[Senate Hearing 114-206]
[From the U.S. Government Publishing Office]
S. Hrg. 114-206
FREIGHT RAIL TRANSPORTATION: ENHANCING SAFETY, EFFICIENCY, AND COMMERCE
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JANUARY 28, 2015
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PUBLISHING OFFICE
99-549 PDF WASHINGTON : 2016
_________________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, [email protected].
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
David Schwietert, Staff Director
Nick Rossi, Deputy Staff Director
Rebecca Seidel, General Counsel
Jason Van Beek, Deputy General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel and Policy Director
C O N T E N T S
----------
Page
Hearing held on January 28, 2015................................. 1
Statement of Senator Thune....................................... 1
Statement of Senator Nelson...................................... 3
Prepared statement........................................... 4
Statement of Senator Blunt....................................... 37
Statement of Senator Cantwell.................................... 39
Statement of Senator Gardner..................................... 40
Statement of Senator McCaskill................................... 41
Statement of Senator Fischer..................................... 42
Statement of Senator Daines...................................... 44
Statement of Senator Markey...................................... 47
Statement of Senator Moran....................................... 49
Statement of Senator Manchin..................................... 49
Statement of Senator Klobuchar................................... 51
Statement of Senator Peters...................................... 56
Statement of Senator Johnson..................................... 58
Statement of Senator Blumenthal.................................. 61
Witnesses
Frank Lonegro, Vice President, Service Design, CSX
Transportation, Inc............................................ 5
Prepared statement........................................... 7
David A. Brown, Chief Operating Officer, Genesee & Wyoming Inc... 16
Prepared statement........................................... 18
Bill Johnson, former Director, PortMiami; and former Chair,
Florida Ports Council.......................................... 21
Prepared statement........................................... 23
Michelle Teel, P.E., Multimodal Operations Director, Missouri
Department of Transportation................................... 25
Prepared statement........................................... 27
Letter dated November 14, 2014 from the National Radio
Passenger Corporation...................................... 28
Letter dated December 23, 2014 from the Missouri Department
of Transportation.......................................... 29
Chris Jahn, President, The Fertilizer Institute.................. 30
Prepared statement........................................... 31
Appendix
National Association of Railroad Passengers, prepared statement.. 63
Response to written questions submitted by Hon. John Thune to:
Frank Lonegro................................................ 64
Chris Jahn................................................... 70
FREIGHT RAIL TRANSPORTATION:
ENHANCING SAFETY, EFFICIENCY
AND COMMERCE
----------
WEDNESDAY, JANUARY 28, 2015
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10:03 a.m. in
room SR-253, Russell Senate Office Building, Hon. John Thune,
Chairman of the Committee, presiding.
Present: Senators Thune [presiding], Nelson, Blunt,
Fischer, Moran, Johnson, Gardner, Daines, Cantwell, McCaskill,
Klobuchar, Blumenthal, Markey, Manchin, and Peters.
OPENING STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
The Chairman. This hearing in the Commerce, Science, and
Transportation Committee will come to order and we're delighted
to have a great panel here to talk about railroad issues.
As 2013 and 2014's freight rail delays and service
challenges highlighted, rail service is absolutely critical to
our Nation's economy. South Dakota farmers scrambled to find
rail cars and watched as rail turn times worsened, delaying
shipments and creating grain shortage challenges for the
record-breaking wheat, corn and soybean crops that we've had in
our state.
However, those delays were not just limited to the north
central United States; they also extended across the country
and impacted every shipping sector and industry. Thankfully,
this winter's relatively mild weather and better service have
provided some improvements, but there's still work that needs
to be done.
I was pleased that Genesee & Wyoming, the parent company of
South Dakota's Rapid City, Pierre and Eastern Railroad has
joined us for today's hearing. I look forward to hearing from
Dave Brown, the Chief Operating Officer of Genesee & Wyoming,
which is the largest Class II railroad in the country with over
100 short line and regional railroads, about the opportunities
and challenges the RCP&E and other short line railroads face.
From automobiles, to coal, to ethanol, to agriculture, rail
service moves goods from farm and factory to consumer
marketplaces across the country and across the globe. The U.S.
Department of Transportation notes that freight rail moves
roughly 40 tons per person each year. As a Nation, we rely on
cost-efficient, timely service to move food, consumer products,
and energy resources on a daily basis.
The private infrastructure that makes up our Nation's
freight rail system is costly, as old tracks and equipment
require ongoing maintenance and investment. Our nation's
railroads continue to invest in new track, sidings, locomotives
and car resources with the goal of serving their customers.
Class I railroads and short lines alike face increasing demands
for prompt, reliable and safe service.
In 2014, freight traffic increased nearly 5 percent over
2013 levels, and we should seek solutions that foster an even
stronger freight rail network to meet this increasing demand.
The Federal Railroad Administration has proposed or
finalized over 15 new freight rail safety rules since the
passage of the Rail Safety Improvement Act of 2008, and many of
these regulations will take effect in 2015.
Not only is the Positive Train Control, or PTC, mandate
looming with its December 31 deadline, but the DOT has
announced that it expects a crude-by-rail regulation to be
published around May of this year.
Although the PTC deadline is quickly approaching, it
remains unattainable. Through the end of 2014, railroads have
invested over $5 billion in PTC, and they expect to spend
billions more in the coming years.
They have begun installation of the radio towers,
locomotive technology, and other PTC infrastructure, but full
compliance with the statutory requirements cannot be achieved
by the end of this year. The FRA and the Government
Accountability Office have documented the immense technical and
programmatic challenges with implementing PTC.
As a result of these challenges, the DOT has reported that
the deadline will not be met and has offered a proposal to
ensure the benefits of PTC are realized. I look forward to
working with my colleagues on a legislative fix to ensure that
we can set a more realistic implementation timeline for this
important safety improvement.
I'm also closely monitoring the proposed crude-by-rail
requirements and I have expressed concerns to the Office of
Management and Budget as well as to the DOT about the
unintended harms that could result from the proposed rule. The
DOT estimates its proposed crude-by-rail rule could cost nearly
$6 billion, and it acknowledges the rule would increase network
delays and out-of-service time for rail equipment.
Without question, we must improve the safety of our
Nation's rail system, but I am concerned about the unattainable
deadlines that the rule proposes. Like the PTC mandate, there
are very real impacts when Federal agencies set unreasonable
and, in many times, unachievable deadlines.
Among other things, the DOT issued this proposed rule
without analyzing the potential tank car shop capacity needed
to retrofit or replace over 100,000 DOT-111 tank cars. Shippers
have raised concerns about a tank car shortage with a
disruption in energy supply transportation if DOT finalizes
this rule with an unattainable deadline. I look forward to
working with my colleagues, stakeholders and the Secretary of
Transportation on a realistic timeline for such a phase-out.
While safety can and should be improved, we certainly do
not need to build in system-wide delays and congestion like we
witnessed during the past year and a half. Our transportation
network connects port to rail to truck. Delays and burdensome
regulations, and failing infrastructure disrupt our Nation's
economy and cost jobs, so we must work together to find
workable solutions.
In addition, we must ensure that the Surface Transportation
Board, which is tasked with resolving railroad rate and service
disputes and reviewing proposed railroad mergers, can provide
effective and efficient oversight to the rail industry.
This Committee has a great deal of work to do in addressing
freight rail service and safety in addition to passenger rail
reauthorizations. I hope members will bring forward thoughtful
solutions as we address these challenges.
I'd like to turn now to my distinguished Ranking Member
from Florida, Senator Nelson.
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Thank you, Mr. Chairman, and did you know
that most of the witnesses are from Florida?
The Chairman. I did not.
Senator McCaskill. There's one from Missouri.
[Laughter.]
Senator Nelson. Three of the five. And just like your state
is so dependent upon railroads, so are so many of our states.
And my state of Florida actually developed a railroad. It was
Henry Flagler that brought his railroad south. And as he
brought it down the east coast of Florida, so developed
Florida.
Said back in the old days, when they would, Henry Flagler
would bring it as far south as a place like Saint Augustine, he
built a hotel, which is now the Flagler Hotel. It is part of
Flagler College in Saint Augustine; the oldest continuous
settlement in the United States, by the way. We are celebrating
450 continuous years.
And then, he would move it further south and he would build
another hotel. Palm Beach, The Breakers, a place that the two
gentlemen to my right have been many times.
[Laughter.]
The Chairman. Now, I would say to the Senator from Florida,
how does he know that?
Senator Nelson. Because I know the pattern of other
Senators who like to come to Florida.
And so, it used to be said in the old days--the old-timers
in Florida, back in the early part of the last century, would
say that all the natives, which are called ``Florida
Crackers,'' of which I am one, they'd live off of fish and
alligators during the summer and they'd live off the tourists
during the winter as Flagler would bring them further south.
And so, I'm going to submit my statement for the record.
You have covered it; most of it.
Mr. Chairman, I would say that U.S. Department of
Transportation estimates that the tonnage of freight moving by
rail is going to increase by 88 percent through 2035, and if
we're going to handle this future growth we have to prepare and
improve starting today.
And some recent events highlight the challenges that we're
going to have to overcome. In the past year, high demand and a
harsh winter has resulted in several delays in several parts of
the country. Railroads have responded by investing record
amounts to expand capacity, to expand equipment and to hire
more crew.
And so, I want to hear from our witnesses. Do you think the
situation is improving? And I want to hear about what you think
about the industry's progress on safety.
Rail is already one of the safest ways of moving people and
goods, but there are challenges. Positive Train Control, to
prevent collisions and enforce speed restrictions; first
recommended by the NTSB way back in 1969. Well, Positive Train
Control will even make this industry even safer. And so, we've
got a lot to do.
Mr. Chairman, I'll just short-circuit my comments so we can
get right into the witnesses.
[The prepared statement of Senator Nelson follows:]
Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
I want to thank everyone for being here today.
I especially want to welcome several of the witnesses from Florida:
Frank Lonegro, the Vice President for Service Design at CSX
in Jacksonville, who has a significant amount of experience
working on positive train control technology;
David Brown, the Chief Operating Officer for Genesee &
Wyoming, Inc., also in Jacksonville; and
Bill Johnson, the former Director of the Port of Miami.
Your presence here today underscores the importance of freight rail
not only to Florida, but also to our country.
Historically, railroads played a critical role in developing and
uniting our growing nation.
Florida developed around railroads built by the likes of Henry
Flagler, a pattern that was repeated around the country.
Today, freight railroads remain the backbone of the Nation's
economy.
About 40 percent of all freight in the U.S. moves by rail, more
than any other way. That amounts to an average 5 million tons of goods
delivered by rail every day.
Freight railroads haul all types of goods that we depend on, from
grain for our food to the clothes that we wear.
Railroads also connect thousands of communities to the global
economy by bringing American goods to ports, like Port Miami, where
they are exported abroad.
For our country to remain competitive, freight railroads must
deliver goods safely, reliably, and efficiently.
But there's more to the story than just moving freight.
The freight rail industry employs more than 180,000 highly-skilled
and well-paid professionals--nearly 25 percent of which are veterans.
Moving freight by rail also has other benefits like reduced highway
congestion and cleaner air.
And, in many parts of the country, passenger rail service is
provided over tracks owned and maintained by freight railroads.
While this hearing isn't focused on passenger rail, it will also be
an important issue for me this Congress--especially when it comes to
the development of high-speed rail.
Simply put, freight railroads are fundamental to the American
experience and our daily lives.
Florida is a key example.
CSX alone operates more than 2,800 miles of track and employs over
5,000 people in Florida, while moving 1.1 million carloads of freight.
They are an integral part of Florida's entire economy--serving 12
ports and thousands of businesses.
Despite freight rail's great success story, we need to keep
improving our system, and that's why I'm pleased the Chairman called
this hearing today.
The U.S. Department of Transportation estimates that the tonnage of
freight moving by rail will increase by 88 percent through 2035.
To handle this future growth, we've got to start preparing and
improving today. Some recent events highlight challenges we will have
to overcome.
Over the past year, high demand and a harsh winter resulted in
severe delays in several parts of the country.
Railroads responded by investing record amounts to expand capacity,
buy new equipment, and hire more crew.
I look forward to hearing if our witnesses think the situation is
improving and the prospects for 2015.
I also look forward to hearing about the industry's progress on
critical safety issues.
Rail is already one of the safest ways to move people and goods.
The past two years for which data are available were the safest years
on record.
But challenges remain.
Implementing Positive Train Control to prevent collisions and
enforce speed restrictions--first recommended by the National
Transportation Safety Board in 1969--will make an already safe industry
even safer.
Despite the industry's efforts, however, this year's deadline for
implementation will not be met, so we must create a workable path
forward.
Another key safety issue we need to address is the shipment of
crude oil by rail.
Finally, Florida and the Nation cannot continue to grow unless
we're moving freight efficiently.
Achieving this goal will also require connecting rail to other ways
of moving goods, especially our ports.
I hope the Commerce Committee will continue examining these
challenges and the solutions our country needs.
I thank Chairman Thune for calling this hearing and all of the
witnesses for being here today. I look forward to your testimony.
The Chairman. Thank you, Senator Nelson.
And appreciate the important role that railroading played
in the state of Florida, likewise in South Dakota. I've got
deep family ties, as I've mentioned before in this committee,
to railroading as they kind of made their way across the
country and in our state of South Dakota.
We've got a great panel to talk about some of these issues
today and I want to welcome all of you. Thank you for being
here.
We've got Mr. Frank Lonegro. He's the Vice President of
Service Design at CSX Transportation.
Mr. Dave Brown, as I mentioned earlier, is the Chief
Operating Officer of Genesee & Wyoming Railroad Services, which
serves our state of South Dakota.
Mr. Bill Johnson is the former Director of PortMiami and
former Chair of the Florida Ports Council.
And, Ms. Michelle Teel. Ms. Teel is the Multimodal Director
of the Missouri Department of Transportation.
And we have Mr. Chris Jahn who is here on behalf of The
Fertilizer Institute where he serves as President.
So thank you so much for being here. I look forward to
hearing from you. And we'll start on my left and your right
with Mr. Lonegro.
STATEMENT OF FRANK LONEGRO, VICE PRESIDENT--SERVICE DESIGN, CSX
TRANSPORTATION, INC.
Mr. Lonegro. Good morning, Mr. Chairman, Mr. Ranking
Member, and members of the Committee. I'm Frank Lonegro, Vice
President of Service Design at CSX and Chairman of the AAR's
PTC Interoperability Committee.
Thank you for the opportunity to appear here today. I'm
here to represent CSX as well as the freight rail industry and
our views on the current state of Positive Train Control.
Safety is the highest priority of every American railroad.
In preserving the safety of our workers, the safety of our
communities, where we operate and the safety of rail passengers
is the overriding factor in the thousands of decisions that we
make every day.
Our steadfast safety focus has resulted in dramatic safety
improvements. Since the year 2000, the freight train accident
rate has fallen 42 percent. One way we achieve improvements in
safety is through the consistent investment and infrastructure
and in new technologies. America's railroads invest more than
$25 billion annually to ensure the safety, reliability and
efficiency of the rail network.
For the last 6 years, we have also been investing in a key
safety technology known as Positive Train Control, or PTC. PTC
is not a single system but rather is a large number of
subsystems that are linked together. Those components are
designed to stop a train before certain types of accidents
occur. The Rail Safety Improvement Act of 2008 requires Class I
railroads to install PTC by the end of 2015, on main lines used
to transport passengers or certain toxic materials.
PTC is being designed to prevent accidents in four specific
situations: trains traveling beyond the allowable speed; trains
traveling beyond their authority; trains traversing a
misaligned switch; and trains entering a work zone. To do so,
PTC most be able to determine the precise location, direction
and speed of trains, warn train operators of potential
problems, and stop the train if the operator does not respond.
This is not an easy task.
Such a system requires the creation, and I do emphasize
creation, of highly complex technologies that are able to
analyze the many variables that affect train operations. As you
can imagine, the length of time that it takes to stop a train
depends on the train speed, the terrain, the weight and length
of the train, the number and distribution of locomotives and
the number of loaded and empty freight cars on that train.
PTC must take all of these factors into account reliably
and accurately in order to safely stop the train.
The task of deploying PTC in the United States includes:
equipping 23,000 locomotives with onboard computers designed to
know exactly when to take control of a train and bring it
safely to a stop; completely rebuilding tens of thousands of
miles of railroad signaling systems to be capable of
interacting with the ultra-modern PTC system; deploying 35,000
sensors to communicate the status of signals and switches to
the PTC system; completing a geospatial survey of 60,000 miles
of rail infrastructure; building a new nation-wide
communication system designed for the massive data transmission
requirements of PTC; and developing back office systems to feed
the precise data requirements of PTC. And each railroad's PTC
system must be interoperable with each of the 40 railroads that
are developing PTC on their main lines since locomotives and
trains of one railroad frequently operate on the main lines of
another.
In all of these areas, railroads have made significant
progress. Railroads have also overcome significant regulatory
challenges. For example, in 2013 the FCC required that all new
PTC communications towers undergo statutory review. This
required significant engagement with the State Historical
Preservation Societies, the Native American Tribes, and others.
Resolving this issue delayed the installation of these towers
by more than a year. Thanks to the efforts of all involved, and
specifically the efforts of this committee, we believe that
this issue is now behind us.
As of the end of 2014, CSX has invested some $1.2 billion
on PTC and we expect to spend another $300 million on PTC this
year. The freight railroads, together, have spent over $5
billion to date and expect to spend at least $9 billion before
PTC is fully operational.
It is important that PTC deliver the mandated functionality
while also ensuring the safety and the efficiency of rail
transportation.
Two principal risks illustrate why it is so important that
we take the time necessary to do this job right. The first
great risk is safety. An immature PTC system could actually
create safety hazards. Candidly, we are still finding critical
defects in the key pieces of PTC software we are receiving from
our suppliers. Second, an immature PTC system could interrupt
the free flow of rail cargo and rail passengers across the
United States, which would impact our recovering economy.
The railroads remain committed to implementing PTC as
quickly as possible and in a manner that ensures both the
safety and the efficiency of the railroad network. Despite the
railroad's best efforts and our substantial progress to-date,
PTC will not be completed this year.
Thank you, Mr. Chairman, for calling this hearing and for
your support for a PTC extension.
Thank you.
[The prepared statement of Mr. Lonegro follows:]
Prepared Statement of Frank Lonegro, Vice President--Service Design,
CSX Transportation, Inc.
On behalf of CSX Transportation, Inc. (CSX) and the Association of
American Railroads (AAR), thank you for the opportunity to appear
before you today to discuss positive train control (PTC).
CSX operates a freight rail network spanning approximately 21,000
miles, with service to 23 eastern states, the District of Columbia and
two Canadian provinces. We are part of a 140,000-mile U.S. freight rail
network that serves nearly every industrial, wholesale, retail,
agricultural, and mining-based sector of our economy. Whenever
Americans grow something, eat something, mine something, make
something, turn on a light, or get dressed, CSX or another freight
railroad is probably involved somewhere along the line.
In this testimony, I will describe what positive train control is,
the steps CSX and other freight railroads have taken to develop and
implement this new technology, and explain why--despite railroads' best
efforts--the existing statutory deadline for nationwide PTC
implementation is unrealistic and should be extended.
What is Positive Train Control?
``Positive train control'' (PTC) describes technologies designed to
automatically stop a train before certain accidents caused by human
error occur. The Rail Safety Improvement Act of 2008 (RSIA) requires
passenger railroads and Class I freight railroads to install PTC by the
end of 2015 on main lines used to transport passengers or toxic-by-
inhalation (TIH) materials.\1\ Specifically, PTC as mandated by the
RSIA must be designed to prevent train-to-train collisions, derailments
caused by excessive speed, unauthorized incursions by trains onto
sections of track where maintenance activities are taking place, and
the movement of a train through a track switch left in the wrong
position.\2\ The PTC systems that will be installed to meet the
statutory mandate are overlay systems, meaning they supplement--rather
than replace--existing train control systems.
---------------------------------------------------------------------------
\1\ TIH materials are gases or liquids, such as chlorine and
anhydrous ammonia, which are especially hazardous if released into the
atmosphere.
\2\ A switch is equipment that controls the path of trains where
two sets of track diverge.
---------------------------------------------------------------------------
Positive Train Control is an Unprecedented Technological Challenge
A properly functioning PTC system must be able to determine the
precise location, direction, and speed of trains; warn train operators
of potential problems; and take immediate action if the operator does
not respond to the warning provided by the PTC system. For example, if
a train operator fails to begin stopping a train when approaching a
stop signal, or slowing down for a speed-restricted area, the PTC
system would apply the brakes and stop the train automatically, before
the train passed the stop signal or entered the speed-restricted area.
Such a system requires highly complex technologies able to analyze
and incorporate the huge number of variables that affect train
operations. A simple example: the length of time it takes to stop a
train depends on train speed, terrain, the weight and length of the
train, the number and distribution of locomotives and loaded and empty
freight cars on the train, and other factors. A PTC system must be able
to take all of these factors into account automatically, reliably, and
accurately in order to safely stop the train.
The development and implementation of PTC systems constitute an
unprecedented technological challenge for railroads (See Attachment A).
Tasks involved include:
A complete physical survey and highly precise geo-mapping of
the approximately 60,000 miles of railroad right-of-way on
which PTC technology will be installed, including geo-mapping
of nearly 440,000 field assets (mileposts, curves, grade
crossings, switches, signals, and much more) along that right
of way.
Installing PTC technology on more than 22,900 locomotives.
Installing over 35,000 ``wayside interface units'' (WIU)
that provide the mechanism for transmitting information to
locomotives and the train dispatching office from signal and
switch locations along the right of way.
Installing PTC technology on over 3,300 switches in non-
signaled territory and completing signal replacement projects
at more than 14,500 locations.
Developing, producing, and deploying a novel radio system
and new radios specifically designed for the massive data
transmission requirements of PTC at 4,000 base stations, 31,000
trackside locations, and on 22,900 locomotives.
Developing back office systems and upgrading dispatching
software to incorporate the data and precision required for PTC
systems.
In all of these areas, railroads have made substantial progress. As
of the end of 2014, 13,000 locomotives were at least partially equipped
with PTC, out of the 22,900 that will require PTC installations; some
19,000 WIUs are deployed, out of 35,000 that will ultimately be
required; and close to 1,500 of the 4,000 base station radios were
installed. These statistics represent the incredible effort railroads
have made toward installing the nationwide, interoperable PTC network.
However, there is no question that much more work remains to be done.
More Time is Needed to Ensure Safe and Effective Implementation
CSX and other freight railroads have been working tirelessly, and
spending tremendous amounts of money, to meet the PTC mandate. As of
the end of 2014, CSX has invested some $1.2 billion on PTC. We expect
to spend another $300 million this year. Our current estimate for the
total cost of PTC on our railroad is at least $1.9 billion. Freight
railroads together have so far spent well over $5 billion--of their own
funds, not taxpayer funds--on PTC development and deployment, and
expect to spend at least $9 billion by the time PTC is fully
operational nationwide. This does not include the hundreds of millions
of additional dollars needed each year to maintain the railroads' PTC
systems when they are complete.
Despite these huge expenditures, PTC's complexity and the enormity
of the implementation task--and the fact that much of the technology
PTC requires simply did not exist when the PTC mandate was passed and
has had to be developed from scratch--more time is needed for full
implementation.
Much of the railroads' efforts to date has been directed toward
development and initial testing of technology that can meet the
requirements of the legislation and which can be scaled to the huge
requirements of a national system. For example, production and
installation of the new radios was possible only after a long period of
development and testing. Essential software and hardware for many PTC
components are being deployed, and rigorous testing of these components
are being performed. Only after this work is completed and the
technology has been installed can the task of testing each of the
individual parts, and the system as a whole, be completed.
This task is made particularly complex by the need to ensure that
PTC systems are fully and seamlessly interoperable across all of the
Nation's major railroads. It is not unusual for one railroad's
locomotives to operate on another railroad's tracks. When that happens,
the ``guest'' locomotives must be able to communicate with, and respond
to commands from, the ``host'' PTC system. Put another way, a CSX
locomotive has to behave like a Norfolk Southern locomotive when it's
traveling on NS's tracks; a BNSF locomotive must be compatible with
Union Pacific's PTC system when it's on UP tracks, and so on. That's
much easier said than done, and ensuring this interoperability has been
a significant challenge.\3\
---------------------------------------------------------------------------
\3\ Some have questioned why railroads don't all simply implement
identical PTC systems, thereby ensuring interoperability. That's not
possible because a railroad's PTC system must function within the
parameters of that railroad's existing communication and dispatching
system. These existing systems vary from railroad to railroad.
