Railway Age September 2019

september 2019

w w w. r a i lwaya g e .c o m

AILWAY GE S e r v i n g t h e r a i lway i n d u s t r y s i n c e 1 8 5 6

a look

AHEAD TO AUTOMATIC

PSR: PROMISE OR PERIL? Implications for shippers

railwayage.com

August 2017 // Railway Age 1

MAINTENANCE & EQUIPMENT SOLUTIONS BALLAST & TIE SOLUTIONS

GEOTECHNICAL SOLUTIONS

STRUCTURAL MONITORING SOLUTIONS

N E X T- G E N E R AT I O N R A I L S O LU T I O N S TO K E E P YO U O N T R AC K

D I S C OV E R O U R I N N OVAT I O N S AT I N T E R C H A N G E B O OT H # 1619

AILWAY GE

JUNE 2019 2019 SEPTEMBER

42 FEATURES

22

A Look Ahead

26

Welcome to Class

30

PSR Implications

NYAB, TTCI Test ATO

Industry Education Efforts

Promise or Peril?

38

Mobility’s Momentum

42

Locomotive Analytics Big Data, Algorithms, IoT

48

Technology, or Technologists?

52

A Chat With Siemens USA

Positive Train Control

Windy City TOD

Leveraging Chicago’s Railways

DEPARTMENTS 4 6 8 56 56 56 57 58 58 59

Industry Indicators Industry Outlook Market People 100 Years Ago Events Products Professional Directory Classified Advertising Index

NEWS/COLUMNS 2 10 20 60

From the Editor Update Watching Washington Financial Edge

On the Cover: New York Air Brake/TTCI “Zero to Zero” test train cab.

Photo: NYAB

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September 2019 // Railway Age 1

FROM THE EDITOR

AILWAY GE Subscriptions: 800-895-4389

Koch Industries Crashes and Burns in Phoenix

T

his just in: Voters in Phoenix, Ariz., have overwhelmingly defeated Proposition 105, a special-election measure that would have permanently prevented the city’s Valley Metro light rail system from expanding.

Koch Industries, called the “toxic empire,” “kingpin of climate science denial” and “Standard Oil of our times,” orchestrated and funded the anti-rail proposition.

This is not surprising. According to the University of Massachusetts Amherst Political Economy Research Institute, Koch Industries is one of the top polluters of America’s air, water and climate. Koch’s toxic output outpaces oil conglomerates Valero, Chevron and Shell. Combined, Koch businesses annually generate 24 million metric tons of greenhouse gases.

Koch Industries, founded by ultraconservative multi-billionaires Charles Koch and his late brother, David, over the years has been funneling billions into political front groups like Americans for Prosperity, which then spread the Koch “wealth” around the country to the political campaigns of candidates opposed to public transportation, health care reform, climate change legislation—indeed, anything having to do with providing a better, more-sustainable life for the vast majority of American citizens.

In Phoenix, the anti-LRT movement began in early 2018 when a small group of

locals came together to form Building a Better Phoenix (BBP) to stop a Valley Metro extension into south central Phoenix. Their ill-conceived argument: Reducing a four-lane road to two to accommodate LRT would decrease vehicle traffic and hurt local businesses, despite evidence to the contrary. BBP became a convenient conduit for Koch—with its deep, dirty pockets—to leverage opposition to the LRT extension into Proposition 105.

Koch’s corrupt, sticky, stinky method of poisoning rail transit worse than the toxic trash the company and its putrid political influence dumps into America’s environment has been successful in other regions.

This time, it didn’t work. Educated, enlightened voters saw through the Koch-funded smog and said no to Propostion 105.

Why? LRT in Phoenix has been a resounding success for the region.

According to Valley Metro, since 2008, light rail has generated more than $10 billion in private and public investment along LRT corridors. Ridership has far-exceeded projections. Rail transit has helped urbanize Phoenix, and is helping the region meet its climate goals. As a result, public awareness of rail transit’s benefits has grown, with support for continued expansion.

Koch’s vipers may have slithered back into their pits. But they’ll be back, in force, someplace else. Be prepared.

WILLIAM C. VANTUONO Editor-in-Chief

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Industry Indicators “Worrisome Economic Weakness Around the Globe” “Continuing economic uncertainty, fueled in great measure by ongoing trade disputes and worrisome economic weakness around the globe— combined with low natural gas prices and the shift from coal-fired electricity in the U.S.—produced another month of disappointing rail traffic in Mexico and the U.S., while Canada achieved moderate growth in intermodal,” the AAR reported last month. “Carload and intermodal traffic fell by 4.8% and 6.1%, respectively, in the U.S. in July vs. July 2018. Canadian railroads saw a 2.8% gain in intermodal traffic, but carload traffic was flat (up 108 carloads). Mexican railroads saw carload traffic rise in eight categories, but overall carload traffic fell 0.4% in July vs. the previous year.”

Railroad employment, Class I linehaul carriers, JULY 2019 (% change from JULY 2018)

TRAFFIC ORIGINATED CARLOADS

MAJOR U.S. RAILROADS

by Commodity

59,291 (-1%)

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

Executives, Officials, and Staff Assistants

Total U.S. CarLoadS

Total employees: 140,703 % change from JULY 2018: –1%

Transportation (train and engine)

7,756 (-1%)

CANADIAN RAILROADS

Professional and Administrative

total CANADIAN carloads

11,430 (-1%)

Five WEEKS ENDING August 3, 2019

COMBINED U.S./CANADA RR

JULY’19

JULY ’18

% CHANGE

115,524 3,546 46,421 27,766 158,741 62,769 384,293 5,679 15,803 26,714 34,461 19,479 44,448 15,971 70,227 119,306 21,378 42,139 17,639 31,796

