Tag Archives: Kansas City Southern

AP: Railroads beat back new safety rules after derailments

Repost from the Boston Herald

AP: Railroads beat back new safety rules after derailments

By Matthew Brown and Michael Kunzelman, December 05, 2015
FILE -In this Monday, Feb. 23, 2015, file photo, clean up continues near Mount Carbon, W.Va., where a train derailed and sent a tanker with crude oil into the Kanawha River. A little-known truth about North American railroads: No rules govern when rail becomes too worn down. Since 2000, U.S. officials blamed rail wear as the direct cause of 111 derailments causing $11 million in damage. (AP Photo/Chris Tilley, File)

A pair of train derailments in 2012 that killed two people in Maryland and triggered a fiery explosion in Ohio exposed a little-known and unsettling truth about railroads in the U.S. and Canada: No rules govern when rail becomes too worn down to be used for hauling hazardous chemicals, thousands of tons of freight or myriad other products on almost 170,000 miles of track.

U.S. transportation officials moved to establish universal standards for when such steel gets replaced, but resistance from major freight railroads killed that bid, according to Associated Press interviews with U.S. and Canadian transportation officials, industry representatives and safety investigators.

Now, following yet another major accident linked to worn-out rails — 27 tanker cars carrying crude oil that derailed and exploded in West Virginia earlier this year — regulators are reviving the prospect of new rules for worn rails and vowing they won’t allow the industry to sideline their efforts.

“We try to look at absolutely every place where we can affect and improve safety,” said Federal Railroad Administrator Sarah Feinberg. “Track generally is the place that we’re focusing at the moment, and it’s clearly overdue. Rail head wear is one place in particular that we feel like needs to be addressed as soon as possible.”

An official announcement on the agency’s intentions to revisit rail wear is expected by the end of the year.

In the meantime, federal regulators haven’t taken the positive steps that they need to, said Ronald Goldman, an attorney for the families of the two 19-year-old women who died in a 2012 derailment outside Baltimore.

“It’s a lack of will, not a lack of ability, in my opinion,” he added.

Industry supporters argue that the seven major freight railroads in the U.S. and Canada are in the best position to know what is going on with their lines, including when they need to be replaced or have the maximum speeds for trains traveling on them lowered. They also note a long-term decline in accidents that has reduced the frequency of derailments by more than 40 percent since 2000.

All sides agree it’s difficult to pinpoint how many accidents are tied to worn rail. Since 2000, U.S. officials blamed rail wear as the direct cause of 111 derailments causing $11 million in damage.

That’s less than 1 percent of all accidents, yet it masks a broader safety dilemma: Years of massive loads rolling over a rail will exacerbate defects in the steel, such as cracks or fractures. Investigators ultimately list the defect as the cause of a derailment, but it might never have been a problem if the rail had not been worn down.

“Rail defects are internal and rail wear is external, and when external meets internal, that’s when problems may arise,” said John Zuspan of Track Guy Consultants, a Pennsylvania firm that offers track inspections, safety training and other services for railroads.

Two accident causes in particular have the strongest correlation with worn-out rails: “detail fractures” that result from fatigued metal, and “vertical splits” in the head of the rail, where it makes contact with a train’s wheels, according to the FRA.

Those problems caused a combined 1,200 derailments with $300 million in damages, three deaths and 29 people injured in the U.S. between 2000 and the present, according to accident records reviewed by the AP.

Among them was the July 2012 derailment of a Norfolk Southern Railway train hauling ethanol and other products through Columbus, Ohio. Seventeen cars derailed, including three hauling highly flammable ethanol that exploded into flames, triggering an evacuation of surrounding neighborhoods.

A month later, another accident occurred involving a CSX Transportation train hauling coal over a bridge along Main Street in Ellicott City, Maryland, outside Baltimore. Twenty-one cars derailed when the company’s worn-down rail split beneath the weight of the coal cars. The two college students sitting on the bridge died, crushed by thousands of pounds of spilled coal.