---------------------------------------------------------------------------
It is also critical that the many potential failure points and
failure modes in PTC systems are identified, isolated, and corrected--
all without negatively impacting the efficient movement of goods by
rail throughout the country. This is incredibly important. The PTC
systems the railroads ultimately develop must work flawlessly, day in
and day out, or risk seriously impairing operations on key parts of the
U.S. freight rail network. The damage that would cause to our Nation's
economy would be enormous.
In addition, the Federal Railroad Administration must review each
railroad's PTC safety plan and certify each railroad's PTC systems
after the development and testing of the components are complete. Only
then can a railroad's PTC installation be completed and placed into
operation.
Railroads knew when the PTC mandate was passed in 2008 that the
technological challenges related to PTC would be immense. But railroads
have also faced significant non-technological barriers to timely PTC
implementation.
Most notably, one such challenge involves regulatory barriers to
the construction of antenna structures. As part of PTC implementation,
railroads must install over 35,000 wayside antenna structures
nationwide to transmit PTC signals. Approximately 97 percent of these
structures are relatively small poles, between 6 and 60 feet high,
installed on railroad rights-of-way alongside railroad tracks. The
remainder, approximately 3 percent, are larger base stations similar to
traditional telecommunication towers. Depending on the location, these
larger structures may or may not be located on a railroad's right-of-
way.
The railroad industry had been working with the Federal
Communications Commission (FCC) for years to license the wireless
spectrum necessary for PTC. Despite this work, an issue arose in early
2013 that neither the rail industry nor the FCC foresaw: the FCC's
requirement that the railroads submit the poles that support PTC
antennas for historic preservation and tribal review. The FCC's
historic preservation review process requires railroads to provide
information (height, location, etc.) on each antenna structure to
historic preservation officers within state governments and Native
American tribes so that the states and tribes can determine if the
installations will negatively impact areas of historic, cultural, or
religious significance.
It quickly became clear that the FCC's existing process was
inadequate for a deployment on the scale of PTC and in the time frame
mandated by the RSIA. In fact, in May 2013, the FCC asked the railroads
to stop filing applications for review while the agency developed a new
process for PTC antenna structures. In the meantime, railroads were
asked to cease the installation of these structures, creating a huge
impediment to timely PTC implementation.
To its credit, the FCC was willing to work with the railroads to
find a workable solution. (The rail industry is also grateful to
members of this committee for the attention they gave this issue.) As
far as the railroads are concerned, the current approval process, put
in place in May 2014, is functional, and installation of antenna
structures is now going forward. That said, the 2013 construction
season and part of the 2014 construction season was essentially lost
for PTC wayside antennas, setting the railroads back significantly in
their implementation plans.
Despite these setbacks, railroads' aggressive implementation of PTC
will continue. However, it is simply not possible to complete a
nationwide, interoperable PTC system by the end of 2015. Adjusting the
implementation deadline would more accurately reflect railroads'
considerable efforts to design, test, approve, produce, distribute,
install and train 100,000 employees on the use of this incredibly
complex technology. Rushing PTC development and installation and
foregoing a logical plan for sequencing its implementation would
sharply increase the likelihood that the system would not work as it
should, which is an outcome that serves no one's purpose.
Some have suggested that the railroads have somehow not tried hard
enough to meet the existing statutory deadline. That is simply not
true. I have been intimately involved in the PTC development and
implementation process at CSX since it began, and I know how much we
have devoted to PTC. I'm proud of CSX's and other railroads' efforts,
and I'm sure that those involved in PTC at other freight railroads
would say the same thing. We in the railroad industry are fully
committed to PTC, but it must be done correctly. That's simply not
possible by the end of this year.
The ``Business Benefits'' of Positive Train Control
Some have claimed that railroads will achieve billions of dollars
in ``business benefits'' from PTC because PTC will allow trains to be
more tightly spaced, thereby reducing train delays and increasing a
rail line's capacity without the need to install new track. Any
industry that invests billions of dollars in a new technology will try
to leverage those investments into operational improvements, even if
the main purpose of that technology is to enhance safety. That said,
the rail industry has yet to identify any substantial ``business
benefits'' for the foreseeable future attributable to PTC deployment as
mandated under RSIA.
That's mainly because of the urgency to comply with an extremely
challenging statutory deadline, railroads have not had the luxury of
developing and implementing supplemental PTC technologies that, in
addition to safety benefits, have the most promising potential
operational benefits. It is far less likely that the first-generation
PTC systems being deployed now will yield meaningful business benefits
compared with second-or third-generation PTC systems that might come a
decade or two later.
Moreover, many of the business benefits some have claimed will be
achieved by PTC actually have little or nothing to do with PTC. For
example, many of the claims that PTC will reduce train delays and allow
more trains to move over a rail line presuppose the use of ``precision
dispatching.'' This term refers to the use of complex computer
algorithms to analyze a variety of factors (such as the priority levels
of different trains, train crew availability, and the location and
schedules of other trains) to decide in what order and when trains on a
railroad's network should travel. But there is no direct relationship
between the use of precision dispatching and PTC implementation: the
development of precision dispatching has begun and would continue if
PTC did not exist.
In fact, it's possible that PTC could actually make existing rail
operations less efficient, especially if it is put into place without
adequate testing. As I noted above, the PTC systems railroads are
developing have essentially had to be created from scratch--they don't
exist anywhere in the world. By necessity, a fully functioning PTC
system is enormously complex, and the failure of a single part within
that complex system means the entire PTC system will not work as it
should. If that happened, the affected rail line would be substantially
operationally degraded until the failure was corrected. It goes without
saying that the inefficiencies this would create, and the damage it
would cause to our economy, are best avoided. That's another key reason
why the PTC development and implementation process should not be
rushed.
Conclusion
Since enactment of the RSIA, CSX and other railroads have devoted
enormous human and financial resources to develop a fully functioning
PTC system, and progress to date has been substantial. However, despite
railroads' best efforts, the immense technological hurdles are such
that a safe, reliable, nationwide, and interoperable PTC network will
not be completed by the current deadline. Railroads remain committed to
implementing PTC as early as possible and are doing all they can to
address the challenges that have surfaced, but more time is needed to
ensure safe and effective implementation on the Nation's vast freight
and passenger rail networks.
Attachment A
PTC Data \4\
---------------------------------------------------------------------------
\4\ The data in this Attachment is based on estimates as of
December 31, 2014, current PTC implementation plans on file with FRA
(including amendments to plans that have been approved by FRA), and the
regulations in existence on December 31, 2014.
Table 1.--Equipping Locomotives with PTC
----------------------------------------------------------------------------------------------------------------
Railroad ARR BNSF CN CP CSX KCS NS UP Total
----------------------------------------------------------------------------------------------------------------
# to be equipped 54 6,000 1,000 1,000 3,900 614 3,811 6,532 22,911
----------------------------------------------------------------------------------------------------------------
# partially equipped to date 27 671 238 225 1,825 301 1,993 4,394 9,674
----------------------------------------------------------------------------------------------------------------
# fully equipped 17 2,389 72 146 812 0 0 0 3,436
----------------------------------------------------------------------------------------------------------------
Table 2.--Railroad Signal Personnel Hired or Retained Due to PTC
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
ARR 4
----------------------------------------------------------------------------------------------------------------
BNSF 447
----------------------------------------------------------------------------------------------------------------
CN 117
----------------------------------------------------------------------------------------------------------------
CP 35
----------------------------------------------------------------------------------------------------------------
CSX 554
----------------------------------------------------------------------------------------------------------------
KCS 36
----------------------------------------------------------------------------------------------------------------
NS 659
----------------------------------------------------------------------------------------------------------------
UP 569
----------------------------------------------------------------------------------------------------------------
Total 2,421
----------------------------------------------------------------------------------------------------------------
Table 3.--Integrated WIU Installation
----------------------------------------------------------------------------------------------------------------
Railroad ARR BNSF CN CP CSX KCS NS UP Total
----------------------------------------------------------------------------------------------------------------
# integrated WIUs required to 55 6,648 1,036 591 5,250 658 5,486 11,399 31,123
be deployed
----------------------------------------------------------------------------------------------------------------
# integrated WIUs deployed to 14 4,171 85 423 1,915 363 1,805 8,700 17,476
date
----------------------------------------------------------------------------------------------------------------
# integrated WIUs remaining to 41 2,477 951 168 3,335 295 3,681 2,699 13,647
be deployed
----------------------------------------------------------------------------------------------------------------
Table 4.--Stand-alone WIU Installation
----------------------------------------------------------------------------------------------------------------
Railroad ARR BNSF CN CP CSX KCS NS UP Total
----------------------------------------------------------------------------------------------------------------
# stand-alone WIUs required to 2 417 488 114 894 148 487 1,615 4,165
be deployed
----------------------------------------------------------------------------------------------------------------
# stand-alone WIUs deployed to 0 262 0 6 122 56 51 1,167 1,664
date
----------------------------------------------------------------------------------------------------------------
# stand-alone WIUs remaining to 2 155 488 108 772 92 436 448 2,501
be deployed
----------------------------------------------------------------------------------------------------------------
Table 5.--Signal Replacement Projects
----------------------------------------------------------------------------------------------------------------
Railroad ARR BNSF CN CP CSX KCS NS UP Total
----------------------------------------------------------------------------------------------------------------
# locations of signal 0 4707 177 63 2,100 391 2,851 4,252 14,541
replacement required
----------------------------------------------------------------------------------------------------------------
# locations replaced to date 0 2,579 125 52 1,134 304 975 3,262 84,31
----------------------------------------------------------------------------------------------------------------
# locations remaining to be 0 2,128 52 11 966 87 1,876 990 6,110
replaced
----------------------------------------------------------------------------------------------------------------
Table 6.--Switches in Non-Signal PTC Territory
----------------------------------------------------------------------------------------------------------------
Railroad ARR BNSF CN CP CSX KCS NS UP Total
----------------------------------------------------------------------------------------------------------------
# needed 45 417 227 225 700 133 617 974 3,338
------------------------------------------------------------------------------------------
# equipped with 7 262 0 41 130 54 38 58 ,590
power to date
------------------------------------------------------------------------------------------
# non-signaled # remaining to be 38 155 227 184 570 79 579 916 2,748
switch locations equipped with
needing power & WIUs power
------------------------------------------------------------------------------------------
# equipped with 6 262 0 41 130 54 38 58 ,589
WIUs to date
------------------------------------------------------------------------------------------
*#remaining to be 39 155 227 184 570 79 579 916 2,749
equipped with
WIUs
----------------------------------------------------------------------------------------------------------------
# non-signaled # needed 0 0 227 248 700 133 617 974 2,899
switch locations
needing switch
position monitors
------------------------------------------------------------------------------------------
# equipped to date 0 0 0 117 130 54 38 58 397
------------------------------------------------------------------------------------------
# remaining to be 0 0 227 131 570 79 579 916 2,502
equipped
----------------------------------------------------------------------------------------------------------------
Table 7.--Communications Deployment
----------------------------------------------------------------------------------------------------------------
Railroad ARR BNSF CN CP CSX KCS NS UP Total
----------------------------------------------------------------------------------------------------------------
# needed 35 731 181 112 1,285 85 736 847 4,012
------------------------------------------------------------------------------------------
# Base station # installed 8 521 26 18 395 0 242 282 1,492
220 MHz radios
------------------------------------------------------------------------------------------
# of future 27 210 155 94 890 85 494 565 2,520
installations
needed
----------------------------------------------------------------------------------------------------------------
# needed 84 6,015 1,751 663 5,299 806 4,763 11,877 31,258
------------------------------------------------------------------------------------------
# Wayside # installed 19 4,098 184 28 2,160 0 1,147 4,136 11,772
location 220
MHz radios
------------------------------------------------------------------------------------------
# of future 65 1,917 1,567 635 3,139 806 3,616 7,741 19,486
installations
needed
----------------------------------------------------------------------------------------------------------------
# needed 54 6,000 1,000 1,000 3,900 614 3,811 6,532 22,911
------------------------------------------------------------------------------------------
Locomotive # installed 16 2,389 72 75 812 0 10 1,855 5,229
220 MHz radios
------------------------------------------------------------------------------------------
# of 38 3,611 928 925 3,088 614 3,801 4,677 17,682
locomotives
remaining to
be equipped
----------------------------------------------------------------------------------------------------------------
Table 8.--Status of PTC GIS Projects
----------------------------------------------------------------------------------------------------------------
Railroad ARR BNSF CN CP CSX KCS NS UP Total
----------------------------------------------------------------------------------------------------------------
# PTC assets to be* mapped and 2,800 88,447 25,630 16,468 114,731 9,641 52,000 130,000 439,717
extracted for GIS consumption
----------------------------------------------------------------------------------------------------------------
# track miles # miles mapped 600 19,886 257 1,515 21,565 0 10,904 21,150 75,877
required to to date
be GIS mapped
-------------------------------------------------------------------------------------------------
# miles to be 0 2,164 4,043 696 0 2,227 0 0 9,130
mapped
----------------------------------------------------------------------------------------------------------------
# track miles # miles 600 16,318 257 1,183 21,565 293 10,904 21,150 72,270
required to processed to
be data date
processed
-------------------------------------------------------------------------------------------------
# miles 0 5,732 4,043 1,028 0 1,934 0 0 12,737
remaining to
be processed
----------------------------------------------------------------------------------------------------------------
# track miles # converted to 130 14,888 257 1,162 5,809 154 608 300 23,308
GIS data to date
be converted
to PTC subdiv
files
-------------------------------------------------------------------------------------------------
# remaining to 470 7,162 4,043 1,049 15,756 2,073 10,296 20,850 61,699
be converted
----------------------------------------------------------------------------------------------------------------
* The calculation of assets to be mapped includes the following: integer mileposts; signals; crossings;
switches; interlockings/control point locations; permanent speed restrictions; the beginning and ending limits
of track detection circuits in non-signaled territory; clearance point locations for every switch location
installed on the main and siding tracks; and inside switches equipped with switch circuit controllers.
Table 9.--Status of PTC Dispatch System Projects
------------------------------------------------------------------------
Railroad Date System will be PTC-capable
------------------------------------------------------------------------
ARR Completed
------------------------------------------------------------------------
BNSF Completed
------------------------------------------------------------------------
CN 1st quarter 2015
------------------------------------------------------------------------
CP March 2015
------------------------------------------------------------------------
CSX Completed
------------------------------------------------------------------------
KCS 1st quarter 2015
------------------------------------------------------------------------
NS Completed
------------------------------------------------------------------------
UP Completed
------------------------------------------------------------------------
Table 10.--PTC Investment
------------------------------------------------------------------------
PTC investment through December
Railroad 31, 2014 ($)
------------------------------------------------------------------------
ARR 103,000,000
------------------------------------------------------------------------
BNSF 1,230,000,000
------------------------------------------------------------------------
CN 105,400,000
------------------------------------------------------------------------
CP 196,945,493
------------------------------------------------------------------------
CSX 1,178,000,000
------------------------------------------------------------------------
KCS 82,400,000
------------------------------------------------------------------------
NS 814,349,713
------------------------------------------------------------------------
UP 1,496,700,000
------------------------------------------------------------------------
Total 5,206,795,206
------------------------------------------------------------------------
Table 11.--Training
----------------------------------------------------------------------------------------------------------------
Railroad Category 1 Category 2 Category 3 Category 4 Category 5 Total
----------------------------------------------------------------------------------------------------------------
ARR 110 9 199 250 30 598
----------------------------------------------------------------------------------------------------------------
BNSF 1,234 728 12,018 7,054 859 21,893
----------------------------------------------------------------------------------------------------------------
CN 857 240 2,550 1,120 200 4,967
----------------------------------------------------------------------------------------------------------------
CP 550 100 1,600 900 250 3,400
----------------------------------------------------------------------------------------------------------------
CSX 1,315 445 14,085 900 1,275 18,020
----------------------------------------------------------------------------------------------------------------
KCS 202 44 1,526 493 130 2,395
----------------------------------------------------------------------------------------------------------------
NS 2,150 445 12,000 6,275 1,780 22,650
----------------------------------------------------------------------------------------------------------------
UP 2,324 710 13,546 8,450 914 25,944
----------------------------------------------------------------------------------------------------------------
Total 8,742 2,721 57,524 25,442 5,438 99,867
----------------------------------------------------------------------------------------------------------------
Categories of employees requiring training (49 C.F.R. 236.1041):
(1) Persons whose duties include installing, maintaining, repairing,
modifying, inspecting, and testing safety-critical elements of
the railroad's PTC systems, including central office, wayside,
or onboard subsystems;
(2) Persons who dispatch train operations (issue or communicate any
mandatory directive that is executed or enforced, or is
intended to be executed or enforced, by a train control system
subject to this subpart);
(3) Persons who operate trains or serve as a train or engine crew
member subject to instruction and testing under part 217 of
this chapter, on a train operating in territory where a train
control system subject to this subpart is in use;
(4) Roadway workers whose duties require them to know and understand
how a train control system affects their safety and how to
avoid interfering with its proper functioning; and
(5) The direct supervisors of persons listed in paragraphs (a)(1)
through (a)(4) of this section.
The Chairman. Thank you, Mr. Lonegro.
Mr. Brown.
STATEMENT OF DAVID A. BROWN, CHIEF OPERATING OFFICER, GENESEE &
WYOMING INC.
Mr. Brown. Good morning, Mr. Chairman, Ranking Member
Nelson and members of this committee. My name is David A.
Brown. I was appointed Chief Operating Officer of Genesee &
Wyoming in October, 2012, and in this capacity I oversee the
management and operations of the 116 railroads owned by G&W.
G&W is a global railroad holding company that owns freight
railroads in the U.S., Canada, Australia, the Netherlands and
Belgium. In the U.S., we own two Class II regional railroads
and 105 Class III short line railroads located in 39 states.
Based on the diversity of G&W short line holdings, we believe
we are able to offer a relevant perspective on safety and
efficiency of the short line industry.
I would like to address four areas for consideration by
this committee within the focus of this hearing. First, short
line and regional railroad safety. Second, the infrastructure
challenges facing short line railroads. Third, the uncertainty
created for short line and regional railroads associated with
the PTC mandate. And fourth, the importance of short line and
regional freight railroads as part of the national rail freight
network.
Like the railroad industry as a whole, G&W-owned railroads
have dramatically improved their safety performance over the
past decade. We have become an industry leader in safety
through an intense, multi-faceted approach that focuses on
building a culture of safety.
As a result of this intense safety culture, 101 of 113 G&W-
owned railroads completed 2014 with zero FRA reportable
injuries, which yields a consolidated injury frequency rate
that is safer than any Class I railroad and nearly six times
safer than the short line industry average. We believe the same
attention to detail that is required to eliminate injuries
translates to every area of operations resulting in efficient,
well run freight service for our customers. Our objective is
simply for every G&W-owned railroad to stay injury-free every
day.
Eighty-six percent of all short line shipments are
interchanged with the Class I railroad demonstrating the
interdependence between the short line railroads and the Class
I carriers. This demonstrates the true network nature of Class
I, II and III railroads.
However, if a short line cannot handle the same weight of a
freight car as its Class I connection, the utility of the short
line service to its customers suffers. The speed and weight
limitations on short line routes are most often due to aged
rail and bridge structures. Limiting car weights and train
speeds can ensure safe operations over these lines, but that
does not address the lost economics caused by lighter freight
shipments and slower service speeds faced by the customers
dependent on our short lines.
Since 2004, Congress has provided a Short Line Tax Credit
to help short line and regional railroads improve their lines,
replace their rail and upgrade their bridges; all to serve
their customers with more competitive freight services.
Since 2005, the credit has spurred over $1.5 billion of
private investment in railroad infrastructure. The credit was
extended on December 19 of last year with support from 15
members of this committee. Unfortunately, it expired on
December 31, 2014. I strongly encourage the Senate to renew it
so as to continue encouraging the private sector during 2015 to
invest in short line and regional railroad infrastructure
improvements.
PTC implementation is led by the Class I industry, and has
not yet addressed areas of serious concern to the smaller
freight railroads. The vast majority of focus on PTC
implementation has been done by the Class I carriers and their
suppliers without consideration to the financial and physical
constraints of short line railroads. Little attention has been
given to these new PTC systems, but will interface with
connecting short line operations referred to as, Frank
mentioned, interoperability.
The majority of short lines that will be required to
implement PTC are doing so because of a physical interaction
with a Class I railroad. While the FRA created PTC exemptions
for certain short line operating situations, short line
railroads have no clear guidance on how to meaningfully apply
these exemptions to actual situations.
In addition to the significant costs associated with
purchasing and installing PTC on short line, locomotives, the
technology being used for PTC requires on-going technical
support and maintenance that is largely unavailable on short
line railroads. The expense and difficulty in acquiring this
support could be significant.
Clearly there is not enough time between now and December
31 of this year for this to happen. For these reasons, I
encourage members of this committee to develop a fixed period
of extension of the existing PTC deadline and to clarify the
exceptions of short line railroads as they relate to Class I
operations and Class I PTC-implementation requirements.
From a short line perspective, it is amazing how focused
one becomes on superior customer service when your railroad
only has a few customers to serve, and those few customers must
provide the cash to meet your payroll. Our part of the overall
rail freight industry is highly capable of providing that First
Mile/Last Mile of service safely and efficiently.
To that end, I ask the members of this committee to
consider the following: appreciate and understand the
significant role short line and regional railroads play as part
of the U.S. rail freight network; support extension of the
Short Line Tax Credit and allow the continuation of expanded
reinvestment of private capital back into the short line and
regional railroads across the country; understand that the
economics and financial resources of short line and regional
railroads are limited, and recognize that the burdens of
regulations and mandates like PTC fall heavily on the small
railroads.
Thank you.
[The prepared statement of Mr. Brown follows:]
Prepared Statement of David A. Brown, Chief Operating Officer,
Genesee & Wyoming Inc.
Introduction
My name is David A. Brown. I was appointed Chief Operating Officer
of Genesee & Wyoming Inc. in October, 2012, and I have management
oversight responsibility of the 116 railroads owned by G&W. Thank you
for the opportunity to take part in this hearing today, and to briefly
review the important role of regional and short line freight railroads
in enhancing safety, efficiency and commerce across the United States.
As background, G&W is a global railroad holding company that owns
short line and regional freight railroads in the United States, Canada,
Australia, the Netherlands and Belgium. In the United States, we own
two Class II regional railroads and 105 Class III short line railroads
located in 39 states. These railroads, which range from as few as two
to as many as 670 track miles, are each locally managed companies
intensely focused on providing their on-line customers with safe,
flexible, and efficient freight service. Based on the diversity of G&W
short line holdings, we believe we are able to offer a relevant
perspective on safety and efficiency of the short line industry.
The typical U.S. short line railroad has light traffic density,
interchanging freight from the one or two major customers on its line
with a connecting Class I railroad. U.S. short line railroads thus
serve a fundamental and essential purpose: To provide the critical
``First Mile/Last Mile'' of service connecting their communities and
customers to the national rail freight network.
In my comments today, I would like to address four areas for
consideration by this Committee within the focus of this hearing: Short
line and regional railroad safety, the infrastructure challenges facing
short line railroads, the uncertainty created for short line and
regional railroads associated with the Positive Train Control mandate
enacted through the 2008 Rail Safety Improvement Act, and finally, the
importance of short line and regional freight railroads as part of the
national rail freight network.
Short Line and Regional Railroad Safety
As with any heavy industry, and indeed any mode of transportation,
safety must be in the forefront of all efforts in railroad operations.
At the same time, short line operations must provide a high level of
local service that is critical to their customers' viability. Providing
this local service is physically intense, creating risks of human harm
and physical damage if not done properly and with care.
Like the rail industry as a whole, G&W-owned railroads have
dramatically improved their safety performance over the past decade. We
have become an industry leader in safety through an intense, multi-
faceted approach starting with the orientation of every new employee,
continuing with both classroom and on-the-job training, coaching and
support from both line managers and fellow employees, and continuous
analysis of how to improve the safety of operations. Two examples of
investments at G&W to support this approach are:
1. The implementation of a DuPont safety training program for
railroad employees, which focuses on the relentless
identification and elimination of unsafe behaviors and unsafe
conditions in the work environment. This program was developed
by DuPont, a recognized safety leader, and adopted to the
railroad industry. The program is critical to instilling a
culture of safety with all employees, and participation has
been expanded to include customers and members of the G&W Board
of Directors.