119,182 3,686 48,395 28,649 160,680 56,304 428,247 5,599 17,487 29,719 32,005 21,731 49,332 19,076 72,961 125,656 19,851 41,585 19,431 28,930

-3.1% -3.8% -4.1% -3.1% -1.2% 11.5% -10.3% 1.4% -9.6% -10.1% 7.7% -10.4% -9.9% -16.3% -3.7% -5.1% 7.7% 1.3% -9.2% 9.9%

1,264,100

1,328,506

-4.8%

406,867

406,759

0.0%

1,670,967

1,735,265

-3.7%

Maintenance-of-Way and Structures

31,724 (-1%)

Maintenance of Equipment and Stores

24,936 (-1%)

Transportation (other than train & engine)

5,566 (-1%)

Source: Surface Transportation Board

almost no CHANGES TO REPORT Identical to June 2019, figures released by the STB show Class I total railroad employment dropped an almost negligible 1% in July 2019, measured against July 2018. But for the first time, all six employment categories experienced virtually the same percentage drop, 1%, when rounding is taken into account. In the short term, it most likely indicates headcount reductions attributable to Precision Scheduled Railroading. Longer term, it’s difficult to predict where employment is headed, especially when traffic is down (but we said that last month, the month before, and the month ... ).

4 Railway Age // September 2019

Intermodal

FIVE WEEKS ENDING AUGUST 3, 2019

MAJOR U.S. RAILROADS

by Commodity

JULY ’19

JULY ’18

% CHANGE

Trailers Containers TOTAL UNITS

99,320 1,215,013

124,159

1,314,333

1,275,052 1,399,211

-20.0% -4.7% -6.1%

0 355,875 355,875

0 346,314 346,314

2.8% 2.8%

Trailers Containers

99,320 1,570,888

124,159 1,621,366

-20.0% -3.1%

TOTAL COMBINED UNITS

1,670,208

1,745,525

-4.3%

CANADIAN RAILROADS Trailers Containers TOTAL UNITS

COMBINED U.S./CANADA RR

Source: Rail Time Indicators, Association of American Railroads

railwayage.com

TOTAL U.S./Canadian CARLOADS, juLY 2019 VS. juLY 2018

1,670,967 JULY 2019

AILWAY GE

1,735,265 JULY 2018

Short Line And Regional Traffic Index CARLOADS

by Commodity

ORIGINATED JULY ’19

ORIGINATED JULY ’18

% CHANGE

53,911 18,356 30,897 11,830 28,441 7,912 10,175 2,650 18,259 11,146 2,835 2,499 19,047 14,998 45,393 9,823 81,741

48,699 22,994 31,683 10,302 25,166 6,649 10,154 3,097 20,330 10,491 1,977 2,163 19,114 14,392 44,308 11,302 85,767

10.7% -20.2% -2.5% 14.8% 13.0% 19.0% 0.2% -14.4% -10.2% 6.2% 43.4% 15.5% -0.4% 4.2% 2.4% -13.1% -4.7%

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

Copyright © 2019 All rights reserved.

average weekly U.S. Rail Carloads: all commodities (not seasonally adjusted) 310,000 300,000

Not seasonally adjusted

290,000

Seasonally adjusted

280,000

ARE YOU A RAILROAD OR SUPPLIER SEARCHING FOR JOB CANDIDATES?

270,000 260,000 250,000 240,000

Visit http://bit.ly/railjobs

230,000 220,000

2013

2014

2015

2016

2017

2018

2019

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

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To place a job posting, contact: Jeanine Acquart 212-620-7211 jacquart@sbpub.com

September 2019 // Railway Age 5 RA_JobBoard_1/3Vertical.indd 1

8/17/17 10:59 AM

Industry Outlook BRX Purchases Pioneer Railcorp

Rail Equipment Positioning Amid Market Selloff A looming U.S. economic recession— just look at freight rail traffic figures from the past six months—and “cyclical industrial fears” have significantly impacted rail equipment equities, creating opportunities for long-term investors with what Cowen and Company analysts Matt Elkott, Jason Seidl (Railway Age Wall Street Contributing Editor) and Adam Kramer describe as “quality companies with self-forged narratives” like Wabtec, Trinity and Greenbrier.

Cowen is raising its 2019 and 2020 estimates for North American freight railcar orders to 46,100 units and 49,400 units, from 41,800 units and 47,900 units, respectively. The increase is based on several factors: 2Q19 orders of 11,700 units, higher than the 9,600 units Cowen had modeled.

Continued solid demand for plastic pellets and tank cars. Cowen’s recent industry channel checks.

“Demand remains tempered, but our order estimates are only modestly above replacement demand of 40,000-45,000 units annually,” the analysts noted. “We are fine tuning our 2019 and 2020 production estimates to 61,300 units and 57,100 units, from 61,600 units and 57,500 units, respectively.”

“A confluence of recession and cyclical 6 Railway Age // September 2019

industrial concerns have pressured rail equipment valuations significantly,” the analysts said. “This creates unique opportunities for long-term investors seeking quality and compelling growth stories.

“Wabtec, which remains our favorite in the space, ticks both boxes, in addition to having a significant transit component that is largely non-cyclical. The company’s merger with GE Transportation doubles the rail component manufacturer’s revenues, improves its margin profile and raises barriers to entry. The company became an S&P 500 component this year, and its recent secondary offerings for the sale of GE’s 25% stake eliminate that overhang. Rail automation and tuck-in acquisitions are likely to be key growth drivers for Wabtec’s growth, longer term.”

Elkott, Seidl and Kramer described GATX, whose North American railcar lease fleet is 120,000 units, as “one of the best operators in the railcar leasing market,” as the company “possesses a heightened ability to identify emerging industry trends and to navigate cycles. If a brief recession were to occur, GATX could be somewhat of a defensive play, relative to other rail equipment stocks.”

