Railway Age January 2022

JANUARY 2022

W W W. R A I LWAYA G E .C O M

AILWAY GE S E R V I N G T H E R A I LWAY I N D U S T R Y S I N C E 1 8 5 6

Railroaders of the Year

TRANSNATIONAL TEAM

CP’s Keith Creel and KCS’s Pat Ottensmeyer

2022 PASSENGER RAIL OUTLOOK Leveraging the Infrastructure Investment and Jobs Act railwayage.com

August 2017 // Railway Age 1

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AILWAY GE

February 2020 JANUARY 2022

8

David Duffin

FEATURES

8

Railroaders of the Year

DEPARTMENTS

32

Passenger Rail Outlook

36

Timeout for Tech

40

TTCI R&D

4 6 7 44 46 46 47

Transnational Team

Leveraging the IIJA Windfall

First In a Series With Gary Fry

Automated Cracked Wheel Detection

Industry Indicators Industry Outlook Market People Professional Directory Classified Advertising Index

COMMENTARY 2 48

From the Editor Financial Edge

COVER PHOTO Railroaders of the Year Keith Creel and Pat Ottensmeyer.

Canadian Pacific/Kansas City Southern photo.

Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 88 Pine St., 23rd Fl., New York, NY 10005-1809. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 223, No. 1. 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© 2022 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: 212-221-9195. 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, PO Box 239 Lincolnshire IL 60069-0239 USA, Or call +1 (402) 346-4740, FAX +1 (847) 291-4816. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital).

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January 2022 // Railway Age 1

FROM THE EDITOR

AILWAY GE

‘To a Locomotive in Winter’

T

here are very few people in the rail industry who don’t love steam locomotives, which provided motive power for nearly 150 years. Steam didn’t disappear overnight. The Norfolk & Western dropped the final fires on its fleet in 1960.

Steam locomotives are a sensory delight.

The sounds, smells and visible moving parts, combined into a massive rolling machine, touch something deep in our souls. Walt Whitman’s 1875 poem, “To a Locomotive in Winter,” describes the feeling: Thee for my recitative, Thee in the driving storm even as now, the snow, the winter-day declining, Thee in thy panoply, thy measur’d dual throbbing and thy beat convulsive, Thy black cylindric body, golden brass, and silvery steel, Thy ponderous side-bars, parallel and connecting rods, gyrating, shuttling at thy sides, Thy metrical, now swelling pant and roar, now tapering in the distance, Thy great protruding head-light fix’d in front, Thy long, pale, floating vapor-pennants, tinged with delicate purple, The dense and murky clouds out-belching from thy smoke-stack,

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Thy knitted frame, thy springs and valves, the tremulous twinkle of thy wheels, Thy train of cars behind, obedient, merrily following, Through gale or calm, now swift, now slack, yet steadily careering; Type of the modern—emblem of motion and power—pulse of the continent, For once come serve the Muse and merge in verse, even as here I see thee, With storm and buffeting gusts of wind and falling snow, By day thy warning ringing bell to sound its notes, By night thy silent signal lamps to swing.

Fierce-throated beauty!

Roll through my chant with all thy lawless music, thy swinging lamps at night, Thy madly-whistled laughter, echoing, rumbling like an earthquake, rousing all, Law of thyself complete, thine own track firmly holding, (No sweetness debonair of tearful harp or glib piano thine,) Thy trills of shrieks by rocks and hills return’d, Launch’d o’er the prairies wide, across the lakes, To the free skies unpent and glad and strong.

Today, we can experience the thrill of iconic locomotives like Union Pacific’s 4014 Big Boy in action on special excursions. In 2023, to commemorate formation of North America’s first transnational railroad, Canadian Pacific Kansas City, CP’s Class H1B 2816, the Empress, will escort a business train from Canada, through the U.S. and into Mexico, thanks to our 2022 Railroaders of the Year, Keith Creel and Pat Ottensmeyer. The trip will be one for the ages.

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Industry Indicators ‘SOMETHING THAT HAS NEVER HAPPENED BEFORE IN OUR RECORDS’ “U.S. railroads originated 917,787 total carloads in November 2021, up 2.0% over November 2020 and down 3.9% from November 2019. The 2.0% gain was the ninth straight, but also the smallest percentage gain in those nine months,” the Association of American Railroads reported last month.

“U.S. railroads originated 1.03 million intermodal containers and trailers in November, down 9.6% from 2020 and up 0.8% over 2019. November was the fourth straight month in which intermodal volume fell, and the 9.6% decline was the biggest decline in those four months. September, October and November were all in the bottom half of months for intermodal, something that has never happened before in our records that go back to 1989.”

Railroad employment, Class I linehaul carriers, NOVEMBER 2021 (% change from NOVEMBER 2020)

TOTAL EMPLOYEES: 113,957 % CHANGE FROM NOVEMBER 2020: -0.87%

Transportation (train and engine) 46,978 (+1.17%)

Executives, Officials and Staff Assistants 7,281 (-0.48%)

TRAFFIC ORIGINATED CARLOADS

FOUR WEEKS ENDING NOV. 27, 2021

MAJOR U.S. RAILROADS

BY COMMODITY

NOV. ’21

NOV. ’20

% CHANGE

Grain Farm Products excl. Grain Grain Mill Products Food Products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber & Wood Products Pulp & 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

98,832 3,132 37,694 24,834 131,482 39,508 262,636 3,985 12,393 21,700 20,500 12,957 31,962 15,635 50,026 73,180 12,715 30,144 14,788 19,684

106,733 3,675 36,185 24,346 125,919 41,126 241,905 4,004 12,046 21,090 20,726 11,717 29,233 13,942 58,212 68,113 12,646 30,766 14,368 23,039

-7.4% -14.8% 4.2% 2.0% 4.4% -3.9% 8.6% -0.5% 2.9% 2.9% -1.1% 10.6% 9.3% 12.1% -14.1% 7.4% 0.5% -2.0% 2.9% -14.6%

TOTAL U.S. CARLOADS

917,787

899,791

2.0%

296,683

323,555

-8.3%

1,214,470

1,223,346

-0.7%

CANADIAN RAILROADS TOTAL CANADIAN CARLOADS

COMBINED U.S./CANADA RR

Professional and Administrative 9,757 (-5.05%)

Maintenance-of-Way and Structures 28,061 (+0.71%)

Maintenance of Equipment and Stores

Intermodal

FOUR WEEKS ENDING NOV. 27, 2021

MAJOR U.S. RAILROADS

BY COMMODITY

NOV. ’21

Trailers Containers TOTAL UNITS

84,885 943,154

17,231 (-5.54%)

CANADIAN RAILROADS

Transportation (other than train & engine)

Trailers Containers TOTAL UNITS

4,649 (-3.73%)

COMBINED U.S./CANADA RR

Source: Surface Transportation Board

Trailers Containers

TOTAL COMBINED UNITS

NOV. ’20

% CHANGE

91,909

1,028,039

1,044,835 1,136,744

-7.6% -9.7% -9.6%

2 242,793 242,795

0 308,660 308,660

— -21.3% -21.3%

84,887 1,185,947

91,909 1,353,495

-7.6% -12.4%

1,270,834

1,445,404

-12.1%

Source: Rail Time Indicators, Association of American Railroads

4 Railway Age // January 2022

railwayage.com

TOTAL U.S./Canadian CARLOADS, nov. 2021 VS. nov. 2020

1,214,470 november 2021

AILWAY GE

1,223,346 november 2020

Short Line And Regional Traffic Index CARLOADS

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

ORIGINATED NOV. ’21

ORIGINATED NOV. ’20

% CHANGE

54,816 15,260 25,272 12,463 30,670 8,156 9,811 3,113 17,651 7,552 2,551 2,223 17,877 15,285 45,779 11,972 69,419

46,420 16,035 19,624 10,840 31,053 7,519 8,693 2,621 15,207 10,023 2,210 1,869 15,635 14,035 40,731 10,237 68,748

18.1% -4.8% 28.8% 15.0% -1.2% 8.5% 12.9% 18.8% 16.1% -24.7% 15.4% 18.9% 14.3% 8.9% 12.4% 16.9% 1.0%

Copyright © 2021 All rights reserved.

TOTAL U.S. Carloads and intermodal units, 2012-2021

(in millions, year-to-date through NOVEMBER 2021, SIX-WEEK MOVING AVERAGE)

ARE YOU A RAILROAD OR SUPPLIER SEARCHING FOR JOB CANDIDATES?

Visit http://bit.ly/railjobs To place a job posting, contact: Frank Rose 917-856-1808 frose@sbpub.com

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7/27/21 3:02 PM

‘Safety Integration Plan’ Proposed for Canadian Pacific Kansas City MERGER PARTNERS CANADIAN PACIFIC AND KANSAS CITY SOUTHERN last month submitted their safety integration plan to the Surface Transportation Board (STB) and the Federal Railroad Administration (FRA) for review, meeting the STB’s procedural schedule deadline.

Before specifically addressing CPKC operations in their plan filing, the railroads emphasized their performance as a measure of merger success. “CP intends to keep learning from the best practices in its crossborder operations and to apply them to its integration with KCS and KCS’s own crossborder operations,” they wrote. “In addition, CP will bring its deep expertise related to its network and its capabilities and to the integration process ... KCS similarly has a proven safety record and maintains strong operating practices ...

Particularly because the CP/KCS combination involves two Class I railroads with mature processes, demonstrated safety performance, a history of successful integrations, and no geographic overlap, CP 6 Railway Age // January 2022

and KCS … have no doubt that the integration of CP and KCS will be safe and successful.”

The railroads also noted that “[w]hile integration planning has already begun, the integration process will continue over the three years following Board approval of CP control … to ensure that there will be no disruptions in safe operations or the service provided to customers.”

Among the plan’s components: • Corporate culture: Both CP and KCS value safety, the railroads wrote, “and this like-mindedness ensures CPKC will continue CP’s legacy as the safest Class I railroad, particularly once CPKC adopts certain of CP’s proven programs.” Among them: a coordinated, centralized safety management system; a consequence leadership program; workplace health and safety committees; a risk reduction program; and efficiency testing and manager accountabilities.

• Operating practices: While practices will remain separate for some period “postcontrol date, CPKC will perform a

comprehensive review of all operating rules and practices to determine the best fit for the combined company.”

• Motive power and equipment: “Mechanical facilities in St. Paul and Shreveport will remain the primary U.S. locations for locomotive maintenance.

