As BNSF and other railroads approach the Dec. 31, 2018, interim deadline for full PTC implementation, there continue to be instances of train crews calling in to their dispatchers or PTC help desks with technical problems. But the biggest issue impeding PTC is that some railroads, including those whose equipment or operations overlap into BNSF territory, are not prepared to function under a common system. In June, BNSF said it “successfully demonstrated interoperability with several railroads that operate on our network, including commuter railroads and Amtrak. However, not all railroads that operate on BNSF will have completed PTC installation by the end of 2018.” Consequently, BNSF submitted a request to the FRA for an alternative schedule, a two-year extension to Dec. 31, 2020. PTC may eventually integrate with other technology to improve such things as fuel economy, route capacity, shipment tracking, and asset management. BNSF declined to speculate on its plans for “PTC 2.0,” but if this next level of railway innovation performs as intended, watch for BNSF to help lead the way, with billions of dollars in commerce transported more efficiently— and more profitably—as a result. railwayage.com

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R AILWAY AGE AND PARSONS PRESENT

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OCTOBER 18 & 19, 2018

The International Conference on Next-Gen Train Control features in-depth technical sessions and comprehensive project updates on CBTC for rail transit, PTC for main line railways, and emerging technologies for both – all presented by leading experts from around the world. Now in its third decade, it’s the rail industry’s single-most important gathering of communications and signaling professionals from around the globe.

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PROGRAM HIGHLIGHTS • Artificial Intelligence • IoT, Big Data & Train Control • Ultra Wide Band Technology • Federal Railroad Administration Testing Requirements • Domestic and International CBTC Projects • Class I PTC Deployment • PTC “2.0”: Moving Toward Real Business Benefits • Interoperability Issues • “Greenfield” vs. “Brownfield” Implementation • Supplier Roundtable

Agenda subject to change.

www.railwayage.com/nextgen

Fueling fueling

Fueling trains in the

BY BRUCE E. KELLY, CONTRIBUTING EDITOR

21 century

t has been likened to a pit stop at the Indianapolis 500. But instead of changing tires and gassing up race cars in a 200-lap speed competition, BNSF’s main line fueling station at Hauser, Idaho, services locomotives that power trains on the western lap of the railroad’s Northern Corridor. When opened in 2004, Hauser represented the state of the art in rapid fueling with environmental safeguards. More than a decade later, Hauser upholds those standards as it tops off the tanks on an average of 25 to 30 trains daily, out of the 60 or more trains traveling each day across BNSF’s busy Spokane, Wash., to Sandpoint, Idaho, route. 24 Railway Age // August 2018

Hauser is located on a single corridor that links multiple main lines serving the Pacific Northwest with the rest of the BNSF network to the east and south, including partner Montana Rail Link. Predecessor Burlington Northern installed a halfdozen tracks at Hauser in 1972 for what was intended to be a 76-track classification yard, but over time that plan lost out to a struggling economy and BN’s other system-wide commitments. Hauser Yard grew to a dozen tracks and became an important staging and re-blocking point for unit grain, automobiles and other traffic during the 1980s and ’90s. Then came the BNSF merger in 1995-96, and with it a new emphasis on

efficiency and throughput. By constructing a run-through, main line facility at Hauser, BNSF could fuel intermodal and unit trains headed into the Northwest, enabling those trains to complete their round trip with the same locomotives and no further servicing until heading east through Hauser again. This was a huge improvement over the time-consuming process of uncoupling power from trains at yards in Washington or Oregon and fueling at facilities described by BNSF as “older and less environmentally sound.” Building a Better Gas Station When first announced in the late 1990s, railwayage.com

fueling The canopy over BNSF’s Hauser, Idaho, fueling facility keeps the servicing pad clear of snow and rain, improving safety and reducing wastewater runoff.

All photos: Bruce Kelly

BNSF’s main line fueling facility at Hauser, Idaho, raised the bar on efficiency and spill containment. the $30 million Hauser fueling facility faced opposition from some members of the public because of its location atop a sole-source aquifer that supplies water to roughly a half-million people in the Coeur d’Alene, Idaho, to Spokane area. Never mind that more than 50 million gallons of diesel, gasoline and aviation fuel were already stored and transported above the aquifer in older tanks and pipelines at gas stations, airports and industries. Opponents of the Hauser facility pointed to contaminated sites in other states, where previous companies during the steam and early diesel eras had serviced and maintained locomotives with little or railwayage.com

no environmental protection in place. At some of those locations, poor practices of the past led to spills during locomotive fueling. But the site most often mentioned by environmental activists—Livingston, Mont.—was contaminated as a result of locomotive maintenance at the massive shops complex once operated by Northern Pacific, and later BN. As BNSF VP-Environmental and Hazardous Materials Mark Stehly said in a September 1999 letter to concerned business leaders, Livingston’s groundwater contamination “was due to chlorinated solvents from electrical equipment tear-down and repair, and had nothing to do with fueling.” In August 2017, the Environmental Protection Agency removed Livingston from its Superfund National Priorities List, saying BNSF had sufficiently removed its predecessors’ sludge, solvents and petroleum from the groundwater, with additional work ongoing. Almost three years of public hearings and negotiations led to BNSF being granted a permit in 2000 to build the Hauser facility. Site preparation began the following year, with work progressing slowly due to the intricate safety features involved, but also due to a flattening of business and corresponding decline in capex spending. BNSF agreed to reduce on-site diesel storage from an originally planned 2 million gallons down to approximately 500,000 gallons, housed in two 250,000gallon tanks. Both tanks are doublebottomed, with leak detection between the bottoms. Tank farm containment walls can safely hold the contents of all storage tanks. Storage and servicing areas rest on reinforced concrete pads up to two feet thick. BNSF also doubled its below-ground protection, adding a second high-density polyethylene liner (original plans called for one). All pipes transporting diesel fuel, lube oil and wastewater are double-walled, with visual and pressure-sensitive leak detection systems. A five-pound PSI change in the nitrogen-charged chamber surrounding the inner pipe will automatically close all failsafe valves and activate alarms. The most visible feature setting Hauser apart from other fueling facilities is its overhead canopy above all four main tracks, which reduces the amount of

industrial stormwater generated from rain and snow on the fuel pad. During opening of the Hauser fuel depot in 2004, Stehly said, “In my 30 years-plus of railroad engineering/environmental experience, I have never observed a facility that can compare to the level of protection and redundancy offered here.” Hauser’s fuel storage tanks are replenished from a three-track offloading platform where inbound tank cars of diesel fuel are unloaded, and outbound cars carrying wastewater can be loaded for off-site treatment. It has the same safety and containment features as the main fueling pad. In keeping with its commitment to protect the aquifer, BNSF chose to receive fuel by railcar rather than have it delivered by truck or pipeline. Hanson-Wilson (now Hanson, Inc.) designed and oversaw construction of the Hauser facility, its previous projects for BNSF having included fueling facilities at Commerce, Calif.; Kansas City, Kan., and Belen, N.M. Key suppliers of Hauser’s initial hardware included Rocla (concrete ties), Safetran Systems (signals), Snyder Equipment Co. (oil and water boom cabinets, filler nozzles), Cyclonaire (sanding systems), Allen-Bradley (programmable logic controllers), Smith Meters (fluids delivery monitors), Carbis (unloading platform hardware), and Electro Systems (controls integrator). Initial Concerns, Recent Expansion Two minor incidents occurred at the Hauser facility during its first year. In December 2004, trace amounts of petroleum run-off were discovered in the ground due to a break in an eight-inch wastewater pipe. Then, in February 2005, a mixture of water and fuel was detected and safely contained within the polyethylene liner. BNSF performed $10 million in repairs and agreed to enhanced monitoring by Department of Environmental Quality personnel. Also in 2005, a sewage plant operated by the nearby city of Post Falls leaked an estimated 150,000 gallons of treated wastewater into the ground. While deemed harmless by city and state officials, that municipal sewage spill illustrated the potential for non-rail-related threats to the aquifer. (continued on p. 28) August 2018 // Railway Age 25