Related Fund Management, Brookhaven Rail Partners and Stephens Capital Partners LLC have acquired Pioneer Railcorp, a railroad holding company that owns short line railroads and several other railroad-related businesses.

BRX Transportation Holdings, LLC—a partnership between Related Infrastructure, a subsidiary of Related Fund Management, Brookhaven Rail Partners and Stephens Capital Partners, LLC—was formed “to purchase Pioneer as a platform investment and intends to invest additional capital to upgrade Pioneer’s existing infrastructure and grow Pioneer’s franchise through industrial development and the expansion of services to its customers. BRX also intends to pursue the acquisition of additional short line railroad companies.”

Related said that Pioneer will be led

by BRX partner and industry veteran Alex Yeros as its new Chief Executive Officer, Ross Grantham as Chief Operating Officer and Carrie Genualdi as Chief Financial Officer.

Yeros has three decades of experience acquiring and growing railroads and other rail-related businesses, having served as Chief Investment Officer and in other industrial development roles at OmniTRAX. Genualdi comes to Pioneer after spending 10 years at Genesee & Wyoming as Director of Finance, and Grantham has 20-plus years’ experience working in overseeing operations at both Class I and short line railroads.

Shares of Pioneer common stock were converted into the right to receive $18.81 per share effective upon the closing of the transaction, Related noted. Arnold & Porter acted as legal counsel to BRX in the transaction.

BMO served as financial advisor and Briggs and Morgan, P.A. served as legal advisor to Pioneer. railwayage.com

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Market HDR Lands at Long Beach The Port of Long Beach, the largest U.S. intermodal import gateway, has selected HDR to perform the final design as it moves ahead with its $870 million Pier B On-Dock Rail Support Facility Project to streamline rail operations and reduce bottlenecks. The Pier B On-Dock Rail Support Facility Project aims to “expand the port’s capability for loading shipping containers directly on rail cars instead of being loaded on trucks for short-haul trips. The expansion and reconfiguration of the existing Pier B rail yard will create a staging area for loading freight trains nearly 2 miles long, eliminating thousands of local truck trips.” HDR will work with sub-consultant Moffatt & Nichol on the Pier B project, scheduled to be completed in three phases, with the first phase expected to be complete by 2024.

NORTH AMERICA Duos Technologies Group, Inc.—through its operating subsidiary Duos Technologies, Inc.—has been awarded a $2.3 million contract with a Class I freight railroad to replace an earlier generation system with Duos’ latest version of rip®, the Jacksonville, Fla.-based company’s railcar inspection portal. The award includes “a five-year contract for technical support as well as the development and maintenance of a significant library of Artificial Intelligence (AI) algorithms with the objective of automating certain aspects of the client’s railcar inspection process.”

Kansas City’s sixth and final streetcar, no.

806, arrived on the property Aug. 26. Manufactured by CAF USA, Inc., 806 is the second of two new streetcars added to the KC Streetcar Authority system, which launched operations with four vehicles (801804) in May 2016. No. 805 joined the fleet in May 2019.

Design-build contractor Mosaic Transit Group awarded London Trackwork Inc. the supply contract for special trackwork and switch machines for the 6.8-mile, 18-stop Finch West LRT in Toronto. The contract will take up to two years to complete. The contract includes R30 and R50 geometry turnouts with single and double crossovers, and diamonds on the main line and at the maintenance and storage facility.

Finch West is scheduled to be in service in 2023.

WORLDWIDE GB Railfreight has taken delivery of an initial batch of 25 JNA-T open-top mineral gondolas manufactured by Greenbrier Europe in Romania. Leasing company Ermewa is financing an order for 100 8 Railway Age // September 2019

JNA-Ts. The initial 25 are being used to move limestone from Tunstead quarry in Derbyshire to Wellingborough as part of the East-West Rail project. The remaining 75 cars are due to arrive in Britain by mid-October.

German Rail (DB) rail freight subsidiary DB Cargo has signed a contract with Siemens to carry out condition-based and predictive maintenance on more than 250 electric locomotives. The aim of the partnership is to increase the availability of class 152 locomotives built in 1995-2001 and multi-system class 189 locomotives supplied in 2003-2005. Siemens supplied both fleets. DB said this is the first time in Europe an operator and locomotive supplier have continued to exchange and exploit technical data after delivery.

Saudi Railway Company (SAR) has awarded CAF a contract to roll out its LeadMind remote monitoring and condition-based maintenance system on the North-South Railway passenger train fleet.

The system will be installed on 12 locomotives and 64 coaches (built by CAF) that are used on Riyadh-Qurrayat services. railwayage.com

Update

STB Rehabbing Antique URCS

I

f you think a currently under way Surface Transportation Board (STB) search for outside experts to rehabilitate and modernize the 30-year-old Uniform Rail Costing System (URCS) is not of significant importance to railroads and their customers, then think again, and stay focused.

URCS is a core component of a gatekeeping function that determines which rail shippers are eligible to pursue relief from alleged unreasonable rail rates, and how much relief they might later obtain if those rates are found unreasonable.

But URCS in its current form is antique technology, lacking modern applications of science, technology, engineering and math.

It requires updating to function as intended.

For more than a month, the STB has been working with DOT contracting officers—as the relatively small STB doesn’t itself employ them—to identify competent consultants capable of advising how best to rehabilitate and update URCS. Expressions of interest were received in late July. Following an exchange of questions and answers, a Request for Proposal (RFP) was issued, with an Aug. 29 due date for interested contractors to submit bids.

URCS evolved from the 1980 Staggers 10 Railway Age // September 2019

Rail Act, which partially deregulated railroads and ended decades of smothering rate-making oversight, as most rail traffic had long-faced effective truck and barge competition.