2. G&W constructed, equipped and staffed a state-of-the-art training
center in Jacksonville, Florida, which includes a locomotive
simulator and fully functioning air brake ``rack'' to aid in
train handling and safety training. Numerous classes, both for
hourly employees and field managers, are conducted by senior
managers with a passion for safety and professionalism. We plan
to link these classes with remote field locations via Internet
tele-video conferencing, allowing for more frequent and
responsive training to meet specific needs.
These examples highlight the culture of safety that is pervasive at
G&W-owned railroads, emphasizing that everyone should go home to their
families after a day of work in the same condition as when they
arrived. As a result of this intense safety culture, 101 of 113 G&W-
owned railroads completed 2014 with zero reportable injuries, which
yields a consolidated injury frequency rate that is safer than any
Class I railroad and nearly six times safer than the short line
industry average. Our real target, however, is for every G&W-owned
railroad to stay injury free, every day. We believe the same attention
to detail that is required to eliminate injuries translates to every
area of operations, resulting in efficient, well run freight service
for customers. In fact, in biennial satisfaction surveys of every G&W
railroad customer worldwide, in which we have consistently outperformed
the trucking and overall railroad industries, the attributes of our
employees rated highest by customers in every survey are ``commitment
to safety'' and ``professionalism''.
Finally, for the good of the short line industry and our Nation,
G&W also supports the Short Line Safety Institute being established
cooperatively by the American Short Line and Regional Railroad
Association (ASLRRA) and the Federal Railroad Administration. This
effort will take the lessons learned in our industry on the importance
of establishing and reinforcing a culture of safety on short line and
regional railroads and help bring this understanding to all Class II
and III operations in a cooperative, open-learning way.
Infrastructure Challenges facing Short Line Railroads
The vast majority of the almost 550 short line railroads in the
United States were created though Class I railroads disposition of
light-density branch and secondary lines. By their nature, these lines
were generally not as well maintained as the core main lines of the
Class I operations, and typically went through a period of declining
revenues and investments prior to being sold or leased to a short line
railroad. When sold the condition of these lines often necessitates
slower-speed operations and weight limitations on the freight cars
handled over the lines.
A recent, high-profile example of a Class I disposition is the new
Class II Rapid City, Pierre & Eastern Railroad (RCPE). The RCPE has 670
miles of former Class I track. At the time of the sale, RCPE faced a
record grain harvest on top of an existing railroad backlog. RCPE
management quickly expanded its startup plan to add the employees,
locomotives and grain cars to move the harvest offline to its three
Class I connections.
Only a very small portion of South Dakota grain is needed in-state;
our role on the RCPE is to be an efficient, safe, and reliable means
for the farmers in the state to reach their distant markets by working
with our Class I connections. This is typical of many short line and
regional railroads. According to ASLRRA, 86 percent of all short line
shipments are interchanged with a Class I railroad, demonstrating the
interdependence between short line railroads and the Class I carriers.
This demonstrates the true network nature of Class I, II and III
railroads.
However, if a short line cannot handle the same weight of freight
car as its Class I connection, the utility of the short line service to
its customers suffers. The speed and weight limitations on short line
routes are most often due to aged rail and bridge structures. Limiting
car weights and train speeds can ensure safe operations over these
lines, but that does not address the lost economics caused by lighter
freight shipments and slower service speeds faced by the customers
dependent on these short lines.
Since 2004, the Federal government has provided a tremendous boost
via the Short Line Tax Credit to help short line and regional railroads
improve their lines, replace their rail, and upgrade their bridges, all
to serve their customers with more competitive freight services. The
credit allows Class II or III railroads to invest more of what they
earn into improving their own railroad infrastructure. A railroad must
spend a dollar for every 50 cents in credit, so the credit maximizes
private investment in capital improvements. The total available credit
is capped at the equivalent of $3,500 per mile per railroad.
According to ASLRRA, since 2005 the credit has spurred over $1.5
billion of private investment in railroad infrastructure. The national
Railroad Tie Association estimates that the credit has allowed short
lines to purchase and install more than 750,000 railroad ties per year
over and above their normalized purchases. All of the new rail, ties,
ballast and bridges afforded by the credit directly benefit customers
such as the South Dakota farmer shipping wheat to market, the Florida
paper manufacturer and the Ohio steel manufacturer serving customers in
the Midwest, and the California carrot distributor shipping to eastern
markets. All of these customers, now served by G&W-owned railroads, and
thousands more across our country directly benefit from the increased
private infrastructure investments made through the Short Line Tax
Credit.
The credit was extended on December 19 of last year after action in
Congress, including the direct support of 251 House and 51 Senate co-
sponsors of bills calling for the extension of the credit. The Senate
count included 15 members of this Committee. Unfortunately, what was
extended on December 19, 2014 expired on December 31, 2014. I strongly
encourage you to help thousands of short line served companies across
the Nation and reinstate this credit as soon as possible so as to
continue to encourage investment during 2015 in short line and regional
railroad infrastructure improvements. These investments will directly
improve the ability short line and regional rail to serve their
customers, providing a vital link to the national rail freight network.
Uncertainty Created for Short Line Railroads with the Positive Train
Control Mandate
Perhaps the only certainty with Positive Train Control (PTC) is the
inability of the industry to meet the December 31, 2015 full
implementation deadline mandated by the 2008 Rail Safety Improvement
Act. While a vast amount of attention and resources has been expended
to development and implementation of PTC on the Class I railroads,
there is tremendous uncertainty on how this mandate will affect short
line and regional railroads, and we are less than a mere 12 months from
the current deadline for implementation. This level of uncertainty is
due to several factors:
The vast majority of focus on PTC implementation has been
done by the Class I carriers and their suppliers, without
consideration to the financial and physical constraints of
short line railroads. Little attention has been given to how
these new PTC systems will interface with connecting short line
operations (referred to as ``interoperability''). For example,
many short line locomotives are older and cannot be rationally
equipped with a functional PTC system, as the cost to equip is
more than the entire locomotive is worth.
The majority of short lines that will be required to
implement PTC are doing so because of a physical interaction
with a Class I carrier. This could be, for example, operating
over a short distance of the Class I PTC-equipped line to enter
its yard to interchange traffic, or an at-grade ``diamond''
crossing of the short line and Class I PTC-equipped tracks.
While the Federal Railroad Administration created PTC
exemptions for certain short line operating situations, short
line railroads have no clear guidance on how to meaningfully
apply these exemptions to actual situations.
In addition to the significant costs associated with
purchasing and installing PTC on short line locomotives, the
technology being used for PTC requires on-going technical
support and maintenance that is largely unavailable on short
line railroads. The expense and difficulty in acquiring this
support could be significant.
To resolve these issues will require a fair and reasoned approach
by all parties, and clearly there is not enough time between now and
December 31 of this year for this to happen. For these reasons, I
encourage members of this Committee to develop a fixed period of
extension of the existing PTC deadline, and to clarify the expectations
of short line railroads as they relate to Class I operations and Class
I PTC-implementation requirements.
Importance of Short Line Railroads as part of the National Rail Freight
Network
The freight railroad network is both unique and an important
element of the competitive future of the Nation. It is difficult to
imagine another industry of so many diverse ownerships working closely
together to provide generally seamless and competitive services to a
such a wide variety of different customers. Nor an industry that holds
itself open as ``common carriers'' that maintains at its own expense
and liability so much infrastructure. The network works through the
learned experiences of many, many years of successes and failures: from
the bankruptcy and collapse of almost the entire Northeastern rail
system in the 1970s to the birth and growth of hundreds of short line
railroads over the last 30 years.
From a short line perspective, it is amazing how focused one
becomes on superior customer service when your railroad only has a few
customers to serve, and those few customers must provide the cash to
meet your payroll. Our part of the overall rail freight industry is
highly capable of providing that ``First Mile/Last Mile'' of service
safely and efficiently. To that end, I ask the Members of this
Committee to consider the following:
Appreciate and understand the significant role short line
and regional railroads play as part of the U.S. rail freight
network.
Support extension of the Short Line Tax Credit, and allow
the continuation of expanded reinvestment of private capital
back into the short line and regional railroads across the
country.
Understand that the economics and financial resources of
short line and regional railroads are limited and recognize
that the burdens of regulations and mandates like PTC fall
heavily on the smaller railroads.
Going forward, G&W and, I am sure, the other regional and short
line railroads of our country are ready to tackle the future issues and
land future opportunities, and along the way help grow our economy and
improve our environment. Thank you for giving me this opportunity to
present this information today.
The Chairman. Thank you, Mr. Brown.
Mr. Johnson.
STATEMENT OF BILL JOHNSON, FORMER DIRECTOR, PORTMIAMI, AND
FORMER CHAIR, FLORIDA PORTS COUNCIL
Mr. Johnson. Mr. Chairman, Senator Nelson, and members of
the Senate Committee on Science and Transportation--Commerce,
Science, and Transportation, my name is Bill Johnson and it is
my pleasure to speak with you today.
I'm speaking to you this morning as a former Director of
PortMiami, as a former Chair of the Florida Ports Council. I'm
also today, currently serving as my community's Director of
Water and Sewer, one of the nation's largest public utilities.
Beginning on March 1, I step into the role at the state level,
as Florida's new Secretary of Commerce and CEO of Enterprise
Florida.
Throughout my 35-year public service career, which is
largely focused on infrastructure development, I've seen
firsthand the impact of infrastructure on a community's ability
to thrive economically and, of course, the need to properly
connect to existing and new infrastructure at the local, state
and national levels. I strongly believe that, in order for
these types of infrastructure projects to move forward, there
needs to be partnerships with private sector and, of course,
participation of all three levels of government.
When I became Director of PortMiami in 2006, we were faced
with the reality of an aging infrastructure. And infrastructure
that did not meet the needs of a growing seaport and a changing
economy that depended on regional trade as a key job generator.
While South Florida is known worldwide as the ``Cargo Gateway
of the Americas,'' to remain competitive our region needed to
address the challenges posed by the expansion of the Panama
Canal. PortMiami is the second largest economic engine in South
Florida, second only to Miami International Airport, and our
port contributes approximately $30 billion annually direct and
indirect to the local, state and national economies.
PortMiami supports 225,000 jobs annually, both directly and
indirectly. It is projected that the new infrastructure being
completed at our port, including the deepening of our channel
to a depth of 50 feet, will add more than 30,000 new high
paying jobs over the next several years. And I would say that
these are really high paying jobs. The average job through
PortMiami with a High School Diploma is over $56,000 a year.
However, in addition to deepening the channel to
accommodate a new generation of super post-Panamax container
ships, PortMiami had to address the inland logistics challenges
including how to move goods on and off its port linking South
Florida to markets on the East Coast and throughout America.
Our approach was to implement a three-part, which Senator
Nelson is very much aware of, a three-part development strategy
that focused on capital improvement projects and infrastructure
investments that would support cargo growth and not only by
virtue of a deeper channel, but also projects such as the new
port tunnel, the re-introduction of on-dock rail, stronger
bulkheads and the acquisition of new super Post-Panamax cranes.
I'm briefly going to touch on all three and how they
interconnect to make our port a stronger, if you will, more
valuable port.
Currently, the U.S. Army Corps of Engineers is hard at
work, would create Lakes Dredge and Dock Company to deepen our
channel to 50 feet. This project will be completed on time this
summer, summer 2015; making our port, PortMiami, the only port
south of Norfolk, Virginia on the East Coast at that water
depth; the same depth as the Panama Canal. In fact, Miami will
be at a 50 foot depth one year in advance of Panama's
improvements.
The dredge project is supported by the strengthening of
bulkheads, completed, in order to accommodate the larger
container vessels and also the acquisition of some of the
world's largest gantry cranes. This allows us to load and
unload, if you will, containers timely and efficiently.
As Senator Nelson is very much aware, there has been an
important introduction of a new project last summer, and that's
the construction of PortMiami Tunnel. This tunnel links our
port to the Nation's highway system, and it provides four lanes
under the Biscayne Bay with a seamless connection with no
traffic signals to allow us to move our container and our
cruise passengers in and out efficiently.
This is a successful project because it was a public-
private partnership. It involved all three levels of
government; the Federal, the state and the local. The project
opened on time and under budget. It shows what can be done when
you partner in an open fashion.
Vehicles now, of course, travel, if you will, from our port
and is somewhere in the range now of about 26,000 vehicles a
day using the PortMiami tunnel.
Importantly, for this committee and for our port is on-
dock, the restoration of on-dock rail. Again, this another
great example of America working smart. This was a public-
private partnership involving all three levels of government;
our national government, our state and our local. Today, from
PortMiami, with our partners at Florida East Coast Rail, that's
FEC--and Senator Nelson referred to Henry Flagler. We utilize
the same rail system that Mr. Flagler brought to Florida back,
you know, over 100 years ago.
This rail improvement allows us from our port to connect to
over 70 percent of the American population; from our port, from
one to 4 days. Within 4 days we can get you to Chicago to
Heartland of America to Cleveland faster and at less cost via
rail. Huge, important. And again, it was a partnership with
Washington, our state government and local and our private
sector partners.
On-dock rail is a critical component of PortMiami's growth
strategy. And no, no port, I believe, can be successful without
on-dock rail. Rail is essential to the movement of goods and
people in America. Our new FEC port partnership allows
shippers, again, to reach over 70 percent of our Nation's
population in one to 4 days. It's a win-win.
In summary, PortMiami is in the midst of the most ambitious
capital program in its 100-year history. It's all about
connectivity. It's all about the ability to reach markets
faster and safer. We believe that the new connections, OK, to
Asia with the expanded canal will help America protect or help
all of us in America be able to grow or trade. These are new
opportunities for all of us that do business globally.
Global trade and freight movement should be at the
forefront of economic developments at the local, state and
national levels. Our Nation's transportation systems, which
depend on rail, OK, are vital to moving the Nation's commerce
and supporting our economy. The system demands proper planning
and investment, key investment, to keep freight movement
expeditious and cost effective. Infrastructure projects that
improve the network of how our region and our Nation moves
goods contributes to the entire economic growth in many, many
ways. We all know those, construction jobs, obviously a wide
range of logistics jobs, on and on and on.
The bottom line for me, we need to continue to support a
smart investment in our rail system.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Johnson follows:]
Prepared Statement of Bill Johnson, former Director of PortMiami and
former Chair, Florida Ports Council; speaking on behalf of Juan Kuryla,
Port Director, PortMiami
Mr. Chairman, Sen. Nelson and members of the Senate Committee on
Commerce, Science, and Transportation, my name is Bill Johnson and it
is my pleasure to speak to you today on behalf of Port Director Juan
Kuryla who is in Asia promoting Port Miami and as the former Director
of PortMiami and former Chair of the Florida Ports Council. I am
currently serving Miami-Dade County as the Director of Water and Sewer
and, commencing March 2, I will be taking the reins at the state level
as the Secretary of Commerce and CEO of Enterprise Florida. Throughout
my public service career, which has largely focused on infrastructure
development, I have seen firsthand the impact of infrastructure on a
community's ability to thrive economically, the need to properly
connect existing and new infrastructure at the local, state and
national levels. I also strongly believe that, in order for these type
of projects to move forward, there needs to be partnerships with the
private sector and at all levels of government.
When I became Director of PortMiami in 2006, we were faced with the
reality of aging infrastructure that did not meet the needs of a
growing seaport and changing economy that depended on regional trade as
a key job creator. While South Florida is known worldwide as the
Gateway to the Americas, to remain competitive our region needs to
address the challenges posed by the expansion of the Panama Canal.
PortMiami is the second largest economic engine in South Florida,
second only to Miami International Airport, and it contributes $30
billion annually to the local and state economies. PortMiami supports
225,000 jobs, both directly and indirectly, in the State of Florida. It
is projected that new infrastructure investments at the port, including
deepening the port's channel to minus 50-feet, will add more than
30,000 jobs over the next several years.
However, in addition to a deeper channel to accommodate a new
generation of super-sized container vessels, PortMiami must also
address inland logistical challenges including how to move goods on and
off the port linking South Florida to markets along the Eastern
Seaboard and Midwest.
Our approach was to develop a three-part development strategy that
focused on capital improvement projects and infrastructure investments
that would support cargo growth not only by virtue of a deeper channel,
but also such projects as a new port tunnel, the re-introduction of on-
dock rail, stronger bulkheads, and the acquisition of new Post-Panamax
gantry cranes. I'd like to touch on each of those projects.
Deep Dredge, Bulkhead Strengthen and New Gantry Cranes
The U.S. Army Corps of Engineers awarded a contract to Great Lakes
Dredge and Dock Company to deepen the Port's channel to a minus-50
feet. When the project is completed this summer, PortMiami will be the
ONLY port south of Norfolk, Virginia at -50 feet when the expanded
Panama Canal opens in 2016. The dredge project is supported by the
strengthening of the bulkheads in order to accommodate larger cargo
vessels and the acquisition of new gantry cranes capable of loading and
off-loading the super-sized ships.
Port Tunnel
Construction of the Port Tunnel, linking the Nation's interstate
system with port facilities, was completed in May 2014, and has been
operational since last August. The project was delivered both on-time
and on-budget. The tunnel, like a number of port projects, was a
private-public partnership managed by the Florida Department of
Transportation in conjunction with Miami-Dade County, the City of Miami
and our private sector partners, the Miami Access Tunnel and Bouygues
Civil Works. The tunnel not only benefits PortMiami, but has also
greatly improved traffic flow in downtown Miami. Pedestrians and
automobiles no longer compete with the 18-wheeler cargo trucks for
space on our downtown residential and commercial streets. Vehicles now
travel from the Interstate to PortMiami without crossing a SINGLE
traffic signal.
On-Dock Rail Connection
Another public-private project of great importance to PortMiami was
the re-introduction of on-port rail. In partnership with Florida East
Coast Railway (FEC), we have restored freight rail linking our port to
an intermodal center with links to the national railway system. We are
currently moving hundreds of containers on a daily basis as part of
FEC's regular service. While the tunnel connects our port facilities
directly to the Interstate and the State of Florida, the rail connects
PortMiami to the Southeastern U.S. and beyond.
On-dock rail is a critical component of PortMiami's growth
strategy. No modern port can be successful without on-dock rail. The
new FEC-Port partnership allows shippers to reach more than 70 percent
of the U.S. population from Miami within one to four days. In global
trade, it's all about time to market and this connection has afforded
South Florida an important competitive advantage.
In summary, PortMiami is in the midst of the most ambitious capital
program in the Port's 100-year history. It is all about connectivity--
fast and efficient connections to transportation systems and markets.
We believe with new connections to Asian markets via the expanded
Canal, there are great new opportunities for those of us who do
business in this part of the world.
Global trade and freight movement should be at the forefront of
economic development efforts at the local, state and Federal levels.
Our nation's transportation network, which depends on rail, is vital to
moving the Nation's commerce and supporting our economy. The system
demands proper planning and investment to keep freight movement
expeditious and cost-effective. Infrastructure projects that improve
the network of how our region and nation moves goods contribute to
economic growth in multiple ways. These include not only construction
jobs created to build the new infrastructure, but also a wide-range of
logistics jobs in the goods distribution and retail industries. By
allowing goods to reach domestic and international markets efficiently,
we can provide consumers a broader variety of goods with minimal, added
cost for transport, if any. Delay in bringing goods to market causes
price inflation and deters American business, not to mention the
harmful environmental impacts of idle machinery stalled at various
system chokepoints.
In closing, without the ability to move our goods and people
efficiently, a community cannot grow.
Thank you for the opportunity to address you this morning.
About PortMiami
PortMiami is Miami-Dade County's second most important economic
engine contributing $30 billion annually to the local economy and
supporting more than 225,000 jobs in South Florida. It is recognized as
the Cargo Gateway of the Americas.
Miami's unique geographic position makes the Port easily accessible
to Caribbean and Latin American markets, as well as those of Asia and
Europe by way of the Panama Canal.
PortMiami is also known worldwide as the Cruise Capital of the
World, welcoming more cruise passengers to its terminals than any other
port in the world.
Our Mission
PortMiami's mission is to operate and further develop the world's
leading cruise port and the largest container port in the State of
Florida; to maximize its assets and strengthen its advantage for future
growth; promote international trade and commerce as a vital link
between North and South America and a growing center for global trade;
support sustainability and operate in an environmentally responsible
manner.
Our business plan and quarterly performance reports outline
PortMiami's strategic alignment, performance measures as well as our
ongoing progress toward meeting those objectives. The documents include
a table of organization that defines the reporting relationships within
the department.
Foreign Trade Zone 281
FTZ 281 is a General Purpose Foreign Trade Zone established under
the Alternative Site Framework (ASF). The ASF provides an expedited
process to becoming an FTZ site. Since its authorization in August 2012
by the Foreign Trade Zone Board, we have 27 sites that have been
designated with approximately 3.0M square feet available for foreign
trade zone logistics operations.
Mission & Vision
To make Miami-Dade County's international trading community more
profitable and competitive by providing quick and easy access to
foreign trade zone benefits.
Geographic Impact
FTZ 281 stretches from Southwest Eighth Street to the Broward
County line, from Miami Beach in the east to the Urban Development line
in the west. This area encompasses many industrial areas and critical
logistics components including:
Miami International Airport
Opa-locka Airport
PortMiami
Railyards and other transportation infrastructure
The Chairman. Thank you, Mr. Johnson.
Ms. Teel.
STATEMENT OF MICHELLE TEEL, P.E.,
MULTIMODAL OPERATIONS DIRECTOR,
MISSOURI DEPARTMENT OF TRANSPORTATION
Ms. Teel. Thank you, Chairman Thune and Ranking Member
Nelson for inviting me to participate in this hearing. Thank
you, also, to our Missouri senators, Senator Blunt and Senator
McCaskill, for your support of transportation. I am so pleased
to be here to share the state experience on freight rail
safety, efficiency and commerce.
Situated in the center of the United States, Missouri is
the crossroads for our Nation's railroads. Missouri is the
fourth most rail intensive state, annually carrying more than
420 million tons of goods. Nearly 20 million additional trucks
a year would be needed to move this same amount of freight on
our highways in Missouri.
We have more than 4,800 miles of track, 3,800 public rail
crossings and six Class I railroads operating within the state.
We're also proud to have two of the top three rail terminals in
the country. Kansas City Terminal Railway is the second largest
terminal in the country. Approximately 250 freight train
movements occur at KCT every day. Missouri is also a home to
Terminal Railroad Association of St. Louis the third largest
terminal in the country.
At the Missouri Department of Transportation, safety is our
highest priority and we do everything within our ability to
make our transportation system as safe as possible. When we
recently saw Bakken crude oil shipments increase, Missouri's
railroad safety inspectors worked with the railroads and with
the Federal Railroad Administration to make certain those
routes received our highest attention.
The rise of railroad movements also spurred MoDOT to
increase their railroad safety inspection staff. So, in a time
when resources are scarce, this decision demonstrates MoDOT's
commitment to rail safety and the safety of our citizens.
In Missouri, we value our strong relationships with the
nation's second and third largest terminal railroads. We know
Missouri's terminal railroads are an important national asset,
moving a significant amount of freight, including hazardous
materials. They allow multiple railroads to use common
infrastructure thus maximizing efficiencies and minimizing
environmental impacts.
Amtrak and the state-sponsored Missouri River Runner,
passenger rail service contracted through Amtrak, also use
these nationally significant terminal railroads. Six passenger
trains traverse KCT each day. As I mentioned earlier,
approximately 250 freight movements occur every day at KCT,
which is obviously driving our nation's economy.
With Positive Train Control regulations, the terminal
railroads were only required to install PTC if they had
passenger movements with no regard to operation volume,
population density, tonnage or commodities moved, including
hazardous materials. So recently, MoDOT received a letter from
Amtrak regarding PTC improvements in Kansas City and St. Louis
terminals, which is attached to my testimony. This letter
indicates Amtrak is receiving invoices from Kansas City
Terminal for the implementation of Positive Train Control.
The estimated total cost for installation in KCT is about
$32 million, and Missouri's share for that state-sponsored
passenger rail service is approximately $20 million and $2
million a year for maintenance in Kansas City alone. So to give
some scale to this, Missouri's cost to fund the entire
passenger rail service between Kansas City and St. Louis is
about $9 million a year. And the service operates on Kansas
City Terminal for only about 6 of the entire 250 miles of the
passenger rail route.