The victims’ families reached a settlement with CSX last year for undisclosed terms. Goldman, the families’ attorney, said he pressed federal officials for a forum that would allow his clients to testify about the issue, but “nothing really happened.”

A month after the CSX derailment, federal regulators asked the Rail Safety Advisory Committee — a panel created by the Railroad Administration to include the industry and others in fashioning safety rules — to craft new standards to reduce the risks of worn-down rail. The committee set up a 116-person working group to tackle the problem, made up of industry representatives, government officials, consultants, researchers and railroad worker unions.

The group included 55 representatives from the major freight railroads and their industry organization, the Association of American Railroads. The FRA had 14 seats at the table and their counterparts from Transport Canada had five.

Following several meetings in 2012 and 2013, the group — which required consensus before recommending action — agreed on voluntary guidance for companies to manage rail wear, but no new regulations.

“There was certainly a lot of pushback and a lot of political pressure put on FRA not to adopt regulations for rail wear,” said Richard Inclima, director of safety for the union that represents track inspectors and a member of the working group. “Rail wear limits were on the table. The industry raised a lot of arguments against rail wear limits.”

“The industry doesn’t want to be regulated,” he added. “That’s no secret.”

The railroads’ opposition was confirmed by others involved with the group’s work including from the National Transportation Safety Board, the FRA and Transport Canada.

Association of American Railroads spokesman Ed Greenberg said the railroads were “unaware of any science-based data supporting rail wear limits.”

NTSB investigator Richard Hipskind, who took part in the Ellicott City and Columbus accident investigations and later served on the rail wear working group, said more research would be needed to establish universal standards.

Railroads have their own internal standards for rail wear, and have replaced more than 30,000 miles of rail since 2010, according to reports submitted by the major railroads to the U.S Surface Transportation Board, a semiautonomous agency under the umbrella of the U.S. Department of Transportation.

Standards vary among railroads and are complicated by differences in how much weight a given line bears, whether it’s in a wet or dry climate, and if the line goes through mountains or involves lots of turns. Those variables can make the difference between well-worn rail that’s still safe and routes that poses a heightened safety hazard, according to industry experts and safety officials.

Greenberg said the industry takes an aggressive approach to identifying and removing defective or worn sections of rail.

“Each railroad has its distinct operating environment and operating conditions that would be factored into this,” Greenberg said. He added that the industry was now interested in “renewed dialogue” with the FRA on the topic.

The AP requested details on rail wear standards from each of the seven major freight railroads — BNSF Railway, Union Pacific, Canadian Pacific, CSX, Canadian National, Norfolk Southern and Kansas City Southern. They either refused the request or referred questions to the railroad association, which also declined to release the standards.

Public attention to train derailments increased sharply after July 2013, when an out-of-control oil train derailed and exploded in Lac-Megantic, Quebec, killing 47 people. One of the most significant changes to emerge from that and other accidents involving crude and ethanol was a mandate for companies to phase out or upgrade tens of thousands of tank cars that are prone to rupture.

Those are important changes, said James Horbay, a rail safety engineer with Transport Canada. But what causes trains to come off the tracks in the first place needs to be resolved, he said.

“If you crash an airplane, are you going to say, ‘Let’s build an airplane that’s not going to fall apart when it hits the ground?'” he asked. “Whether rail wear is something that should be looked at is a good question to ask. You’re going right to the cause now.”


Matthew Brown reported from Billings, Montana.  Michael Kunzelman reported from Baton Rouge, Louisiana. 