Significantly, the relatively few shippers lacking effective transportation alternatives to rail—so-called captive shippers—were assured by the law that, notwithstanding economic deregulation, a safety net would protect them should railroads abuse their market power in setting rates.

The first step in that protective process requires determining if a shipper is captive.

To make that “market dominance” determination, the STB uses a general-purpose costing system. Only validated captive shippers, whose freight rate exceeds 180% of variable costs, are eligible for regulatory rate relief in succeeding steps of the process.

Three decades ago, in 1989, STB predecessor Interstate Commerce Commission, assisted by the congressionally created Railroad Accounting Principles Board, adopted URCS as its general-purpose costing system. It built on a rudimentary costing system dating to 1939 known as Rail Form A. URCS uses statistical estimation tools to develop a challenged movement’s variable

costs—direct expenses such as fuel, maintenance, wear-and-tear and train crew costs.

URCS also is used to measure costs in line abandonment proceedings and for setting access fees where one railroad operates over tracks owned by another.

Note that for smaller, non-Class I railroads, market dominance determinations are made not using URCS, but rather regional averages extracted from Class I railroad data.

With no significant rehabilitation of URCS since its 1989 introduction, the accuracy of its assumptions is questionable.

That’s understandable. URCS was developed

There has been no significant update to URCS since its 1989 introduction.” railwayage.com

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Update in the era of antique computer mainframes with relatively low processor speeds.

Moreover, when URCS was developed in 1989, railroads, rather than shippers, owned most freight cars. The number of Class I railroad systems was 13, not the current seven, four of which (BNSF, CSX, Norfolk Southern and Union Pacific) now carry 90% of all rail traffic. Unit trains had yet to become ubiquitous. And average linehaul distances—723 miles in 1989— have leaped more than 40%, to 1,020 miles today. Some of URCS’ built-in averages still date to time and motion studies made during the 1930s.

Although in 1993 and 2009 the STB made technical changes to URCS, its underlying weaknesses were not cured.

A 2015 Transportation Research Board report, Modernizing Freight Rail Regulation, criticized URCS as “a cost allocation scheme that has no economic foundation.” Most recently, former STB Chief Economist William Huneke, in an opinion article published by Railway Age

12 Railway Age // September 2019

(“URCS: Love It or Hate It; We’re Stuck with It”) faulted URCS for underestimating the costs of most chemicals traffic, particularly hazmat. URCS, said Huneke, “spreads insurance expense evenly across all rail traffic instead of adding risk factors to more-hazardous traffic.”

STB Chairman Ann Begeman and Board members Patrick J. Fuchs and Martin J. Oberman concluded this summer that repairing the STB’s URCS problem could wait no longer.

The fix will be expensive. The consultancy work-product as contemplated by the RFP could exceed $2 million, although neither the STB nor DOT contracting officers have made the numbers public. It is expected that STB-budget savings from two authorized but vacant STB seats, and those vacant seats’ support staff, will cover the costs. The STB’s current Fiscal Year 2019 budget is $37.1 million, with no increase contemplated when Congress finalizes the agency’s Fiscal Year 2020 budget for the period Oct. 1, 2019Sept. 30, 2020.

The RFP seeks bids from “an expert consultant contractor to identify possible options for better reflecting the operating environment of today’s railroad industry.”

Over a maximum of 18 months, the consultant is to “conduct an overall assessment of the methodologies currently incorporated into URCS, and identify areas of potential modification.”

The RFP provides that the consultancy’s report be confidential, meaning the STB intends to review the work product prior to making it public, which presumably would precede a Notice of Proposed Rulemaking updating URCS. The STB’s determination to modernize URCS—combined with recent hearings and ex parte meetings with stakeholders, plus the release of a report from the STB’s internal Rate Regulation Task Force—suggests that the agency is now moving forward toward changes in regulatory policies and procedures.

Times they are a changin’ at an agency too long mired in inaction.

—Frank N. Wilner

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Update FSI to Acquire Patriot Rail and Ports Global infrastructure investor First State Investments (FSI) has reached an agreement with SteelRiver Infrastructure Partners to acquire 100% of the equity of Patriot Rail and Ports, which operates a portfolio of 12 short lines with more than 585 track-miles across 14 states in the U.S. Terms were not disclosed.

Jacksonville, Fla.-based Patriot represents the initial unlisted infrastructure investment in the U.S. by FSI, which manages more than $8 billion of unlisted infrastructure investments across the U.K., continental Europe, Australia, New Zealand and North America, with a focus on mid-market companies in the transportation and utility sectors worldwide.

As part of its acquisition strategy, FSI has partnered with MidRail LLC, a team of experienced rail industry veterans focused on originating, acquiring, and developing rail assets and operations in North America.

MidRail is led by Gilbert Lamphere, a railroad executive who previously served as the

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chairman of Illinois Central Railway and cofounder of MidSouth Rail Corp.

Patriot’s operations include line haul and local rail service, in addition to rail-related services such as railcar storage, transloading, railcar cleaning, scrapping, repair and maintenance, and contract switching. The Patriot ports business provides terminal stevedoring, logistics and warehousing services across nine terminals and two cold storage facilities in the Southeastern U.S. FSI (known in Australia as Colonial First State Global Asset Management) has invested in unlisted infrastructure since 1994 with a focus on mid-market transportation and utility assets. FSI established its unlisted infrastructure presence in North America in 2018 with a team in New York.

“Patriot is a great addition to our global infrastructure investment portfolio and provides further diversification by sector and geography,” said Danny Latham, a Sydneybased founding partner in FSI’s unlisted

infrastructure business. “It is consistent with our philosophy of ‘buy and build’ on behalf of our 100-plus global investor base including a number of pension fund and insurance company clients in the U.S. and Canada.”