Once operations are integrated postcontrol date and operating patterns are established, CPKC will assess the appropriateness of any changes to network repair and service locations.”

• Signal and train control: “CP and KCS have created a team to lead planning and integration post-control date. The team is currently developing a detailed plan to integrate signal and train control design, maintenance, and construction activities, systems, and processes, including integration of PTC by analyzing which processes, standards, and systems are the most appropriate fit for CPKC.” • Track safety standards and bridge structures: “CPKC will transition to the [CP] Engineering Red Book [of Track & Structures Requirements] after the requisite training occurs. Similarly, CPKC will use SAM [Structures Asset Management] after it migrates all data in BIMS [Bridge Inspection Management System] and TOMS [Task Order Management System] to SAM and employees are sufficiently trained on SAM. CPKC will also use DTN [Digital Track Notebook] until the mapping of assets is complete and all employees are trained on TAM [Track Asset Management].”

• Dispatching operations: During the early stages of integration, “the former CP and KCS territories will continue operating separately according to their established train control systems. However, CP plans to migrate the Minneapolis Operations Center to Kansas City, and to integrate CP’s OC with KCS’s at the appropriate time postcontrol date. While relocation of employees is under way, the move will focus on maintaining safe operational practices in Minneapolis, including the use of qualified train dispatchers to fill vacancies that may result from employee relocation.” Regarding train control systems, CPKC will evaluate each one, “focusing on operating rule requirements, operational safeguards, efficiencies, and the ability to accommodate the needs of customers and the newly merged company.” railwayage.com

Canadian Pacific/Kansas City Southern

Industry Outlook

Market Greenbrier, USS, NS Break New Gondola Ground Greenbrier, U.S. Steel and Norfolk Southern have joined forces on a sustainable steel gondola constructed of a new highstrength, light-weight steel developed by USS that adapts advancements in motor vehicle steels to the rail industry. Employing this steel reduces the gondola’s empty weight by up to 15,000 pounds.

The gondola’s design is traditional, in that it’s meant to transport loose bulk material such as metal scraps or steel slabs, but its high-strength carbody resists damage from the rigors of loading and unloading.

NORTH AMERICA

NORDIC RE-FINANCE has awarded HITACHI RAIL a contract to fit its fleet of 27 TMe diesel-electric locomotives operating in Sweden, Norway and Denmark with ETCS and Specific Transmission Module (STM). The Swedish rolling stock leasing company acquired 26 six-axle units from Danish State Railways (DSB) in November following the operator’s transition to electric traction. ATC will be fitted to the fleet to allow operation in Sweden. The locomotives will then be made available.

THE PORT OF LONG BEACH is partnering with technology consulting firm UNCOMN to help shippers, ocean carriers, trucking companies and others in the supply chain track cargo across all modes of transportation; a soft launch is planned for February 2022. The move follows meetings with industry partners and stakeholders who said they wanted access to a platform that securely collects, curates and publishes data across all modes of transportation, and allows users to analyze the data using their own systems.

“Shippers have two basic questions: Where’s my cargo? How do I get more visibility?” Port of Long Beach Executive Director Mario Cordero said. “We’re developing a system of systems that complements existing datatracking platforms by giving supply chain participants real-time updates at each transfer point in the intermodal network.” The Port is investing $400,000 to jumpstart the program, dubbed the “Supply Chain Information Highway.” After a competitive request for proposals, St. Louis-based UNCOMN was selected to develop the program, which will be free to supply chain participants. The St. Louis, Mo.-based company has worked for more than 10 years supporting the

Greenbrier

WORLDWIDE

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Department of Defense’s U.S. Transportation Command, U.S. Army Surface Deployment and Distribution Command, and U.S. Air Force Air Mobility Command in areas such as data analytics, cloud application development and cloud data environment development, according to the Port.

BLUEJAY CAPITAL PARTNERS last month completed the purchase of Salt Lake City, Utah-based PACIFIC WEST. Terms of the deal were not disclosed. Pacific West builds railroad fueling facilities, track beds and rail, wastewater treatment plants, and above and below ground mechanical facilities, and provides 24/7 emergency response, among other services. Bluejay Capital financed the transaction with SOUTHFIELD MEZZANINE, which provided debt and an equity co-investment. “Pacific West has an exceptional track record serving industries that Bluejay Capital knows very well,” said Josh Putterman, Founding Partner of Bluejay Capital. “The strong team at Pacific West, coupled with our network of industry relationships, creates a powerful combination. We are ready to help Pacific West provide great service and grow.”

January 2022 // Railway Age 7

RAILROADERs OF THE YEAR

KEITH CREEL & PAT OTTENSMEYER TRANSNATIONAL TEAM

BY WILLIAM C. VANTUONO, EDITOR-IN-CHIEF

8 Railway Age // January 2022

railwayage.com

Canadian Pacific/Kansas City Southern

R

ailway Age’s 2022 Railroader of the Year Award, our 59th annual, goes to two exemplary and visionary North American rail industry leaders: Canadian Pacific President and Chief Executive Officer Keith Creel, and Kansas City Southern President and Chief Executive Officer Patrick J. Ottensmeyer. The two are reconfiguring the North American rail landscape by completing, if all goes as planned, what will be the first Class I merger in more than 20 years, and creating North America’s first transnational freight railroad, Canadian Pacific Kansas City, or CPKC. CPKC is a landmark combination that will enable seamless, single-line freight rail service linking Canada, the United States and Mexico, opening up new opportunities for rail market share growth and vastly improved customer service. Merging these two iconic railroads, each with a unique history and legacy, required strategic planning, cooperation, enthusiasm and execution.

Railway Age previously named Ottensmeyer Railroader of the Year in 2020 and Creel Railroader of the Year in 2021.

Keith Creel became President and CEO of CP on Jan. 31, 2017. He is the 17th person to lead the company since 1881. Creel was appointed President and Chief Operating Officer in February 2013 and joined the CP Board of Directors in May 2015. Prior to joining CP, he was Executive Vice President and Chief Operating Officer at CN. He held various positions at CN, including Executive Vice President Operations, Senior Vice President Eastern Region, Senior Vice President Western Region, and Vice President of the Prairie Division. Creel began his railroad career at Burlington Northern Railway in 1992 as an intermodal ramp manager in Birmingham, Ala. He also spent part of his career at Grand Trunk Western Railroad as a superintendent and general manager, and at Illinois Central Railroad as a trainmaster and director of corridor operations, prior to its merger with CN in 1999. Creel holds a Bachelor of Science in Marketing from Jacksonville State University. He also completed railwayage.com

RAILROADERs OF THE YEAR the Advanced Management Program at the Harvard Business School. He has a military background as a commissioned officer in the U.S. Army, during which time he served in the Persian Gulf War in Saudi Arabia.

Pat Ottensmeyer was elected as KCS President and CEO on July 1, 2016. From April 2015 to June 2016, he served as President of KCS. From October 2008 through March 2015, he served as KCS Executive Vice President Sales and Marketing. He joined KCS in May 2006 as Executive Vice President and Chief Financial Officer and served in that role until October 2008. Ottensmeyer has a broad range of railroad experience from the various senior executive positions he has held at KCS over the past 13 years, and also with BNSF. During his time as Executive Vice President Sales and Marketing, he developed a deep understanding of KCS’s strategy as well as its customers and growth opportunities. He has an extensive understanding of financial matters, which helped him lead KCS’s Finance department during his time as CFO. He came to KCS with substantial experience in financial matters from serving in various executive roles, including treasurer and chief financial officer positions. Ottensmeyer holds a Bachelor of Science in Finance from Indiana University.

Railway Age Editor-in-Chief William C. Vantuono in mid-November 2021 sat down in person with Creel and Ottensmeyer in New York City.

RAILWAY AGE: The reason why we have chosen you as our co-Railroaders of the Year, the first time in a long time, is because of the historic nature of the transaction in process now. The transaction that will form North America’s first transnational railway, Canadian Pacific Kansas City. My congratulations to you both. It’s great to see you in person.

Big change from looking at you on a computer screen.

KEITH CREEL: I’m honored and I’m humbled for the recognition, but this isn’t about me, it’s about we the CP family—12,000 railroaders, their collective body of work that really earned a seat at the table to be able to pursue this

historic combination with the KCS. The second part of the we is actually the KCS franchise and the team that we’re going to get to partner with that we’re so excited about. So again, thank you for the recognition.

PAT OTTENSMEYER: Thank you for this recognition. And I know you appreciate, being a follower of the industry, the historic significance of this transaction.

It truly is going to be a North American rail franchise unmatched by any other with just phenomenal opportunities.

Given all of the factors that are taking place in the world of logistics and supply chain, this is coming together at exactly the right moment, and it’s truly going to be a formidable and unique North American rail franchise.

RAILWAY AGE: Both of you can truly say unique. That’s a word we use carefully. How did this all come together?

When you made your initial announcement in March of 2021, it was probably one of the best-kept secrets in the industry. What’s the backstory?

KEITH CREEL: Well, there’s quite a bit of backstory. A lot of ups and downs, but if I go back to the very beginning, certainly the idea of the concept was well before I came to CP. In fact, Pat could probably share the history; this was something that our predecessors years ago had actually explored. But CP, as I understood it, as I learned through that initial conversation I had with Pat because I was not aware of it at that time, did not have the balance sheet, the financial strength, or the ability to have a seat at the table. Go back to 2020 when I made a phone call to Pat. I said, “Pat, I’m coming to Kansas City. Do you have time to have lunch?” We obviously owned a joint agency yard in Kansas City so I had a reason to go there. Pat said, “Sure I do.” So we sat down, and at that lunch I presented an idea, a concept about the possibility of bringing these two great companies, iconic companies, together to create an even greater company.

We had a very exhaustive discussion about hypothetically what that might look like, what competitive responses might be, what the regulatory landscape looked like, all of those things. Just an January 2022 // Railway Age 9

RAILROADERs OF THE YEAR

exploratory discussion that was the first of what became many discussions that finally came to a successful consummation of our merger agreement together the second time.

RAILWAY AGE: Pat, when you got that call from Keith, and he said, “I want 10 Railway Age // January 2022

to meet you in Kansas City,” did you have maybe even an inkling of what he might want to meet about?

PAT OTTENSMEYER: I did. Keith, the way I recall it, said, “I’m going to be in Kansas City, are you free for lunch?”

And then we got together for lunch and I kind of explored a little bit what else

Keith might be doing in Kansas City.