fueling There’s no such thing as a “minor” spill BY MERRILL BISHOP

any rail-to-truck transloading site managers have far bigger problems than to chase after careless workers who set up spills and accidental releases. Some of the most common errors are breaking hose connections while the hose is still under slight pressure, or “cracking” a valve just to see if the pipe is full, or even throwing aside a “just used” hose and allowing it to drain out on the ballast or access roadways. Unfortunately, the real cost of this carelessness often doesn’t hit the company until many years later, when the U.S Environmental Protection Agency or other agencies detect contamination in subsurface water down-gradient from your facility. Back in the mid-80s, as manager of facility planning for Safety-Kleen Corp., I was leading a management team evaluating a possible site for a regional truck-to-rail used motor oil transloading operation just north of New York City. On the surface, the site had a railroad spur track, plenty of flat land to build tanker truck parking, and good access to feeder highways. As was our practice, our environmental staff hired a well drilling firm to place sample wells and then do a detailed analysis. The analysis showed excess quantities of tannic acid. This triggered our environmental staff and the state’s staff to attempt to find the source of this contamination. Research uncovered that a leather tannery had been closed about 20 years earlier— and it was more than five miles up-gradient from our sample wells. Spills from processing vats and/or tainted surface water from tanker unloading operations had slowly migrated from surface water down into the immediate subsurface aquifer, and continued for years. There’s a saying in the environmental business: “Dilution is not the solution to pollution.” What about handling and disposal of tainted rainwater or the usual “just hose it down with water” that ends up in your loading rack’s or locomotive servicing track’s drainage storage tank? The more rainwater that is exposed to your tainted open spill collection pans, the more tainted water you have to pay to process. So, it makes sense to capture the release before it hits the slab or ballast. This is where real effort is needed to reduce monthly disposal expenses and stem long-range expenses. Using adequate spill containment is the key. A “tippsy,” a fivegallon plastic pail, is a common yet poor spill containment tool. Just the manual movement of delivery hoses will tip it over onto your slab or ballast. A wide collector

26 Railway Age // August 2018

pan would be much better, but here again, a “sawed-off 55-gallon drum” or wash tub with a few gallons of “spill” in it is difficult to move around for emptying without spilling it on the ground. Loose ballast is just another “gravel stream bed” at the surface. The primary purpose of a ballast mound of loose gravel is to allow rainwater to quickly drain away from the wood ties, to allow the ties to absorb the extreme weight variations caused by a passing tank car wheel. This ballast bed, under the ties, may be 2-3 feet deep and goes continuously out to the railroad’s main tracks. Spills originating from broken hose connections or overflows will travel the path of least resistance. This under-surface drainage pathway may be penetrated by buried utility pipelines wiring. This situation, too, can be avoided by having railroad track spill containment pans along the rails at loading or unloading locations. The vast majority of releases from tank car transloading happen within about five feet of the bottom hose connection or the overhead dome area. The most frequent releases during locomotive refueling occur at the fuel port nozzle attachment. The releases will run down the outside surface of a tank car and will drip off about anytime. The personnel ladder up to the tank car’s dome control area often causes this “rundown” to spray outward, way past the rails. There are many designs of track spill containment pans. The cheapest approach is to purchase open pans. These will collect rainwater, contaminate it with residue in the collector pan and then drain into your holding tank and greatly add to disposal costs. A typical open track pan installation may be 12 by 20 feet. For every one inch of rain, you’ll collect 150 gallons of contaminated water that needs to either be processed on-site or hauled off by a contractor. A much smarter approach involves collector pans that can be closed between loading operations. Snow and ice accumulation is another weather related spill containment issue. The labor expense to shovel off an open spill containment pan or to chip out ice from a frozen track pan is sizeable. Also, a worker using an ice chipper on plastic or fiberglass track pans might create “drains” in the pan. Often, the practice is to just shovel the tainted snow and ice to the outside of the containment and let it thaw with the spring weather. Where do you think that tainted meltwater will go? Closeable track pans make much more

sense. Norfolk Southern has more than 80 in its switching yards on pre-designated open spur tracks to provide immediate spill containment. They’re positioned near the entrance/exit from where trains are assembled. We’ve heard comments from one railroad that this isn’t needed since they’ve got first-responder team contracts. They just stop the train with the leaking cargo and wait for the arrival of the contract team. How long before a remedy is in place? It may be useful to evaluate your company’s first-responder contracts and response time. What was the cost of excavation of contaminated ballast after the last “leaker” incident? In recent years, some railroads have adopted “on-the-fly” refueling rather than bringing their locomotives into a maintenance yard with fixed fueling pumps and proper spill containment. This practice generally involves a contract fuel delivery tanker truck. True, this saves time, but what about the spilled fuel risk? Positioning closeable track spill pans on these refueling spurs could lower the risk of groundwater contamination. These types of environmental liabilities may be averted by careful review of your tank car loading or unloading facilities and refueling/locomotive service practices. Nearly all leaks, overflows, broken lines/hoses, etc. involve chemicals/oils that should not get into streams and drinking water sources. The legal ramifications of these events will definitely affect a company’s bottom line, but some of the damage may not be “seen” for many years. Merrill Bishop, President and founder of Trans Environmental Systems, Inc., spent 15 years as a facility design engineer, planner, and in-house consultant at Safety-Kleen Corp, heading the design team for waste oil transloading facilities nationwide. Facilities he has designed utilizing his patented spill containment system are in place throughout the U.S.

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Between 2004 and 2014, BNSF covered the $100,000 annual cost for state DEQ oversight. Now it directs that funding to Kootenai County. In February 2013, an Idaho DEQ waste and remediation manager told the Coeur d’Alene Press that Hauser “has been running in tip-top shape” since

the improvements performed in 2005. Gus Melonas, Director-Public Affairs for BNSF, outlines some of the more recent upgrades to the Hauser fueling depot. “We installed a new liner system in our tank farm, which consists of a Geogrid fabric sprayed with a product called

Polyurea,” Melonas says. “The entire wastewater system has been updated with ‘Cured In Place piping’ and a new wastewater evaporator. We upgraded the fueling system with a state-of-the-art Air Eliminator, dual mechanical flow meters, larger diameter piping, and various valves and pumps.” For most of its existence, the Hauser fueling facility has had three run-through main tracks in service. A fourth fueling main line provided limited access for short trains or light power maneuvered in from the adjacent yard. In 2017, BNSF expanded track capacity at Hauser so there are now four complete runthrough fueling mains. Peak periods have seen as many as 43 trains fueled in a single day, but 25 to 30 trains per day is the norm. BNSF says Hauser’s all-time fuel dispensing record—355,498 gallons—was achieved on May 26, 2018. All that, plus nearly 2,500 days without a reportable injury (as of late July), make the Hauser facility the standard by which all other railway fueling centers could be judged.