“The short line freight rail sector, providing essential transportation services to industrial regions in the U.S., is a strong fit with First State’s long-term infrastructure investment strategy and mandate,” said John Ma, director of the New York-based FSI infrastructure team. “We are excited about the opportunity to invest in the continued growth of Patriot and support the team on their safety-focused offering to rail customers.”

“More than ever, short line rail is a key player in the efficient movement of freight,” John Fenton, CEO of Patriot, said.

“We share a similar vision and outlook with FSI for expanding a sustainable and efficient rail business in North America, and we’re enthusiastic about helping build the Patriot platform,” Lamphere said.

September 2019 // Railway Age 13

Update

Loram Australian Subsidiary Acquiring Aurizon Grinding Assets Loram Pty Ltd., the wholly owned Australian subsidiary of Loram Maintenance of Way, Inc., has executed a binding agreement to acquire all the assets of the rail

14 Railway Age // September 2019

grinding business of Aurizon Operations Ltd. Upon completion, Loram will increase the number of Australian customers to which it provides rail grinding services by

four, including all main line and turnout rail grinding for Aurizon Network Pty Ltd. Completion of the acquisition remains subject to certain conditions precedent.

“Loram’s continued global expansion as a respected leader in railway maintenance contract service operations is based on the principle that technology is global and service is local,” said Loram President and CEO Phil Homan. “While drawing upon our global technical expertise, Loram will deliver its customer service to Australian customers under the leadership of its Australia-based team from our office in Brisbane and strategic sites interstate.”

Loram is the original equipment manufacturer of Aurizon’s entire fleet of rail grinders and has “unmatched technical and operating expertise with its advanced equipment for customers in numerous countries,” the company said. The acquisition includes Loram’s newly built 120-stone RG419, expected to arrive later in 2019. Loram said the RG419 “will be the most productive rail grinder in the Southern Hemisphere.”

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Update

CN, CSX Launching New Intermodal Lane On Oct. 7, CN and CSX will launch a new intermodal service linking CN’s greater Montreal and Southern Ontario areas with CSX-served ports in Philadelphia and New York/New Jersey.

“Over the long term, the freight market

16 Railway Age // September 2019

will increasingly depend on demand driven by the consumer economy, and the rail industry must create new intermodal services that can successfully [compete with] over-the-road options,” said CN President and CEO and Railway Age 2019

Railroader of the Year JJ Ruest. “This interline service fits perfectly with our strategic focus on feeding our unique network through organic and inorganic growth opportunities, including extending our reach into new geographic markets.”

“This new intermodal offering aims to convert long-haul trucks to interline rail services,” explained CN Senior Vice President Consumer Product Supply Chain Keith Reardon. “Trains will run directly into the heart of the metropolitan markets of Toronto and Montreal via CN intermodal yards, making this partnership a natural opportunity for both railroads.”

“CSX is pleased to work with CN to deliver superior all-rail intermodal service into the Montreal and Toronto markets,” said CSX President and CEO Jim Foote.

“Answering a need expressed by our customers, this new service positions us to capture market share from trucks and increases capacity in these expedited lanes, as larger container ships call at the Port of Philadelphia and Port of New York and New Jersey.”

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TrinityRail®: Hourglass™, TrinFlo™ the New Shape of Railcars North America’s premier provider of railcar products and services, TrinityRail, is bringing two new railcars to exhibit at Railway Interchange 2019: the Hourglass™ and the TrinFlo™.

The Hourglass™ is a new, patented autorack design intended to optimize interior width for greater access, enhanced ergonomics and what TrinityRail believes will greatly reduce damage claims on motor vehicles being transported.

The Hourglass’ side posts and screens have been extended where possible for additional width. In addition to its extra interior width and unique shape, it fits on a new or existing standard 89-foot flat car allowing it to easily work in conventional loading/

unloading patterns—thus, no special handling is needed when in service. The Hourglass’ current application has been in bi-level service due to current market conditions where larger vehicles such as SUVs and pickup trucks are in demand.

TrinityRail’s facility in Cartersville, Ga., has been repositioned as a true autorack service center featuring what the company calls RecertPlus®. This provides added value to standard recertification and rebuilding of existing racks. TrinityRail says that its RecertPlus® program “for refurbishing and extending the life of your autorack fleet is second to none.”

TrinityRail’s other railcar on exhibit will be the TrinFlo™—a longitudinal discharge covered hopper. The TrinFlo is based on TrinityRail’s industry-proven, patented, longitudinal door system.

TrinityRail, through Ortner Freight Car, pioneered Rapid Discharge technology in the coal market, and introduced the RDL®, the longitudinal version of the Rapid Discharge coal family and would later extend this to the aggregate market with the RDL-A™.

This technology has now been applied to the grain market. The TrinFlo™ is optimized for unit train service, in terms of car length and

speed of discharge. The design is scalable across multiple covered hoppers.

The car TrinityRail will have on display is a 5,211-cubic-foot car, but the TrinFlo™ design could be applied to multiplecapacity cars (TrinityRail has also produced a 3,902-cubic-foot TrinFlo™).

To-date, more than 7,400 longitudinal discharge cars have been put in service.

On November 1, 2018, Trinity Industries completed a spin-off of its infrastructure-related businesses. The company is now primarily focused on operating its integrated rail businesses.

These market-leading businesses provide railcar products and services marketed under the trade name TrinityRail®. The TrinityRail integrated platform is designed to optimize the ownership and usage of railcars, enabling customers to devote more resources to their core competencies.