Anyhow, the topic had come up. As you know and everybody knows, the Kansas City Southern has been rumored or in the crosshairs, I’ll say, for many times over the past 20, 25 years, however long you want to go back. So it wasn’t a surprise.

It’s a very natural combination. As Keith railwayage.com

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mentioned, we share a joint agency yard in Kansas City, a 50-50 partnership. They go north; we go south. We don’t overlap by a single mile. We really never find ourselves competing with CP for business. We do a lot of things together, and have a great relationship. So from that standpoint, it’s a very natural fit. I wasn’t surprised when Keith kind of f loated 12 Railway Age // January 2022

the idea. And just to kind of set the time frame, I think that lunch meeting we had was just a couple of months before the rumors started in July of 2020. It was reported and rumored that a group of private equity investors were interested in making an acquisition or an offer for Kansas City Southern. At that point when the rumor hit the media, we had

not been approached, so we read about it at the same time everybody else did.

And then a few weeks later, there was an approach from a private equity group to make an offer to buy KCS. RAILWAY AGE:: Keith, when you and your team saw that, did that spring you into action? railwayage.com

Canadian Pacific

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RAILROADERs OF THE YEAR

RAILWAY AGE: I don’t want to dwell too much on the past few months, but it’s been kind of tumultuous with CN coming in with a counter-offer. Were you anticipating that?

PAT OTTENSMEYER: Not specifically. It didn’t surprise me or us that there might be other interest, but we were not anticipating that. I was sitting in my den at 5:30 in the morning and got a phone call from Montreal. I wasn’t expecting it necessarily, but nonetheless we weren’t terribly surprised. When we had our discussions in the boardroom over the course of August of 2020 to early 2021 14 Railway Age // January 2022

railwayage.com

Kansas City Southern

KEITH CREEL: Well, it certainly raised our attention. I’ll just be fully transparent. I’m thinking, “I wonder if there was something Pat knew that I didn’t.” But I’ve since learned that he didn’t. Pat’s a man of his word. And quite frankly, I believe these two companies came together because it’s the right answer for North America. It’s the right answer for our industry. But it is the right combination overall for both companies.

You’ve got two like-minded companies: KCS, the smallest of the Class I’s; we were next to smallest. We had to provide great service. We’re very customer-centric, and we also have enjoyed, as of late, implementing the same operating strategies. To be able to have all of those things right, and in the regulatory environment we’re in today with the STB’s mandate, to be able to have a formula that you could present to the regulator that increases competition and creates an opportunity for growth and an opportunity to take trucks off the road in a unique way that no other combination would represent?

To me, it was a fate issue. And it was something that we’re extremely proud to be a part of. I think about the we at CP. I think about the history of the company, a 140-year-old proud Canadian corporation that sort of lost its way, and we’ve restored our way to a point that we’ve had enough success, stabilizing our balance sheet again to get to a place where we could even have the discussion that Pat and I had in July of 2020. And it’s because of our CP family and their sacrifices that we have been able to do what we’re doing and why I’m sitting here today.

RAILROADERs OF THE YEAR

RAILWAY AGE: We at Railway Age certainly had a good time covering it.

If someone said to me, “May you live in interesting times,” I would say, “Yes, we are living in interesting times.” But ultimately, as we know, the outcome 16 Railway Age // January 2022

went right back to the beginning, or back to the future. The timeline for STB approval seems to be pretty tight.

You’re anticipating getting approval sometime by the end of 2022. It would seem to me one reason for that is because this combination is not as heav y a lift as any other combination, from a regulatory standpoint, from a competition standpoint.

KEITH CREEL: I’ll provide a bit of color here. It’s not that it’s going to be any less fulsome. The regulator, the STB, they’ll do a fulsome review of our merger application. But the thing that’s unique, again, and I say that word a lot, there’s not been another combination historically in this industry under the old merger rules, or even under the new rules, that’s so simple, that lacks complexity. There are no customers that are losing options. You’ve got complexities that just are not represented by our combination. When I say perfect, it’s new lanes, new opportunities, new options for customers, new competition, not less in any way. There’s just truly nothing else that fits that mantra. Although 12 months to me is a meaningful period of time with the procedural schedule the

STB has set forth, I look at history, too.

I do a lot of research. And to put it in perspective, think about the simplicity of combining our networks. Think about the complexity of combining a UP-SP or a BNSF. The time frames for those two transactions were actually less than what we’ve suggested or what the STB has come out with from a procedural standpoint. If the others achieved theirs with their complexity, then we certainly can achieve ours.

RAILWAY AGE: You even go back to the Norfolk Southern-CSX Conrail split, which was really complicated if you think about it, the way Conrail was divided and the establishment of the shared assets areas, that didn’t take very long if you think about it.

KEITH CREEL: The Conrail deal was just a little bit longer than what the STB procedural schedule has prescribed for us. Just a little bit.

RAILWAY AGE: What does the merger of these two iconic railroads mean for North America? Not only for our industry, but also for the economy in general, the North American railwayage.com

David Duffin

after the point we announced the first transaction with CP, the question always came up: “Are there others who are interested?” So we considered that, and certainly the possibility that someone might come in with a different offer.

Keith and CP were by far more aggressive in their pursuit, more engaged, more focused on the outcome of putting the two companies together. And our strategy with the Board was to work with, at that point, the two most interested, most aggressive, most engaged suitors: the private equity group and Keith and CP, but retain the right through the negotiation. Retain the right to change our mind and consider another offer if one developed. And obviously, you know how that played out, but it was always our belief that we pursue the transactions that were more eager, more aggressive, and then keep our options open if something else came along.

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RAILWAY AGE: Pat, you and I have talked in the past about Mexico, Kansas City Southern de México, USMCA. We’ve talked about things like nearshoring. What are some of the opportunities for growth? There’s the port in Mexico, Lázaro Cárdenas. There are lots of opportunities there.

PAT OTTENSMEYER: Today being Nov. 18, 2021, in Washington, D.C., President Biden, Prime Minister Trudeau and President López Obrador are headed over to the North American Leaders Summit. There are a lot of big expectations for this meeting about charting the course for better coordination within North America on things such as supply chain issues. They’ll talk about a lot of other things: security, migration, all of that. But if you think about this moment, USMCA is just over a year old, so we have

RAILWAY AGE: Would you agree that our industry is at an inf lection point or a turning point? Given all the events in the past two or three years with the pandemic changing a lot of things, how we work, how we shop for example, and all of, as you both have mentioned, the supply chain issues, problems, I would say that this industry has a real opportunity. We just have to grasp it. I’m sure railwayage.com

Canadian Pacific

economy, but also taking that forward to the global economy?

KEITH CREEL: From my perspective, what it means is growth, an opportunity to combine two of the smallest railroads into one very unique larger railroad, still the smallest but I believe the most relevant in North America.

Connecting all three nations, connecting the commerce that moves today and that will move tomorrow. To Pat’s point about the perfect time, we think about if we go back to when we first explored this combination in 2020, the thought of commerce, the thought of de-risking supply chains, those were all topics that we thought about and talked about. But if they made sense then, they certainly made sense now as we fast forward toward the end of 2021. This railroad will create that backbone that connects all of those supply chain partners, connects our customers to new markets, and creates investment and the U.S. rail network that will harden the

trade certainty, a new trade agreement for at least another 15 years in North America. You have supply chain issues that are causing supply chain leaders, strategists, to rethink global extended supply chains, moving manufacturing and production closer to markets and other things that are really changing the landscape of how leaders think about where to position manufacturing, supply, all of that. We believe, and Keith definitely shares my view on this, that not only will CPKC benefit from those trends; we can help drive some of those decisions, because of the importance of rail. The best example is the automotive supply chain. You look at where the auto plants and the suppliers and the producers are, and you overlay that on our network. It’s a great match. We can actually drive some of those investment decisions because of the fact that we are going to be so critical in connecting those markets. I know that is going to be a big topic of discussion with the presidents.

I met yesterday in Washington with the relatively new Finance Minister of Mexico. The Mexican Cabinet has done a study that concludes if they can relocate 10% of the manufacturing that currently takes place in China and other Asian low-cost countries to North America, it would have a positive impact in the GDP of the three countries ranging from about 0.5% to 2% in Mexico. So 10% of manufacturing relocating back to North America could increase Mexican GDP by almost 2%. The Mexican government is very interested in making sure that we can align priorities and policy objectives across the three countries to drive to that outcome. It’s a great opportunity for North America, and the timing of putting these two companies together could not be better.

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RAILROADERs OF THE YEAR you would agree on that?

KEITH CREEL: I would agree completely. It’s undeniable, the importance of real networks. It’s actually, to me, a success enabler. You think about some of the challenges the supply chains are facing today. Think about the highways. Think about the infrastructure bill in the U.S. that just got passed. We’re spending a ton of money to harden and improve infrastructure with public funds. This in combination with private funds takes trucks off the road. It’s great for the environment. It’s great for congestion. And that’s our transaction.

But for the railroad industry overall, as we evolve and implement being more service reliable, get to a scheduled railroad so to speak, become more truck-like reliable, you’ll see more and more trucks come off the roads and create not only benefits for the railway, but also benefits for the public interest.

RAILWAY AGE: The other thing

is resiliency. And here, I’m specifically referring to impacts from climate change. Almost all the railroads in North America have been affected in some way by climate change. There were terrible rainstorms in the Pacific Northwest and Vancouver that took their toll on the highways, but also on the rail lines. In terms of recovery from that and being prepared, railroads are much better equipped, much more resilient to respond and to rebuild.

KEITH CREEL: It’s an outdoor sport.

We’ve said that a lot. Especially our railroad, right? We have some unique geography going through the mountains. We deal with snow, we deal with mudslides, we deal with rain, so it’s all part of what we do. It’s a core skill set, and obviously I’d like to do less of it, not more of it.

But in a case like this, we’re challenged.

Mother Nature rears her ugly head and she shows that she’s a force to be reckoned with. Having the right resources, expertise, the physical assets, the

manpower and the know-how to be able to tackle those challenges and restore the railroad quickly is certainly something that we’ve had a lot of practice at, and we do quite well with it. Thinking about Mother Nature, global warming, the environment: It absolutely is real. I think about an ability to be able to help that, to take trucks off the road, to lower greenhouse gas emissions, because rail is so much more fuel efficient, 75% less greenhouse gas emissions for the tonnage that we move. To me, we’re a part of the solution for the future that will help the environment and hopefully help mitigate the impact on Mother Nature and some of the cycles and challenges in the environment we’ve all had to go through and been exposed to.