So while we agree, PTC helps improve rail safety, we do not
believe MoDOT and Amtrak should be required to bear the cost of
the entire PTC system in the terminals considering the volume
of hazardous materials and other commodities in these dense
population areas. MoDOT sent a response letter to Amtrak and
another to the FRA regarding this issue, and I've attached both
of those letters to my testimony as well.
You'll see in our letters, MoDOT stands ready to work with
the FRA, with the railroads, Amtrak, and lawmakers to address
this important issue. We know there will be an on-going and
dynamic discussion that we hope, ultimately, leads to a more
informed and more importantly a more equitable method of
implementing PTC in our nation's largest rail terminals.
Again, I'd like to thank you for the opportunity to share
our views on this very important topic, and reinforce that the
Missouri Department of Transportation stands committed to
improving the safety of our entire transportation system.
Thank you.
[The prepared statement of Ms. Teel follows:]
Prepared Statement of Michelle Teel, P.E., Multimodal Operations
Director, Missouri Department of Transportation
Thank you, Chairman Thune and Ranking Member Nelson for inviting me
to participate in this hearing. I am Michelle Teel, the Missouri
Department of Transportation (MoDOT) Multimodal Operations Director.
I'm so pleased to be here to share the state experience on freight rail
safety, efficiency, and commerce.
Situated in the center of the United States, Missouri is the
crossroads for our Nation's railroads. Missouri is the fourth most rail
intensive state by tonnage, annually carrying more than 420 million
tons of goods. Nearly 20 million additional trucks a year would be
needed to move this same amount of freight on Missouri's roads.
Missouri also has more than 4,800 miles of railroads, 3,800 rail
crossings on public roads, and six Class One railroads operating within
the state. Kansas City Terminal Railway (KCT) is the second largest
terminal in the country. Approximately 250 freight train movements
occur at KCT every day. Missouri is also home to Terminal Railroad
Association (TRRA) of St. Louis. TRRA is the third largest terminal in
the country. All sorts of commodities move through these terminals
every day from places like Long Beach California and Powder River
Valley. You don't have to wait long in Missouri to see a unit train of
coal or a load of hazardous materials.
Safety is MoDOT's highest priority, and we do everything within our
ability to make our transportation system as safe as possible. When we
recently saw Bakken crude oil shipments increase, Missouri's railroad
safety inspectors worked with the Class One railroads and the Federal
Railroad Administration (FRA) to make certain those routes received our
highest attention to help ensure the safe movement of goods. We checked
curves of tracks, intersections with roads, and the operations of these
movements to give Missouri the safest rail system possible. The rise of
railroad movements also spurred MoDOT to increase railroad safety
inspection staff. In a time when resources are scarce, the decision to
increase railroad safety inspection staff demonstrates MoDOT's
commitment to rail safety. With rail movements on the rise, we believe
these actions are prudent to make certain our citizens and railroads
are safe.
In Missouri, we work closely with the Nation's second and third
largest terminal railroads to promote safe and efficient rail
transportation. We know Missouri's terminal railroads are an important
national asset, moving a significant amount of freight, including
hazardous materials. They allow multiple Class One railroads to use
common infrastructure, thus maximizing efficiencies and minimizing
environmental impacts. The state sponsored Missouri River Runner
passenger rail service and Amtrak also use these nationally significant
terminal railroads to move passengers. Six passenger trains traverse
KCT each day, moving people to and from our Nation's largest population
centers. Moreover, as I mentioned earlier, approximately 250 freight
movements occur every day at KCT, driving our Nation's economy.
When positive train control (PTC) regulations were created, the FRA
made the ruling through their interpretation of The Rail Safety
Improvement Act of 2008, that terminal railroads would only have to
install PTC if they had passenger movements. However, MoDOT believes
PTC installation requirements should not be triggered by a small amount
of passenger rail traffic, but rather should be based on operation
volume, population density, tonnage, and commodities moved--especially
hazardous materials. This would be consistent with the rest of the PTC
rules and applications nationwide.
Recently, MoDOT received a letter from Amtrak regarding PTC
improvements in KCT and TRRA. This letter laid out that Amtrak had
begun receiving invoices from KCT for the implementation of PTC. As KCT
views the law through FRA interpretation and subsequent regulation, the
only requirement for implementing PTC in the terminal is the six
passenger train movements per day, not the 250 freight movements
through this dense population center. Amtrak explained in the letter
the estimated total cost for installation in KCT will be about $32
million. The letter states Missouri's share for the state sponsored
Missouri River Runner passenger rail service (contracted through
Amtrak) is approximately $20 million and about $2 million a year for
maintenance in KCT alone. To give some scale to this--Missouri's cost
to fund the Missouri River Runner passenger rail between Kansas City
and St. Louis is approximately $9 million per year. The service
operates on the KCT for only about 6 miles of the entire 250 mile
route.
MoDOT believes PTC helps improve rail safety. However, requiring
MoDOT and Amtrak to bear the cost of the entire PTC system in the
terminals--considering the volume of hazardous materials and other
commodities in these dense population areas--does not seem to comply
with the intent of the law. While this issue impacts Missouri the most
severely, Illinois and California are also impacted by this FRA
interpretation.
MoDOT sent a response letter to Amtrak and another to the FRA,
regarding the Amtrak letter. I have attached both of these letters to
my testimony, along with the letter received from Amtrak. You will see
in our letters, MoDOT stands ready to work with the FRA, railroads,
Amtrak, and lawmakers to address this important safety issue. We know
there will be an on-going and dynamic discussion ultimately leading to
a more informed and equitable method of implementing PTC in our
Nation's largest rail terminals.
I would like to thank you for the opportunity to share our views on
this very important topic. Missouri stands committed to improving the
safety of our entire transportation system.
Attachments
National Railroad Passenger Corporation
Washington, DC, November 14, 2014
Mr. Eric Curtit,
Administrator of Railroads,
Missouri Department of Transportation,
Jefferson City, MO.
Re: Positive Train Control on Kansas City Terminal Railway
and the Terminal Railroad Association of St. Louis Rail
Lines
Dear Mr. Curtit:
As you may be aware, Amtrak has received initial bills totaling
approximately $8.8 million from Kansas City Terminal Railway (KCT) and
from the Terminal Railroad Association of St. Louis (TRRA) concerning
the installation of Positive Train Control (PTC) on: (1) KCT's main
line in Kansas City between Rock Creek Junction and Santa Fe Junction
and (2) TRRA's main line in St. Louis between Grand Avenue and the
Amtrak Station. The State-supported Missouri River Runner service uses
these lines. The long-distance Southwest Chief uses a portion of the
KCT route in Kansas City and the Texas Eagle uses the TRRA route in St.
Louis.
KCT and TRRA are asserting that the existence of passenger trains
on these lines is the only reason why PTC must be installed under the
final PTC Rule recently issued by the Federal Railroad Administration.
Amtrak currently is in an arbitration litigation with KCT and in
discussions with TRRA as to whether and to what extent these bills, and
any subsequent bills for installation and maintenance, are indeed
incremental costs which KCT and TRRA have incurred or will incur solely
due to the presence of passenger trains, and if so what amount would be
clue to KCT and TRRA for reimbursement. If reimbursement is
appropriate, Missouri would, pursuant to the PRIIA Sec. 209 Cost
Methodology Policy, be responsible for a substantial portion of the
cost of this installation and subsequent maintenance.
To date, Amtrak has made no payment to KCT or TRRA and has posed
various questions and asserted potential defenses. In response, KCT has
informed us that the estimated total cost of installation will be about
$32 million. If passenger trains were required to pay that amount,
prorating by train counts and routes, approximately $20 million will be
Missouri's share and the balance will be Amtrak's share. Although KCT
has not provided any estimate to Amtrak of its annual maintenance
costs, such annual maintenance costs could be about 10 percent of the
installation cost, i .e., about $2 million per year for Missouri's
share.
Also in response, TRRA has informed us that it is still in the
preliminary engineering phase of its development and does not have a
total cost estimate for its PTC installation. TRRA's installation
involves Missouri's River Runners, Illinois' Lincoln Service, and the
long-distance Texas Eagle. Amtrak's rough order of magnitude estimate
of the portion of the TRRA PTC installation cost west of the Amtrak
station in St. Louis is about $0.7 million. If passenger trains were to
be required to pay that amount, prorating by train counts,
approximately $0.45 million is the state of Missouri's share and the
balance is Amtrak's share. Although TRRA has not provided any estimate
to Amtrak of its annual maintenance costs of PTC, such annual
maintenance costs could be about 10 percent of the installation cost,
i.e., about $45,000 per year for Missouri's share.
Amtrak is not in a position to fund PTC expenses on state-supported
routes, and indeed pursuant to the PRIIA Sec. 209 Cost Methodology
Policy, these costs on the River Runner's route fall to Missouri. Since
KCT and TRRA have begun to issue bills, please advise Amtrak's Mr.
Michael Franke by December 1, 2014, of Missouri's commitment to pay
Amtrak for the PTC expenditures as described above. Amtrak requires
this commitment to continue to operate this state-supported service
beyond the PTC effective elate of December 31, 2015. If Missouri is
unable to commit to this by December 1, 2014, then Amtrak must take
steps to notify KCT that the River Runner service will end and KCT need
not install PTC on any trackage that is not used by Amtrak's Southwest
Chief
Amtrak is sending a similar letter to other states in this
situation. Currently these states are Illinois (Lincoln Service) and
California (Pacific Surfliners).
I look forward to hearing from you.
Sincerely,
DJ Stadtler,
Executive Vice President
and Chief Operations Officer.
CC: Joseph Szabo, FRA
Jay Commer
Mike Franke
Paul Vilter
Keith Holt
Robin McCarthy
Jad Roberts
______
Missouri Department of Transportation
Jefferson City, Mo, December 23, 2014
Mr. Paul Nissenbaum,
Associate Administrator,
Federal Railroad Administration,
Washington, DC.
Dear Mr. Nissenbaum:
My purpose in writing is to formally request that the Federal
Railroad Administration (FRA) review its interpretation of the August
2014 final rule on positive train control (PTC). Specifically, the
Missouri Department of Transportation (MoDOT) seeks FRA's reversal of
its interpretation exempting the Terminal Railroad Association of St.
Louis (TRRA) and the Kansas City Terminal Railway (KCT) from paying for
the cost of installing positive train control on the Missouri portion
of its network. It is our understanding that the Illinois Department of
Transportation is submitting a similar request to you in regard to
TRRA's Illinois network.
TRRA and KCT cite FRA's interpretation of the short-line railroad
exemption, which currently includes both Terminal railroads. The St.
Louis and Kansas City Terminals, however, are unlike other short-lines
in that they are owned 100 percent by Class 1 railroads that are
subject to the PTC mandate at their own expense. The St. Louis and
Kansas City Terminals thus do not in any way fit into the ``small
business'' category of other short-lines.
KCT has already sent Amtrak an initial invoice for PTC work in
Kansas City. Amtrak, in turn, is citing Section 209, stating that PTC
installation is an operational cost that should be borne by the states
supporting passenger rail service. Accordingly, Amtrak is estimating
that Missouri will need to identify $20 million in funding to cover PTC
installation on KCT's infrastructure and $450K in TRRA for Missouri's
share of the PTC installation. Missouri, however, believes that PTC is
a fixed capital asset whose cost allocation should at least be governed
by an as-yet undetermined division of fixed capital asset costs between
the states and Amtrak. But the entire need for such an allocation
discussion would be eliminated if FRA reverses its interpretation as we
request, and requires TRRA and KCT to fund the installation of PTC on
its own--just like FRA is mandating the class 1s to install PTC at
their own expense on other qualifying infrastructure owned by them.
I have instructed Eric Curtit, MoDOT's Administrator of Railroads,
to work with you on this issue. Please follow up with Eric directly.
Thank you for your consideration.
Sincerely,
David B. Nichols, P.E.,
Director.
cc: Joe Shacter, IDOT
The Chairman. Thank you, Ms. Teel.
Mr. Jahn.
STATEMENT OF CHRIS JAHN, PRESIDENT,
THE FERTILIZER INSTITUTE
Mr. Jahn. Thank you, Mr. Chairman and Ranking Member
Nelson, and members of the Committee. We appreciate the
opportunity to talk to you today about rail service issues.
The fertilizer industry and agriculture depend on safe,
reliable and cost-effective rail service. And in fact, nearly,
all fertilizer shipped in North America touches the rail
transportation system at some point. The delivery of fertilizer
in a timely manner is critical to the 2 million American
farmers who produce enough food to feed our citizens and
generate over $400 billion annually in economic output. And, in
fact, 40 to 60 percent of a crop's yield is due directly to
fertilizer.
So it's vital that this committee understands that the
availability of an efficient rail service is not a season issue
for agriculture. Our industry works to support farmers 24 hours
a day, 7 days a week. And the sheer production of volume of
production in the industry couldn't possibly be transportation
just two times a year during the spring and fall planting
seasons. And, in fact, this takes place year round.
In addition, our members have relatively little storage.
And so, if they don't have reliable rail service, those plants
have to shut down. So just as the railroad industry has changed
in the last 35 years since the Staggers Act has passed, farming
has as well due to advanced agriculture. So, for example, last
spring in May of 2014, the country as a whole went from 29
percent of acres planted to 73 percent acres planted. That's 40
million acres that were planted in a 2-week period.
So farmers rely on the robustness of the transportation
system, especially the railroads now more than every. And so,
given our reliance on rail service, The Fertilizer Institute
supports policies that will promote greater competition between
railroads and improve the efficiency and effectiveness of the
Surface Transportation Board. For example, last spring the STB
required the BNSF and CP to track fertilizer shipments. The
transparency helped to improve service that desperately needed
it.
However, we're concerned that the recent STB order,
establishing temporary reporting requirements and the Board's
purposed rulemaking a permanent reporting requirement do not
include separate tracking of fertilizer shipments. Given our
importance to agriculture and the time length of delivery and
application of fertilizer, we feel that it's appropriate to be
included in that permanent reporting order. Farmers at the
April 2014 STB hearing testified to that fact.
We're also concerned about other issues that effect rail
service. For example, the new crude oil tank car standards
proposed by DOT could have the unintended impact of crowding
out shop capacity for maintenance required for other cars.
Further, the proposed speed restrictions for High-Hazard
Flammable Trains, which do not include fertilizer, could add
significant congestion to an already overburdened network.
Moreover, it's likely that the trains under the rulemaking
may have significant number of cars that do not contain
flammable liquids.
We're also concerned about the deadline for deploying
Positive Train Control, which we've heard a lot about this
morning. As you all know, this covers tens of thousands of
miles of track. And while we have very strongly supporting the
effort to deploy PTC and enhance rail safety, we want to make
sure that it does not erode the railroad's commitment to their
common carrier obligation to transport toxic inhalation cargo.
And the reason for that is rail service is vital to the
transportation of anhydrous ammonia, which is used a direct
application fertilizer particularly in the Midwest. It's also
used in the production of many other types of fertilizers. And
as others have said before today, rail is in fact the safest
transportation option for anhydrous over land. So we want to
make sure that those 30,000 tank cars that are transported
annually, we want to make sure that we continue to have the
right to ship over-the-rails. Because, it takes four trucks to
replace one rail car. And that's just--that would not be
possible to do in a timely manner.
So in conclusion, I want to thank again the Committee for
allowing us to be here. Our partnership with the railroads is
crucial in helping feed a growing world and we dependent on
that safe, reliable and cost-effective service. And we want to
work with the Committee, the Surface Transportation Board and
our partners within the railroads to make sure that that
happens.
Thank you.
[The prepared statement of Mr. Jahn follows:]
Prepared Statement of Chris Jahn, President, The Fertilizer Institute
My name is Chris Jahn. I am the President of The Fertilizer
Institute (TFI) which is the national trade association representing
the fertilizer industry. TFI represents virtually every primary plant
food producer, as well as secondary and micronutrient manufacturers,
fertilizer distributors and retail dealerships, equipment suppliers and
engineering construction firms, brokers and traders, and a wide variety
of other companies and individuals involved in agriculture. The
Institute's members play a key role in producing and distributing vital
crop nutrients, such as nitrogen, phosphorus and potassium, which are
used to replenish soils throughout the United States and globally to
produce healthy and abundant supplies of food, fiber and fuel.
Fertilizers make it possible for farmers to grow enough food to feed
the world's 7.2 billion people. Research has confirmed that 40-60
percent of crop yields are attributable to commercial fertilizers
nutrient inputs.
The fertilizer industry depends on safe, reliable, and cost-
effective rail transportation to deliver fertilizer, which is essential
to U.S. food production. While fertilizer shippers also utilize other
modes of transportation to move their products, nearly all fertilizer
shipped across North America touches the rail transportation system at
some point, between its production and ultimate application by the
farmer. In 2011-2012, 61 million material tons of fertilizer products
were sold in the U.S. The delivery of fertilizer products in a timely
manner is critical to farmers. There is only a narrow window of
opportunity to apply the right fertilizer source, at the right rate, at
the right time and in the right place. If farmers do not receive their
fertilizer in a timely manner, there are potential consequences for
food security and the environment. Limited nutrient access during key
utilization periods reduces crop yields which means lower production
and potentially higher food prices for consumers. Additionally, the
inability of farmers to access nutrients during these periods could
encourage use during inopportune times such as frozen or wet
conditions. This could potentially increase nutrient losses to surface
and ground waters.
The 2013/2014 winter was particularly challenging for our members
due to extreme cold temperature and higher than normal snowfall totals
limiting rail capacity and threatening the timely delivery of
sufficient fertilizer to farmers. TFI greatly appreciated the Surface
Transportation Board's (STB) intervention last spring to track
fertilizer shipments on the BNSF Railway and the Canadian Pacific
Railroad. Given our members' reliance on rail transportation and
significant service issues, TFI fully supports policies that will
promote greater competition between railroads and improve the
efficiency and effectiveness of the STB.
TFI commends the STB for last year's efforts to increase
transparency when it comes to rail service by requiring Class I rail
carriers to provide key service metrics. TFI is, however, concerned
that the Board's October 8, 2014, order establishing temporary
reporting requirements similar to last winter do not separately track
fertilizer rail shipments. Furthermore, we are concerned that the
Board's recently-proposed rulemaking to adopt permanent reporting
requirements does not require separate reporting for fertilizer
shipments which are critical to the placement of fertilizer in time for
the spring and fall planting seasons. Notably, the Board's proposed
reporting requirements include grain and ethanol, two products whose
production would be greatly impacted without timely application of
fertilizer. Moreover, the Board's emphasis on these other commodities
provides incentives for rail carriers to prioritize them over
fertilizer shipments when allocating rail cars. As farmers at the April
10, 2014, STB hearing on rail service testified, timely fertilizer
shipments are a very serious concern.
On a separate issue, TFI members have expressed concerns regarding
the new crude oil tank car rules proposed by the Pipeline and Hazardous
Materials Safety Administration. Under the proposed rules, rail car
maintenance facilities will be inundated by orders to retrofit older
tank cars for crude and ethanol over an unreasonably short span of
time. This will crowd out capacity for the routine inspections and
maintenance required by other cars. This will be to the detriment of
other commodities, including fertilizer. Furthermore, the proposed
speed restrictions for High-Hazard Flammable Trains (HHFT) could apply
so broadly that they could add significant congestion to the already
congested national rail network.
The Rail Safety Improvement Act of 2008, which mandated that
railroads implement Positive Train Control (PTC) by the end of 2015 on
main lines that handle toxic-by-inhalation (TIH) materials, also is of
concern to TFI members which ship and receive TIH materials in the form
of anhydrous ammonia used in most all nitrogen based fertilizers, some
finished phosphate fertilizers and several intermediary applications
that produce finished goods for use in the home. Rail transportation is
essential to the safe and reliable movement of anhydrous ammonia. In
most cases, the safest and often only feasible mode of bulk long
distance transportation of anhydrous ammonia is by rail. Shipment of
ammonia by truck alone would place four trucks on the Nation's highways
for every railcar. Shipment by barge is only feasible between a very
limited number of ammonia production and storage facilities located on
a navigable waterway. Rail has proven to be the safest and most
economical mode for TIH shipments over land.
The existing PTC mandate would apply to over 70,000 miles of track
and the rail industry unequivocally has declared that it cannot meet
the current statutory deadline for most of this track. TFI strongly
supports efforts to enhance rail safety, including the deployment of
PTC. However, our members have concerns the railroads would cease or
substantially curtail TIH transportation if they are unable to meet the
statutory deadline. We are also concerned that railroads may curtail
TIH transportation in order to reduce the number of rail lines that
must install PTC. Therefore, PTC implementation must not erode the
common carrier obligation. TFI members must have access to rail
transportation for anhydrous ammonia in order to meet the demands of
U.S. farmers for optimal crop production. For these reasons, TFI
supports Chairman Thune's legislation from last Congress that would
extend the PTC implementation deadline.
We continue to monitor a host of important issues before the STB
and other regulatory agencies. Topics such as unilateral railroad
mandates, railroad pricing power, and reassignment of third party
liability to the shippers are major concerns for our industry. These
and the other aforementioned items will have a major impact on our
member's abilities to serve and supply farmers and meet our goal of
feeding the U.S. and the world.
While there is not a single solution to the ongoing rail service
challenges, TFI, on behalf of our members appreciates this opportunity
to share some of our freight rail service concerns. We look forward to
working with this Committee and Congress on these issues moving
forward.
The Chairman. Thank you, Mr. Jahn, and thank you to all of
you for your great testimony.
And Senators, we'll start with 5-minute rounds and then see
where it goes and how much participation we have. We'll
probably have time to do another round of questions depending
on how many people show up.
I want to start with you, Mr. Brown. As you know, South
Dakota's Genesee & Wyoming property, the Rapid City, Pierre and
Eastern Railroad, which I alluded to earlier, hands off a
significant portion of rail traffic to the Canadian Pacific,
which is a Class I railroad. During the early months of the
transition following G&W acquisition of the line, there were
challenges in managing power and car resources and in
effectively handing off trains. My question is: How do short
lines manage service with Class I railroads and how does that
vary among Class I railroads?
Mr. Brown. It's certainly we have a great--first of all,
we're a customer of every Class I railroad. As a short line
holding company, our various railroads are a customer of every
Class I. We're also partners. So in the case of RCP&E and, our
partnership with CP as we started that operation, we manage it
on a very much multiple, you know, interactions per day basis.
We look at ourselves in our various railroads as an extension
of the Class I's, into the First Mile/Last Mile environment.
For example, in South Dakota, which is a fantastic
operation that we successfully began in last year and it has
progressed well. And we've seen there were some challenges as
we started that operation. There often are as we integrate a
new property into the portfolio of railroads that G&W owns. So
we establish strong communication channels operationally so
that every day, various times through the day, we're planning
for locomotives and how many cars are going to be available for
our customers. We've purchased and brought into that railroad
over 2,000 cars of our own in addition to what CP had previous
supplied to that railroad when it was part of their network.
So we bought our own locomotives. We brought those into
that operation and we hired over 180 South Dakotans to operate
that railroad, and they've done a fantastic job of--yes, sir.
The Chairman. And I'm sure you have to be careful about
what you say in terms of your interchanges with the Class Is,
but are there differences between Class Is?
Mr. Brown. Certainly.
The Chairman. I mean, you obviously interact with a lot of
Class Is.
Mr. Brown. Right. Every one of them. So, yes, every single
Class I, and there are differences.
I understand the networks having formerly worked for two
Class Is and having been well-acquainted with the rest of them.
So there are differences that I see that there's a lot of
attention in the Class Is, all of them in terms of enhancing
their capacity, improving their fluidity, and I'm seeing
results that say they're being successful in improving where
everywhere that we connect with them.
It's progressing well. We all know last winter was----
The Chairman. Right.
Mr. Brown.--off the scale as far as its impact and that has
largely been recovered.
The Chairman. Yes. And we're glad to see the improvements
as well.
Mr. Lonegro, there are disruptions in the rail network that
have cascading impacts. And the question is: how can we better
manage major bottlenecks like the one in Chicago that impact
the fluidity that Mr. Brown eluded to of the entire rail
system? And then, as a sort of a more perhaps specific
question, how have railroads changed their planning for severe
winter weather events like the one that we're experiencing in
the Northeast right now?
Mr. Lonegro. Thank you, Mr. Chairman.
In terms of Chicago, clearly Chicago is the crossroads of
all of North American's railroads. It's the most efficient way
to interchange traffic from west-to-east and east-to-west. So
it's a natural place where all railroads come together; as it
has been historically. You know, Chicago is a situation where
congestion on any one railroad can impact other railroads.