In addition to being the leading manufacturer of railcars in North America, TrinityRail leases and services one of the largest fleets, with an owned and managed fleet of more than 124,000 cars. In addition, TrinityRail is a leading provider of railcar parts, maintenance, investor services and dedicated on-site field support for operational assistance and training.

Watching Washington

Wall Street Darlings or Revenue Inadequate?

A

lthough a purchase is said to be worth precisely what a buyer agrees to pay, not all buyers possess equivalent market power as sellers. United Parcel Service (UPS), for example, may choose between truck and rail. But where freight cannot efficiently move by truck, shippers wishing to remain in business typically pay higher freight rates than if they had effective alternatives to rail.

Thus, when Congress partially scrapped railroad economic regulation—beginning with the 1976 4-R Act and culminating with the 1980 Staggers Rail Act—in recognition of ubiquitous truck competition, regulatory oversight was retained for where railroads possess superior market power. Notably, Congress also instructed regulators to assist railroads in improving their earnings so as to attract needed capital.

This focus on revenue adequacy assures investor confidence by allowing railroads to attract capital to maintain, replace and modernize their track networks. That outcome similarly benefits shippers who depend on reliable rail transportation.

To measure railroad revenue adequacy, regulators compare a railroad’s return on net investment with the industry’s current cost of debt and equity capital— a process as much art as science in that it assesses investor expectations amidst such vagaries as predicting interest rates, stock prices, dividends and inf lation. A railroad is deemed revenue adequate if it achieves—over a yet-to-be regulatordefined business cycle—a rate of return

the STB calculated for 2018 a new railroad

12.22% cost of capital of

20 Railway Age // September 2019

on net investment at least equal to its current cost of capital.

While Surface Transportation Board (STB) predecessor Interstate Commerce Commission (ICC) promised in 1985 it would limit future rate increases by revenue adequate railroads, the agency has yet to declare when and how that will occur, even though major railroads have equaled or exceeded the revenue adequacy threshold.

BNSF and Norfolk Southern have surpassed the threshold for most of the past 10 years, with CSX and Union Pacific exceeding the threshold for 2018—and no Class I railroad has said in annual reports to investors that it is not revenue adequate.

Railroads consider revenue adequacy an “aspirational goal” and not an event to establish new “wide-ranging price controls.” They suggest many shippers troublingly remain addicted to the narcotic of pervasive government intervention that, before partial economic deregulation, sent the entire rail industry hurtling toward financial insolvency.

Shippers, however, are frustrated with the STB’s failure to deliver on a fiveyear-old promise to re-evaluate how revenue adequacy is measured (Ex Parte No. 722) and to apply the rate limitation as promised 34 years ago. One skeptic asked rhetorically of the delay, “Is there a predisposed mindset that the agency simply does not believe captive shippers need protection from the rates railroads are now charging?”

Shipper cynicism intensified in August when the STB calculated for 2018 a new railroad cost of capital of 12.22% —more than 2 percentage points higher than in 2017 and more than 3 percentage points higher than in 2016. Significantly, it exceeds by more than 5 percentage points the 7% cost of capital used by Wall Street analysts in their models, which have been referenced by now-retired BNSF Executive Chairman Matt Rose. Of the STBcalculated leap in the cost of capital, the Western Coal Traffic League said, “There is no reason to think that railroading has become riskier.”

Even the STB expressed surprise over its own calculations, acknowledging that

Shippers reject notions that railroads are an endangered species.” “major ongoing changes within the rail industry—financial and operational— underscore the importance of exploring whether the methodology can still yet better capture information.” Shippers are looking to the STB’s internal Rate Reform Task Force to provide answers.

Perennial sparring between railroads and their customers over regulatory concepts such as revenue adequacy imply each is engaged in rent seeking—the economic term for manipulating public power to enhance one’s parochial interests.

The reality is that Congress, in its wisdom, sometimes cuffs the free-market invisible hand memorialized by 18th century political philosopher Adam Smith, thus preventing railroads from universally practicing a preferred market-based management.

Shippers, meanwhile, reject old notions that railroads are an endangered species, viewing them as Wall Street darlings demonstrably revenue adequate and no longer entitled to regulatory favoritism.

In the middle are rail regulators empowered by Congress to choose winners and losers, but who have dithered for five years and counting on just how to measure and decide.

FRANK N. WILNER Contributing Editor railwayage.com

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Computer-Controlled Train Handling

Look Ahead

TTCI/New York Air Brake’s joint “Zero-to-Zero” test demonstrated an ability to automatically operate a freight train in a PTC environment.

BY WILLIAM C. VANTUONO, EDITOR-IN-CHIEF 22 Railway Age // September 2019

railwayage.com

Computer-Controlled Train Handling

New York Air Brake

A

railwayage.com

ug. 27, 2019 will arguably be one of the single-most important days in North American freight railroading in recent history. On a test track at TTCI (Transportation Technology Center, Inc.) in Pueblo, Colo., with railroad executives and industry officials in attendance and locomotive engineers in the cab, a PTC (Positive Train Control)compliant, heavy-haul freight train consisting of three EMD high-horsepower road locomotives and 30 loaded cars carrying 4,725 trailing tons started and stopped solely under the command of an on-board computer.

The test, called “Zero-to-Zero,” involved the latest iteration of New York Air Brake’s LEADER (Locomotive Engineer Assist/Display and Event Recorder) system. LEADER, widely deployed across the industry as a fuel optimization technology, demonstrated automatic operation of throttle, dynamic brake, independent brake and air brakes, controlling the train for 48 miles over a variety of terrain, starting and stopping on uphill and downhill grades and on level right-of-way, “providing precise control that conserves fuel and reduces in-train forces,” according to NYAB Senior Vice President Marketing, Sales and Service Jason Connell.

“The main purpose of the Zero-to-Zero demonstration was to show that LEADER can precisely execute any railroad’s operating strategy in the North American PTC environment.”