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fueling SpillX: From planes to trains

pillX™ is a high-flow pollution prevention locomotive fueling system developed by MPL Innovations, Inc. to bring aviation fueling technology to the railroad industry. The system has been designed to reach fueling rates up to 600 gallons per minute using a dry-break connection that ensures no fuel leakage at disconnect. SpillX was developed using proven aircraft fueling technology and modifying the components to meet railroad industry needs. The result is a robust, durable system that provides enhanced safety as well as significantly increased fueling rates. MPL Innovations worked closely with the Advanced Manufacturing Institute at Kansas State University and Meggitt, a leader in aviation fueling products, to develop this patent-pending locomotive fueling system. The SpillX system was designed partially around the intended goals set forth in the 2001 AAR locomotive fueling recommended practice (RP-5503). These goals include providing higher flow capabilities over

traditional locomotive fueling systems, reducing leakage by utilizing widely available dry-break connections, and implementing a reliable automatic overfill protection mechanism. However, the SpillX system is also different from the guidelines set forth in that recommended practice. It requires no special electronic sensors to be installed on the locomotive, nor any special controller on the fueling platform. Installation is simple and can be completed track-side in a matter of minutes with little to no modifications to the existing locomotive fuel tanks. MPL has served the rail industry for more than 20 years with its line of SolidStick™ solid polymer wheel flange lubricants and other solid lubricants. MPL works closely with its customers to understand problems impacting the industry and address those problems through research and development and advanced engineering of new products. SpillX is a direct result of this research and development. The 2001 AAR recommended practice for fuel-

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ing highlighted the need for an improved fueling system comprised of dry break connections, more reliable shut-offs, and increased fueling rates. MPL spent more than eight years working with customers to design a fueling system that was able to strike a balance among increased fueling rates, safety, simplicity and cost effectiveness. Now, SpillX is in use at the Providence & Worcester and recently completed a six-month pilot with BNSF, where it was installed on 35 locomotives and dispensed more than 200,000 gallons.

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August 2018 // Railway Age 29

winter prep

ready for the cold? High-tech ways of maintaining that “warm and fuzzy feeling.” BY WILLIAM C. VANTUONO, EDITOR-IN-CHIEF

xtreme cold doesn’t have to have an extreme effect on railroad operations and maintenance. Following are several examples of how the supply industry has warmed up to the task. HOTSTART HOTSTART, a supplier to the railroad industry since 1965, is expanding its efforts to serve the market. Railroads, rebuilders and lessors based in the Midwest and East Coast prompted the company to open an office in Merrillville, Ind., for regional sales support. “We have embraced getting closer railwayage.com

to our customers, having more ‘face time’ and more frequent site visits,” says Casey Hall, Market Manager-Railroad. “We plan to offer training from our Chicagoland office and establish regional field service support, allowing us to respond quicker to customer needs during the winter months.” HOTSTART is among the leading companies in the industry providing locomotive diesel engine heating solutions. Heating engines during winter not only keeps the locomotives running on schedule, but also eliminates the need for idling in freezing temperatures. Among its most successful products is the APU (Auxiliary Power Unit),

a self-contained water and oil preheater that uses the locomotive’s onboard fuel supply to heat the prime-mover without requiring an external shore power connection. Running on 0.5 gallons per hour, the APU “offers significant fuel savings compared to the 4-5 gallons or more per hour consumed by locomotives while idling,” says Hall. “Depending on what notch the locomotive is idling at, that consumption can be more. Depending on the ambient temperature, the water temperature in the locomotive can be maintained between 90-120 degrees F (32-49 degrees C) with the APU, and the battery charge is maintained for full August 2018 // Railway Age 31

winter prep additional bonuses. The remote monitoring gives real-time alerts, keeping track of fuel savings, engine temperatures and much more. This gives piece of mind knowing our locomotives are being monitored around the clock. It’s basically set ’em and forget ’em. PDI is the only company we’ve found that offers this, and it’s one of the main reasons we decided on the PowerHouse.” PDI adds that its water separation technology protects against frozen compressed air lines by eliminating water from them.

cranking power when needed.” “Use of the APU in the winter can be easily integrated into existing day-to-day mechanical operations,” says Hall. “The operator control panel is configurable to display real-time status. It offers automatic operation for worry-free heating, and the APU is compatible with existing auto engine start-stop (AESS) systems.” For operations that have their locomotives return to the yard, HOTSTART offers electric idle reduction systems that can plug into shore power. The DLV and CLV engine heaters offer dual- or single-fluid heating, depending on the locomotive’s requirements. Both electric systems maintain locomotive water temperature above 100 degrees F (38 degrees C), “easily keeping locomotives ready for starting without idling,” says Hall. “Our electric systems come with temperature sensors, operator controls and pumps to circulate heated water and/or oil, reducing cold-start wear and tear. For operations needing installation flexibility, both electric heaters are available in modular configurations, decoupled from the standard vertical mounting plate.” PDI Power Drives, Inc. (PDI) is a Buffalo, N.Y.based manufacturer and OEM supplier of locomotive idle reduction technology, fuel filtration systems, and water separation technology for locomotive compressed air systems. PDI’s PowerHouse™ Idle Reduction Technology is available in two models: The APU and the 120. The APU (Auxiliary 32 Railway Age // August 2018

Power Unit) incorporates a Tier 4-compliant, 9.5 hp Kubota® engine that drives an alternator, powering the pumps and tricklecharging the locomotive battery bank. It consumes, on average, 0.38 GPH (gallons per hour) of fuel once at temperature. The 120 operates from a 120/240 VAC external power source and consumes, on average, 0.35 GPH of fuel, once at temperature. Jonathan McCullough, Manager of Mechanical at customer TNW Corp., says, “120 volts is a big advantage. The electrical requirements are lower, allowing for more locations to utilize the PowerHouse 120.” Both compact units feature the PowerHouse Heat Exchanger, rated at 136,000 BTUs/hour (40kW). The heat exchanger provides rapid coolant heating, maintaining coolant temperature of 100 degrees F, “even in the coldest of temperatures.” “Idling is extremely costly in the winter months,” McCullough says. “For EMD locomotives in particular, oil consumption through excessive idling is a large expense. The PowerHouse has greatly reduced our fuel and oil consumption while reducing maintenance costs from fewer operating hours. The TXR Railway is located in town, so eliminating unnecessary idling helps reduce noise pollution.” The PowerHouse also offers remote monitoring capabilities, which allows users to monitor operating parameters in realtime remotely on smart devices or computers. “The initial benefit is fuel savings,” McCullough says. “The oil and maintenance savings and remote monitoring are

ZTR Cold weather extremes can wreak havoc on locomotive batteries. Generally, about 1,200 amps are required to start a diesel primemover. If the available current falls to 800 or below, the engine won’t turn over. ZTR Control Systems’ KickStart™ (photo, above) is a compact (4 X 20-inch), lightweight (45-pound) battery augmentation device that can be installed in several locations including the battery compartment. It uses supercapacitor technology to supplement locomotive batteries during engine start-up. It’s designed to augment healthy batteries to reduce the strain on them during starting, or supply missing amps that weak batteries can’t provide. “The result is less energy drain from the batteries, longer battery life, faster cranking speed, less recharge time, improved cold weather starts, and ultimately, increased locomotive availability,” ZTR says. Supercapacitors are virtually impervious to temperature extremes. Consisting of conductive plates separated by a di-electric material, and controlled by internal software, they store energy in an electrical field. By contrast, a battery stores energy chemically. One key difference between a battery and a supercapacitor is its rapid discharge capability. Another is longevity: Supercapacitors can last up to 1 million cycles, as opposed to 500 cycles on a battery, which typically has a two-year life span. Plus, says Brian Nelson, ZTR Director of Commercial Development, “KickStart reduces battery drain during starting to extend life by up to 50%. If a battery drains down, it will maintain a charge and be ready to assist starting, even after extended shut-down intervals.” Yet another difference is in relation to recharging time: minutes instead of hours, using 74VDC Aux Gen power. And, a railwayage.com

sit idle without idling By equipping a locomotive with a HOTSTART idle reduction heater, the prime mover can be shut down and easily restarted after sitting in freezing weather. Reduce idling, wasted fuel and oil, wet-stacking, emissions, noise and engine wear with a HOTSTART system.