RAILWAY AGE: Let’s talk more about single-line service.

PAT OTTENSMEYER: People who are familiar with the industry understand what that means, but for a lot of people,

CONGRATULATIONS to Canadian Pacific President and Chief Executive Officer Keith Creel

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20 Railway Age // January 2022

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RAILROADERs OF THE YEAR I don’t know that they fully understand the importance of single-line service that we are going to be able to provide to so many new markets, huge freight markets, huge consumer markets. But single-line service really comes down to making sure that you have total alignment and coordination of operating practices and philosophies, which we actually do today with our implementation of PSR, coming obviously years behind what Keith and CP have done, but very similar in terms of an operating philosophy. And then the capital investment strategies. It takes an awful lot of trust between two independent companies to align and make the capital commitments that are going to be necessary and are described in our merger application to get the capacity where it needs to be to be able to take advantage of the growth opportunities we have described in the merger case, particularly intermodal, automotive, truck-to-rail conversion up and down the network. It’s normally not reasonable

to think that two independent parties are going to trust each other that much to make those kinds of long-term capital investment decisions that will improve service consistency, reliability and resiliency to really get the momentum for particularly the truck-to-rail conversion opportunities that we know are there.

If you look at our map—Mexico City, Monterrey, Texas, Kansas City, and then kind of fanning out between Minneapolis, Chicago, Detroit and Toronto, that is a huge freight market. And it’s a growing freight market dominated by truck. All of that will come together in a way, with the investments that we’re planning, to provide the kind of service consistency, and resiliency that will be necessary to drive that growth.

RAILWAY AGE: Independently, Canadian Pacific and Kansas City Southern have been making major investments in infrastructure for capacity and resiliency. One example is the big automotive

distribution center being built in Mexico. On the CP side, there’s been a lot of investment in port facilities and other things. Can you give us an idea of some of the joint investments planned? That’s a big word these days, infrastructure.

What are some of the plans?

KEITH CREEL: They’re pretty big and it’s hard to forget them. This is going to unlock an opportunity, a financial case, to invest an order magnitude of about $300 million in the infrastructure between Minneapolis, St. Paul, going down to the La Crosse, Wisconsin, our route that parallels the West side of the Mississippi River to Kansas City, and then of course Kansas City down to Laredo. If you break that down, it’s CTC, centralized traffic control, which obviously has a capacity and safety benefit for the communities we operate in and through. It’s also siding extensions and new-builds to the tune of about 30 miles over the first three years to prepare us for those synergies that we’re talking

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RAILROADERs OF THE YEAR about to get us started. It’s a substantial amount of investment in an underutilized asset. And to Pat’s point, as a stand-alone, you could never justify doing that. But together it unlocks that opportunity with that investment to create this real backbone that we’re talking about, which will uniquely benefit so many stakeholders.

RAILWAY AGE: Pat, on your side, especially the Mexican side, we’re talking about that port on the Pacific Coast, Lázaro Cárdenas, which has a lot of potential.

PAT OTTENSMEYER: It’s an amazing place. If you can’t go there physically, just spend a little bit of time on Google Earth and look at the ports up and down the West coast of North America. And what you’ll see for the most part is ports that are in very heavily congested, urban areas, L.A. / Long Beach obviously the most, but that really don’t have a lot of room to

26 Railway Age // January 2022

grow. And then go to Lázaro Cárdenas and see how much growth space, how much extra land is ready for future development in addition to the terminals that are there today that have, I think theoretically, probably seven or eight million TEUs of capacity between the two ports. The port authority at Lázaro Cárdenas has a spent an enormous amount of money over the years building rail infrastructure, roads, bridges, every thing else. It’s a unique piece of property, and I think there’s just a tremendous amount of potential. A lot of interest, particularly now given the congestion in Southern California and ports for shippers and ocean carriers and benef icial cargo owners, moving some of their freight to come into North America through Lázaro Cárdenas. Actually, our route to get from Lázaro to Houston is actually 300 miles shorter than the shortest route from L.A. /Long Beach to Houston. So long-term, it’s got a lot of potential.

RAILWAY AGE: At the U.S./Mexico border itself, there is the busiest crossing at Laredo, Tex. Going back to the late ’90s with the privatization, that was the connection to the so-called crown jewel of the Mexican system, now KCSM. What else needs to be done at that border crossing to make it even more f luid than it is?

PAT OTTENSMEYER: Infrastructure processes, technology—we’re working on all of those things. On the infrastructure side, we have approval on the U.S. side to build a second span of the international bridge. We are planning to do that in probably 2023, and that will increase capacity substantially.

The bridge we have today is a singleline bridge. In terms of working with the customs and security agencies on both sides of the border, we’re hoping to replicate at the Southern border the processes that have existed for a long time between the U.S. and Canada. The security concerns are different, so that’s going to be a challenge. But we’re also

railwayage.com

THE CANADIAN PACIFIC AND KANSAS CITY SOUTHERN TEAMS CONGRATULATE THE 2022 RAILROADERS OF THE YEAR Keith Creel Patrick Ottensmeyer

RAILROADERs OF THE YEAR working with labor to improve the efficiency of how we move trains across the border. I heard a quote recently from a group that convened former ambassadors of Mexico and the U.S. to talk about issues, and some of these things to be talked about in the summit between the presidents. And the quote was, “We have a 21st century economy. We have 20th century infrastructure, and we have 19th century processes.” Not too much of an exaggeration. Over the years, we have located two inspection facilities on the North side of the border that are now shared by the Mexican and U.S. customs agencies. Where there were two separate inspections and other things taking place on both sides of the border for northbound and southbound freight, we have consolidated those working with the federal agencies to co-locate in the same facility on U.S. soil. That has really been helpful in streamlining the processes, but there’s a lot more work to be done.

RAILWAY AGE: I wanted to ask you both about the people, the mood at both railroads. The uncertainty is mostly over. What’s it like now? It would seem to me that a lot of people from all across both railroads are probably excited about putting these two companies together, from the switchmen and brakemen right up to the C-suite.

KEITH CREEL: Well, you can imagine at CP we’ve been through a range of emotions. When we announced this historic transformational deal, the whole company was energized and excited because we’ve always been an originrich network. We’re not blessed with the destinations that we needed to optimize our network, so we were very excited.

Through the battle with CN, we stayed focused and committed. And now that we’ve actually won the merger agreement again and we’re going to be the successful suitor, so to speak, and create a marriage for a lifetime between these two great companies, the pride that’s in

our company matches the pride that’s in KCS. There are so many similarities. We turned 140 this year, so there’s 140 years of proud history, tons of excitement. We honor that every day, but are looking forward to the next 140. It’s our job, our mandate and objective to make those even better years. We’re super excited to get to work.

RAILWAY AGE: Pat, interviewing you two years ago, I used the term “fiercely independent.” That has changed for the better. Your thoughts?

PAT OTTENSMEYER: There’s a lot of excitement at KCS, and Keith has done a phenomenal job of the way he’s communicated with the KCS family, things he’s done to take off some of the edge. Anytime there’s a merger acquisition there’s going to be a certain amount of anxiety. But when we announced the second CP transaction and agreement, Keith and his executive team came to Kansas City. He wanted to be in Kansas

Driving velocity in the rail industry.

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RAILROADERs OF THE YEAR City the day that we announced the merger agreement in September. And I think that was very impactful on the people in Kansas City. As you get further away from Kansas City, I think it’s all positive. There’s job growth. There’s a lot of excitement from the Mexican side employees and others who see this as validation that Mexico is an important part of the investment thesis in North America. In Kansas City, the fact that Keith has committed to relocating the U.S. headquarters in Kansas City has gone a long way in keeping people calm and focused on the opportunity and the upside more so than the risk and the potential consequences of the integration process. You’ve heard it a thousand times here: This is not about cost cutting and closing facilities and shrinking and all of that. This is about growth. The vast majority of people at KCS I think look at that and they see just how interesting and strategically significant this new combination is going to be, and they see that as

a source of excitement as opposed to risk.

RAILWAY AGE: Pat, as you’ve said many times, and I think now both of you can say this with confidence, “Service begets growth.” Those three words I think are the most important here when we’re talking about this transaction. I think you’d agree.

PAT OTTENSMEYER: I agree with you. That’s what it’s all about. Rob Krebs coined the phrase, “You grow or you die.”

This company, this network, this team under Keith’s leadership, just phenomenal opportunities. And right now, I think you look at this exact moment, you look at the service performance, the focus on customers that CP and KCS have, and I don’t think it’s a stretch to say we’re leading the industry right now.

The growth opportunities are going to be there, and there’s no question that we’re going to be able to execute and deliver that promise.

KEITH CREEL: Number one, services

are products. If we don’t have a service to sell in the marketplace, obviously it’s going to impede our growth. The commitment that our company has, and I know Pat’s team of railroaders has, to service and to customers comes from quite frankly, if we don’t have good service it’s hard for us to compete with the bigger players in this industry. I’ve said this: “Maintain our humility, maintain our hunger, and work to earn the right to move our customers’ freight.” If we take that approach and maintain that approach, and we will as CPKC, we’ll create value across all stakeholders that is truly something to be excited about, and unique in this industry.

RAILWAY AGE: Would you say that’s an important message for the STB to hear?

Especially with Chairman Oberman, who has been an activist talking about service quality and seems to be deeply concerned about that. If he were here as part of this interview, what would you say to him?

REMSA congratulates Railroader of the Year 2022 recipients

Keith Creel of Canadian Pacific

Keith Creel

& Pat Ottensmeyer of Kansas City Southern

Pat Ottensmeyer

www.remsa.org

30 Railway Age // January 2022

railwayage.com

RAILROADERs OF THE YEAR PAT OTTENSMEYER: I’d say this is, without a doubt, a combination that creates new options for shippers. It is procompetitive. As we said, we don’t overlap by a single mile and there is not a single shipper that is going to lose options. This is a new single-line service in probably the largest and fastest-growing freight corridor in North America. We’re talking to customers all the time, and they see this as a very attractive option to connect some of these big markets and give them more options than they have today. The other rail options will continue to be there, and obviously the highways, but I think shippers are genuinely excited about the possibility of new single-line service connecting some of the largest, fastest-growing and most important freight markets in North America.