That PTC environment, as industry leaders envision, would be so-called “PTC 2.0,” which would begin to advance PTC from a federally mandated safety overlay to a full-blown “smart railroad” network utilizing IT (information technology) architecture, Big Data, IoT (Internet of Things), data communications, analytics, AI (Artificial Intelligence) and related technologies currently under development.

The first version of LEADER was LEADER DriverAssist™, first deployed on Norfolk Southern. NYAB describes this version as “advising locomotive engineers (“driver prompt”) on train handling (throttle and dynamic/pneumatic brake application) in a way that

saves fuel.” The algorithms programmed into LEADER DriverAssist™ generate “look ahead” scenarios that do not start and stop a train, but enable the locomotive engineer to achieve, in railroading lingo, a “golden run.”

A few years later, the system advanced to LEADER AutoControl™, which “automatically inputs throttle and dynamic brake commands, improving precision and fuel savings, and minimizing in-train forces.”

Recently, the Rio Tinto mining company deployed the next generation, LEADER AutoPilot™, to automatically operate heavy-haul freight trains also equipped with Wabtec ECP (electronically controlled pneumatic) brakes and Hitachi Rail STS’s (formerly Ansaldo STS) AutoHaul™ technology to transport iron ore from mines in Western Australia to ports hundreds of miles away.

The Zero-to-Zero demonstration at TTCI “showed that the LEADER on-board digital platform can also operate trains with pneumatically controlled air brakes, predominant in North America,” NYAB said, noting that the “energy management software uses track profile, consist manifests and GPS data to ‘look ahead’ and calculate the ideal operating strategy in real-time to achieve low fuel consumption, at a desired velocity, with minimal in-train forces.”

Precision train handling using computers is improving railroad operations and reducing operating ratios.

Autonomous operation of PTC-compliant freight trains in PTC territory in select locations in North America is several years away. The computerized train handling test at TTCI in Pueblo is the first of what are expected to be many such demonstrations and evaluations.

Driverless Down Under Rio Tinto on Dec. 28, 2018 successfully completed its $940 million AutoHaul project to automate the operation of its 1,054-mile heavy-haul rail network in the Pilbara region of Western Australia—the Mine of the Future™, which it describes as the “world’s largest robot and first automated heavy-haul, long-distance rail network.”

September 2019 // Railway Age 23

Computer-Controlled Train Handling Rio Tinto first proposed full automation of its Pilbara heavy-haul rail network about 10 years ago. The project reached a milestone in May 2018 when the AutoHaul™ system received Australian regulatory approval. This was followed in July 2018 by the first fully automatic operation of a loaded train. The 28,000-ton train was hauled by three GE (now Wabtec) locomotives and traveled more than 175 miles from Tom Price mine to the port of Cape Lambert without an engineer in the cab.

By October 2018, autonomous operation had increased to an average of 34 1.5-milelong trains per day, equating to 180,000 miles or 45% of daily route-miles operated. Since July 2018, Rio Tinto had steadily increased the number of autonomous trips across its network, with more than 600,000 miles operated autonomously as of year-end 2018, although a few trains continue to be operated manually, or have engineers on board, monitoring conditions.

AutoHaul™ technology, developed by Hitachi Rail STS, is based on the international standard digital radio-based signal

and train protection system ATO over ETCS (European Train Control System, the signaling and control component of the European Rail Traffic Management System, or ERTMS) Level 2 at GoA4 (Grade of Automa-

Autonomous operation of PTC-compliant trains in PTC territory in North America is several years away.

tion 4), which enables fully automated train operation. Locomotives fitted with AutoHaul™ software also have on-board cameras to permit constant monitoring from the Rio Tinto operations center in Perth, more than 930 miles south of the Pilbara region.

In addition, all grade crossings along the right-of-way have been equipped with CCTV upgraded to what Rio Tinto says are “the highest safety standards.”

Automation was expected to increase average train speed 6% by reducing acceleration and braking variations caused by manual operation. Trains now no longer have to stop for crew changes en-route, and Rio Tinto expected to avoid having to transport engineers by highway for operational reasons such as train crews reaching the limit of their hours of service before arriving at a terminal.

In addition, the company expected its annual iron ore capacity to rise from 340 million to 360 million tons. Automation, Rio Tinto said, would also enable it “to adapt output more easily to changes in market conditions.”

Rio Tinto operates a fleet of about 200 Wabtec high-horsepower diesel-electric locomotives transporting iron ore from 16 mines to four port terminals. The trains average about 500 miles on a round trip, with an average trip cycle, including loading and dumping, of around 40 hours.

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Computer-Controlled Train Handling “The safe and successful deployment of AutoHaul™ across our network is a strong reflection of the pioneering spirit inside Rio Tinto,” said Rio Tinto Iron Ore Managing Director-Rail, Port and Core Services Ivan Vell earlier this year. “It has been a challenging

journey to automate a rail network of this size and scale in a remote location like the Pilbara, but early results indicate significant potential to improve productivity, providing increased system flexibility and reducing bottlenecks.

Over the coming months, we will continue to

refine our autonomous operations to ensure we are able to maximize value. We continue to work closely with engineers during this period and do not expect to make any reductions in 2019 as a result of the deployment of AutoHaul™.”

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September 2019 // Railway Age 25

Education

Lupta sum abor ration reribus pores si dem sam quatur si blaboo lor.

Welcome to Class What is our industry doing to attract and retain talent? Here’s what experienced railroaders and educators are saying.

he old saying goes: “Ignorance is bliss.” However, such “bliss” is partly responsible for decimating interest in the railroad industry.