Visit HOTSTART.com or email railroad.com to learn how you can drastically reduce fuel and maintenance costs with HOTSTART idle reduction technology.

winter prep battery’s operating temperature range is typically 32 to 114 degrees F (0 to 45 C). KickStart’s supercapacitor is –40 to 150 degrees F (–40 to 65 C). KickStart also offers fault notifications and diagnostics that eliminate the need for proprietary software for setup and commissioning. In one test, KickStart reduced required battery amperage by up to 35%, while reducing battery voltage drop by up to 38%. The current through the starting motors was consistent in both tests, as KickStart provided the additional required power. “Our focus is on safety, efficiency and reliability,” Nelson says. “KickStart, which has been in the field for nearly 10 years, addresses reliability. We have clients with zero non-starts. Everyone is looking for power, and with the locomotive market leaning heavily toward rebuilds and upgrades, rather than new units, 2019 will be ‘the year of the battery.’” Railway Equipment Co. Railway Equipment Company’s Rail-NET™

remote asset monitoring is capable of monitoring track switch heaters, track switch machines, lubricators, battery chargers, batteries, crossing equipment, track circuits, generators, and cameras. REC has developed a system to collect and circulate pertinent asset operating data. Railroad-defined data is collected via interface modules that monitor a variety of analog and digital inputs. Data is transmitted to a secure online portal for processing and accessibility. The portal allows the user to customize the data presentation as well as when an alert should be sent out and to whom, whenever an asset is operating outside normal parameters. Railroads can prioritize their responses to better utilize maintenance resources. With remote monitoring, a site visit is no longer needed. Instead, the information ensures that maintenance personnel are equipped to correct the situation before traveling to the asset. The largest installed base is on CP, followed by BNSF, Metrolinx and MBTA. “At CP and BNSF, where Rail-NET

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is installed, the structures group looks after switch heaters instead of the signaling group,” says REC Vice President and General Manager Joe Ashley. “Controlling and viewing the unit remotely helps avoid 200-mile drives in the middle of a snowstorm. “Metrolinx acquired Rail-NET as a tool for maintenance contractor PNR RailWorks to increase switch reliability. Also, operating data is imported into Metrolinx’s data warehouse to periodically compare it with other data such as fuel invoices, switch reliability, train schedules, etc. This ‘Big Data’ comparison should help Metrolinx focus spending on where it’s most needed. “MBTA bought Rail-NET as a tool for contract commuter rail operator Keolis. MBTA has been pleased with the performance of our gas hot-air switch heaters; this success should lead to higher adoption. “The signal group at BNSF is interested in a new control module feature that allows it to ‘plug-in’ via various radios to a data aggregator BNSF is installing in 30 bungalows on the Emporia Subdivision as a proof

Everyone using the Single Car Test Device to check their air brake system will benefit from this manual. This book has already helped thousands in its previous editions. This edition is compliant with the latest Code of Air Brake System Tests for Freight Equipment: AAR Standard S-486, including changes effective June 1, 2013. The book is divided into two sections: Test Procedure Flowcharts and Job Aids. The Test Procedures Flowchart section is derived from the current code. It contains additional test information as well as a troubleshooting guide. The Job Aid section contains inspection, adjustment and testing information for the components found on a freight car. It was derived from procedures supplied by product manufacturers and was designed to offer that extra bit of guidance when you just might need it most. Hard bound, 192 pages.

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winter prep of concept, to send exception reports to internal BNSF systems.” Thermon Thermon Group Holdings, Inc., San Marcos, Tex., acquired CCI Thermal Technologies Inc., in October 2017. CCI Thermal, through acquisition of Fastrax in 2012 and the Hovey Industries SCD product line in 2016, consolidated snow clearing device products for track and switches. The SwitchBlade and Hellfire products (acquired from Hovey) have been in service on Class I and transit railroads for decades. The company expects the North American market for snow clearing devices to grow. “High-performance, reliable snow clearing devices are key to successful winter movement of trains across most of the U.S. and all of Canada,” says Thermon. Fastrax will carry on under the Thermon Heating Systems brand. “The railroads are familiar with our products; however, the Thermon name is new to many of them,” the company says. “We continue to sell to

36 Railway Age // August 2018

the Class I’s. We have transit customers in Canada and the U.S.: Toronto’s Metrolinx/ GO Transit, Toronto Transit Commission, Calgary LRT, Edmonton LRT, VIA Rail, Maryland Transit Administration, MBTA, RTD Denver, SEPTA, Utah Transit Authority, WMATA and Amtrak.” Among the company’s recent projects are the Toronto Union Station Rail Corridor revitalization project for Metrolinx, where Thermon is supplying 50 new Hellfire heaters and 149 upgrade control panels to bring existing Hellfires up to the current design, all of which will connect to and be remotely controlled and monitored by GO Transit’s SCADA system. The Eglington Crosstown, Ottawa’s Trillium and Confederation lines, and Edmonton’s Valley line are using Hellfire systems. Kitchener-Waterloo’s ION LRT has installed customized hybrid systems consisting of SwitchBlade and FEB products for their main line and MSF yards. Denver RTD selected SwitchBlade systems for the Eagle P3 expansion project, and as part of

the North Metro expansion in 2016, with 43 control panels and more than 130 heated switches. Thermon also supplies to several short line and industrial railroads, such as Rio Tinto’s Iron Ore Company of Canada and the Quebec North Shore & Labrador. “Hellfire has several new enhancements,” says Thermon. “These include a new network-compatible controller with an RS-485 communications port and MODBUS protocol to allow for remote control and monitoring via the internet or SCADA system. Other enhancements include design changes as a result of testing to AREMA standard 11.5.1, Recommended Environmental Requirements for Electrical and Electronic Railroad Signal System Equipment; a new 100% stainless steel burner design for improved efficiency, flame signal strength and minimized maintenance; a continuous fan mode operation that eliminates in-rush currents and is ideal for drifting snow locations; a burner defroster that ensures reliable ignition, and improved access panel seals to keep controls clean and dry.”