KEITH CREEL: I would say to the Chairman that this is about competition that allows that growth. It’s about job creation. It’s about taking trucks off the road, 64,000, to start with, a year. Think

about the environmental impact of those trucks being minimized and how much greenhouse gas is saved. Think about the infrastructure across the nation. And finally, it’s about investment. The U.S. rail network becomes stronger, not weaker, as a result of this combination. There are no redundant lines. It’s all about enhancing what we have and increasing capacity. It’s not about reducing anything. You put all of those facts together to the regulator.

You have a stronger U.S. rail network as a result of this combination in so many unique ways. I would believe that, based on those facts, it’d be a positive response from the regulator.

RAILWAY AGE: This is for the enthusiasts out there and in all of us: Sometime in early 2023, if all goes as planned, the CP Empress Steam Locomotive, the 2816, will be fired up and rolling with a special train from Calgary all the way into Mexico. I think she’s been well kept and a lot of people really look forward to

that. Pat, you’re going to have to get that locomotive across the Mexican border!

PAT OTTENSMEYER: We’ll do that!

It will truly be a historic photo opportunity event across the continent that probably has never happened. That would be a terrific, terrific event.

KEITH CREEL: The work has begun.

We’re getting prepared. You can imagine that’s a large undertaking, but it’s one we’re all honored and proud to be participating in. There’s a lot of excitement and energy around the 2816.

RAILWAY AGE: Keith Creel and Pat Ottensmeyer, once again congratulations to our co-Railroaders of the Year for 2022. We look forward to seeing you both in person in March at our Railroader of the Year dinner at the Union League Club of Chicago. Pat, you had your dinner in 2020. Keith, you didn’t get a dinner last year, so you finally get a dinner. And maybe we’ll serve plain vanilla ice cream for dessert!

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2022 Passenger Rail Outlook

MORE THAN A

WISH LIST Amtrak’s plans for leveraging IIJA to modernize and expand service. he Infrastructure Investment and Jobs Act—signed into law on Nov. 15, 2021—provides $102.1 billion for passenger and freight rail. This includes $66 billion of advance appropriations for FY 2022-26, of which Amtrak will receive $22 billion ($6 billion for Northeast Corridor and $16 billion for National Network grants).

The advance appropriations also include $36 billion for an updated version of the Federal Railroad Administration’s FederalState Partnership grants program (with a setaside of not more than $24 billion for NEC

32 Railway Age // January 2022

projects); $5 billion for FRA’s CRISI program; and $3 billion for a new Railroad Crossing Elimination competitive grants program.

“This is truly a once in a generation investment that will change the course of intercity rail transportation in America,” said Rep. Donald M. Payne, Jr. (D-N.J.) during a hearing he chaired last month for the House Committee on Transportation and Infrastructure’s Subcommittee on Railroads, Pipelines, and Hazardous Materials.

The $58 billion designated for intercity passenger rail is roughly equivalent to the total federal funding Amtrak has received since its

founding 50 years ago, President and CEO Stephen Gardner testified at the hearing. (He takes on the CEO role Jan. 17, p. 44.) “It fulfills at last the long-held dream of adequate, multiyear federal funding to begin the modernization of Amtrak’s assets and ... significant expansion of our route network,” Gardner said.

IIJA also provides $36.1 billion of additional General Fund authorizations, which include $19.2 billion for Amtrak investment ($6.57 billion for NEC and $12.65 billion for National Network grants) and $13 billion for competitive rail grants ($5 billion for CRISI, $7.5 billion for the Federal-State Partnership for Intercity railwayage.com

Amtrak

T

BY MARYBETH LUCZAK, EXECUTIVE EDITOR

2022 Passenger Rail Outlook

Passenger Rail, $2.5 billion for Railroad Crossing Elimination, and $250 million for Restoration and Enhancement [R&E]).

Additionally, IIJA includes key policy provisions focused on intercity passenger rail, such as the establishment of a new competitive grant program for implementing interstate rail compacts; broadening the Federal-State Partnership grants program to help improve performance of or establish new service, and to cover projects that replace, rehabilitate or repair infrastructure, equipment or facilities to a state of good repair (SOGR); and the creation of a Corridor Identification and Development Program.

Following are highlights of how Amtrak could leverage the funding, which Gardner provided during the Subcommittee hearing. railwayage.com

ASSET RENEWAL/REPLACEMENT “On the NEC main line from Boston to Washington, the IIJA funding appropriated directly to Amtrak will enable advancement and acceleration of both the sole-benefit critical infrastructure projects and SOGR work that are urgently needed after decades of underinvestment despite growing use,” Gardner said. “These appropriations will also advance SOGR projects on the Amtrakowned Keystone Corridor and Springfield Line, Amtrak-owned trackage in Chicago and on the Michigan Line, and the portions of the Albany Line of the Empire Corridor that are owned or leased by Amtrak.

“The primary source of funding for the large-scale NEC infrastructure investments will be the FRA’s Federal-State Partnership grants, which will provide Amtrak and its state partners with a reliable, programmatic source of 80% federal funding for these critical, oncein-a-century projects, and the additional federal transit funding the IIJA provides to our commuter partners. These projects include the construction of the long-sought Hudson Tunnel Project between New York City and New Jersey, which has just received from the Army Corps of Engineers the final federal regulatory approval required for construction; the replacement of the 148-year-old Baltimore and Potomac Tunnel in Baltimore by the new Frederick Douglass Tunnel; and the replacement of major bridges like the Connecticut River and Susquehanna River bridges that have exceeded their useful lives.”

The IIJA directs FRA to create a “Project Pipeline,” or prioritized list of NEC capital projects that includes their proposed federal funding levels and cost allocation among project sponsors, by November 2022, Gardner said. The NEC Commission, comprising representatives from Amtrak, NEC states, USDOT and FRA, completed in July 2021 CONNECT NEC 35 (C35), a 15-year NEC reinvestment implementation plan. The Commission is now working to include additional project details and assessments of project readiness; to address service impacts during implementation; and to take into account the availability of funding, equipment and workforce.

“When fully funded and completed over the next 15 years, the infrastructure investments included in the C35 plan will cut down travel time by up to 30 minutes for passengers traveling between New York City and Washington or Boston,” Gardner said. “Maintaining the

reliability and service frequency of Amtrak and commuter rail services along the NEC in the midst of all the work required to construct these investments will be a major challenge requiring close coordination with our commuter rail partners. While some disruption of and adjustments in services will be necessary while work is under way, passengers will see incremental improvements in trip times and reliability as projects are completed.”

The IIJA’s advance appropriations to Amtrak, Federal-State Partnership grants that Amtrak will seek, and IIJA transit funding provided to commuter railroads will allow advancement of the Major Station Amtrak Development Programs in New York City; Washington, D.C.; Philadelphia; Baltimore; and Chicago. IIJA funding will also help Amtrak move forward SOGR and improvement projects at more than 500 other stations nationwide in collaboration with state partners, communities and private entities. “In particular, it will enable us to accelerate work to bring all of our stations throughout the country into full compliance with the Americans with Disabilities Act,” Gardner testified.

Replacing obsolete equipment used on Amtrak’s state-supported and long-distance routes is one of the primary purposes of the $16 billion in additional National Network funding the IIJA provides to Amtrak, according to Gardner. “By 2031, we expect to have replaced nearly 40% of the passenger railcars we are currently operating across the entire network, and all the Amtrak-owned diesel locomotives used on our state-supported and long-distance services,” he pointed out.

“The IIJA specifies that the National Network and NEC advance appropriations shall be used to fully fund Amtrak’s replacement program for the single-level equipment Amtrak operates on the NEC in Northeast Regional service and on state-supported routes, providing the resources to cover both the Amtrak share and the state share that would otherwise be required under the Section 209 cost allocation methodology,” Gardner said, noting that the roughly $5.5 billion program covers 83 trainsets and related maintenance facility investments to replace the 45-year-old Amfleet I cars.

“The National Network funding will also allow Amtrak to initiate a procurement process to replace long-distance passenger cars that have reached the end of their useful lives, and exercise options to acquire January 2022 // Railway Age 33

2022 Passenger Rail Outlook

additional ALC-42 locomotives, on top of the 75 we have already ordered, to replace the 20to 30-year old Genesis diesel locomotives that power our long-distance trains,” Gardner said.

Additionally, IIJA funding appropriated for Amtrak will cover new information technology systems and maintenance-of-way equipment and facility upgrades.

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National Network capital investments, will be eligible for the portion (at least $12 billion) of the Federal-State Partnership for Intercity Passenger Rail funding that FRA awards to National Network projects, Gardner said.

Informing this new program will be Amtrak’s 15-year “Connects US” plan, which has identified some 30 new corridors “with high demand and potential for intercity passenger rail service, and an additional 20 existing corridors that were prime candidates for service expansion”; FRA’s recently completed Midwest Regional Rail Planning Study; and state-rail and corridor-specific plans for intercity passenger rail expansion from the states of California and North Carolina and the Southern Rail Commission, for example, Gardner testified.

“To encourage states to initiate new or expanded Amtrak service, the IIJA authorizes $250 million for competitive grants under the existing R&E Program, which provides operating funding support during the initial years,” Gardner said. “It increases the percentage of operating losses these grants can cover

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Amtrak

Amtrak President and CEO Stephen Gardner

INTERCITY EXPANSION “The Corridor Identification and Development Program is perhaps the most important component of the IIJA because it will set the priorities and schedule for billions in future investments,” said Gardner, who noted that the current Amtrak route network is about the same size, and serves most of the same routes and places, as Amtrak’s route network 50 years ago. “It does not reflect the roughly 120 million increase in the U.S. population since then, much of which has occurred in now large, fast-growing states with diverse populations, such as Florida, Texas and Georgia, that Amtrak barely serves,” he emphasized.

IIJA directs FRA to establish the program, and to solicit proposals from Amtrak, states and other public entities. FRA is to submit to Congress by May 2023 a prioritized list of selected corridors and details on their funding needs, to be updated annually. FRA, in partnership with public entities, is also tasked with developing Service Development Plans for each selected corridor. Projects included in the Project Pipeline, along with other

2022 Passenger Rail Outlook to a maximum of 90% in the first year of operation and extends the period during which R&E grants can be used to cover a diminishing share of operating losses from three to six years. The IIJA also authorizes Amtrak to use up to 10% of its National Network grants—up to $1.26 billion if Congress fully funds authorized appropriations—for capital needs and initial operating assistance on routes selected for the Corridor Development Program.”