There are also a series of switching carriers within Chicago
that make connections between railroads that don't naturally or
physically exist.
Chicago last winter suffered from the same challenges that
Mr. Brown just spoke of in terms of the winter as well as the
additional volume that we all experienced starting in the
second quarter of last year. There are two ways, I think, to
help look at Chicago. One of those is investment.
And when you look at the create projects or the great
public-private partnership, multibillion-dollar, multi-decade
series of projects that help both freight railroads as well as
passenger railroads and in the individual investment of many
railroads as we all look to make our interchanges and our
individual rail networks as sufficient as possible, there are a
series of committees that are operational committees on the
ground every day in Chicago. We call it the CTCO, the Chicago
Traffic Coordination Office. We each have members that sit on
that coordination office and their job is literally to try to
get freight from one side of Chicago to the other side of
Chicago every day. They have gone into a very revised series of
what they call ``OPCON,'' or Operating Condition changes so
that, if any one railroad gets in trouble, that railroad has to
bring forward a plan to alleviate that congestion. If they are
unable to do so, then the other railroads pitch in and begin to
divert traffic to alternative interchanges.
So there is a lot happening right there. Amtrak has put
together a blue ribbon panel to look at that. Class Is have put
together a retired executive panel to look at ways to improve
Chicago fluidity. Many of us have looked at alternative
interchanges. We just opened one with the BNSF in Smithboro,
which is just Northeast of St. Louis, so that if we do get into
a situation where traffic needs to be diverted from Chicago, or
maybe doesn't have to go to Chicago at all, we do have those
alternative gateways that can help reduce the congestion in
Chicago.
To your winter question: Obviously, last winter took many
of us by surprise; probably the worst winter in 30 to 40 years.
We have winter every year, it's just a question of how extreme
it is, how much snow, how much precipitation, how much cold
there may be. And so, you know, we did dust off our plans and
make sure that they were each as up-to-date as possible. It's
making sure we have the supplies of the right components for
freight cars and locomotives and rail that are temperature
sensitive. You know, everything that we deal with by and large
is steel and steel reacts to temperature both extremes on the
low end and extremes on the high end.
We also have invested in new equipment, what are called
switch heaters and jet blowers. It is, in essence, how we clear
the railroad of snow and ice to make sure that the equivalent
of the exit ramp off of the main line remains fluid. And then,
it gets down to communication and making sure we understand
where certain trains may be in trouble in getting crews and
additional power out there to rescue a train that might have
had a locomotive failure or track failure or car failure.
The Chairman. Thank you.
And anything you can do in Chicago, I know there's a lot
being done, but that was a huge, as you know, bottleneck in
last season.
My time's over. I've got some PTC questions but I'm sure my
other colleagues will get to those.
So, Senator Nelson.
Senator Nelson. So, Mr. Lonegro, you all have been trying
to implement Positive Train Control. There have been some
complications. What can we do to help you and how does the
extension figure into that?
Mr. Lonegro. Well, certainly this committee plays a major
role in introducing legislation to extend the deadline for PTC.
We're appreciative to the Committee and, certainly, your
sponsorship or co-sponsorship and Senator Thune and Senator
Blunt's sponsorship of the extension that you introduced in the
last session. And we look forward to continuing that discussion
with you in this session of Congress.
The extension will be used for the following. The next
handful of years, say 3 years or so, will be the continued
deployment in the infrastructure side. The 30,000 locomotives
that I mentioned in my opening testimony, 23,000 locomotives in
my opening testimony, in the tens of thousands of miles of
signal replacement that we have to do in order to bring it up
to the type of technology that can interface with Positive
Train Control.
So the hardware deployment will continue significantly in
the next 3 years. Certainly, the software is not yet in its
final form and we will look forward to working with our
suppliers to try to get it into final form. And, in some
respects, that merely starts the process of testing in a
laboratory and then testing in the field in order to make sure
that it works in an operating environment. And so, the safety
and the efficiency of that.
And I think it's important to remember the amount of money
and the dedication. Literally, at CSX we have 1,000 people
working on PTC, the industry literally has thousands of people
working on Positive Train Control and they've, in essence, made
it their career and life's work in order to deliver this
technology for the safety of our workers and our communities
and the passengers who run on our railroad.
Senator Nelson. Mr. Johnson, you started the interactivity
and connectivity of rail to the Port of Miami before you
actually did the tunnel, the tunnel for trucks, and the rail
obviously for rail. Share quickly, distill your answer, with
the Committee why the rail connectivity was so important.
Mr. Johnson. Without rail, Port of Miami literally could
not grow. And this is true for a number of ports. Miami is at
the end of a long peninsula; Miami, PortMiami, Port Everglades
as well. Both ports have had substantive rail improvement.
You've got the major road quarter, I-95, it's already heavily
congested. And for PortMiami to grow from just under a million
TEU containers to 4 million, there's no way to move that
product. The success for PortMiami and the billions of dollars
that have been invested without rail, you don't need a billion-
dollar port tunnel, you don't need 50 feet of water.
The ability in this Nation to move the product through, if
you will, an intelligent road system and a rail system is
vital; whether it's the Port of LA in Long Beach, whether it's
the Port of Miami. Without that interconnectivity, you cannot
connect your port to America and then globally. And this is a
global, obviously, trading environment we live in. So rail is
really the heart of it all.
And Senators, you know I made it very well-known, the
linchpin was securing Federal support, which we did through
TIFIA with former Secretary of Transportation LaHood. It was,
in fact, that ability to again partner with Washington with our
state government, Governor, and of course local and our private
sector partner, FEC. A true win for my port and I think it's a
win for America; interconnectivity through rail.
Senator Nelson. And by the way, I might point out to my
colleagues, that was a part of the much maligned appropriations
bill that was trying to give an economic jolt to the country
from the depths of the recession back in 2009.
Mr. Brown, I have been out on a couple of your railroads
and given the fact that we've got some real problems with fiery
crashes, with oil tankers, on the Class I and then you passed
that over to your short line railroads, what are these
challenges of transporting the crude for the short lines in
addition to the Class I?
Mr. Brown. I would suggest that it is somewhat unique in
the short line world. We certainly support enhanced tank car
safety standards that are currently underway. We have, over all
of the G&W-owned properties, we've established some safety
protocols and precautions based upon the type of hazardous
materials that are transported over those unique properties;
their volume as well as the existing level of maintenance of
the infrastructure.
So it is unique in the sense that our railroads do vary in
that level of maintenance of the infrastructure depending on
traffic density, car weights. We talked about, I mentioned,
rail conditions as well as bridge structures, so we look at
where those were, say, crude-by-rail might be operating across
a G&W-owned railroad and we enhance our infrastructure
maintenance as well as apply operating protocols and procedures
for safety.
Senator Nelson. Thank you.
The Chairman. Thank you, Senator Nelson.
I have, in the following order, Senators Blunt, Cantwell,
Gardner who is no longer with us, and McCaskill. So Senator
Blunt and then Senator Cantwell and then the double shot from
Missouri, Senator McCaskill.
STATEMENT OF HON. ROY BLUNT,
U.S. SENATOR FROM MISSOURI
Senator Blunt. All right.
So Ms. Teel, thank you for being here again. I think this
is the second time we've had you testify on a couple of
different issues in the last year and we all appreciate you
being here. And Senator McCaskill and I particularly do.
On the Amtrak route in Missouri that is state-sponsored,
what's the status of Positive Train Control now as it relates
to the Department of Transportation?
Ms. Teel. So right now we operate that service on mostly
Union Pacific's rail line. So Union Pacific, being a Class I
railroad, is installing the PTC at their cost.
Where we're running into a situation is with the terminal
railroads, and they're in a tough spot. You know, we are great
partners with the terminal railroads. In fact, Mike McCarthy,
the President of St. Louis, The Terminal Railroad Association,
is here today. And we're also great partners with the Kansas
City Terminal. They're in a tough situation because were it not
for the passenger rail activity they would not be required to
install PTC. So they host us and we don't have a funding source
to pay for PTC.
In fact, every year it's a challenge just to get the $9
million that we need to operate Amtrak because we don't have
any dedicated funding in the state of Missouri for passenger
rail. So to come up with an additional 20-plus million in
capital on additional on-going maintenance for just that small
section in both of those terminal railroads is going to be a
real concern for the state of Missouri and possibly impact the
future of passenger rail. So we're really concerned about that,
in particular, in regards to those terminal railroads.
Senator Blunt. And has the Department of Transportation
given you any guidance on what you can or can't do or what the
terminal railroads have to do?
Ms. Teel. You know, Amtrak is actually working very close
with those terminal railroads. We contract with Amtrak then
Amtrak contracts with the railroads. And they've been working
closely on trying to figure out how to pay for this, but
ultimately the way the law and the interpretation is today
those responsibilities are going to fall on the passenger rail
portion because of the Class III railroad exemption of passing
PTC.
Senator Blunt. So the responsibility would fall on the
terminal railroad or the state as the sponsor of Amtrak?
Ms. Teel. The state and Amtrak.
Amtrak has some national routes that flow through both St.
Louis and Kansas City terminals and then we obviously have the
state-sponsored route that goes back and forth between St.
Louis and Kansas City. So breaking those into a proportion that
each Amtrak and the state of Missouri would have to pay their
fair share for the portion of PTC that is impacted in those
terminals.
Senator Blunt. OK.
Mr. Lonegro, on this topic in general, I know you can tell
from Senator Nelson's comments and Senator Thune's comments and
many others on this panel that we've been concerned that the
Government itself has been one of the obstacles to meeting the
deadline. Where will railroads generally be by the end of 2015
and what would be a reasonable deadline to, now that hopefully
the FCC and others are working with railroads, to actually get
this accomplished?
Mr. Lonegro. So a couple of questions embedded within that,
I'm sure you know.
In terms of the Government, certainly the FCC and the tower
issue that we confronted last year in and going back from about
mid-2014 to mid-2013, certainly was a major obstacle that we've
since overcome. We are working closely with the FCC on what we
call the tower or the antenna height waiver, which we are
working closely with them. We need that to get through the FCC.
And then, there are some cross border issues between the
United States and Canada that have to get resolved also. In
other words, if a train is coming in from Canada, in order for
it to be PTC-enabled when it hits the boundary between Canada
and the United States, it has to begin to converse with PTC
while it's still in Canada. Right, so we have to get through
that cross border issue.
At the FRA level, we meet with them quarterly and discuss
issues. I think the dialogue has been very candid. At the same
time, as you all know, when the Congress passed the Rail Safety
Act, about one page of that legislation was Positive Train
Control and it has turned into, you know, hundreds if not
thousands of pages of regulation which became final in August
of last year. So some six years after the legislation was
initially passed, we finally have the recipe, so to speak, from
the regulatory perspective on what we're required to do.
Senator Blunt. On the tower-siting issue at FCC, your
railroad particularly is impacted by that. Am I right on that?
Mr. Lonegro. We are impacted by it, but the industry has
about 20,000 towers that have to go through that process. The
majority of those are in the Western U.S. We certainly have our
fair share, but it pales in comparison to what the western
railroads have to put through the process.
Senator Blunt. My last question as my time runs out, is the
FCC now doing what they need to be doing for tower-siting to
happen or are we still looking at an obstacle there?
Mr. Lonegro. We're still looking at an obstacle only
because every tower has certain documentary requirements; so we
have to do field surveys, put documentation together get it to
the FCC, the state preservation societies and the American
Tribes in order for them to review it. So every tower, every
one of those 20,000 sites has probably 100 days or so, you
know, review process that it has to go through. So there still
will be obstacles there based on the streamline process.
Senator Blunt. OK.
Now, the question I didn't get answered, it may have been
unfair for everybody, but how long do you think it'll take your
railroad to comply with PTC?
Mr. Lonegro. If everything goes well, and that's a huge
caveat I know to the answer, our plans take us to 2020.
Senator Blunt. Thank you, Chairman.
The Chairman. Thank you, Senator Blunt.
Senator Cantwell.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman, and thank you
for holding this important hearing. Earlier, I was looking at
the members and attendants and I always think, save the Senator
from Florida, I bet you Washington ports export products from
every single state that was represented here this morning; and
from fossil fuel products to agricultural products, we're the
second largest port now with the combined Seattle Tacoma
alliance. And so, ports are us and freight and freight movement
is critically important for us to keeping our competitive
advantage and it's also very important for us as it relates to
the growing market outside the United States. And doubling of
the middle class around the globe in the next 15 years is a
great economic opportunity for the United States.
I do want to make one note to your comments earlier. My
viewpoint on the rail car issues is that we should go faster.
The administration should get those new recommendations
implemented. I say that because with the 44 percent increase in
the number of rail cars carrying crude in the last 6 years.
My constituents who are now seeing these trains through
every major city in our state, just because of the way they
enter the state and go out to the refineries, they're literally
hitting Spokane through the tri cities, through Vancouver, up
through Tacoma, Seattle, Everett, and then up to the
refineries. So these rail cars are going through every major
population center.
In fact, Seattle is now debating whether they want to make
some new requirements, keeping the commuter trains and these
rail trains which go into these same tunnels at various points
in time, make rules regarding that. So it's a very big issue
for us. So I'm anxious for them to act and I just wanted to
make that a point.
But for our panel today, and I would say, Mr. Chairman, I
hope that we do play, the Commerce Committee, a very big role
in surface transportation issues as that debate happens on,
throughout the Senate and throughout the House. I feel like our
committee has some very important role to play on safety and
security on those. And so, we'll look forward to that.
But I wanted to ask our witnesses, again, because freight
is so important, Mr. Johnson or Mr. Lonegro, about
implementation of the freight mobility board recommendations
and how we--what would your recommendations be on how will we
move to get those recommendations adopted by Congress so that
we can improve our competitiveness of the infrastructure?
Mr. Johnson. Typically, your ports are going to approach it
with their rail partners. So we in part, for example, at the
Port of Miami we really work closely with Florida East Coast
Rail because, truly, they are our partner. So we're looking for
their advice, their input. We have our governmental folk, of
course, who work with us on issues here in Washington, but we
are concerned in terms of implication of cost, delay.
So the big thing for us is making sure that on the
regulatory side that things obviously don't become over
burdensome but also that there's a focus on really supporting
the necessary dollars for the infrastructure. That really is
the key for us. And the programs that have happened
historically, and Senator Nelson hit on that.
The TIGER program was really, really instrumental,
particularly for our ports, and that linkage between rail. We
secure 23 million out of TIGER too for rail. And without that
TIGER Grant that project would not have happened. Of course,
the State of Florida pumped in 11 million, my private partners
from Florida East Coast put in money. So to me as a former port
director, really the focus, the regulatory stuff, is very
important, but we're really sort of focused on that
infrastructure plan and how we make those funding decisions
happen. And I think that's true probably for most ports in
America.
Senator Cantwell. So getting those recommendations
implemented, Mr. Lonegro?
Mr. Lonegro. Yes, ma'am.
I think in terms of the partnership that we talked about,
certainly the short lines are major partners for the Class I
railroads. About 20 percent of our freight either originates or
terminates on a short line. CSX serves 70 East Coast and Gulf
ports. And so, certainly the ports are big customers and
partners for us as well.
Certainly the funding on both of those constituents is
going to be really important. Our job, by and large, is to work
with our customers to develop properties where they can site
new rail-served facilities whether they be at the port or
inland ports or simply manufacturing as that comes back onshore
which is a wonderful thing for us. And then, to provide great
service.
And one of things that certainly was a challenge in 2014
was doing exactly that. We've hired thousands of people that
can run trains, we have invested over a billion dollars in
locomotives. So we believe we have a good line-of-sight into
good service this year. Certainly regulatory certainty is an
important thing for us. The balance and the balanced regulation
on the economic side will certainly keep that in balance.
So, thank you.
Senator Cantwell. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Cantwell.
Senator Gardner.
STATEMENT OF HON. CORY GARDNER,
U.S. SENATOR FROM COLORADO
Senator Gardner. Thank you, Mr. Chairman, and I apologize
for my absence as I attended a small business committee hearing
upstairs.
Great to have you all with us today.
In your testimony today and the written testimony, you've
talked about the need to improve safety on our rail systems of
which Congress, we passed the law for that purpose, and you've
talked about the effort made to respond to that law. We've also
heard about a number of the technical barriers, though, that
have delayed the rail company's ability to fully test and
implement this technology by the end-of-the-year deadline.
Obviously, all of us are in strong support of railroad safety
and the safe freight, safe rail system. And I know everyone
here is as well.
What I didn't hear too much about today and I'd like to get
into it a little bit more is another type of safety and that
deals also with our national security, and that concern being
the issue of cybersecurity. Safety technology requirements from
the law basically allows a computer to overrule human error
when operating a train, as I understand. When this happens,
then the system or the rail line shuts down until the problem
is solved. As we hear more about cyber attacks on our country,
I'm concerned that not giving enough time for this technology
to operated could me we unnecessarily open our rail lines up to
cyber attacks and other concerns.
In the name of safety, is there an issue that we are not
addressing that could in fact make our rails less safe?
Mr. Lonegro.
Mr. Lonegro. Thank you, Senator.
I believe that we are working on cybersecurity in the realm
of PTC. We have one of the most well-known national labs that's
looking at it from an independent, third-party perspective to
make sure the cybersecurity challenges are accounted for. As I
know you are aware, cybersecurity is always a defensive
measure; right? And so, every day there are new ways that
either nation--states or individuals can attempt to infiltrate
whether it's governmental or business or personal, you know,
accounts and technologies.
I think the important thing in the PTC realm is that the
data transmissions and the communication's networks are
encrypted with state-of-the-art encryption; so certainly the
messages and the data transmissions are secure as anything else
we're able to transmit today.
The other thing, and I think again it's important to note
where you talked about the technology coming in and taking over
control of the train, the only interface of PTC is to the
breaking system. Right? There is no throttle control by the
system for Positive Train Control. So, you know, the failsafe
mode for Positive Train Control is to bring the train to a
stop.
Senator Gardner. To a stop. OK.
And in your opinion--and anybody else would like to address
the question, please feel free to.
In your opinion, is there adequate time, though, to provide
the kind of testing that you're carrying out?
Mr. Lonegro. No is the answer. Certainly not against a
December 31, 2015 deadline. You know, the security elements,
the safety elements, of being able to test all of this and, you
know, to hire smart people to try and break into it, are
certainly things that we will do. But you can't actually do
that until the system is complete.
Senator Gardner. Yes. Thank you.
Mr. Chairman, I yield back.
The Chairman. Senator McCaskill.
Thank you, Senator.
STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. As you can tell, my voice is not what it
should be which is a cause for rejoicing in many places around
the country and in this complex. So I will not spend a lot of
time questioning today. I want to associate myself with
comments and questions of my colleague, Senator Blunt. And I
have a number of questions I'll submit for the record about
issues, such as the transporting of crude which is one of the
reasons I support the pipeline. I'm one of many but it's one of
the major ones that the transportation of crude across my state
is an everyday occurrence and something that we're concerned
about in terms of overall safety.
This issue with the Kansas City Terminal Railroad is
complex, it's hard and I just want to state for the record that
it is unacceptable that we would disrupt passenger service in
Missouri over this issue. It's unacceptable. We have tens upon
thousands of people that rely on the trains in Missouri. It
isn't like the Northeast quarter, but it's essential in my
state.
And so, I would like to see--everyone knows that Congress
is going to probably adjust this deadline and I would like
there to be a more realistic target for the deadline, which
gives us time to try and work this out among the various
players that need a way in and help here. This can't be all on
Amtrak, it can't be all on MoDOT and frankly the question is
whether or not this is the right way to put all of that
responsibility there because of what the rule currently states.
So I hope we can get quick action on the PTC delay bill in
order to give some more certainty to the environment in
Missouri so we can make sure that we have and continue
passenger rail service.
I apologize for my voice and I'll submit the rest of the
questions for the record.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator McCaskill.
Senator Fischer.
STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. Thank you, Mr. Chairman.
Everybody up here has some health issues today. So I would
apologize as well.
Mr. Lonegro, could you talk a little about your overall
capital investment plan and what might happen to that plan if
government did things to either restrict your revenue or change
your regulatory structure based on how much revenue that you
generate?
Mr. Lonegro. Thank you, Senator.
Certainly all Class I railroads are spending at record
levels both because of the growth that we've seen as well as
making sure that we run a safe and efficient rail network. And,
as luck would have it, we just released the details of our CSX
Capital Plan to our customers. One of the things that we've
done in the last few months is truly open up a transparent
dialogue with our customers around service as well as around
the capital expenditures.
And so, you know, rail as you know is a very capital
intensive business. We're going to put in 3 million tons of
ballast, 3.2 million crossties, we're going to rebuild 95
locomotives, buy 200 new ones, and spend $100 million on
technology. In the $2.5 billion capital plan that we have, and
I think it's important to note that $300 million of that is for
Positive Train Control. Additional regulation generally costs
money and certainly having some balance there and being able to
look at what I'll call the aggregate weight of all the
regulation, I think is an important thing. And certainly, as
you get into reregulation topics, anything that constrains the
topline will ultimately constrain the ability for us to
reinvest in the railroads.
Senator Fischer. So, when we look at the STB revenue
adequacy standard, that will affect your ability to invest in
the future?
Mr. Lonegro. It could. It depends on certainly all
railroads meeting that revenue adequacy test and certainly
looking at the future growth opportunities that we have. If
we're unable to build capacity in order to hand, you know,
handle that additional growth, then, yes, it could.
Senator Fischer. And then, just one question on the PTC
that you've been asked about on the regulations there. What are
the challenges that you see in getting it installed? We've
heard some that Congress has highlighted, but what do you see
as that and, when it's finally deployed, what are the
challenges that you will be facing?
Mr. Lonegro. So a fair interpretation of that question
would be: What have we been doing?
And certainly designing the requirements we----
Senator Fischer. And how are going to do it in the future?
Mr. Lonegro. Absolutely.
We literally started from scratch. Now, many people have
testified that Positive Train Control in theory has been around
for a long time and it has. It certainly did not, you know, it
wasn't able to comply with the requirements that we've received
as part of this. And so, the most mature piece of software was
the onboard system and yet we haven't received the final
version of that to be able to comply with these requirements.
So the software has been a challenge.
You know, every railroad's information technology
infrastructure is slightly different. Right? The dispatching
systems, for example, are all different. And those have to be
integrated in such a way that they can speak the language of
PTC.
The railroad signaling infrastructure, which runs a very
safe railroad, has to be replaced to get up to the modern
technology that PTC represents. And so, we're investing,
literally, billions of dollars in replacing prematurely, in
many respects, the signaling system.
The communications infrastructure; we've literally have
built as an industry our own brand new radio network. You know,
we're all blessed with cellular technology but as you know,
especially, you know, in more rural parts of the country and
out West, cellular is not a ubiquitous, you know,
communications vehicle. So we had to invest in our own radio
frequency in order for that to happen; you know, making sure
that is safe and secure, to the earlier question that we had,
is an important thing from an IT perspective.
Moving forward, what are the challenges; right?
The challenges are technical in scale, right, because of
the reasons that I just mentioned and certainly some of the
regulatory hurdles that we've had, and may likely encounter in
the next handful of years.
The care and feeding of the system will be expensive. You
know, when you, for example, for us at CSX, we'll spend at
least $1.9 billion on PTC; right? The majority of that is in
the new signaling system and in the technology and the
retrofits of locomotives. Much of that is hardware and
software; right? That has to be replaced every so many years.
Right? And the support of the systems that we procure from
other people have a maintenance cost every year. So, you know,
hundreds of millions of dollars of incremental cost every year
will come to the railroads in order to continue to support this
technology going forward.
Senator Fischer. Do you think it is wiser to look at seeing
the implementation of this on a regional basis or do you think
we're going to reach a point where we're going to be able to
flip a switch and have the whole country lined up?
Mr. Lonegro. I absolutely don't believe we'll flip a switch
and do what we call a hot cutover. This technology needs to be
phased in. There are people that need to be trained. So
specifically crew bases that run our trains, the engineering or
what we call ``maintenance of way,'' and communications and
signals workforce in the field, all have to be trained on this.
We have about 32,000 people in our company and 80 to 90 percent
of those folks will have to be trained on Positive Train
Control. So the training element of things. You know, all of
the time tables, what we use to run the railroad, will have to
be updated. The dispatching system runs the railroad by
segments. And so, those segments have to be cutover into PTC.
So we see, you know, a very methodical phase-in to this,
hopefully starting with, I'll say, some of the easier
territories or less dense traffic territories first and
ultimately getting up to place, you know, where
interoperability will be, you know, of a significant magnitude.