railwayage.com

Book REview

Railroading for Railroaders By Frank N. Wilner, Capitol Hill Contributing Editor

or railroaders, a cerebral repast beckons in the form of two new books illuminating the careers of legendary CEOs. One is a biography of the late John Walker Barriger III, a peripatetic dispenser of efficiency enhancements to a stable of halt-and-maimed iron horse properties, earning him the appellation, “Doctor of Sick Railroads.” The second is an autobiography by Robert Duncan (Rob) Krebs, a retired chairman and CEO of BNSF, who distinguished himself through a career-long dedication to delivering seamless service shorn of delays, and whose vision for a true transcontinental railroad may invigorate his successors actually to achieve it. Where Barriger is celebrated as having devised and implemented improved engineering, management and marketing practices in hopes of keeping troubled railroads afloat during the most smothering years of 20th century economic regulation, Krebs arrived at the executive suite level as the regulatory burden was being lifted. With greater freedom to adjust nimbly to market forces, Krebs melded two already healthy railroads, so improving their post-merger

railwayage.com

efficiency, customer service, market reach and prospects that the most persnickety and successful long-term investor on the planet came a-calling with a unit-train of cash. Although of different generations, Barriger and Krebs each demonstrated consistently, and without hesitation, an extraordinary ability to identify, extract, organize and put to productive use strategies, managerial teams and solutions essential to corporate excellence. In John W. Barriger III: Railroad Legend, Clemson University historian H. Roger Grant recites the life and accomplishments of Barriger, whose approach to railroad management was largely scientific. His railroad research collection became so vast that a library in St. Louis dedicated to preserving the history of railroad business practices and technology is named in Barriger’s honor. In contrast to Grant’s academic style of narrating Barriger’s career, Riding the Rails is a breezy memoir by Krebs that reads like a transcript of an informal after-dinner soliloquy. One can visualize the smiles of the “old heads” as Krebs offers enchanting reminiscences, or the studied attentiveness of a younger generation of railroad leaders absorbing Krebs’ managerial insights. While there were hundreds of Class I railroads during Barriger’s years, dozens still remained during Krebs’ career, and he headed three of them—Southern Pacific (SP, now part of Union Pacific); Santa Fe Pacific Corp. (which included Atchison, Topeka & Santa Fe during a failed attempt to acquire SP); and BNSF (created by the merger of Burlington Northern and Santa Fe, and subsequently acquired by Warren Buffett’s Berkshire Hathaway global investment conglomerate). Barriger earned a civil engineering degree from prestigious Massachusetts Institute of Technology (MIT). Krebs secured an undergraduate degree in political science from equally prestigious Stanford University, and an MBA from Harvard Business School. While Barriger interspersed college studies with manual labor in the Altoona, Pa., machine shops of the Pennsylvania

Railroad (now part of Norfolk Southern), Krebs spent his college summers working at banks: “My dad was a banker, and I wanted to be a banker, too.” Although Krebs began his railroad career in business attire at SP’s San Francisco headquarters, quite soon he was learning the three-point stance of a yard switchman. “The railroad’s thinking was that if you’re going to manage these people, you need to walk in their shoes for a time and understand their jobs,” he writes. Barriger entered the PRR’s management training program following college, but after being assigned as a yardmaster, he chose to depart for Wall Street as a railroad financial analyst. The year was 1927, just prior to the Great Depression and at the tail-end of an abandoned effort by the Interstate Commerce Commission to fulfill a decade-long congressional directive to redraw the nation’s railroad map through centrally planned mergers. Barriger developed a general theory for what he termed, “Super Railroads.” Both books may be most accurately described as “railroading for railroaders.” They are available for purchase from Simmons-Boardman Books. See www.transalert.com.

August 2018 // Railway Age 37

wheels

Reliability & innovation

roll on

The industry looks for new ways to improve on a railroad basic.

38 Railway Age // August 2018

anniversary of a landmark event in railroad wheel manufacturing. It was sometime after March 9, 1978 when so-called “wheel dots” began appearing on thousands of freight cars all over North America. That was when the National Transportation Safety Board and Federal Railroad Administration directed carriers to inspect cars for a specific brand of wheel that failed after overheating and was suspected in a rash of derailments. A yellow dot indicated the car was safe for interchange; a white dot meant the car carried the offending wheel and was banned from interchange. The ubiquitous dots were seen on older cars for years after, a moving

artifact to industrial product safety and a reminder that the business of moving freight can be a tenuous proposition when it comes to staying on track. [The AAR’s Component Tracking Program is registering wheels and other parts, to improve safety. Sidebar, opposite.] The lessons of the past and technology of the present in the research, design, and testing of wheels and axles by today’s manufacturers means railroads rolling off more miles and wheels that are more reliable than ever before. Griffin has been producing wheels and related equipment since 1877, and stands at the forefront of acquired experience, railwayage.com

Bruce Kelly

onsider the flanged wheel. A marvel of physics, metallurgy and engineering, the wheel provides a mere fractional interface ’twixt train and rail in relation to its size in a constant battle with friction, a glorious metaphor as it helps keep trains weighing tens of thousands of tons—and much of the underpinnings of the world economy—moving reliably and safely in the right direction. To be sure, there are times when a little help is needed to get from here to there, but, as we know, the squeaky wheel does indeed get the grease. Which brings us to a rather dubious

By STUART CHIRLS, SENIOR EDITOR

Amsted

wheels

innovation and expertise. A unit of Amsted Rail, Griffin produces about half of the 10-12 million wheels now operating in the North American freight car network. The focus on reliability goes to the heart of any product’s performance, says John Oliver, Vice President of Technical Services. “When an operator has to pull a wheelset [out of service], they’re not getting the mileage they would if the wheel wore out.” Griffin’s proprietary Micro Alloy© wheel is made from a patented material that provides increased protection against thermal degradation in frequently encountered high heat environments. “Alloying and micro-alloying are chief among current process improvements,” says Oliver. Alloys are metals typically combining two or more metallic elements, for improved performance. “Typical alloys we use are chromium, molybdenum, nickel, vanadium and other elements,” he says. “Small amounts are added to existing carbon-content wheels, to improve ‘hardenability’ [how deep into a metal a certain hardness can be achieved], strength, ductility [how a metal “stretches” under stress] and toughness, depending on the combination of alloys.” Microalloying helps wheels perform in an environment where temperatures can reach 1,000 degrees Fahrenheit, says Oliver, as well as in the cold, where blowing snow compressed between the wheel and rail can accelerate tread pitting, or the small loss of material from the wheel tread. Pitting is usually a top concern for most customers, Oliver says, along with flat spots, which can cause excessive pounding on rails. Other conditions include similar loss of material through shelling and spalling. Shelling is related to rolling contact fatigue, and is sometimes braking-related. Although rare, the most prominent wheel fracture is the vertical split rim. This failure mode increased in the late 1980s railwayage.com

and early 1990s. “Existing tread cracks can turn and run vertically down, parallel to the face of the wheel, leading to a chunk of the rim coming off, and can be 12 inches long or more,” Oliver says. “Heat-treated, curve-plate wheels appear more susceptible to this than their untreated predecessors. There is some speculation that more rail grinding may contribute to more contact stresses, causing changes in the residual stress [on a wheel].” Griffin markets wheels in 38-inch diameter, for 125-ton articulated double-stack cars; 36-inch, the most popular, for 286K cars; 33-inch for 70-ton intermodal cars and older boxcars, and 28-inch, to maximize clearances for tri-level autoracks. Griffin also manufacturers locomotive wheels. It sells more 42- and 43-inch diameter wheels due to the proliferation of six-axle power. The 43 fits in a 42-inch application; its thicker rims allow the operator to “turn,” or reshape worn wheels, more often, for extra operating life. The same goes for the 40- and 41-inch wheels designed for fouraxle locomotives. Griffin sells to lessors and carbuilders as well as directly to Class I railroads BNSF and CN, which have their own wheel mounting shops. Japan’s Nippon Steel Sumitomo Metal Corp. (NSSMC) sells wheels through its Sumitomo sales agent in North America. NSSMC began production of its Class D wheels in 2012, and has sold 15,000 units to customers in North America through March 2018, says sales representative Yuki Maruyama. NSSMC offers Class C wheels in 33-, 36and 38-inch diameters, but since 2009 has sold Class D wheels made with a proprietary alloy that makes it harder than conventional carbon steel wheels. “Depending on operations and a given situation, the average wheel life of a Class D wheel can be two times that of a Class C wheel,” Maruyama says. “There is a higher resistance to shelling, especially in severe cold climates, and where braking friction is an issue.” Sumitomo is testing or has sold Class D wheels to eight customers in North America, South America and Australia. It is expanding its specific applications to include grain cars and iron ore cars, and expects to sell an additional 20,000 wheels through March 2019.