IIJA also requires that the State-Amtrak Intercity Passenger Rail Committee revise the Section 209 Cost Methodology Policy that governs the allocation of costs of statesupported routes between Amtrak and states, Gardner said. “We know some states have concerns about the appropriateness, accuracy and transparency of some of the cost allocations under the current 209 Policy,” he testified. “Now is the time to update and improve the policy to support service growth and create higher degrees of predictability and control for both our state partners and Amtrak.”

Under IIJA, FRA—in consultation with Amtrak, host freight railroads and other

railwayage.com

stakeholders—must undertake a two-year study of increasing service frequency to daily Amtrak’s two tri-weekly long-distance routes, the New York-Cincinnati-Chicago Cardinal and the New Orleans-Los Angeles Sunset Limited; and of restoring discontinued longdistance routes, according to Gardner.

As well, IIJA repeals a longstanding prohibition of any food or beverage service on Amtrak trains unless revenues covered all costs, and establishes a task force to improve its financial performance as well as quality.

‘MORE THAN A WISH LIST’ “The comprehensive, prioritized processes the IIJA establishes for funding and implementation of both NEC capital investments and expansion of corridor services are a welcome development, particularly since they are accompanied by funding that will make the lists of prioritized projects more than a wish list,” Gardner summed up. “However, despite the aggressive timelines the IIJA sets for implementation of these processes, it could be a year and a half before that occurs.

“Needless to say, we hope we can avoid hitting the pause button for 18 months on implementation of already planned NEC capital projects, or on advancement of additional state-supported services on which work to add new trains and routes, in collaboration with our state partners, is already under way.

Within the next 18 months, Amtrak and its state partners plan to add service to Roanoke and Norfolk, Va.; to Burlington, Vt.; and between New Orleans and Mobile, Ala. We also hope to finalize agreements and initiate construction of capital investments for new corridor service between Chicago and St. Paul, Minn. We also plan to continue our work with state partners on other service expansions, such as the development of the portion of the Southeast High Speed Rail Corridor between Petersburg, Va., and Raleigh, N.C. ...

“It is essential that FRA, Amtrak and the NEC Commission work together to ensure that the FY 2022 and 2023 funding the IIJA appropriates for infrastructure investments and corridor development is made available for that purpose as quickly as possible.”

January 2022 // Railway Age 35

TIMEOUT FOR TECH

Figure 1. Transverse fatigue crack in a broken railroad rail. (Courtesy of Gary T. Fry.)

METAL FATIGUE How dangerous fatigue cracks develop in sound steel.

W

elcome to “Timeout for Tech with Gary T. Fry, Ph.D., P.E.” Each month, we examine a technology topic that professionals in the railway industry have asked to learn more about. This month, our topic is fatigue cracks in steel.

Figure 1 (above) is a photograph of the head of a broken railroad rail. The fracture of this rail originated from internal transverse fatigue cracks. Fortunately, before a

36 Railway Age // January 2022

train found these defects, the Class I railroad’s inspectors found them using technology that can scan inside the solid steel.

The defective portion of rail was removed, and sometime later the rail owner used a loading frame to break the rail open and expose the defects. That’s the type of successful scenario we like to hear about.

The fitness for service assessment program worked exactly as it should.

But isn’t it somewhat frustrating, disconcerting even, that we must remain on guard against fatigue failures in steel?

Can’t we invent a “fatigue-proof ” steel?

It sounds like a great idea to me, but I’m afraid I have disappointing news on that front. We rely upon certain forms of imperfections in the atomic lattice of iron to provide essential structural properties of steel, such as strength, ductility and fracture toughness. It is these same atomic-scale imperfections that cause fatigue cracks to form. Let’s have a look at the details.

The steel used to manufacture today’s railroad rail is a carbon steel railwayage.com

Gary T. Fry

BY GARY T. FRY, PH.D., P.E., VICE PRESIDENT, FRY TECHNICAL SERVICES, INC.

TIMEOUT FOR TECH comprising, by weight, roughly 97% iron, 0.80% carbon, 0.90% manganese, 0.20% silicon, and less than 0.70% other elements at specified maximums. Essentially, then, rail is crystals of iron, and we need to know something about iron crystals to understand why they become hosts to fatigue cracks.

Iron crystals are formed from fundamental cuboid units that contain the volume of two iron atoms. A yard of AREMA 136RE rail contains around 3.3x1026 of these foundational units. It is the way in which these units combine into crystals that gives steel the properties we depend on. And the assemblage of these units into crystals is also the key to understanding where fatigue cracks come from.

Despite being cubic at their most basic level, iron crystals are not generally perfect rectilinear forms. Instead, as the iron crystals solidify out of liquid steel, they assemble themselves into irregularly shaped, randomly oriented, interlocking chunks of varying size. These chunks are usually referred to as grains.

Though individual grains largely ref lect the cubic nature of iron, it suffices to say that there are many imperfections present when compared against an idealized cubic grid pattern.

The most important class of imperfections, called dislocations, was theorized in the 1930s and directly observed in the 1950s. Figure 2 (above) is a schematic drawing of a dislocation in an atomic lattice. The dislocation, an extra row of atoms, is indicated by the red circles.

When loads such as wheels rolling on a rail are applied, dislocations will move, or glide, through adjacent positions until they reach a surface—for example, the peripheries of metallurgical discontinuities or of the members themselves. There they cease movement, but the geometry of the lattice has now changed and permanently so. Atomically sharp steps are formed at the free surfaces, and the process is not reversible. Those steps keep accumulating and growing larger as more and more dislocations arrive at the end of their journey. As troubling as that might sound, this process is exactly how steel derives its ductility—a very good thing. So how many dislocations railwayage.com

Figure 2. Schematic drawing illustrating a dislocation (red circles) in an atomic crystal lattice.

are present in high quality steel? One can expect to find on the order of 10 million miles of dislocations in a yard of AREMA 136RE rail.

Regarding the roles of carbon and manganese in steel, essentially these elements become part of the atomic

When loads such as wheels rolling on a rail are applied, dislocations will move, or glide, through adjacent positions until they reach a surface— for example the peripheries of metallurgical discontinuities or of the members themselves. lattice through which dislocations glide. They act as barriers that make it more difficult for the dislocations to move. That means more load is required to activate the dislocations and keep

them scudding along their glide planes.

Today’s rail steel is roughly 10 times stronger than pure iron. But since there is a hindrance to dislocation motion, rail steel is also less ductile than pure iron, roughly by a factor of four.

With that background, we are ready to describe how fatigue cracks form in steel. Figure 3 (p. 38) is a schematic drawing of a microscopic region of a steel member resisting axial loading.

In this case, the loading is cyclic and alternates between being tensile and compressive. Dislocation glide planes are indicated on the member. There are two general levels of applied load to consider: large loads approaching or exceeding the yield strength of the steel, and smaller loads, well below the yield strength, but large enough to activate dislocation motion.

With the large load cycles, dislocations rapidly reach surfaces forming steps that eventually result in ruptures of the lattice that grow along the glide planes.

The number of load cycles for ruptures to form is on the order of 10,000 or lower. This regime is referred to as “low cycle fatigue.” Conversely, with small load cycles, the dislocations will eventually reach surfaces, forming steps and progressive lattice ruptures, but it takes many more cycles—greater than 10,000.

This regime is referred to as “high cycle fatigue.” The lattice ruptures caused by cyclic loads are indicated in Figure 3 as “Stage I Fatigue Cracks.” Loads that are too small to activate dislocation motion do not cause fatigue damage.

The head of a railroad rail presents three forms of cyclic damage January 2022 // Railway Age 37

TIMEOUT FOR TECH

Figure 3. Schematic drawing illustrating applied stress, dislocation glide planes and fatigue cracks.

38 Railway Age // January 2022

loads in service are large enough to activate dislocation movement.

Another important takeaway is this: The root causes of fatigue cracks in steel are not manufacturing defects. Perfectly sound, high quality steel is susceptible to fatigue damage. Even a single crystal of pure iron, with no metallurgical discontinuities present, can develop fatigue cracks. The only requirements are enough cycles of loads applied at amplitudes above a level that activates dislocation motion. Having said that, poor quality steel can result in much more rapid formation of fatigue cracks.

This is partly because microscopic (or sometimes larger) metallurgical discontinuities, such as inclusions and porosity, come with higher densities of dislocations, cause amplified motions of dislocations, and provide extra surfaces where dislocations can terminate and establish the fatigue damage process. But it is important to recognize that both high quality and low quality steels are

susceptible to forming fatigue cracks. It just takes the right number of cycles of loads at the right amplitudes.

That is how dangerous fatigue cracks form in sound steel.

Gary T. Fry

simultaneously. On the running surface in direct contact with the wheel, the loads are large and ultimately cause a rhythm of cracking referred to as ductility exhaustion defects. Just beneath the running surface, loads exceed the yield strength and low cycle fatigue occurs.

Ductility exhaustion cracking and low cycle fatigue cracks often coalesce.

Deeper below the running surface, high cycle fatigue occurs. The transverse cracks in Figure 1 are high cycle fatigue cracks. The base of a railroad rail is subjected to high cycle fatigue.

Steel, and other structural metals, present us with a dichotomy. Naturally occurring atomic lattice imperfections are the reason that steel has ductility and fracture toughness. Without these imperfections, steel would be as brittle as glass (or, more accurately, gemstones) and not useful as a structural material. But these imperfections are also the reason that steel can develop fatigue cracks if the applied

Gary T. Fry railwayage.com

TTCI R&D

A wheel with an internal crack detected by ACWDS before the wheel was removed from the FAST train. The inset photo is an example of a broken wheel that might result from such a defect.

ACWDS

IMPLEMENTATION The Automated Cracked Wheel Detector System safely detects wheels with internal defects, without interrupting revenue service.

ransportation Technology Center Inc. (TTCI) has concluded the research, development and testing of a Tycho-manufactured Automated Cracked Wheel Detector System (ACWDS) capable of inspecting wheels for internal fatigue cracks at speeds of up to 15 mph. The validation

40 Railway Age // January 2022

of the system, sponsored by the Association of American Railroads (AAR), was performed using the heavy axle load (HAL) test train (a consist of about 120 cars, each with a 39-ton axle load) at the Facility for Accelerated Service Testing (FAST) near Pueblo, Colo.

Wheel impact load detectors (WILD) effectively find out-of-round and shelled

wheels, but by design, these detectors are not meant to find wheels with internal cracks that may lead to breaks. In fact, many broken wheels fail without ever indicating WILD-recorded high impact loads. Other vision- or laser-based systems can only find broken wheels after they fail. These systems are not designed to find internal fatigue cracks that are railwayage.com

TTCI

T

BY ANISH POUDEL, PH.D., PRINCIPAL INVESTIGATOR I (NDT), TRANSPORTATION TECHNOLOGY CENTER, INC.