Think of places like Chicago where you have so many railroads
that are coming together. Washington, D.C. and Northern
Virginia will be similar in that thing.
Senator Fischer. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Fischer.
Very quickly, Mr. Brown--Mr. Lonegro, you said 2020 for
PTC.
Mr. Brown, when do you see your railroad being----
Mr. Brown. Yes, well, in our situation of course, we have
to work with all the Class Is. So every Class I has some unique
qualities to what they're developing. Although, very similar
but some unique qualities. So it depends upon the Class I's
completion of their projects.
So I really can't give a date without having every Class I
come to the table with a, you know, how they see their, as Mr.
Lonegro mentioned, the phase-in of their systems. Everywhere
that we interface with a Class I as it is phasing-in its system
we will then phase-in our system. So it very much depends upon
the Class I timetable.
The Chairman. OK, thank you.
I have Senator Daines, Markey and Moran.
STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines. Thank you, Mr. Chairman, and thank you for
holding this hearing today.
I represent the state of Montana. We are home to over 3,000
miles of railroad track and we move a lot of products. In fact,
we heavily depend on our railroads for our ag industry.
Agriculture is our number one industry in Montana; it's a $5
billion a year industry. For example, 80 percent of our wheat
crop is exported overseas. And so, it's our connection from the
rails to the ports that allows us to grow our businesses back
home.
We've had a lot of success and growth certainly in the
energy industry as well. Certainly, we see a lot of coal trains
going by, we see the growth now with the Bakken. It's not just
a North Dakota experience, the Bakken spills into Montana as
well.
In fact, today I met with the Montana grain growers. I
literally just came from meeting with them to this hearing.
They ship over 130 million bushels of wheat to the Pacific
Northwest Terminals each year. And we've had some constraints
and been working with our rail carriers, but it should be known
to you.
And today, we're going to be having the Keystone Pipeline,
some more amendment votes and hopefully get this Keystone
Pipeline passed in the Senate. Just some quick math, the
Keystone Pipeline, there will be oil coming into an onramp in
Baker, Montana. What that means overall for the supply chain is
the equivalent of 4,000 rail cars a month. And that's just the
Montana/North Dakota oil that would come into the Keystone
Pipeline to be one more avenue in the overall complex supply
chain to allow us to maybe reduced some of the constraints that
we see right now in rail.
So it's yet another argument for the need for the Keystone
to allow us to more efficiently transport our goods to market.
Mr. Lonegro, I really see you do not have operations in
Montana but I was a supply chain guy back in my days at Procter
& Gamble and the complicated nature of logistics in forecasting
and so forth. We've had some capacity constraints in Montana.
It's a byproduct of economic growth, which better to have
constraints probably than excess capacity but known the less
constraints.
How have you addressed rail capacity issues in other
regions of the country when you look at solving some of these
challenges?
Mr. Lonegro. Thank you, Senator.
And you're right, we don't serve Montana but we certainly
take interchange from many railroads which do serve Montana.
You know, again, 2014 was a situation where winter hit us
first and for essentially the first 3 months of last year we
were a bit under siege because of the weather, yet the volumes
that we experienced in the first quarter really didn't drop off
which told us there was a lot of demand there. In the second
quarter, literally the first day the sun came out and the snow
stopped falling we began to get significant growth. And, you
know, when we plan for, say, three percent growth and we get
six or eight or 10 percent growth, that's a significant uptick
for our business.
The other thing we experienced last year was bit of a
geographic shift in our business. We saw a lot more traffic
that went between, say, Chicago and St. Louis into the mid-
Atlantic and into the Northeast. So you know, not only did we
have abnormally and un-forecasted growth, we also had it twice
that much on that Northern part of our railroad. So what are we
doing about it?
When we got to the point in the second quarter of last year
where we believed that this growth was going to be sustained
rather than simply penned up demand from the harsh winter, we
began to pull a lot of levers. The first of those levers was to
hire more people. You know, our train crews take between six
and nine months to go from somebody that you hire off the
street to get qualified to actually run a train and operating
service. And so, that length of time, that lead time on that
particular resource, was pretty significant.
We hired about 2,000 people last year and we still have
about half of them. A little less than half of them are still
on the pipeline which will come out of our training and on-the-
job training qualification in the first four months of this
year. So train crews are really an important thing.
The locomotives are also an extremely important part of the
equation. We brought 400 more locomotives into our fleet last
year; a combination of leases plus what we had in storage.
Again, as the seasons ebb and flow, you have locomotives that
might be in service or storage. So we took all of those out of
storage. And then, we issued a purchase order for 300 new
locomotives at, you know, in the high two point something
million per copy. And so, we pulled that----
Senator Daines. What's the lead time on a locomotive?
Mr. Lonegro. Upwards of a year.
Right, so we're just beginning. We've got the first two
locomotives that came out of that purchase order literally
today. And so, we'll see the first 75 of those ratably
throughout the first five or six months of this year. The rest
or the remaining 125 we'll get in the second half of the year.
A hundred next year and then we also have a rebuild program
which is pretty significant; 100 more units out of that. And,
150 units out of what we call ``the heavy repair program.'' So
we literally will have another three or 400 locomotives in
service this year on top of the incremental 400 locomotives
that we put into service last year.
Senator Daines. What metrics do you use to measure customer
service?
Mr. Lonegro. Well, J.D. Power is certainly a measure that
we look at both internally as well as allowing the customers to
have verbatim comments. So J.D. Power, being an independent
agency, helps us understand both quantitatively as well as in
narrative form what are customers are saying. And, you know,
candidly our local service, so that First Mile/Last Mile that
Mr. Brown talked about in his opening statement, was one of the
highest scores that we saw. Certainly the network, because of
all the factors that we've already mentioned, we saw some
degradation in the----
Senator Daines. I imagine you have some internal metrics so
too you're using there?
Mr. Lonegro. Absolutely.
Senator Daines. Yes.
Mr. Lonegro. Absolutely.
Senator Daines. Yes.
Mr. Lonegro. So things like what we call ``CTA,'' Committed
Time of Arrival, on-time arrivals, on-time departures, line of
road velocity, you know, the number of cars on line, we have a
measure called ``LSM,'' local switching----
Senator Daines. What has been the biggest challenge in the
last, say, 12 to 24 of achieving your customer service goals?
Mr. Lonegro. It has truly been resources.
Again, if the growth hadn't been as great as it was and
we're all very thankful that the economy is growing, at the
same time when we poll our customers and we do this all the
time, we poll our customers: What do you guys see? And how
much----
Senator Moran [presiding]. The gentleman's time has
expired.
Senator Daines. OK.
Senator Moran. Thank you.
Senator from Massachusetts, Senator Markey.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much.
In Massachusetts there is nearly 1,000 miles of freight
track which supports millions of dollars of goods that move in
and out the commonwealth each year, and we need to clearly
continue to invest in our aging infrastructure and modernize
our systems for the twenty-first century.
Safety in our rails is also paramount. Passenger trains
often also share the same tracks as freight trains. Certain
trains carry hazardous materials through our communities and
pass our backyards. Rail lines and roads cross off in creating
dangerous intersections. For all these reasons, safety is most
sacrosanct. And, I look forward to working with the members of
the Committee on the important safety issues that are under the
jurisdiction of the Commerce Committee.
Unfortunately, the increase in oil shipments by rail has
come with an increase in horrible accidents; 2014 was a record
year for spilling oil on railways with 141 reported
unintentional releases. These accidents resulted in explosions,
polluted groundwater, destroyed property and city-wide
evacuations. In 2013, a train derailed and exploded in a small
Canadian town just miles from the Maine and New Hampshire
boarders killing 47 people, destroying much of the town. And we
need to make sure that we do everything to avoid another
catastrophe like this.
So I am very concerned about the Department of
Transportation's failure to adopt new rules that address the
retiring of old DOT-111 tank cars that clearly pose a danger to
our citizens and our communities. Secretary Foxx announced a
rulemaking for the safe transport of crude oil in July 2014.
We're still waiting for those final rules, but the longer we
delay, the more that lives are actually in danger. And those
standards call for tank cars both for retrofitting old cars and
building new ones for tank car thickness, the length of time,
how long the shippers have to refurbish or build new cars, and
the speed and the routes which these trains take. All of this
is in this rulemaking. I think it's critical for us to get some
servitude in terms of what the new rules are going to be.
So Mr. Brown and Mr. Lonegro, just a question to the two of
you. About a year ago, Genesee & Wyoming train carrying 2.7
million gallons of crude oil derailed in Alabama igniting and
spilling oil all over the surrounding wetlands. I'm going to
ask you two to tell us what your company is now doing to make
sure that that does not happen again.
And Mr. Lonegro, last year a CSX train derailed in Virginia
and spilled 30,000 gallons of crude oil into the James River.
What is your company doing to make sure that the safety of oil-
carrying rail cars has been made more safe and we can give
assurance to those neighborhoods?
Mr. Brown.
Mr. Brown. Yes, sir.
So as I mentioned earlier we have established some safety
precautions and protocols that we've applied across, not just
where we handle crude-by-rail, but all hazardous materials on
our various railroads. So those protocols include things like
enhanced infrastructure testing, rail flaw detection testing.
It includes track geometry testing, that has been enhanced.
We've increased the number of inspections we do. We've changed
the visual inspection protocols so we're actually inspecting
our infrastructure more frequently. We have--and often we do
that just in advance of a crude oil train if that particular
commodity is being handled on one of our railroads where we
have several that do that.
So with a whole slate of initiatives, precautions and
protocols, we believe we've far enhanced the safety of the
operation and therefore our focus on prevention of future
incidents of that type.
Senator Markey. Thank you.
Mr. Lonegro.
Mr. Lonegro. Mr. Senator, understanding the volatility, the
product clearly is part of this equation. We look forward to
continuing to work with the regulators in order to reach a
balance in the tank car standards. We do worry about the tank
car builders and the freight car builder's capability to build
those and the impact that that will have on the building of
other cars which are currently in their portfolio that would
have impact on other commodities.
There is the homogenization between the Canadian possible
rules and the U.S. possible rules in making sure that the
international travel of crude-by-rail can be supported. We have
a heavy increase on what we call ``train securement rules.'' So
making sure that any train that is stopped is; a, not left
unattended and; b, is securely tied down to prevent accidents
like you referenced in the Canadian incident a couple of years
ago that was very tragic.
The routing and making sure that we have an appropriate
balance of the safety and the security that PHMSA has put
forward; the 27-factor test, in making sure that we are routing
them through that set of standards. We have reduced the speeds
on crude-by-rail voluntarily to a maximum speed of 50 miles an
hour on the network and 40 miles an hour through high threat,
urban areas. However, the modeling work that we've done
indicates that going much below that could cause dramatic
impacts on service more broadly.
Train first responders is an important thing. If an
incident unfortunately does occur; making sure that everyone
understands the commodities that we're dealing with as well as
how to handle a freight rail situation versus, say, a house
fire or something that might happen on the roadways.
To go farther on Mr. Brown's points around the track
standards, the level of inspections that we have is very
important and certainly the time-frame between finding
something and fixing something. We have shrunk that
dramatically and made sure that we immediately issue a slow
order so that all trains have to slow down if they happen to go
over a piece that has been detected by that inspection
technology.
Thank you.
Senator Markey. Mr. Chairman, I appreciate your indulgence.
The witnesses had important information but I did go over and I
apologize.
STATEMENT OF HON. JERRY MORAN,
U.S. SENATOR FROM KANSAS
Senator Moran. Thank you, Senator.
In my new-found status as Chairman Pro Tem, I was anxious
to rule you out-of-order and move forward and----
[Laughter.]
Senator Moran. But, I am anxious to do that because it is
now my turn to ask questions.
[Laughter.]
Senator Moran. Apparently, because I went to Senator Markey
first, they're suggesting that I now call on Senator Manchin
who was to be ahead of the gentleman from Massachusetts.
Senator Manchin.
STATEMENT OF HON. JOE MANCHIN,
U.S. SENATOR FROM WEST VIRGINIA
Senator Manchin. Thank you very much, Mr. Chairman.
And thank you all for being here today.
West Virginia, as you know, is quite a rail state and if it
wouldn't for rails we might not be there; to be honest with
you. But we have 2,200 miles of rails and it's some of the
best-paying jobs so we appreciate the opportunities; and the
ancillary jobs that come from that. Very much so. With that
being said, I start looking at different things going on with
debating the XL Pipeline; we've talked a good bit. Senator
Markey just mentioned some things concerning that and the
concerns we have; the dangers of hauling that and how to make
it safer.
With the XL Pipeline, I believe and I think everyone here
believes it will be built. We just don't know exactly when, but
it will probably be built. With that being said, how is that
effecting the railroads? Because I know you're upgrading your
systems to be able to handle 800,000 barrels a day and the
pipeline will take that tonnage away from you, or that revenue,
and you'll be building up infrastructure for that. Is that your
model or your plan? How do you all prepare for that? So if I
could ask anybody to chime in here.
Start with CSX since they're one of the bigger carriers
in----
Mr. Lonegro. Thank you, Senator.
Senator Manchin.--West Virginia. Norfolk Southern.
Mr. Lonegro. Yes, we're proud supporters of West Virginia,
as you know.
The rail industry by and large is growing, and one of the
opening remarks that the Ranking Member made at the beginning
was that rail freight would grow nearly 100 percent by 2035. So
there is ample growth in many different markets in order to
handle the capacity that we're building. We're certainly
forecasting growth in many markets not simply in the crude
business. Crude represents somewhere between two and 3
percent----
Senator Manchin. Right.
Mr. Lonegro.--of the rail volumes.
Senator Manchin. You don't see that as a threat to your
model or your plan and your investments that you're making
anyway?
Mr. Lonegro. Correct.
Senator Manchin. Do all of you feel the same way, what
you're seeing and analyzing it?
Mr. Brown. Yes. I mean I think in the short line where,
very similarly, we see some growth in some market segments. We
see diminished volumes in other market segments over time and
we're preparing for----
Senator Manchin. So we don't have the railroad pitted
against the oil, the pipeline.
Mr. Brown. No.
Senator Manchin. OK. You think it's basically they work
together?
Mr. Lonegro. Certainly, we would like to move most of it by
rail but----
Senator Manchin. I understand.
Mr. Lonegro.--there are refineries on the East Coast, which
I'm sure will still need crude-by-rail and we look forward to
continuing to serve them.
Senator Manchin. The other thing, infrastructure such as
highways and waterways, projects for infrastructure, we've been
able to streamline that through legislation. For some reason,
we weren't able to streamline the permitting process for rails
for projects. And they're still very, very costly, very time-
consuming. Do you all have, I mean, a way that you can try to
give us some help here that we can help you all to streamline
the needs that we have for infrastructure including rails in
this country?
Mr. Brown. Well I think, and from my perspective, a
critical part of doing that is the short line tax credit being
extended over a period of time and just a two week extension at
the end of 2014 that leaves a lot of potential investment.
Senator Manchin. So then, shortening the tax code gives you
some insurance?
Mr. Brown. Right.
So it leaves a potential return on investment in hanging in
the balance when you know how the tax credit may apply or not
apply.
Senator Manchin. What kind of cost are you incurring
because of the permitting process; basically, the time
consumption in permitting process? Is it 1 percent, five
percent or more? I mean, do you have any idea that it's adding
significant cost to you?
Mr. Lonegro. It's certainly adding a lot of opportunity
cost. A lot of the infrastructure that we build, we're building
because customers need that infrastructure to generate
additional capacity so that we can handle their additional
volumes. And so, the length of time that it takes, the amount
of money that we end up paying consultants and lawyers in order
to help us through the process, any reduction in time and the
amount of documentation and review process that it has to go
through will help us put that infrastructure in the ground more
quickly.
Senator Manchin. PTC would be the next. The Positive Train
Control, I think you've talked--I had to go to other meetings.
If anyone can chime in on that. I know you're not going to make
the 2015 deadline; correct?
Mr. Lonegro. Correct.
Senator Manchin. And you all spent, what? Five billion so
far?
Mr. Lonegro. Correct.
Senator Manchin. OK.
Tell us, and if you're repeating, I'm sorry. But, any quick
solution to that or resolve to that, and what time extensions
do you need?
Mr. Lonegro. There aren't any quick solutions,
unfortunately. We, to your point, have invested $5 billion so
far. We'll invest another $4 billion as an industry before we
are all said and done. I was asked a question by the Chairman
about how long it would take CSX in order to complete Positive
Train Control and I suggested that with a large caveat; and
that is that everything goes well from here on out, that our
plans take us through the end of 2020. And so, we're certainly
looking forward to working with this committee in introducing
legislation very similar to what was introduced in the last
session.
Senator Manchin. Thank you, Mr. Chairman.
Senator Moran. You're welcome.
Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much. I appreciate it.
Thank you to all the witnesses.
Just as Senator Manchin was talking about his state, the
State of West Virginia, Minnesota also has a lot of train
service, a lot of freight service. In fact, we hit a record:
$6.8 billion in agricultural exports in 2012, which is actually
a 13 percent increase over the previous year and it's
continuing to go up. We are the fourth largest agriculture
exporting state in the country. So you can imagine we care a
lot about the freight rail issue. We are proud of the work
that's going on next door to us in North Dakota and it has
helped to bring down the cost of oil and it has helped to bring
down the cost of manufacturing. So it has been good, but we
also have a lot of needs for rail. And so, I think it has been
a balance with all of that as well as our increasing
agricultural market.
And I'm truly one to believe that the way we have gotten
out of this downturn and the way we now expand our economy is
by bringing more goods to market by exporting to the world.
We've learned we're not--we have a steady domestic economy, but
the way we truly expand is by getting these goods to other
markets and making things in America again. So that's why I
care so much about this.
Our farmers have traditionally held a competitive advantage
over foreign producers like Brazil and Argentina due to the
reliability and the cost effectiveness of our rail. And because
agriculture is the largest user of freight transportation in
the U.S., the rail service delays we saw last year resulted in
a lot of cost increases. And, obviously, you know, it's
damaging. But, what I'm concerned about, it starts making us
less competitive with these other food producers.
So Mr. Jahn, what do you think the impact would be on
domestic agriculture from American export markets turn to
producers like Brazil and Argentina?
Mr. Jahn. It would be significant. As you said, agriculture
is in some ways leading the economy and we're very quickly
going from a world that has 7 billion people to, in the year
2050, we're going to have 9 billion people and they're all
going to want to eat. They're going to need agriculture to help
provide that for them, and certainly fertilizer.
And so, we're very concerned that while the significant
investments that have been talked about today, the railroads
are spending billions of dollars, but we see that
unfortunately, they're not adequate in many areas to meet the
demand. And, whether it is grain, intermodal frac sand, and a
number of different areas, we'd like to see more focus on the
ag space. And that's why last year the Surface Transportation
Board, as you know, required sort of a reporting----
Senator Klobuchar. And has that been helpful? We worked on
that too----
Mr. Jahn. Absolutely.
Senator Klobuchar.--members of this committee.
Mr. Jahn. And we appreciate that. And it's interesting how
effective sunshine in transparency can be in terms of
motivating productivity.
And you mentioned in terms of peak capacity. One thing I'd
like to note is in 2014, we're very close to peak carload
volume and everybody expects growth again this year. So we're
looking at a network that is strained. And, any time there's
any kind of a challenge or a shock whether it be weather,
record harvest, et cetera, it's very tough for that network to
respond. And so, that's why we're supportive of efforts to try
to address that ahead of time rather than after the fact.
Senator Klobuchar. Thank you and we have seen, I will say,
some of our markets, we've seen some improvement and we want to
keep that up. We had got some help with some of our iron ore
shipments that had to go out and some of the issues up in
Northern Minnesota because as you know the lakes freeze at some
point and we weren't going to be able to get the things to the
shipments to the ports. And we also had some improvements with
propane, which we were worried about. So I know that the rail
companies are trying to improve this, but it's just been a
growing problem. We want to make sure that ag people understand
the importance of ag as we go forward.
Another challenge to the implementation, I know some of my
colleagues asked about the PTC implementation, is that the FCC,
as you all know, must approve the siding construction and
replacement of the 25,000 communication towers and antenna
structures. I know Senator Blunt, I wasn't here for his
questions because we have a little confirmation hearing going
on for the Attorney General in Judiciary, but I wanted to
follow up on something he touched on with you, Mr. Lonegro.
And that is: following the FCC's announcement last year,
that the Class I freight railroads could begin using previously
constructed poles, something that we advocated for, do you
think a batching will help streamline the approval process?
Mr. Lonegro. I appreciate the support for the streamlining
efforts and the exemption for existing towers. That was
certainly very helpful and brought that number down to that
20,000 that you referenced. My sense is that the batching will
help streamline the process. There is a limit to the amount of
batching. For example, we can't send all 20,000 through at one
time. And so it will certainly help and, at least in the pre-
program comment and the post-program comment timeframes that we
saw, we are seeing the approval process in essence reduce by
upwards of half. So I think it has been helpful. I think it's a
magnitude problem now.
Senator Klobuchar. Right, very good.
My last question, just to you Mr. Johnson, coming from the
port perspective. We have a little different port than your
port, but up in Duluth we have a major port. And obviously part
of this has been trying to, with the increase rail usage, to
coordinate it in a multi-modal way with the ports. Can you talk
about the importance of connecting freight rail and the ports
and how do you think we better align planning from the Federal
Government among the states, ports and local communities to
address those choke points and what has been going on?
Mr. Johnson. Thank you, Senator.
My testimony really focused on the importance of
connectivity. Clearly global trade is a huge part of the driver
of the U.S. economy and will continue to do so, including the
agriculture.
The ports, to be successful, I stated that no port today, I
believe, can be successful without having rail and intermodal.
And so, for us, at the end--in Miami, at the end of a long
peninsula, it's very important that we have partners like CSX,
FEC and Norfolk Southern because they are the ability for us to
go from a million TEU containers to 4 million. We have the
other infrastructure, but without the ability to move the
product--you can't move it on your nation's highway system. I
can't grow double, triple volume just by moving to up I-95.
So it has to get into the Heartland of America and that's
where FEC connecting to CSX up in Jacksonville; Norfolk
Southern, that's the vital link. The policy and, again, I think
over the last few years--I will say this: I've notice more of
an interest on the part of U.S. DOT and all of this, I think,
focused partly on the TIGER grant. A number of ports, including
mine, received TIGER funding.
Senator Klobuchar. So did ours.
Mr. Johnson. Mine was, again, for rail intermodal. But, you
know, I think you won't find at any port, large or small--the
entire system of ports in the United States believes in the
importance of connectivity not just within our country, but
clearly the ability to connect to the globe; globally to the
world.
And rail is essentially there. Not just deepwater; water is
important, dredging is important, harbor maintenance is
important. But oftentimes rail is the missing link. Excuse the
pun there but it is, in fact, the vital piece. And as I've
stated, the billions we've invested in Port of Miami would have
been for not. A billion-dollar port tunnel, 50 feet of water,
make no difference whatsoever without having that rail
connection.
Senator Klobuchar. All right.
Mr. Johnson. Thank you.
Senator Klobuchar. Does anyone want to add?
Thank you very much. I'm going to go back to the Judiciary
hearing.
If you have any questions you want me to ask, Senator
Moran, let me know?
Senator Moran. I trust your judgment.
Senator Klobuchar. OK.
Senator Moran. Let me start with Mr. Brown.
Mr. Brown, I introduced the 45G tax credit in the year 2003
as a House member.
Mr. Brown. Yes, sir.
Senator Moran. I apologize for our inability to reach
decisions in regard to its extension, other tax code provisions
in any kind of timely fashion that would provide a level of
certainty in an ability to make better decisions about
investments.
This hearing and this committee is generally focused on
rail transportation and the safety aspect of rail. What does
45G do that allows you and other short line railroads to be
more safe in your operations? It's thought of as an
infrastructure investment but I assume there are consequences,
the money that you spend on infrastructure as a result of 45G,
means that there is an ability to support other efforts within
your company in regard to rail safety. Is that a fair
assumption and would you describe that to me?
Mr. Brown. Yes, sir.
Senator Moran. Why does this matter?
Mr. Brown. Thank you, Senator.
It's actually very critical. It just allows--we have a
limited amount of capital that we can invest in properties.
Some of the railroads are challenged because of low density.
They serve important customers but often it's a very low
density customer. It's often a customer in a rural area who
otherwise would not have the ability to have a rail service
provided to them. So it allows our capital, our limited capital
dollars to be spread further. And certainly those capital
dollars are invested based upon the important upgrading of
infrastructure from a safety perspective.