Tracking wheels for improved safety

ore than four million North American rail equipment wheelsets have been registered in Railinc’s Component Tracking program since its inception in 2012. The initiative was launched under the leadership of the Association of American Railroads Equipment Health Monitoring Committee to improve safety, productivity, and reduce costs. “As rail equipment is brought into shops for periodic overhauls, wheelsets must now be registered in support of the industry’s goal to improve visibility into the status and history of wheelset health,” says David (Chip) Summey, Railinc Director of Asset Services. “This policy has resulted in a steady increase in the number of registered wheelsets, which stands at 67% of all wheelsets in North America today.” Among the key benefits of this program is its role in improving equipment recalls. Like automobiles, there are rare occasions where a railcar part needs to be recalled. Because wheelsets are registered and tracked through the Component Tracking system, Railinc can generate a list of cars that may be affected in a matter of minutes, and advise the industry to act on those cars. In 2017, a minor recall of 215 wheelsets was executed in a number of days, instead of spending years looking for specific components scattered all over North America. This provides a key safety benefit to the industry. In addition to the management of recalls, the program allows industry stakeholders to capture and view component-level data about applications and repairs. This enables improved maintenance planning and more informed decision-making. With the wheelsets initiative well under way, Component Tracking has been extended to include side frames, bolsters, couplers, brake valves and slack adjusters. This essential data gives equipment owners, shops, reconditioners and other rail industry participants a broad view of equipment health and performance. – James Street Associates, for Railinc

August 2018 // Railway Age 39

Passenger focus passenger Focus

New ways of thinking are boosting the future of the high-speed sector.

By stuart chirls, SENIOR EDITOR

n both coasts and more than a few places in between, advocates of high performance passenger rail are charging smartly into a future that is looking as promising as any in the transportation sector, with new approaches and new opportunities for operators, developers, suppliers and many other stakeholders. In California, construction of the

40 Railway Age // August 2018

electrified line from the Bay Area to Silicon Valley is well under way, the first steps in a statewide HSR network. In Texas, a planned bullet train is getting ready to break ground. Eastward, Amtrak has ordered new trains and announced right-of-way upgrades for the next generation Acela Express service on the Northeast Corridor; Connecticut opened an upgraded route that will host high-speed Amtrak services. In Florida, Brightline, the privatelyowned South Florida passenger startup, is creating the kind of buzz usually associated with new age transformative ventures, the kind that promise to disrupt traditional ways of doing business, only this time for the better. Operated by All Aboard Florida, a division of Florida East Coast Industries, what would become Brightline was first proposed as a Miami-Orlando high speed route in 2012 as the first privately owned

and operated intercity passenger service since 1983, when the Denver & Rio Grande Western Railroad discontinued the Rio Grande Zephyr between Denver and Ogden, Utah. Construction on Phase 1 from Miami to West Palm Beach began in mid-2014, and the first revenue runs began in January 2018. Higher-speed trains along the upgraded Florida East Coast Railway freight right-of-way are limited to 79 mph, but that’s speedier than the adjacent TriRail commuter service average speed of about 38 mph. But Brightline was never conceived as a commuter line, and focuses instead on what marketing types refer to as “the customer experience” as it develops a grand vision of a true high speed corridor linking Miami to the theme parks and other attractions of Orlando. It was a new experience for suppliers, who were used to working with pubic transportation agencies that prioritize railwayage.com

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Passenger Focus engineering over creature comforts. “This is the first time we have worked with a private entity,” says Ray Ginnell, program manager and head of the passenger coach business at Siemens Mobility, which supplied Brightline’s six trainsets. “Typically, we work with federal or state organizations, so this was new for us.” Siemens initially began with short-term agreements to start the engineering, and ramped up as Brightline became schedulecritical. “It was interesting to see how a company like that starts up and gets going,” says Ginnell, who has worked at Siemens for more than two decades. “The passenger experience was what they were looking at. They had a focus on hospitality that was at the forefront of everything they did, and more of a focus on aesthetics of both the interior and exterior of cars, and on passenger comfort. We figured that was key.” The Siemens team had to adjust their traditional engineering approach and embrace a design-first mandate, “translating design into something that was technically feasible,” Ginnell says. “There are a lot of regulations covering what you can do in rail based on safety and standards. We had to find a path to success without violating those standards for safety. Getting to mutual solutions was new for us, without losing the vision they had. As we went into the project, we didn’t quite realize what that meant. We had to evolve as we went along.” Siemens worked closely with the Federal Railroad Administration to maintain safe function while preserving Brightline’s branding vision. The coaches are similar to Siemens’ Railjet high speed trains operating in Austria ands the Czech Republic —reengineered with stainless steel instead of carbon steel—and featuring touches conveying a sleek aesthetic, such as limited exterior handholds and steps, and side skirts not typical of U.S. equipment, the better to conceal the cars’ underbody equipment. For the new Charger locomotives, Brightline again had its own ideas. “[Then-President] Mike Reininger sketched out the nose, and we converted it to a manufacturable design,” says Ginnell. “He was very handson, which was a little different for us, down to the smallest detail. For the handholds on the seats, he took a paper clip and formed the shape he wanted the handhold to be. His background was in design, and he had 42 Railway Age // August 2018

a vision of what he wanted.” Ginnell says that there were more ideas that weren’t practical or didn’t fit the process. “We had open discussions about what was affordable and what made sense. There were adjustments to pricing to manage that, and generally we were able to accommodate them.” Since January, Brightline service has been running to great acclaim and with no more than normal mechanical adjustment. Siemens is also building next-gen passenger equipment for Caltrans and a group led by the Illinois Department of Transportation, and have had their teams down to its Workshop B facility in West Palm Beach for review. “We are looking at the North American market as a proving ground for