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TTCI R&D believed to be the precursor of broken wheels. Rails are tested ultrasonically for internal defects; currently, wheels are not tested in the same manner. The goal of the ACWDS is the safe detection of wheels with internal defects without interrupting revenue service.

The ACWDS evaluated at FAST is a wayside, ultrasonic, non-destructive evaluation (NDE) system that uses spring-loaded contact ultrasonic transducers to inspect moving train wheels for internal fatigue cracks in the tread, near the rim face and at the wheel f lange.

The trackwork uses a wide gage segment with inboard ultrasonic probes positioned at the wheel tapeline (center) and a standard gage segment with outboard ultrasonic probes placed on the field side of the wheel tread (near the rim face) to inspect the entire wheel tread.

For a single pass, every wheel (38-inch diameter maximum) is inspected during two full revolutions of the wheel in the wide gage section and during one full

revolution in the standard gage section.

The use of multiple revolutions provides for a complete inspection of the wheel tread with 0-degree probes, as well as

Each ultrasonic probe inspects a sector of the wheel, and the individual inspections are seamed together. an inspection of both the f lange and the rim with angled 70-degree probes.

It should be noted that the 70-degree

1_2pgHorzWrkStTraining2019.qxp_Layout 1 7/17/19 10:00 AM Page 1

angled probes do not operate well above 5 mph, but 0-degree probes can operate at speeds up to 15 mph.

Each ultrasonic probe inspects a sector of the wheel, and the individual inspections are seamed together to provide a view of the wheel’s entire circumference. The system uses wheel f lange speed sensors laid next to the ultrasonic probes to measure wheel speed and to synchronize the triggering of the ultrasonic probes with the arrival of the wheels. Additionally, the system uses transmitter/receiver pairs of photoelectric sensors to wake up and shut down the system as the train enters and exits.

The Tycho ACWDS is also equipped with a self-diagnostic tool to help ensure continuous operation. When a probe malfunctions, the ACWDS acquisition software will notify the operator to replace the probe. Similarly, the ACWDS acquisition software will alert the operator if any ultrasonic hardware or data collection units, such as those inside

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TTCI R&D the wayside cabinets, malfunction or fail to communicate properly. These systems performed as intended during TTCI’s evaluation.

During recent FAST operations, the train passed 12 times through the ACWDS, and 5,204 total wheelset inspections (10,408 wheels) were performed.

ACWDS detected seven wheels with crack indications. All indications were later verified with hand-held ultrasonic testing (UT). To date, the verification hand-held UT scans have been in close agreement with the ACWDS findings.

Some of the wheels with crack indications were tracked over time to gain insight into crack growth rates. The illustration on p. 40 shows a wheel with an internal crack that was detected by ACWDS before the wheel was removed from the FAST train. The inset photo is an example of a broken wheel that might result from such a defect. In addition, prior work attempted to estimate the false-negative rate with a hospital train

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(with all known wheel conditions).1 Subsequent updates and the addition of the outboard probes would address the previously missed detections. Despite the addition of these probes, inconsistent triggering of the system may still generate false negatives.

The research also revealed several operational events and associated recommendations.2 It is important to note the differences between testing the Tycho ACWDS with a single-unit train in a controlled environment and actual train operations in revenue service. For instance, while the FAST train ran through the Tycho ACWDS during TTCI’s evaluation, the quantity of wheels that will be scanned in an actual revenue service installation will be much higher. Consequently, the amount of observed wear on both the probes and the trackwork at FAST has been minimal and might not reflect performance in revenue service.

The ACWDS tested at FAST is relatively unprotected, so its maintenance

requirements are both unique to its location and more complex than if the system were protected by a shelter building. Based on the lack of protection from the environment, frequent maintenance would be impractical in actual revenue service. Therefore, a design update along with regular system maintenance is recommended for any Tycho ACWDS installations. Determining the location of any system for revenue application should consider the specific environmental requirements.

REFERENCES: 1. Poudel, A. and M. Witte. January 2017. “Automated Cracked Wheel Detection with Tycho ACWDS,” Technology Digest TD17-002, AAR/TTCI, Pueblo, Colo.

2. Poudel, A. and M. Witte. January 2017. “Tycho ACWDS Service Implementation,” Technology Digest TD21-001, AAR/TTCI, Pueblo, Colo.

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4/16/18 1:17 January 2022 // Railway AgePM 43

People STEPHEN GARDNER AMTRAK

HIGH PROFILE: Stephen J. Gardner is taking over Amtrak leadership on Jan. 17, 2022, succeeding William J. Flynn, the railroad reported last month. Flynn, who is retiring, will remain as a senior advisor through the end of the fiscal year (October 2021-September 2022) to support the transition. Gardner joined Amtrak in 2009. He is currently President, directing the railroad’s day-to-day operations; customer growth initiatives; and strategies to modernize products, services, infrastructure and fleet. He has also been responsible for efforts to expand state-supported service partnerships, increase Acela capacity, improve Northeast Corridor infrastructure, and develop Amtrak’s strategic plan. On Jan. 17, he adds CEO to his role.

Gardner was promoted from Executive Vice President/Chief Operating and Commercial Officer to President at the end of 2020, also taking over for Flynn, who remained as CEO and continued to serve on the company’s Board of Directors. Gardner’s appointment, Amtrak said at that time, was “part of a broader set of actions taken under Flynn’s leadership, working with the Board of Directors, to ensure that Amtrak is wellpositioned for success in fiscal year 2021 and beyond.”

ALAN SHAW

Norfolk Southern HIGH PROFILE: Norfolk Southern (NS) last month an-

nounced that Chairman and CEO Jim Squires will retire in May 2022; he will be succeeded by Executive Vice President and Chief Marketing Officer Alan H. Shaw, a 27year NS veteran. As part of NS’s planned succession process, the Board of Directors has elected Shaw, 54, to the role of President, effective immediately. NS’s executive leadership team now reports to Shaw. Squires, 59, and Shaw will continue to work together over the next five months “to complete a smooth transition,” the railroad said.

Shaw, with experience in marketing, operations and finance, began his NS career as Cost Systems Analyst and Manager in 1994. He rose through the ranks and was appointed Executive Vice President and Chief Marketing Officer in May 2015. Shaw has been responsible for innovations in customer-facing technology, sustainability and new product offerings. “I look forward to working with Jim, our Board of Directors, and the entire team at Norfolk Southern to provide superior service to our customers, create compelling value for shareholders, and build on the momentum of our improving operating ratio,” Shaw said.

Squires joined Norfolk Southern in 1992 and served in several law positions before being named Vice President Law in 2003, Senior Vice President Law in 2004, Senior Vice President Financial Planning in 2006, Executive Vice President Finance in 2007, Executive Vice President Administration in 2012, President in 2013, and Chairman and CEO in 2015. A native of Hollis, N.H., Squires is a graduate of Amherst College, where he received a bachelor of arts in Ancient Greek in 1983. After graduation, he spent a year as Amherst-Doshisha Fellow at Doshisha University in Kyoto, Japan. He then served in the U.S. Army from 1985 to 1989. In 1992, he received a Juris Doctor degree from the University of Chicago Law School, where he has served as a member of the Visiting Committee.

44 Railway Age // January 2022

E

NSCO Rail has named Acacia Reber as Director of Marketing and Business Development. A 13-year marketing veteran, Reber will help grow ENSCO Rail’s worldwide presence by building new customer contacts and relationships, managing sales and CRM software, leading interactions with international partners, and coordinating customer events and training sessions.

“We are excited to have Acacia join ENSCO Rail and look forward to having her marketing and business development expertise on the team,” said Jeff Stevens, Senior Vice President of the ENSCO Surface Transportation Group. “ENSCO was awarded with the TTC (Transportation Technology Center) contract early last year, and we look forward to Acacia joining team to expand commercial operations focused on providing research and development, testing, engineering and training services.”

Chad Hewitt has joined HDR as Senior Rail Project Manager. He will provide freight rail expertise for the firm’s Pacific Northwest business. With an engineering design and construction management background, Hewitt has worked on intermodal facilities and gate systems projects across North America. He served most recently as Chief Engineer at Remprex Engineering Services. “Chad’s passion for client service, combined with his technical mastery of terminal design and construction make him a fantastic addition to HDR’s freight rail practice,” HDR Freight Rail Director Bill Hjelholt said. “I look forward to working with him on major projects in the Pacific Northwest and across all of North America.”

Brian Frizzell has been promoted to lead two Sasser Family Companies subsidiaries: Division President of Rail for Chicago Freight Car Leasing (CFCL) and repair shop operator CF Rail Services. He will focus on improving operating results, building on business synergies and strengthening strategic relationships across the rail segment. Now reporting to Frizzell are Josh Chesser, General Manager of CFCL, and James Allen, President of CF Rail Services. “In his role as Chief Strategy Officer, Brian has been an integral part of the Sasser leadership team,” Sasser CEO Jeff Walsh said. railwayage.com

WE SIFT THROUGH THE NEWS SO YOU DON’T HAVE TO RAIL GROUP NEWS brings you a daily round-up of news stories from Railway Age, RT&S, and IRJ. This email newsletter offers North American and global news and analysis of the freight and passenger markets. From developments in rail technology, operations, and strategic planning to legislative issues and engineering news, we’ve got you covered.

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46 Railway Age // January 2022

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Ad Index COMPANY

PAGE #

PHONE #

FAX #

URL/EMAIL ADDRESS

AMSTED RAIL GROUP

312-922-4516

312-922-4597

kskibinski@amstedrail.com

C4

DANELLA RENTAL SYSTEMS, INC

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561-743-1973

SBolte@danella.com

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ENCORE

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FREIGHTCAR AMERICA

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fcasales@freightcar.net

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GREENBRIER COMPANIES THE

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C2

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26

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alexis.b.nubbe@loram.com

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hnicholson@steelcar.com

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HOLLAND LP

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KANSAS CITY SOUTHERN

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LORAM

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NATIONAL STEEL CAR

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NORDCO

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28

OKONITE CO

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3

PLASSER AMERICAN CORP

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plasseramerican@plausa.com

24-25

POWERRAIL INC

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35

RAILWAY EDUCATIONAL BUREAU

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bbrundige@sb-reb.com

34,42,C3

jroberts@relaminc.com

17

info@remsa.org

30

trinityrail.com

19

RELAM

770-335-9273

REMSA

202-715-2921

763-478-2221

202-204-5753

TRINITY RAIL

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WESTERN CULLEN HAYES

773-254-9600

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jm@wch.com

31

WI-TRONIX LLC

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jessica.sawyer@wi-tronix.com

21

541-484-1987 wvcorailroadsolutions@wilvaco.com

23

WVCO RAILROAD SOLUTIONS

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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.