Rail Logjams Are Putting The Whole US Economic Recovery At Risk

Repost from Business Insider
[Editor: Significant quote: “Many experts blame an incomplete recovery from last winter’s freight backlogs, coupled with record crops and rising competition with crude oil tankers for track space amid an economic recovery.”  – RS] 

Rail Logjams Are Putting The Whole US Economic Recovery At Risk

Susan Taylor and Solarina Ho, Reuters, Aug. 15, 2014

TORONTO (Reuters) – More than eight months after an extreme winter began snarling North American rail traffic, a Reuters analysis of industry data shows delays lingering, raising the risk of a second winter of chaos on the rails.

Across the continent’s seven largest operators, trains ran almost 8 percent slower on average and sat idle at key terminals for nearly three hours longer in the second quarter than a year earlier, data from the main railroads, known as Class 1, show.

While Canada’s rail operators have nearly recovered, many U.S. operators lag far behind.

The concerns are sharpest in the U.S. Farm Belt, with lawmakers fearful that the biggest crops on record may be slow to reach markets or could even rot.

Rail logjams contributed to the economic slowdown early in the year, rippling across corporate America and affecting everything from car makers to ethanol producers.

Many experts blame an incomplete recovery from last winter’s freight backlogs, coupled with record crops and rising competition with crude oil tankers for track space amid an economic recovery.

“It’s like a sinking ship – you’re bailing out at one end, but it’s coming in the other end just as fast, if not faster,” said Citigroup Global Markets transportation analyst Christian Wetherbee.

Performance fell behind as loads grew: between April and June, U.S. rail carload volumes grew 5.4 percent and intermodal traffic, which include shipments partly by rail, rose 8 percent, Association of American Railroads (AAR) data shows.

At the same time, the industry is producing “tremendous” margins, profit and cash flow, with some companies setting records, said rail analyst Tony Hatch.

The largest operators plan to spend about 18 to 20 percent of annual revenue this year on new terminals, track, sidings and equipment to help boost capacity and efficiency, according to Thomson Reuters data. That is slightly higher than recent average annual spending.

Some shippers complain that spending hasn’t been sufficient to meet demand, especially in bad weather. Still, many investment projects are multi-year improvements that can’t quickly fix traffic jams.

“We’re criticized … because we haven’t put infrastructure in to handle the growth. But then when you try to put infrastructure in, the not-in-my-backyard lobby kicks in and says: We don’t want you here,” Canadian Pacific Railway Ltd Chief Executive Hunter Harrison said on a recent earnings conference call.

Over the four decades to 2000, the nation’s major track system shrank by about half, in terms of miles of rails, according to the U.S. Federal Highway Administration.

Although Berkshire Hathaway’s BNSF Railway Co is spending a record $5 billion this year, its performance lagged those of competitors last quarter.  BNSF trains traveled 11 percent slower than year-ago speeds, and stayed at terminals for 18 percent longer.

Fadi Chamoun, an analyst at BMO Capital Markets, said BNSF is unlikely to recover until mid- to late-2015 due to the amount of work it must do.

In recent years, BNSF accounted for some 50 percent of the entire rail industry’s volume growth, analysts said. The company says it handles up to 15 percent of U.S. intercity freight.

BNSF declined to respond to Reuters’ questions about its performance metrics. The Fort Worth, Texas-based railway has said it is working closely with shippers to clear backlogs and adding track, locomotives and crews.

The other four U.S. Class 1 railroads are CSX Corp, Kansas City Southern, Norfolk Southern Corp and Union Pacific Corp.

Kansas City Southern and Norfolk Southern did not respond to requests for comment. CSX said it was investing in strategic capacity additions and was adding train crews and locomotives to restore performance and support growth. Union Pacific CEO Jack Koraleski told Reuters that the railroad’s performance has been improving even as volumes have been increasing, adding that it has worked hard to address disruptions and customer issues.

Cowen & Co analyst Jason Seidl said winter exacerbated problems for the industry. “As they were trying to dig out, the volumes took off,” he said.

ECONOMIC FALLOUT

In the United States, more than 40 percent of goods, valued at more than $550 billion, are shipped by railroad each year on some 140,000 miles of track. Canada’s 30,100 miles of track carry half of the country’s export goods.