”We are looking at the North American market as a proving ground for this equipment.” this equipment,” says Ginnell. “These cars were designed for procurement across the continent, and for public entities, too.” While the future seems uncertain for Amtrak’s long-distance trains, the National Passenger Rail Corp. is eyeing high-performance rail as its Next Big Thing. “There are many paired metropolitan areas that are within rail-competitive distances that would make viable corridor markets for frequent, trip-timeefficient and competitive service,” says spokeswoman Christina Leeds. “Expansion of these types of corridors, whether at conventional or high-speed levels, is Amtrak’s focus and is the future of intercity rail in the U.S.” Rebranding the current Acela Express service, Amtrak in 2121 will take delivery of new Avelia trainsets built by Alstom of France “that serve as a platform for rethinking all aspects of the current product,” says Leeds. “The new trainsets will allow for

increased service, updated designs, greater efficiency and lower costs.” Amtrak took a new approach, assembling an advisory group prior to the Avelia development process. Amtrak viewed the program as an opportunity to relaunch its premium service, so multiple departments were engaged from the beginning. The acquisition was divided into 45 different design areas, with working groups of Amtrak subject matter experts to first help define the specifications in these areas, then evaluate proposals and finally to participate in design reviews. “We also branched out further, looking at infrastructure, stations, reservations, and the many other issues that will form part of the relaunch of the service in 2021,” Leeds says. The Avelia trainsets are being constructed by Alstom for the high-end passenger experience to serve the NEC, and to accommodate one-third more passengers per train than the Acela Express. “The concentrated power architecture of the trains can add up to three passenger vehicles into the basic trainset without modifications to the trains,” says Scott Sherin, Vice President, Marketing and Strategy North America for Alstom. “The trainsets are nine passenger vehicles as delivered, including one dining car.” The prototype trainset is to be delivered in firstquarter 2019. Sherin credited Amtrak and the FRA for the new-age development process. “Both were really smart about how they structured procurement,” he says. “An engineering task force was set up by FRA several years ago, with representatives of the industry, operators, unions, and was all led by FRA in an effort to take a look at standards for high-speed trainsets. The goal was to create a new Tier III standard, recognizing that the current Acela Express equipment (Tier II) was a procurement unique to U.S. standards. When problems arise, sometimes one-offs don’t get the attention they require. The creation of Tier III requirements was very close to European norms, and allowed the development of a trainset that looks and performs similarly in terms of safety, and is completely suitable and accepted by FRA to run in the U.S., similar to what Alstom has delivered to customers all over the world.” railwayage.com

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(2) FRA anticipates being able to resolve this rulemaking without a public, oral hearing. However, if FRA receives a specific request for a public, oral hearing prior to August 15, 2018, one will be scheduled and FRA will publish a supplemental document in the Federal Register to inform interested parties of the date, time, and location of any such hearing.

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People / 100 years / Events SEPTEMBER 16-19, 2018

Dan Smith

Watco Companies, LLC High profile: Dan Smith succeeded Rick Webb as Chief Execu-

tive Officer of Watco Companies, LLC, while Webb took on the role of Executive Chairman. Smith joined Watco in 2009 and has since held multiple leadership positions with the company, serving as Chief Operating Officer since 2014. Under Smith’s leadership, Watco’s Terminal division more than tripled in size. He led the purchase of full ownership of Greens Port Industrial Park in Houston, which now operates as Greens Port Industrial Terminals, the largest privately owned multi-tenanted industrial terminal in the Gulf Coast market. The Transportation division also expanded its rail service area to the Eastern U.S. with the addition of the Blue Ridge Southern in North Carolina and the Kanawha River in West Virginia and Ohio, as well as the Jacksonville Terminal Railroad in Florida. Rick Baden will continue as President and Chief Financial Officer. He joined Watco in 2004 as Executive Vice President and CFO.

SX appointed Executive Vice President and Chief Administrative Officer Mark Wallace as Executive Vice President Sales and Marketing. Chief Human Resources Officer Diana Sorfleet takes Wallace’s place, assuming responsibility for information technology, human resources, labor relations, executive compensation and aviation. Kevin Boone, who previously reported to Wallace, will continue as Vice President Corporate Affairs and Chief Investor Relations Officer, and will assume responsibility for the Corporate Communications function, reporting to President and CEO James Foote. Norfolk Southern Corp. appointed Vanessa L. Allen Sutherland as Vice President Law. She will be headquartered in Norfolk and report to John M. Scheib, Executive Vice president Law and Administration. Allen Sutherland previously

worked as CEO and Chairperson of the U.S. Chemical Safety and Hazard Investigation Board in Washington. Prior to that, she served as Chief Counsel with the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA). Bob O’Malley, formerly of CSX Transportation, joined Brightline as Vice President of Government Affairs, a newly-created role. RATP Dev USA, the North American subsidiary of the global transportation provider, appointed Russ Tieskoetter as Chief Operating Officer. The National Association of Railway Business Women (NARBW) elected Melanie Bennett McKim as its 40th President. Cad Railway Industries named Michael Obertop Vice president of Sales, Marketing and Business Development.

100 years ago in railway age gazette august 1916

Damaging Equipment Helps the Kaiser Delays caused by equipment damaged in the rush to handle cars may offset any apparent gains. There may be disloyal men who are responsible for some of it. If so, their fellow workmen should hunt them out and hand them over to the federal authorities. Damaging a car during a time of war is as much an offense and may have just as serious results as going to sleep on duty at the front, and yet the latter offense is punishable by death.

44 Railway Age // August 2018

AREMA 2018 Annual Conference & Exposition Hilton Chicago http://conference.arema.org/

SEPTEMBER 16-19, 2018 Intermodal EXPO 2018

Long Beach Convention Center Long Beach, Calif. http://intermodalexpo.com/

SEPTEMBER 18-21, 2018 InnoTrans 2018

Berlin Exhibition Grounds Berlin, Germany https://www.innotrans.de/en/

SEPTEMBER 25-27, 2018

North East Association of Rail Shippers (NEARS) fall conference Westchester, N.Y. http://nears.org/

OCTOBER 9, 2018

Western Railway Club Union League Club Chicago, Ill. http://www.westernrailwayclub.org/ railway-meetings.htm

OCTOBER 16-17, 2018

Advanced Track Geometry Workshop Tennessee Valley Railroad Museum Chattanooga, Tenn. http://ctr.utk.edu/CTRrailcourses/ railclass.php?id=513&loc=1

OCTOBER 18-19, 2018

railway age/parsons NextGeneration Train Control Conference 2018 Le Méridien Philadelphia Philadelphia, Penn. https://www.railwayage.com/nextgen

railwayage.com

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line map, one must first define the map settings. This includes, for example, image size, colors, background image, fonts, text spacing and alignment, as well as the properties of station symbols. Then the lines are drawn, and the stations are positioned.  For output, the line map can be scaled to the desired size. Since the line map is completely redrawn on resize, loss of quality can be avoided.  The route maps can also serve as a basis for printed plans that can be supplemented with additional graphics and design elements. The plans can also be pasted directly into other applications such as word processing or image editing. LineMap Draw is available in five editions (Home, S, M, L and XL) that differ in the supported image resolution. While the smallest version, LineMap Draw Home, is suitable for internet projects in the leisure/ hobby sector, the largest version, LineMap Draw XL, can create line network plans in A0 or larger format. Since the viewing distance usually increases with increasing size, the resulting line map can be used for largeformat posters. LineMap Draw requires one of the current Windows versions, 7, 8 or 10. Further information and a free demo version can be found at www.ptraffic.net.

el Power Solutions and Protection offers the LDD240-WU, a DIN Rail DC-DC converter suited to applications where flexibility, compactness and high reliability are required. It is fully isolated and highly efficient over a broad operating range of input and output voltages. In addition, its compact size and ease of installation make it ideal for most industrial applications, such as control panels, instrumentation and railways, and can complement or even replace existing models and families of DC-DC converters. The LDD240-WU is a 240W, 4.2kV isolated DC-DC converter that can convert any DC voltage from 11 to 55V to any DC voltage between 5 and 55V, with 10mV resolution, using Digital Power regulation to give up to 240W output (max 10A). Existing converters are based on a fixed input and output voltage, which generates many individual models (for example: 24 Vin, 48 Vin, 5 Vout, 12 Vout and 24 Vout) that need to be individually qualified and stocked. With Bel Power’s new LDD240, only one model needs to be qualified and stocked, resulting in a significant cost savings. Output voltage setup can be done through the front panel, or through a Modbus over a USB interface (Windows or Android) for remote monitoring and control. Information: belfuse.com/power-solutions. Technical inquiries: Tech.Support@ psbel.com, or call 866-513-2839.