So as we prioritize our investments each year in our
infrastructure, we're certainly basing that upon improved
safety through improved infrastructure integrity. Maybe it is
bridge upgrades; it might be taken from 263,000 weight limits
to 286,000 weight limits for cars. Things that make it more
economically viable for our customers to safely and
efficiently, over those short lines and often again in rural
areas, over those short lines link to the Class I networks and
therefore throughout the entire transportation network.
Senator Moran. Well, what I wanted to make certainly that
we get on the record is that while 45G is an important tool for
providing greater efficiency, it also has a significant
consequence to the ability to provide safety. Is that true?
Mr. Brown. Yes, sir.
I mean, the vast majority of what we are investing in is
crossties, rail, upgraded bridges; things that improve the
integrity of our infrastructure and that absolutely goes to
safety first.
Senator Moran. Well, the intention is that I think Senator
Wyden, Senator Crapo and I and others, will introduce the
extension of 45G here in the next few days. And I look forward
to educating and encouraging our colleagues to continue to the
practice of utilizing that provision of the tax code for the
benefit of safety and efficiency.
Mr. Brown. Yes, sir.
Senator Moran. Certainly matters in places like Kansas
where short line rail has become such a significant component
of how we get agriculture goods and products to market.
Ms. Teel, in an effort to be--it's easier to be bipartisan
here than it is to be Kansan supporting Missouri.
[Laughter.]
Senator Moran. But I just wanted to make the offer to you
and to Senator Blunt and Senator McCaskill that those trains
that operate in Kansas City are also the trains that operate in
Kansas. And so, if I and my staff can be of help to you and to
the terminal circumstance in Kansas City, please ask us to help
in ways that we can. Kansas City is a major terminal for what
transportation occurs in our state. It's growing. BNSF on the
Kansas side, its intermodal facility, but what happens at your
terminal is critical to us and I'd be glad if you have
something you want to tell me this morning that we ought to be
focused on or remind me of its importance of what you do to
Kansas.
Ms. Teel. Thank you. I appreciate your support very much,
Senator.
Senator Moran. You're welcome.
Ms. Teel. I look forward to working with you.
Senator Moran. Great.
Let me ask some questions about circumstances that we found
in Kansas. Our utility companies have expressed some concerns
about access to coal. Our grain elevators have expressed,
particularly a year or so ago, a concern about access to rail
cars for pollen grain. And the culprit, at least in the
explanations that we're often provided, is that rail cars are
being used for the transportation of petroleum for oil and
therefore less available for grain and coal. Is that--and I
assume the suggestion is that there is more money to be made in
hauling oil than there is in hauling either one of those
products. I'm interested in knowing if that is an either/or
situation is true.
This is probably, again, a Mr. Brown question for the kind
of things that you're hauling. But is there a decision that's
made based upon the most profitable return based upon the
commodity being hauled? And I would guess that there's a
consequence now to declining oil prices such that the
circumstance that you may have been in with a shortage of rail
cars is less of a problem today than it was. Maybe the benefit
of Mr. Jahn's customers, fertilizer prices may be slightly
lower and you will be hauling more fertilizer. But any thoughts
about how the change in oil price structure effects your
ability to provide services otherwise to Kansans and others and
agriculture and utility states that utilize coal?
Mr. Brown. Well, in terms of the various commodities that
you've mentioned, often in most of the cases they're in
different types of equipment. So coal is handled in coal cars
and oil is handled in tank cars and agricultural commodities
generally are in covered hoppers. So it's different types of
equipment. We certainly endeavor to have the available supply
of cars either through our Class I partners or those that we
provide ourselves for our customers to be able to move the
amount of commodity that they would wish to ship. And, as that
grows, we try to keep pace with additional equipment throughout
the various market segments.
And in terms of the oil business, you know, we know that as
prices reduce the volume has lessened greatly. So in some cases
we have some of those cars in a storage status. But maybe Mr.
Lonegro deals with it on a much larger scale than I do.
Mr. Lonegro. Thanks.
David is right. They all move in different pieces of
equipment. And in the crude situation specifically, the grand
majority of those are privately owned by the shippers not by
any of the railroads. So we don't allocate those cars to any
particular customer.
You know, there are different prices depending on different
commodities and ultimately what the market will bear based on
alternative means of transportation, risk, et cetera. You know,
the service equation, there are multiple networks within the
broader freight rail network. Right? So we look at the coal
network and the grain network and things of that nature. But
they all utilize the same crew base, the same locomotives and
the same track infrastructure.
So it is very difficult if not impossible to give priority,
you know, to any one particular commodity over another because,
you know, if, for example, you have one commodity that wants to
move at 50 or 60 miles an hour and you have another commodity
that might move a little bit slower, it actually degrades your
network capacity, you know, for everybody. So we try very, very
hard to balance under our common carrier obligation to balance
the way that we treat all of our customers and make sure that
we have the equipment and the resources necessary to handle
today's demand and tomorrow's demand.
Senator Moran. Thank you very much.
Thank you, Mr. Chairman.
The Chairman [presiding]. Thank you, Senator Moran.
That era of Kansas-Missouri good feeling will end when the
first basketball game comes up I'm guessing.
Senator Moran. It doesn't exist any more.
[Laughter.]
The Chairman. Yes, right.
Senator Peters.
STATEMENT OF HON. GARY PETERS,
U.S. SENATOR FROM MICHIGAN
Senator Peters. Thank you, Mr. Chairman.
And thank you, for the witnesses and your testimony today
about the freight system. I appreciate it.
As a new member of the Committee, I've enjoyed learning
more about this wonderful freight system that we have here in
the country and ways that we can improve it. And I just have a
couple of questions; one for Mr. Lonegro and Mr. Brown, related
to Michigan specifically.
My understanding is Michigan presents somewhat of a
challenge to the railroad industry because we are a peninsula,
basically two peninsulas. So, in terms of cycle time, it's a
little bit more problematic particularly in Northern Michigan.
I know, Mr. Brown, your short lines are up in the Central
Michigan and Northern Michigan and servicing just a few
customers, as I know is your bread and butter, as you take
their products and try to get them into markets and then it has
to get into the broader stream, that CSX and the other national
railroads go. So if you could, both of you, maybe start with
you, Mr. Brown, kind of comment on cycle time? And, I know
you're the interconnectivity with CSX and other rail lines that
service Michigan. Has that been a challenge? Is it something we
need to be aware of and does it perhaps impact Michigan more
than other states as a result of the fact that geographically
we're a peninsula?
Mr. Brown. Yes, sir. Thank you, Senator.
Certainly last winter with our Class I interchange
partners, that's primarily Norfolk Southern and CSX in
Michigan, we saw cycle times increased as they did over the
entire national network. Our Michigan short lines are a very
good example of the G&W sort of niche where we have lighter
density lines that are well connected to Class I partners and
they're very fluid. I mean, as we've talked throughout the
testimony, there was a period of time in 2014 where fluidity
was challenged and it started in the winter and it was
exacerbated by additional volumes that came into the Class I
networks, in particular. And certainly we shared in that growth
as well.
So we've seen a marked improvement in overall velocity and
fluidity over those interchanges in Michigan, to the point
where we've seen additional traffic come to those railroads and
we see demand increasing, because of the improved service
product and overall equipment utilization through fluidity.
Mr. Lonegro. Thank you.
Michigan has revitalized, as I know you're well aware of,
and used to be the mainstay of our automotive business and
obviously that has been disaggregated to other locations. You
know, we waited for the economy in Michigan to come back and
it's nice to see that it has. And so, we are putting
investments in the Grand Rapids in Plymouth subdivisions, which
we have there.
I think the overall service levels you'll see in Michigan
will improve as the broader network improves; certainly the
cycle times will be instrumental in that. We have I think some
new business that has interchanged between some of the Canadian
railroads in CSX, which will flow through the lower peninsula
in Michigan. So we look forward to having our traffic run
through the crew bases there and continuing to invest in both
the resources as well as the infrastructure in Michigan.
Senator Peters. Right. Well, thank you.
And Mr. Brown, one final folk question. You mentioned in
your opening comments the impact of the Positive Train Control
systems and the cost associated with that because of your kind
of unique customer base, very small customer base. And I know
the travel I mentioned to you before the hearing, some great
elevators, and they've got the--you know, you're their lifeline
to get to markets but just maybe a few customers. Could you
kind of flesh out and elaborate a little a bit: you talked
about how the requirements really disproportionately impact
your small lines and the customers that you service
particularly in Northern Michigan?
Mr. Brown. Yes, sir.
Well, most of the G&W-owned railroads do not require PTC to
be installed overall. There are literally, though, hundreds of
interactions with Class Is where there will be PTC installed on
their lines; maybe we cross their line or it's a point where we
operate across, over the Class I line for some distance. So
those are the areas where there is still not much clarity on
exactly what we will be required to do in terms of equipping
locomotives, in terms of other infrastructure requirements that
may fall to one of our short line properties; to the point
that, you know, it's possible that just that capital intensive
requirement on a particular short line pushes it into an
economic situation that's not viable. So, I mean, it's that
critical.
In terms of Michigan, it's relatively a minor issue. And
again, it just centers around interactions with Class I, PTC
installed routes.
Senator Peters. OK, great.
Thank you.
Mr. Brown. Yes.
Senator Peters. Appreciate that.
Thank you. Yield back, Mr. Chairman.
The Chairman. Thank you, Senator Peters.
Senator Johnson.
STATEMENT OF HON. RON JOHNSON,
U.S. SENATOR FROM WISCONSIN
Senator Johnson. Thank you, Mr. Chairman.
Certainly in the State of Wisconsin, we've experienced some
of these service disruptions from a number of factors; weather,
the increase in the freight required for transporting oil. The
result of those service disruptions has been, in some quarters,
a call for greater involvement by the Surface Transportation
Board, other potential government intervention. I could just
kind of like go down the panel. Personally, as somebody who,
you know, utilized rail services for 31 years in my plastics
company, I would have a great deal of concern for the Federal
Government getting involved and starting to allocate the, you
know, who should get what. But I just kind of wanted to get all
of the witnesses, their opinion in terms of the pros or
potentially cons of greater involvement by the Federal
Government as opposed to just the private sector taking care of
it.
And I'll start with you, Mr. Lonegro.
Mr. Lonegro. The railroads produce, prior to the October
temporary order that came from the STB, we produce measures
through the AAR to the STB which go to the fluidity of the rail
network and those are published on a weekly basis. And so you
do have a good understanding already prior to the temporary
order and the rulemaking about the fluidity of the rail
network.
That said, most of those are going to give you a snapshot
and a retrospective on how the railroads have performed. As I
mentioned earlier in the hearing, we've invested literally
billions of additional dollars based on where we saw service
and where we saw volumes in 2014 months ahead of the temporary
order. So, in terms of spurring action by the railroads, we had
already taken the action; we had already recognized that we
need to invest more in order to deliver service for our
customers.
Senator Johnson. Let me quick interject.
My concern is if the Government got involved, is the
incentive for investment might be reduced. Would you be
concerned about that as well?
Mr. Lonegro. I think the challenge is if the government
begins to pinpoint where that investment should occur. Right?
Again, as I mentioned earlier, it's a network of networks so
it's very difficult to say the investment should go to a
specific location or to favor a specific commodity when we're
trying to serve, you know, a multitude of commodities and
literally have hundreds of thousands of rail cars on the system
every day.
Senator Johnson. It's hard enough for a business who is
fully aware of the customer base to make those capital
investment decisions efficiently much less a bureaucracy?
Mr. Lonegro. Absolutely.
Senator Johnson. OK.
Mr. Jahn, as a customer, what are your thoughts on that?
Mr. Jahn. I'm sorry?
Senator Johnson. Mr. Jahn.
Mr. Johnson. Well, from my perspective, having been inside
government for 35 years, what I've learned is at the, and being
an infrastructure person, what I've seen and what I've learned
is that the successes really come through our partnership at
private sector. And having run a port for 8 years, which is a
$30 billion economic engine to my community, one of the things
that, in order to make our port successful and to move things
forward, we try to get government out of the way.
And one of the problems, whether it's at the national level
up here with Washington or at the state level or local, the
success comes where you're able to truly partner with your
private sector partner and with all levels of government. And
really to understand, what are the rules and try--one of the
frustrations I find in government is that there is way too much
bureaucracy and we tend to get weighed done and we lose our
way. We can't find our self out of the forest for all the rules
and regulations.
So I think it's a problem at all level, including within my
own local government, but the State of Florida I think has
taken a lot of advances over the last 4 years regardless of
political affiliation; democrat or republican. One of things
that Florida is focused on: How can we be more business-
friendly; how do we create that environment in the state of
Florida?
Now mind you I'm stepping in as the top salesman for the
State; my new role as the, you know, the head of the Secretary
of Commerce for the State. So my job is to sell the state. But
one of the things we will sell is the fact that we're a
business-friendly state. So we are concerned about the
environment, we're concerned with, obviously, the importance of
education, but we're also concerned making sure that we don't
overregulate. And that's a big way to sell your community, sell
your state.
Senator Johnson. OK.
Mr. Brown.
Mr. Brown. I would just kind of echo what Mr. Lonegro said
as well as say, you know--for example, Mr. Chairman's state
where we started a new railroad operation called the Rapid
City, Pierre and Eastern Railroad in 2014 it was a startup
operation; it was formerly a Canadian Pacific operation. The
STB did require that Canadian Pacific conduct regulator
communications with STB about the fluidity that specifically
required they say how many locomotives and how many cars are
interchanged to RCP&E from CP over the new interchange. It was
the point where we began operating.
We, as a part of that process, we voluntarily established
an STB regular communication ourselves so that we could make
sure that they understood the level of communication that was
happening between the two companies. They understood the amount
of cooperation that was required and was occurring in order to
successfully begin that operation and that we were all talking
about the same facts. So that process occurred over a period of
a few months until it got to the point where there really
wasn't much to talk about. So it was a 15-minute how's-it-
going-this-week call and we ended that process.
So that can be helpful. I think it more informs STB so that
as shippers come to them about a specific operation, whether it
be congestion or whether it be a startup operation as in our
case, they have the information they need to respond and
helpfully we are successful in how we do that and it's a
positive story. And in this case, it turned out to be extremely
positive. So that's a good involvement in my opinion.
Senator Johnson. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Johnson.
And I would just say, too, I'd certainly agree with the
Senator from Wisconsin when it comes to the Government
mandating investment. I do think that what we saw last year
with some of the bottlenecks is a need for greater transparency
about where those were, car supply, power, those sorts of
things which was very helpful because we have literally
millions and millions of dollars at stake in our economy when
you can't get rail transportation in a timely way.
And so, we've introduced a bill which we passed out of
this--or will introduce a bill which we passed out of this
committee last year that would basically focus on process
reforms at the STB and allow board members to discuss pending
business and address service and rate issues on the frontend
rather than waiting until it becomes a crisis. So I look
forward to working with our colleagues on this committee on
something that makes sense.
Senator Blumenthal.
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thank you, Mr. Chairman, and thank you
for holding this hearing on a really critical issue that is
unappreciated by a lot of the public who focus on passengers
and commuters, but we know how critical freight is and how
important safety and reliability of freight transportation is.
And so, I want to thank all of you for being here today.
And focus, for a moment, on the safety issue as it concerns
folks who work on the tracks; our workers who are out there and
whose safety can be at issue and even at risk so often. Late
last fall, the National Transportation Safety Board issued an
in-depth report on the tragic loss of 15 workers in 2013 alone:
11 on railroads and 4 on transit systems. And the NTSB made
recommendations, as you know, across the industry to the
Federal Railroad Administration as well as other agencies like
OSHA.
These recommendations urged the agencies and the industry
to do more to protect the employees on the railroads, ensuring
that they're given proper briefings and sufficient information
and devices that will protect them in the course of their work.
The death of Robert Luden little more than a year ago in West
Haven, Connecticut. Tragic death, fully preventable,
unnecessary, leaving his family and his colleagues without him,
just shows how this issue can be a matter of, literally, life
and death.
So I'd like to ask each of you: What can be done to make
sure that regulators like the FRA, it's an agency of
government, act on recommendations from the NTSB especially for
workers who are often the most in danger?
And my view is that there should be consequences for the
failure of the FRA to act in protecting workers. This issue is
national in scope and so I'd like to ask each of you beginning
with Mr. Lonegro. What can be done to compel the FRA to follow
recommendations of the NTSB and other commonsense measures that
should be taken?
Mr. Lonegro. Thank you, Senator.
We opened up a dialogue with NTSB as part of the Positive
Train Control mandate and have met with them several times both
in terms of the departing chairperson as well as the new
chairman. And as part of that, I think it has been a healthy
dialogue around what training requirements are necessary to
protect railroad workers both in the cab of the locomotive and
on the, what we call, the wayside or trackside, and one of the
four main pillars of Positive Train Control is to protect the
track workers when they haven't established authority along the
main line. That territory will be sacrosanct in the Positive
Train Control world where that, the head worker in charger
there, the foreman or the employee in charge we call them, will
have the authority to allow a train to pass through or not and
at what specific speed.
So I do think Positive Train Control will significantly
address that, certainly on the process side, the training side,
the safety briefing piece and the communication. And additional
technologies like the cameras, which are both inward facing and
outward facing, will help us understand the true root cause of
many of these accidents.
In terms of the interworkings between the NTSB and the FRA,
I have to leave that one to this committee. I will tell you
that we look at the NTSB's most wanted list that they've
published for a number of years and determine whether or not
those make sense for us to deploy. And, this inward-facing
camera, which has been apart of a number of the investigations
that NTSB has put forward, makes a lot of sense to us.
Senator Blumenthal. Thank you.
I've been an advocate of Positive Train Control as well as
a number of the measures that you just mentioned, such as
cameras, alerters and redundant signal protection. I think
they're vital, but Positive Train Control certainly is critical
to the safety strategy. And many of the really tragic
incidences, most recently Spuyten Duyvil, could have been
prevented with Positive Train Control. Wouldn't you agree?
Mr. Lonegro. I would.
Senator Blumenthal. And let me ask all the witnesses: Isn't
it unfair to the railroads that have made advances and are on a
path to meet the deadline to potentially postpone the Positive
Train Control mandate?
Mr. Lonegro. With all due respect, I would be very
surprised if any railroad makes the 2015 deadline. You may
remember that the California delegation had proposed a 2012
deadline as part of the deliberations and clearly that was a
reaction to the tragic accident in Chatsworth, California. At
the same time, that agency, Metrolink, had committed at that
time, which was 2008, to be finished with Positive Train
Control by 2012. They have just recently announced that they
will only be in testing in 2016.
So we are all working as diligently as possible. And
companies can show their will and their commitment by the
number of dollars that they spend and the number of people that
they allocate to Positive Train Control, in the thousands of
people that are working on it every day at CSX and in the
industry, in the billions of dollars that we're spending in
order to deliver it just as quickly and safely and efficiently
as possible, I think is testament to that.
Senator Blumenthal. My time is expired.
I don't know whether any of the other witnesses have
answers to that question but I thank you, Mr. Chairman.
The Chairman. Thank the Senator from Connecticut.
And I want to thank, again, our panelist for all your great
responses today. We'll keep the record open for a couple of
weeks but appreciate everybody being here today and
participating in this.
And we'll inform our discussions and decisions with regard
to how we deal with and manage the rail issues under this
committee's jurisdiction. So thank you, again.
And with that, this hearing is adjourned.
[Whereupon, at 12:11 p.m., the hearing was adjourned.]
A P P E N D I X
National Association of Railroad Passengers
Washington, DC, February 12, 2015
Committee on Commerce, Science, and Transportation,
Subcommittee on Surface Transportation,
Dirksen Senate Office Building,
Washington, DC.
Following upon the January 28 hearing on freight rail safety,
please consider the following policy recommendations from the National
Association of Railroad Passengers regarding the implementation of
Positive Train Control.
Accepting that compliance with the December 31, 2015, statutory
deadline is not feasible, NARP recommends that any new law which
changes that deadline should:
(1) Grant authority to the Secretary of Transportation, on an
individual company basis, to give up to three, consecutive 18-
month extensions, bringing the latest possible date of
compliance 4-1/2 years after the current deadline, or June 30,
2020.
(2) Change the law so that heavily traveled mainlines are not exempt
because they happen to be owned by other than a Class 1;
(3) Explicitly require the prevention of low-speed, rear-end
collisions--of which there have been fatal ones within the past
four years [see below]. The system as currently being installed
does not know the length of trains and therefore cannot prevent
low-speed, rear-end collisions.
Point #1 would be preferable to legislatively forcing the gift to
the entire industry of a blanket 5-year extension. It would enable the
Secretary to treat with appropriate differences railroads which have
worked hard on PTC vs. those who have not.
Point #2 would protect the railroads from a tragic accident that
also would be a public relations disaster for the industry--how to
explain having installed PTC all across rural America but having taken
advantage of a legal loophole either to avoid installation in populated
areas like the cities of Kansas City and St. Louis. [Some states may
come up with the money to save their passenger trains; other states
already choking on the big run-up in Amtrak-related costs under Section
209 of the 2008 law may let the service die and leave PTC absent where
most needed.]
Point #3 would make explicit what most people thought the law
already meant--train-to-train collisions must be prevented; there is no
exception for low-speed, rear-end collisions. The NTSB April 24, 2012,
report on the April 17, 2011, fatal collision at Red Oak, Iowa, stated
that ``the PTC designs that are being deployed and the FRA's final rule
on the application of PTC are unlikely to prevent future restricted
speed restricted speed rear-end collisions similar to the 58 rear-end
collisions reported to the Federal Railroad Administration over the
last 10 years or the collision at Red Oak because train speeds at the
upper limit of restricted speed are allowed.''
FRA's April 25, 2012, advisory in response to the NTSB's report
detailed six rear-end collisions over the past year that caused four
employee fatalities (the other two were at Mineral Springs, NC, on CSX
on May 24, 2011, and DeWitt, NY, on CSX on July 6, 2011), six employee
injuries and property damage exceeding $6 million. Thankfully, no
passenger trains were involved.
______
Response to Written Questions Submitted by Hon. John Thune to
Frank Lonegro
Question 1. Flammable liquids proposed rule. You described your
experience with the implementation challenges of positive train control
(PTC)--including issues with component supply, employee training, and
interoperability--and the significant operational complexities.
a. Given your experience and expertise, could you provide insights
into the potentially similar implementation challenges with another
safety proposal: the requirement for electronically-controlled
pneumatic (ECP) brakes under the flammable liquids unit train proposed
rule (also known as the crude-by-rail rule)?
Answer. A mandate for ECP brakes cannot be justified. ECP brakes do
not provide a significant safety benefit, are very costly, and such a
mandate could severely disrupt railroad service.
The ECP brake proposal could substantially impair network fluidity.
AAR understands that a stringent speed limit is being contemplated by
DOT for unit trains of flammable liquids where ECP brakes are not
utilized. Railroad service for freight and passenger traffic would be
significantly impaired, as all trains behind a slow moving train
containing flammable liquids would also be forced to reduce speeds--
both freight and passenger trains. Furthermore, there would be delays
attributable to immature ECP brake technology. For example, delays with
the few ECP trains currently in service are experiencing operational
problems much more frequently than with trains operating with
traditional air brakes, and these delays are lasting much longer.
Examples of the problems that occur are poor cable connections and
depleted batteries. Note also that when locomotives and rail cars are
used only sporadically in ECP service, the functioning of the ECP
equipment becomes problematic, with the problems only evident when the
equipment is put back in ECP service.
Finally, it would cost industry billions to install ECP brakes.
Yet, the safety benefit would be insignificant. DOT is claiming that
ECP brakes would mitigate the effects of an accident, but DOT is not
claiming that ECP brakes would actually reduce the number of accidents.
A study by the Technology Transportation Center, Inc., shows that ECP
brakes would, at most, result in reducing the number of cars being
derailed by an average of 1.6 cars--that is the number of cars being
derailed, not the number of cars releasing product.
b. To what extent would the flammable liquids unit train proposed
rule create additional operational complexities within the rail system,
including through increasing congestion (through a speed limit),
decreasing the interchangeability of rail cars (through the ECP brake
requirement), or creating a tank car shortage (through an accelerated
deadline)?
Answer. A drastic speed limit, such as 30 mph, on unit trains that
are not utilizing ECP brakes, would have a dramatic effect on railroad
capacity, adversely affecting the railroads' ability to provide
efficient railroad service. Think of a vehicle traveling 30 mph on a
highway with only one lane in the direction of travel, where the speed
limit is much higher. The slow-moving vehicle affects all of the
traffic behind it.