Frozen transportation links contributed to a nearly 3 percent contraction in the U.S. economy during the first quarter, the New York Federal Reserve said last week.

Lawmakers and the $395 billion agricultural industry fear that trains may fail to clear last year’s record-breaking crops in the Midwestern U.S. Farm Belt, which could strand part of this summer’s grain harvest.

“We’re sounding the alarms right now,” North Dakota Senator Heidi Heitkamp told Reuters. “We believe the 2014 crop could be taken off the fields and there won’t be any place to store it, because of the lack of ability to move product by rail.”

BNSF and Canada’s CP Rail operate the main rail networks in North Dakota, where farmers vie for space with some 700,000 barrels per day of crude oil shipped by rail from the state’s Bakken Shale.

“You can’t see these massive increases in crude-by-rail and not appreciate that they are creating problems for moving agricultural products,” Heitkamp said.

Members of Congress, utility companies, the United States Department of Agriculture and others are asking the U.S. rail regulator, the Surface Transportation Board, for help.

“With remaining grain in storage due to the backlog, grain elevators in some locations, such as South Dakota and Minnesota, could run out of storage capacity during the upcoming harvest, requiring grain be stored on the ground and running the risk of spoiling. The projected size of the upcoming harvest creates a high potential for loss,” USDA Under Secretary Edward Avalos wrote to the regulator this month.

Utility Xcel Energy said coal deliveries to a key Midwest facility were behind schedule.

“When we run out of coal, the plant can’t produce electricity. We are right in the middle of summer when air-conditioning load creates our highest levels of electric demand,” Xcel Chief Executive Ben Fowke wrote in a letter to the STB at the end of July.

Since an April 10 hearing on rail service, the STB has issued several orders, primarily involving CP and BNSF. The most recent directive, issued in June, required the two railways to publicly file their plans to resolve their backlog on grain orders and provide a weekly update on grain car service. It declined to comment on complaints or its plans.

Earlier this month, the Canadian government ordered Canadian National Railway Co and CP to further boost regulated grain shipments, in an effort to prevent a repeat of last season’s backlog.

Recent University of Minnesota data showed that transportation bottlenecks cost the state’s soybean, corn and spring wheat farmers nearly $100 million between March and May.

United Parcel Service Inc, the world’s largest courier company, said that “very poor” railroad performance last quarter raised its costs. Even passenger service Amtrak has been affected, with some of the trains it runs on Class 1 tracks falling far behind schedule.

Canada’s biggest rails, CN and CP, operated their trains at speeds 4.7 percent and 3 percent slower in the second quarter than year-ago levels respectively, better than most U.S. rivals.

CN said its ability to avoid Chicago, a hub notorious for bottlenecks, helped its sector-leading recovery. In 2009, CN bought a rail network that encircles Chicago, the Elgin, Joliet and Eastern Railway Co.

CHICAGO BLUES

Chicago’s third-snowiest winter on record severely tangled traffic at a hub that handles one quarter of the nation’s freight-by-rail and has recently become a major conduit for Bakken crude.

Data from Union Pacific shows its trains idled in Chicago for an average 65 hours in February, around double the typical time for much of 2013.

Following a severe 1999 blizzard that paralyzed trains for days, government and railroads launched a $3.8 billion plan to improve the Chicago system.

That’s not a quick solution for the industry’s woes.

“It takes a long time for new lines and new terminals to get built, and additional locomotives to be delivered and additional crews to be trained,” said Steve Ditmeyer, an adjunct professor at Michigan State University’s Railway Management Program.

“There’s a time lag that the railroads cannot snap their finger and, all of a sudden, get out of the current problem.”

(With additional reporting by Joshua Schneyer and Jonathan Leff in New York, and Sagarika Jaisinghani in Bangalore; editing by Joshua Schneyer and Peter Henderson)