August 2018 // Railway Age 45

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PTSI Transportation 46 Railway Age // August 2018

railwayage.com RTS_RailBriefAd_QuarterPage_Final.indd 1

1/9/18 12:20 PM

Ad Index Company

Phone #

Fax #

URL/Email Address

Page #

alstom

514-673-5278

elaine.west@transport.alstom.com

beena vision- a trimble co

678-597-3156

trimble.com/beenavision

dixie precast

770-944-1930

770-944-9136

fbrown142@aol.com

fastraxâ&#x201E;˘-thermon heating

855-244-3218

303-979-7350

sales@fastraxind.com

hotstart mfg

219-648-2448

219-648-2449

railroad@hotstart.com

ltk engineering

215-641-8826

215-542-7676

tfurmaniak@ltk.com

MAC PRODUCTS

973-344-0700

973-344-5891

edward.gollob@macproducts.net

miner enterprises inc

630-232-3000

630-232-3055

sales@minerent.com

mpl innovations inc

425-398-1310

425-398-1320

info@mpltechnology.com

new york air brake

3156-786-5431

315-786-5676

Janice.Pfeil@nyab.com

ngtc

212-620-7208

conferences@sbpub.com

22-23

power drives

716-822-3600

716-824-4817

r.panzica@powerdrives.com

railhead corp

800-235-1782

708-844-5559

jdonnan@railheadcorp.com

railquip inc

770-458-4157

770-458-5365

sales@railquip.com

railway equipment co

763-972-2200

763-972-2900

sales@rwy.com

railway educational bureau

402-346-4300

402-346-1783

bbrundige@sb-reb.com

29,43

800-611-7245

859-885-7804

www.rjcorman.com

630-685-461

630-783-2590

sales@salcoproducts.com

USA.Siemens.com/transportation

korozco@stratoinc.com

r j corman railroad group SALCO PRODUCTS INC siemens corporation

800-SIEMENS

strato inc

732-317-5406

town & country crossing

636-227-8226

jnewman@tccortho.com

trans environmental systems

800-220-2466

transenvsys.com

519-452-1233

srae@ztr.com

ztr control systems

732-981-1222

The Advertisers Index is an editorial feature maintained for the convenience of readers. It is not part of the advertiser contract and Railway Age assumes no responsibility for the correctness.

railwayage.com

August 2018 // Railway Age 47

Financial Edge

Tempest in a Tank Car

ndustry watchers greeted the news of the recent BNSF derailment in Doon, Iowa, as typical ho-hum news. 32 tank railcars hauling crude derailed on a stretch of track that had been compromised by floodwaters. Several of the cars were ruptured and there was a crude spill. It was noted that the tank railcars involved in the derailment were DOT 117R cars. A DOT 117R is a railcar that has been retrofitted to meet the standards of HM-251, put in place by the USDOT in May 2015 and confirmed by Transport Canada. The required tank shell thickness in a DOT 117R is 7/16-inch. As a point of reference, a DOT 117J is a tank railcar built new to HM-251 standards. The tank shell thickness in a DOT 117J is 9/16-inch, or 1/8-inch thicker than a DOT 117R. It was surprising to hear from certain corners of the shipper community that, on the heels of the derailment, BNSF was making overtures to their customers indicating that it would only offer contract rates for the DOT 117J car while holding back or refusing to offer contract rates on the DOT 117R. Industry watchers were alarmed. The issue? Three years after HM-251, BNSF was telling customers that an approved design, the DOT 117R, was going to face a restriction on use. It has also been anticipated that Union Pacific (UP) will quickly follow BNSF’s lead and make a similar adjustment. This continues the crude by rail (CBR) rollercoaster. In addition to wild demand cyclicality, the industry has been transitioning from the DOT 111A to a DOT 117 for flammable commodities. Railroads moving crude have used a variety of strategies to accelerate the pace of change in the tank railcar supply for hauling crude and other flammable commodities. Railroads are able to deny the right to load a car on their lines (OT-5 loading authority) and are able to use tariff rate increases to influence what cars are being operated. While the railroads maintain an obligation as a “common carrier,” they do not have an obligation to offer contract rates. In this particular case, the core issue is that BNSF has placed many customers in an economic bind. Between 2010 and 2015, tank railcar prices steadily increased.

48 Railway Age // August 2018

DOT 117J cars did not begin production in earnest until roughly 2014. From 2011 to 2014, tank railcars were being built as DOT 111As, but to the voluntary CPC-1232 standard, which is stronger than a DOT 111A but does not meet HM-251 requirements. The CPC-1232s are the primary pool being selected for retrofit to DOT 117Rs. A retrofit can cost approximately $60,000. This allows shippers that made an investment in a soon-to-be-outmoded tank railcar to utilize the interchange life of that car. Even with the retrofit cost, owners and operators of DOT 111A cars benefit by not having to purchase two completely new tank railcars in less than a decade. If the railroads follow this initiative to completion, the 1232—whose value in the marketplace was already under stress—will have a limited customer base and opportunity for use operating as a DOT 111A or as a DOT 117R. Railroads carry a heavy liability when it comes to derailment remedy and reclamation. If there is a derailment-related crude oil fire, those costs increase exponentially. Two industry sources indicated that they did not blame BNSF for requiring the highest-standard tank railcars on their lines. Railroads should not be responsible for bearing the risk of a sub-optimal asset that could cause them to increase their financial liability as a result of a derailment. There are five main points of concern: • How should the industry address the issue of safety and keeping the commodities in the cars during a derailment? • What is ability of the railroads to legislate change without regard to what has been approved as safe for operation? • Which party’s economic perspective takes priority: the billions turning DOT 111As into DOT 117Rs, or the railroad hypothesis that using only DOT 117Js could prevent crude spills (and possibly fires) from a derailment—potentially saving hundreds of millions? • How should the industry address the timing of the BNSF initiative and manner in which BNSF is going about trying to administer change? • How will other railroads respond to BNSF’s actions?

it is difficult to establish a logicAL, GOALORIENTED PATTERN.” In 2014, when the industry was debating DOT 117R and DOT 117J specs, the incremental difference/improvement in the Conditional Probability of Release (CPR) between these cars was small enough that the USDOT and Transport Canada were comfortable issuing HM-251, allowing for both options. Decisions made and studies done to validate safety assumptions included input from the RSI Tank Car Committee, the American Petroleum Institute, the railroads and the AAR. Many will remember BNSF stating an intention to order 5,000 tank railcars, only to back away as the DOT began to issue HM-251. Many will also remember that the American Fuel & Petrochemical Manufacturers (APFM) sued BNSF regarding additional tariff penalties being placed on the DOT 111A 1232 design in early 2015. It is difficult to establish a logical, goaloriented pattern. Spend some time at a tank car committee meeting and you will find an industry concerned about safety and responsible about self-policing. This is a complicated issue that would seem to require collaboration. Stay tuned. Got questions? Set them free at dnahass@ railfin.com.

DAVID NAHASS President Railroad Financial Corp. railwayage.com

ÂŠ ALSTOM 2016

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