AAR understands that to avoid a stringent speed limit, ECP brakes
would have to be utilized on unit trains with flammable liquids, i.e.,
trains with 70 or more cars of flammable liquids. If a railroad were
tendered tank cars without ECP brakes, the carrier might need to take
those cars out of trains to avoid the speed limit, requiring increased
handling of the cars and delays in getting the cars to destination.
To ensure that locomotives with ECP brakes were available,
railroads would have to equip most of their locomotives with ECP
brakes--at a cost of almost $90,000 per locomotive, that is a $1.7
billion price tag for approximately 20,000 locomotives. Equipping just
a small number of locomotives with ECP brakes would not work because
locomotives travel widely on the railroad network (locomotives are even
interchanged between railroads) and since locomotives do break down,
replacement locomotives would have to have ECP capability.
As noted in the response to the first question, the lack of
reliability with ECP equipment would present operational problems.
Network fluidity would be adversely affected, resulting in less
satisfactory service for railroad customers.
AAR has called for legacy tank cars to be retrofitted or replaced
on an aggressive schedule. Of course, the timeline for retrofits should
not be so stringent that shippers will be unable to secure an adequate
supply of tank cars.
c. To what extent would ECP brakes generate business benefits, such
as fuel savings, wheel defect reductions, and brake inspection savings?
What has the railroad industry learned from trial runs of ECP brakes?
Answer. In 2006, FRA commissioned a study by Booz Allen Hamilton
that postulated enormous business benefits from ECP brakes. Of course,
if there were such business benefits to be realized, the industry would
long ago have transitioned to ECP brakes.
The Booz Allen study is predicated on the heavy use of air brakes
as a benchmark. However, railroads today primarily use dynamic brakes
(akin to downshifting in a car), using air brakes (or ECP brakes in the
few trains that are equipped with ECP capability) only when necessary.
Dynamic braking lowers fuel consumption and reduces wear on wheels and
brake shoes.
That is not to say dynamic brakes are the only way of achieving
these business benefits. For example, since the Booz Allen report was
published, the railroads have done much to reduce fuel consumption,
using, for example, idling reduction technologies to a greater extent
and onboard energy management software that provides the engineer with
information to optimize operation of a train from a fuel consumption
perspective.
Regarding brake inspection savings, FRA regulations already provide
railroads with the opportunity to increase the distance between brake
inspections through the use of ECP brakes. This has been utilized to a
very limited extent. The regulation allows for fewer planned
maintenance events, but because ECP brakes have significantly more
unplanned failures, the proposed safety benefits are moot.
Question 2. Positive train control. You discussed the possibility
of system failure with PTC and emphasized the difficulty of inventing a
technology as you are implementing it.
a. To what extent does the current statutory and regulatory
framework adequately address PTC failures, and what, if any, policies
could ensure rail network fluidity, while protecting public safety,
during such possible failures?
Answer. The regulations restrict the speed at which trains can
operate in the event of a PTC failure, which would adversely affect
network fluidity. Having said that, the initial proposed PTC
regulations would have imposed operating restrictions which had the
potential to slow railroad operations down to a crawl. FRA, to its
credit, revised the regulations so that while reduced speeds are
required where there are PTC failures, the effect will not be as
drastic as would have been the case under the original regulations.
It should be emphasized that PTC is designed to be an overlay
system. PTC ``failures'' do not mean accidents will occur.
Finally, regarding the safety of railroad operations where PTC
``fails,'' the railroads operate very safely today. The last three
decades have shown continuous improvement in the safety of railroad
operations, with railroads today operating at record safety levels.
Where PTC does fail, the railroads will still operate at very safe
levels.
b. Understanding recent progress at the Federal Communications
Commission (FCC), do you expect any additional bureaucratic hurdles
moving forward, and aside from funding, how could the Federal
government better assist railroads with administrative burdens in
implementing PTC?
Answer. There remain numerous administrative steps that must be
completed. At the FCC, certain technical waivers related to spectrum
need to be finalized, in addition to the railroads completing the
historic preservation, Tribal, and environmental review for the antenna
poles needed for PTC.
Under its regulations, FRA must still approve all railroad PTC
safety plans. AAR is concerned about the ability of FRA to complete
these approvals with its current staffing levels. Attached for your
reference is a copy of a January 27, 2015 letter from FRA to the rail
industry regarding the FRA's procedure for certifying PTC safety plans,
which may add additional uncertainty to the certification process. [See
letter below.]
Most importantly, the Congress should set a realistic and
responsible deadline for PTC implementation, beyond December 2015.
U.S. Department of Transportation
Federal Railroad Administration
Washington, DC, January 27, 2015
Mr. Edward R. Hamberger,
President and CEO,
Association of American Railroads,
Washington, DC.
Mr. Michael Melaniphy,
President and CEO,
American Public Transportation Association,
Washington, DC.
Ms. Linda Bauer Darr,
President and Treasurer,
American Short Line and Regional Railroad Association,
Washington, DC.
Re: Positive Train Control Certification
Dear Mr. Hamberger, Mr. Melaniphy, and Ms. Darr:
The Rail Safety Improvement Act of 2008 requires Federal Railroad
Administration (FRA) approval and certification of Positive Train
Control (PTC) systems \1\ for compliance with the approval process of
Title 49 Code of Federal Regulations (CFR) Part 236, Subpart I,
Positive Train Control Systems. PTC System Certification requires
submitting an acceptable PTC Safety Plan (PTCSP) to FRA.\2\ The PTCSP
presents the safety case appropriate to a specific railroad and the
type of PTC system \3\ that reliably and safely provides the required
PTC functions.\4\
---------------------------------------------------------------------------
\1\ See 49 USC Sec. 20157(h).
\2\ See 49 CFR Sec. 236.1009(d)(l).
\3\ See 49 CFR Sec. 236.1015(e).
\4\ See 49 CFR Sec. 236.1005(a).
---------------------------------------------------------------------------
Given the number of PTCSPs, their size, and the need to facilitate
timely certification to support the deadline for PTC installation, FRA
will only audit critical elements of a railroad 's PTCSP submission.
FRA's expectation is that the railroads will exercise complete
responsibility for ensuring that the PTCSP and all associated
documentation is complete consistent, current, and accurate. FRA will
not provide quality control of a PTCSP, nor will it make a
determination of the legal and factual sufficiency of the PTCSP safety
case in the event of civil or criminal litigation.
FRA will continue preliminary PTCSP reviews to help ensure
appropriate regulatory information is included in PTCSP submissions and
to gain an understanding of the railroad's intended meaning of the
document text. Ultimate responsibility for presenting a complete,
consistent, current, and accurate safety case lies with the system
developer and the host railroad. Consequently, if FRA discovers a
significant issue during a review of a PTCSP after formal submission
for approval, FRA will immediately stop its review and return without
any further review the PTCSP to the submitting railroad for correction
and resubmission. To assist FRA in determining the readiness of a PTCSP
for review, we have enclosed a list of issues that would initiate a
return and require resubmittal. The enclosed list is not exhaustive;
rather, it provides examples of typical errors in completeness,
consistency, and accuracy. Although FRA expects that there will be
significant similarities between different PTCSPs submitted by the
railroads , the uniqueness of each railroad's operations will
necessitate differences in the focus of the reviews and audit
conducted.
In lieu of FRA conducting a full audit, FRA will accept an
independent third-party reviewer \5\ finding that an integrated PTC
system and all of its subsystems, as well as the development and test
processes and associated documentation: (1) has no or minimal critical
issues (2) supports the level of ce1iification requested by the
railroad; and (3) is complete, consistent, current, and accurate. This
review must be consistent with the requirements of 49 CFR 236, Appendix
D, Independent Review of Verification and Validation, and Appendix F,
Minimum Requirements of FRA Directed Independent Third-Party Assessment
of PTC System Safety Verification and Validation, with a final report
addressing each element of 49 CFR 236, Appendix D and Appendix F. Upon
receipt of the independent assessor's findings and, assuming there are
no unresolved negative findings, FRA will precertify the PTC system
with operational restrictions if required to ensure safe system
operations pending FRA review and acceptance of the third-party
reviewer report. If a railroad elects this option, FRA will hold the
independent reviewer equally responsible with the railroad in the event
of discovery of misrepresentations and liable for civil or criminal
sanctions as appropriate.
---------------------------------------------------------------------------
\5\ Third-party reviewer is as defined in 49 CFR Sec. 236.1017.
---------------------------------------------------------------------------
If FRA, or the independent assessor, determines that the safety
case provided in a PTCSP does not support certification of the system
at the originally requested level of functionality, but does support
certification at a lower level of functionality, FRA will deny the
request for the certification at the submitted level of functionality
without prejudice, and may issue a certification at a lower level of
functionality.\6\ For systems certified at a lower level of
functionality, FRA will consider new requests for certification at the
higher level of functionality upon presentation of new safety evidence.
---------------------------------------------------------------------------
\6\ A certification request for approval of a PTC system as a
standalone system would automatically be considered for certification
as a mixed , vital overlay or non-vital overlay system; a certification
request for approval of a PTC system as a mixed system would be
automatically be considered as a vital overlay or non vital overlay ;
and a certification request for approval of a PTC system a vital
overlay would be considered as a non-vital overlay. FRA will grant
certification of the PTC system at the highest level consistent with
FRA's evaluation of the safety case provided in the PTCSP submitted for
approval.
---------------------------------------------------------------------------
I would appreciate it if you would share this information with your
member railroads that are installing PTC systems.
If you have any questions regarding certification, please feel free
to contact Mr. David Blackmore, Railroad Safety Program Manager for
Applied Technology, at [email protected].
Sincerely,
Robert C. Lauby,
Associate Administrator for Railroad Safety,
Chief Safety Officer.
Enclosure
______
Enclosure
Examples of Basis for Immediate Return of Submitted Positive Train
Control Safety Plan (PTCSP) Formally Received by the Federal
Railroad Administration
1. Document or portions of the document are marked ``Draft.''
2. Analysis does not explicitly cover all four subsystems (Office,
Onboard, Wayside, Communications) with supporting evidence that
shows the vitality of each subsystem and its role in and how it
supports overall claimed system vitality.
3. Any part of a PTCSP has negative findings, but no corrective
action taken, or full justification as to why an action is not
been taken and its impact on the level of system vitality.
4. Indications of incomplete tests or tests in progress.
5. Claims of interoperability without supporting test records that
show cross system interoperability has occurred.
6. Existence of a single point failure.
7. Incomplete list of mal-actors/system safety.
8. Incomplete or missing reliability analysis.
9. Human factors analysis/mitigation missing for each component.
10. Inconsistent hazard rates between multiple locations in the
document and appendices.
11. Operating rules do not include PTC specific requirements.
12. Inadequate forward plan for replacing marginally acceptable
short-term functional behaviors with long-term functions.
13. Incomplete emergency and planned rerouting management plan that
does not address all subsystems.
14. Incomplete process or procedure for data recovery of missing
data.
15. Mismatch between software versions tested.
16. Missing licensing information.
17. Functions not used by the railroad are listed in railroad-
specific documents.
18. Configurable items not assigned railroad-specific values.
19. Mismatch between as found functionality and PTCSP functionality.
20. Unsupported or not fully justified assertions.
21. Satisfaction of subsystem assumption about required behaviors
not positively identified as having been satisfied.
22. Lack of uniformity of safety assurance concepts between
different vendors' equipment.
23. Verification and validation activities reported as not being
complete.
24. Different versions of what should be the same version are used.
25. Failure rates and reliability do not support assertion of
reliable system type.
26. Incomplete PTC product vendor list or PTC vendor list missing
suppliers.
27. Warning labels not provided for all subsystems.
28. Only abbreviated explanation in hazard log of what were the
specific actions that were taken to closeout a hazard.
29. Certification request made before all elements of subsystems
available to justify vital certification.
Question 3. Other technologies. Highly precise track measurement,
laser-based clearance scanning, and track database collection and
management systems have been critical to reducing cost and improving
the safety of track expansion, maintenance, and operations.
a. What other advanced technologies contribute to optimizing
railway safety and availability?
Answer.
Wayside detectors identify defects on passing rail cars,
including overheated bearings and damaged wheels, dragging
hoses, deteriorating bearings, cracked wheels, and imbalanced
loads. The number and types of detectors with Internet data
access capability has grown rapidly in North America as new
technologies come on line. At the latest count, the North
American railroads have 136 wheel impact load detectors (WILD),
25 truck performance detectors (TPD), 7 wheel profile
measurement (WPMD) systems, and 13 acoustic bearing detector
systems (ABD). These detectors installed on the trackside on
each railroad send actionable information regarding the health
of equipment owned by the railroads and private car owners over
the Internet. The following provides a list of wayside detector
systems used by the North American railroads:
WILD measures vertical impact wheel loads as the car
passes across the site. Their primary function is to
measure vertical impact loads to identify wheels with slid
flats and shells, as well as out-of-round wheels for
removal. Many have subsequently been adapted to function as
overload and imbalanced load detectors.
Because a relatively small percentage of freight cars
cause a higher percentage of track damage and may have a
higher than usual propensity to derail, the railroad
industry is using truck performance detectors and hunting
detectors to identify poorly performing freight cars.
Wheel profile detectors use lasers and high speed
video cameras to determine if wheel tread or flanges are
worn and, consequently, when the wheels need to be removed
from service.
Wheel temperature measuring devices are used to detect
when brakes are not applying when they should be braking
(the temperature of the wheels would be colder than they
should be in such an event) and brakes that are applied
when they should not be (the wheels would be hotter than
they should be in such an event).
Trackside acoustic detector systems use ``acoustic
signatures'' to evaluate the sound of internal bearings to
provide advance warning for those nearing failure. These
systems supplement or replace systems that measure the
overheated bearings.
Internal defects that are not visually detectable are
one of the major causes of wheel-related derailments.
Cracked wheel detectors provide early detection and removal
of cracked wheels. These detection systems can inspect
wheels without removing them from service and prevent
impending derailments due to internal wheel defects.
Machine vision and other available or emerging
technologies are being actively developed by the
Transportation Technology Center, Inc. (TTCI), in
partnership with suppliers worldwide. These are laser and
high speed video inspection systems to 1) assess the
condition of a railcar's safety appliances (ladders, hand
holds, sill steps, etc.); 2) evaluate the condition of the
railcar's underframe and related structural members; and,
3) and scan the top, sides, and undercarriage of every car
at speeds up to 40 mph.
Onboard track inspection systems measure track geometry and
monitor rail integrity, including track surface, track gage and
alignment defects, marginal track support conditions, and rail
internal defects which occur due to fatigue.
Defect detector cars detect internal flaws in rails
using advanced ultrasonic or electro-magnetic sensors. A
prototype of the world's first phased-array ultrasonic
system, which uses hundreds of sensors, is being developed
and tested at TTCI.
Advanced track geometry cars use sophisticated
electronic and optical instruments to inspect track
alignment, gauge, curvature, and other track conditions.
This information helps railroads determine when track needs
maintenance.
Structural health monitoring systems and diagnostic
measurements are used on bridges.
Vehicle Track Interaction measurement systems applied
to locomotives--give real time performance measurements
that allow rapid repair of track defects.
Ground-penetrating radar is being used to help
identify problems below the ground (such as excessive water
penetration and deteriorated ballast) that may hinder track
stability.
New systems--including remote monitoring capabilities--are
being developed and tested to ascertain the structural health
of bridges. Slide sensors and flood sensors are used to monitor
track integrity and improve safety.
Improved track components such as fatigue and wear resistant
rail steels
Improved car components such as advanced wheel steels,
roller bearings, and car joining systems provide longer
component lives and fewer failures in revenue service
Improved car suspension systems used on many higher capacity
freight cars have helped reduce the dynamic loads generated in
curves and tangent tracks due to track geometry variations.
Currently, TTCI is working with suppliers worldwide to develop,
test, and evaluate the next generation suspension systems,
which will be available soon.
b. Have you found that advanced software-enabled services--such as
engineering maintenance management, real-time remote diagnostic
monitoring, in-service performance planning, and component condition
monitoring--help improve freight rail reliability and availability?
Answer. Yes, these technologies can help improve freight rail
reliability and availability. Some industry initiatives along these
lines include:
Storing wayside detector data in a database, developed by
TTCI and referred to as InteRRISTM, TTCI's
Integrated Railway Remote Information Service. This tool set
provides users with the capability to make predictive,
condition-based maintenance decisions rather than having to
rely solely on visual inspection. It also makes data available
to a wider range of stakeholders than possible before.
Currently, InteRRIS collects data from wheel impact load
detector systems (which identify wheel defects by measuring the
force generated by wheels on tracks) and detectors that monitor
the undercarriage of rail cars (which identify suspension
systems that are not performing properly on curves).
InteRRIS gathers detector data over the Internet and feeds
actionable readings to Railinc's Equipment Health Management
System (EHMS) for dissemination to railroads and other car
owners. The EHMS uses the Automatic Equipment Identification
(AEI) data acquired from detector sites to determine vehicle
location, direction of operation, and load condition. This
information can be utilized to determine optimal maintenance
locations. A Car Repair Billing database currently reports
repairs made on off-line cars operating in interchange.
Advanced Technology Safety Initiative (ATSI), a predictive
and proactive maintenance system designed to detect and report
potential safety problems and poorly performing equipment
before they result in accidents or damage. In addition to
reliably detecting cars that exhibit high levels of stress and
reduce derailments, one of the purposes of ATSI is to work with
freight car owners to develop efficient methods to proactively
maintain the freight car fleet and keep out-of-service time to
a minimum.
Rail industry safety is also enhanced by the Asset Health
Strategic Initiative (AHSI), a multi-year rail industry program
initiated by the AAR in December 2011 that applies information
technology solutions and processes to improve the safety and
performance of freight cars and locomotives across North
America. AHSI aims to improve safety and reduce costs across
the rail industry by addressing mechanical service
interruptions, inspection quality, and yard and shop efficiency
at a network level. It is based on the recognition that
improving asset health means more than just focusing on railcar
and locomotive repair. Rather, it encompasses the entire
rolling stock health cycle, incorporating prevention,
detection, planning, movement, and repair.
AHSI aims to improve safety and reduce costs across the rail
industry by addressing mechanical service interruptions,
inspection quality, and yard and shop efficiency. It
encompasses the entire rolling stock health cycle,
incorporating prevention, detection, planning, movement, and
repair.
The Comprehensive Equipment Performance Monitoring (CEPM)
program, which is just one part of the AHSI initiative, is a
web-based application that captures data for railcar equipment
components, including repair histories, the mileage the freight
cars incorporating the components have traveled, and the
current and past health status of the equipment. CEPM will make
it much easier to track the health of individual railcar
components and will provide crucial information on the health
of entire classes of components, making early identification of
potential safety problems much more likely.
U.S. railroads use a variety of track infrastructure
maintenance and renewal information management systems. These
systems are used to store management information regarding
surfacing, undercutting, track geometry and rail inspection,
tie and rail renewal operations, as well as track component
inventory, to improve track condition and improve safety.
Bridge management systems are used for tracking inspections,
bridge capacity ratings, and prioritizing bridge capital and
maintenance spending.
c. Could U.S. passenger rail also benefit from the expanded use of
such innovative solutions?
Answer. Yes, they already are. All railway operations will benefit
to varying degrees. These technological innovations generally are
available to freight and passenger railroads alike. Railroad research
conducted at the Transportation Technology Center, Inc. helped develop
and test many of these technologies.
______
Response to Written Questions Submitted by Hon. John Thune to
Chris Jahn
Question. Flammable liquids proposed rule. In discussing the
potential effects of the flammable liquid unit train proposed rule
(also known as the crude-by-rail rule), you stated that rail car
maintenance facilities would be inundated by crude oil and ethanol tank
retrofit orders required within an unreasonably short span of time, and
that would crowd out facility capacity for other tank cars.
a. Could you provide more detail on the proposed rule's crowding-
out effect for tank cars carrying other commodities, including the
scale and costs of increased out-of-service time and the broader
effects on the economy?
Answer. The Fertilizer Institute (TFI) and its members have
concerns with the shop capacity necessary to service rail cars carrying
non-flammable materials at the same time shops will be dealing with the
requirements for flammable liquids under the proposed requirements when
final. The Pipeline and Hazardous Material Safety Administration
(PHMSA) has proposed a very aggressive transition period that will tax
rail car construction and retrofit capacity. It is already a difficult
task for shippers to keep their rail cars repaired, maintained, and in
compliance because of existing backlogs at shops. This transition
period will make it even more difficult for shippers of non-``High-
Hazard Flammable Train'' commodities to inspect and repair their rail
cars.
According to a study prepared by The Brattle Group for the Railway
Supply Institute's Committee on Tank Cars (RSI-CTC),\1\ even if one
were to assume that these modifications began on January 1, 2015 (an
assumption that RSI-CTC members did not believe was realistic, given
the ramp up period that would be required to order parts and components
and hire and train the necessary workforce), it would not be feasible
to achieve PHMSA's timeline because doing so requires that the
modifications be carried out at a rate of over 1,400 tank cars per
month. Further, during the initial years of the program when the most
complex modifications are being carried out on the nonjacketed legacy
DOT-111 tank cars, the RSI-CTC does not believe that it will be
possible to process more than 550 cars per month. While it may be
reasonable to assume some increase in throughput rates as shops become
more familiar with the process, the RSI-CTC does not believe that under
any realistic scenario it will be possible to approach anything close
to the rates assumed in PHMSA's analysis and instead would take years
beyond what PHMSA anticipates.
---------------------------------------------------------------------------
\1\ Neels, Kevin, and Mark Berkman. A Review of the Pipeline and
Hazardous Materials Safety Administration's Draft Regulatory Impact
Analysis Docket No. PHMSA-2012-0082 (HM-251). Rep. N.p.: Brattle Group,
2014. Print.
---------------------------------------------------------------------------
To avoid crowding out shop capacity and potential losses due to
out-of-service time, TFI would recommend that PHMSA extend the period
for compliance with the new tank standards to help mitigate this
concern.
b. To what extent is the proposed rule scoped appropriately? To
what extent could the high hazard flammable train definition be
improved to better capture or target the risk posed by hazardous
materials rail transportation?
Answer. The Fertilizer Institute (TFI) members are very concerned
that the proposed definition of a ``High-Hazard Flammable Train''
(HHFT), and the proposed restrictions upon such trains, will have
severe negative consequences for all other traffic that depends upon a
fluid national rail network. Accordingly, we have an interest in this
rulemaking due to its general impact on rail operations and possible
future impact on non-HHFT DOT-111 tank cars.
The safety concerns that are driving the need for enhanced safety
standards for flammable liquids have arisen in the context of unit
trains of crude oil or ethanol, which typically consist of 50 or more
tank cars usually tendered by a single customer for transportation to a
single final destination. But the Pipeline and Hazardous Material
Safety Administration (PHMSA) has proposed to classify as an HHFT any
train with as few as 20 tank cars of flammable liquids. Consequently,
far more trains will be designated HHFTs than are warranted by the
risks that these rules are designed to address. We have encouraged
PHMSA to fully consider the impact and unintended consequences of such
a broad HHFT definition which will impact the entire rail network.
For example, speed restrictions for HHFTs are a concern because
they will have impacts on the rail network far beyond any single HHFT
by slowing down and congesting the larger network. The more trains that
fall within the definition of an HHFT, the greater the potential
impact. With the severe service issues experienced by fertilizer
shippers, and shippers overall last winter, PHMSA's proposal will
affect all commodities with longer transit times and increased
congestion. Speed restrictions and overall operational restrictions
will compound the service issues all railroads and shippers have
experienced. Fertilizer shippers depend on efficient rail service in
order to deliver essential crop nutrients in a timely manner to
American farmers and service issues are a top priority for our members.
It is also important to note that shippers have no control over how
train consists are made up after they release the cars to the railroad.
What may seem like a compliant shipment may ultimately turn out to be
part of an HHFT due to the railroad's handling of that shipment. The
HHFT definition may also lead to railroads making a decision between
expedient handling of railcars when determining the makeup of trains,
which could lead to an HHFT, and sitting on loaded cars to avoid
creating an HHFT train, both of which can be a detriment to overall
rail service.
TFI suggests that PHMSA modify the definition of an HHFT to better
target the risks associated with movement of crude and ethanol by only
including unit trains, which typically consist of 50 or more tank cars,
of either product.
[all]