Advertising Sales MAIN OFFICE Jonathan Chalon Publisher 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com AL, KY, Jon Chalon 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, OH, PA, RI, SC, VT, VA, WV, CANADA – QUEBEC AND EAST, ONTARIO Jerome Marullo 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com

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AR, AK, AZ, CA, CO, IA, ID, IL, IN, KS, LA, MI, MN, MO, MS, MT, NE, NM, ND, NV, OK, OR, SD, TN, TX, UT, WA, WI, WY, CANADA – AB, BC, MB, SK Heather Disabato 20 South Clark Street, Suite 1910 Chicago, IL 60603 (312) 683-5026 Fax: (312) 683-0131 hdisabato@sbpub.com

THE NETHERLANDS, BRITAIN, FRANCE, BELGIUM, PORTUGAL, SWITZERLAND, NORTH GERMANY, MIDDLE EAST, SOUTH AMERICA, AFRICA (NOT SOUTH), FAR EAST (EXCLUDING KOREA /CHINA/INDIA), ALL OTHERS, TENDERS Jerome Marullo 88 Pine St., 23rd Floor New York, NY 10005 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com

SCANDINAVIA, SPAIN, SOUTHERN GERMANY, AUSTRIA, KOREA, CHINA, INDIA, AUSTRALIA, NEW ZEALAND, SOUTH AFRICA, RUSSIA, EASTERN EUROPE BALTIC STATES, RECRUITMENT ADVERTISING Simone Fahr +01149 175 2411426 sfahr@railjournal. com ITALY, ITALIAN-SPEAKING SWITZERLAND Dr. Fabio Potesta Media Point & Communications SRL Corte Lambruschini Corso Buenos Aires 8 V Piano, Genoa, Italy 16129 +39-10-570-4948 Fax: +39-10-553-0088 info@mediapointsrl.it

JAPAN Katsuhiro Ishii Ace Media Service, Inc. 12-6 4-Chome, Nishiiko, Adachi-Ku Tokyo 121-0824 Japan +81-3-5691-3335 Fax: +81-3-5691-3336 amkatsu@dream.com CLASSIFIED, PROFESSIONAL & EMPLOYMENT Frank Rose 917-856-1808 frose@sbpub. com

AILWAY GE January 2022 // Railway Age 47

Financial Edge First Thing We Do Is Automate All the Trains

I

t might be the meme of all memes, at least for the COVID-19 pandemic: Al Pacino’s iconic “Just when I thought I was out, they pull me back in!” right before collapsing from a diabetic stroke, sums up what Omicron feels like (collapse included). Just when it felt like the U.S. could be getting its grip on Delta, Omicron has turned the world upside down. That is unless one lives in some segments of South Korea, where they make a fetish of commodities and joining the queue to buy a $9,500 Chanel purse at 5 a.m. is more important than any stinking virus.

The pandemic continues to offer the opportunity to take a very Zen-like approach in contemplating the future of North American rail. Reporting on the supply chain disruptions has yielded multitudinous articles on increasing rail volumes, reducing locomotive emissions and autonomous train operations.

One often baffling thing for the industry veteran is the casual approach of industry “outsiders” to the perception of change in North American rail, which is a bit of an anomaly. Change is a slow word. So when The Wall Street Journal publishes claptrap on its website such as “How to Move More Goods Through America’s Clogged Infrastructure? Robot Trains,” one wonders why perceptions around North American rail are so disconnected from reality.

The notion that productivity and safety improvements are as easy as replacing locomotive engineers with autonomous technology is generally ludicrous. To the casual observer, it suggests that autonomous reorientation of rail traffic is as easy as ordering a Tesla. Wrapped in the Journal’s masthead, this becomes business clickbait: The solution to all our supply chain problems is right here and right now!

It isn’t until about 1,100 words into the article before the oops! moment: “Most autonomous trains are built on new and dedicated tracks they do not have to share with other, human-controlled trains.”

Come again? It makes building track sound like rolling out a mat in the garage to cover a leaky oil pan. In any case, such autonomous trains are automated rail transit, not freight. One would think the Journal’s 48 Railway Age // January 2022

editors couldn’t possibly be that dumb?

Think again.

This is not to say that autonomy in North American freight rail will never happen. The building blocks of autonomy start with PTC, or as reported by Railway Age, PTC 2.0. Roughly a year ago (February 2021), BNSF received a patent for a virtual track block system that would effectively create moving-block train control. Migrating to a technology-based, vehicle-centric virtual system that eliminates traditional fixed blocks will allow for closer train spacing, increased productivity and safer operations. It could eliminate wayside signals, decreasing maintenance costs. In other words, BNSF has positioned itself to be the purveyor of next-gen traffic management tech.

The application of a virtual block system is a plan for the future. Frankly, at today’s loadings levels, it is unnecessary, since the fixed-block system we have continues to operate at much less than maximum capacity.

A more immediate application of technology was announced in December 2021 when Greenbrier announced a partnership with U.S. Steel and Norfolk Southern (above, and p. 7) to build a mill gondola railcar out of a steel alloy that can reduce the total car light weight by 15,000 pounds!

Chances are these cars will be made from an alloy developed by NanoSteel, whose patents U.S. Steel acquired in March 2021.

The impact of taking 20% of the weight of the car is customer- and railroad-friendly.

It is available now.

The lesson here is the same, however: 1.6 million railcars in North America and 50

years is a long time. Railcar vibrations are relentless. Loading and unloading procedures for railcars (especially mill gons) often involve heavy machinery banging the sides and ends of the car (to the chagrin of car owners). Repairing a car made of unique materials might be difficult if body work must utilize the new alloy. So, while applauding the venture to improve mill gon capacity and overall efficiency, secular change in railcar body steel is, more than likely, a future event. It will be interesting to see the performance data when these cars start commercial operation.

It might take a program like the RAILCAR Act (so 2020!) for sweeping change. It will also take input from the FRA to determine if the new alloy can be used in tank car construction.

Technology and North American rail often feel at odds. Technology is inevitably coming, albeit at a slow pace, to an industry that has often been a contentious objector.

So, blink all you want—you probably won’t miss it. In fact, you probably have time to get in line at the Chanel store and score yourself a purse. Try arriving at 4:45 a.m. for the best selection.

Got questions? Set them free at dnahass@ railfin.com.

DAVID NAHASS President Railroad Financial Corp. railwayage.com

We’re current, are you? FRA Regulations Mechanical Department Regulations

Now Include Part 22 s 4

A combined reprint of the Federal Regulations that apply specifically to the Mechanical Department. Spiral bound.

Part Title 210 Railroad Noise Emission Compliance Regulations Updated 4-15-19.

215 Freight Car Safety Standards Updated 5-3-21.

216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment Updated 5-3-21.

217 Railroad Operating Rules Updated 5-3-21.

218 Railroad Operating Practices - Blue Flag Rule Updated 5-3-21.

221 Rear End Marking Device-passenger, commuter/freight trains Updated 5-3-21.

223 Safety Glazing Standards Updated 5-3-21.

224 Reflectorization of Rail Freight Rolling Stock Updated 5-3-21.

225 Railroad Accidents/Incidents Updated 5-3-21.

229 Locomotive Safety Standards Updated 5-3-21.

231 Safety Appliance Standards Updated 5-3-21.

232 Brake System Safety Standards Updated 5-3-21.

There are no new proposals or final rules to report for this issue. Be sure to check back next month to see if there are any changes to FRA regulations.

Part 215: Freight Car Safety Standards 49 CFR 215. Prescribes the minimum safety standards for freight cars allowed by the FRA. Includes safety standards for freight car components, car bodies, draft system, restricted equipment and stenciling. Softcover, spiral.

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Update effective

5-3-21 3-1-21 5-3-21 10-7-20 5-3-21 5-3-21 5-3-21 5-3-21 5-3-21 5-3-21 5-3-21 5-3-21 5-3-21 5-3-21 5-3-21 5-3-21

BKCONDC 242 5-3-21

BKBSS

Each

RR Safety Enforcement Procedures & Rules of Practice Track Safety Standards (Subpart A-F) Track Safety Standards (Subpart G) RR Workplace Safety RR Freight Car Safety Standards RR Operating Rules and Practices RR Communications Use of Locomotive Horns Hours of Service Locomotive Safety Standards Steam Locomotive Inspection RR Safety Appliance Standards Bridge Safety Standards Qualification and Certification of Locomotive Engineers Conductor Certification

232 12-11-20 Brake System Safety Standards

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40 219

4-23-19 Drug and Alcohol Regulations in 5-3-21 the Workplace

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5-3-21 Signal and Train Control Systems 5-3-21 5-3-21 8-26-21 5-3-21 Passenger Safety Standards 5-3-21

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Part 231: Railroad Safety Appliance Standards 49 CFR 231. General requirements for safety appliances including: handbrakes, brake step, running boards, sill steps, ladders, end ladder clearance, roof handholds, side handholds, horizontal end handholds, vertical end handholds, and uncoupling levers. 106 pages. Softcover. Updated 5-3-21

BKSAS

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Railroad Operating Rules & Practices 49 CFR 217 to 218. Part 217: Purpose, Application, Definitions, Penalty, Operating Rules, Program of Operation Tests and Inspections; Program of Instruction on Operating Rules, Information Collection. Part 218: General Blue Signal Collection of Workers Protection of Trains and Locomotives, Prohibition against tampering with safety services, Protection of occupied camp cars. Softcover.

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The Railway Educational Bureau 1809 Capitol Ave., Omaha NE, 68102 I (800) 228-9670 I (402) 346-4300 www.RailwayEducationalBureau.com Add Shipping & Handling if your merchandise subtotal is: U.S.A. CAN U.S.A. CAN Orders over UP TO $10.00 $4.75 $9.20 25.01 - 50.00 12.00 20.05 $75, call for shipping 10.01 - 25.00 8.80 15.35 50.01 - 75.00 13.50 25.05 *Prices subject to change. Revision dates subject to change in accordance with laws published by the FRA. 1/22

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