“A lot of people aren’t attracted to a career in the railroad industry, per se, because they don’t know enough about it,” says Nick Little, Director, Railway Education, Center for Railway Research & Education (CRRE) at Michigan State University (MSU). “I don’t think we as an industry do a particularly good job of getting the public aware that there are good careers out there to be had.”

Little concedes that there are certain campaigns out there to attract potential employees—e.g., some railroads have gone above and beyond to attract ex-military people—but they do little to pique the interest of the younger generation.

Indeed. Dr. Allan M Zarembski, P.E., Professor and Director of the Railroad Engineering and Safety Program, Department of Civil and Environmental Engineering at the 26 Railway Age // September 2019

University of Delaware, agrees that a lack of knowledge about a railway career—“The issue is getting people to realize that there’s a real career in the railroad industry”—has put a damper on recruitment.

“I very frequently have situations where students come into my class and they only vaguely realize there are opportunities in the railway industry,” he says. “So I think right now one of the biggest issues is actually letting students know that there are interesting career opportunities in the railway industry.”

Little adds that several years ago he conducted a survey on what gets people interested in supply chain and supply chain management—particularly people who majored in those subjects. He found that the biggest influence came from word-ofmouth from industry employees. The biggest detractor? Our old friend, unawareness.

“A lot of parents don’t understand that this is a potentially fantastic career for their youngsters when they’re contemplating what

to do with their lives,” he says. “So part of our difficulty is getting the word out there.”

Little notes that once people are aware of the benefits—it’s a potentially long-term career, has a good salary attached to it, has fantastic earning potential once you get into management—then they wake up and think, “Yes, I could be interested in this.”

The perception of the industry, he says, is something that “we as an industry might need to work a lot harder with. You talk to a lot of people about the railway industry and they think of it negatively—as not a lot more than the train that stopped and blocked their route to get somewhere.”

A huge industry selling point would be the large turnover and room for growth within the industry, according to Dr. C. Tyler Dick, Ph.D., P.E., Senior Railway Research Engineer, Rail Transportation and Engineering Center (RailTEC) at the University of Illinois at Urbana-Champaign. The myriad retirements and turnover, he says, especially within the railroad engineering sector, railwayage.com

Michigan State University CRRE

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Education harbor “a lot of opportunity for students at entry level positions, both for internships and for new graduates entering the industry.

They see that opportunity—that chance to move up quickly, gain a lot of responsibility.”

Knowledge Is Power One way to combat lack of awareness is education—and what better way to educate than via school?

Zarembski says his school has undergraduate and graduate programs—which isn’t always the case—including some that are dual courses. UDel doesn’t turn potential students away, and it’s “a little bit stronger at the graduate level than the undergraduate level, but we’re starting to attract undergraduates more.

We’ve had a lot of internal discussions about how to get the word out as well.”

Dr. Christopher Barkan, Professor, RailTEC, said that his program’s most popular class is high-speed rail engineering, which he believes is indigenous in North America to RailTEC. “The University of Nevada Las Vegas may have launched a class in that subject, but we’ve been teaching that since 2010,” he says.

The class is taught by two professors. One is from Taiwan—the former Vice President of Engineering for the Taiwan High Speed Rail Corp. and was deeply involved with the concept, planning, design, and the construction and initial operation at the time. The other worked for Amtrak on the Northeast Corridor for his entire career—about 35 years—and has plenty of experience with high-speed rail mixed with freight and commuter rail.

“That’s really a nice mix,” Barkan says. “It gives the students a great balance of understanding, domestically and internationally.”

There are now classes to be taken online.

Simmons-Boardman Publishing’s Omaha, Neb.-based Railway Educational Bureau (REB)’s main focus is training employees in the mechanical and engineering departments. Its training is delivered where the employees are located, not in a classroom.

“Our programs are structured in a way that all of our lessons can stand on their own,” says Brian Brundige, Director, REB. “This allows our clients the benefit of selecting the courses or lessons they wish to have their employees take. Another example of flexibility lies in the fact that we don’t put a time limit on our programs.

28 Railway Age // September 2019

“Once an individual starts working on a correspondence lesson, it typically takes 2-4 hours to complete. Our training offers the benefit of bringing an instructor directly to your location. Our certification programs and other general topics like freight car or locomotive inspection and repair can include hands-on training as well as classroom training.”

Higher, Higher Learning Those educational options are terrific for recruiting people to the field, but what about folks already in the industry who want to further their railway learning? That’s where Little and the CRRE come in.

Little notes that the CRRE doesn’t have an undergraduate program; the MSU program’s theme is continuing education.

The course takes people already in the industry who have the potential to be future managers and leaders, and educates them on a non-credit basis. They get to understand more about the industry and then can go back to their organizations and perform at a higher level.

“One thing about MSU that makes us unique is the fact that we look at the management side of things, rather than the engineering side,” Little says. “So we look at the railway as an ecosystem, which brings together a lot of different disciplines within the industry. It gets people to understand that there are tradeoffs to be made among different things and how to actually go about asking the right questions to get the answers to help managers make better decisions.”

Differences in Generations One potential magnet to modernize the industry is right there in the problem posed: modernization. Zarembski says that this generation, right on the cusp of entering the workforce, looks at the railway industry in the current context. This helps not only to solidify employment, but also to strengthen and embolden the entire workforce.

“A lot of the buzzwords that are going around in the university world are environmentally friendly, sustainable, smart cities and all that good stuff,” he says. “And then they realize that rail was integrally part of all of those definitions. If you take a look in Europe right now, it’s looking at rail to help make it environmentally friendly.

Any discussion of smart cities you can

possibly have, you want to throw out the automobile and replace it with some sort of rail system—be it light rail, heavy rail, commuter rail, high-speed rail, etc. A lot of the new students we are attracting are finding that rail fits that mold. I’ve had students who say, ‘Wow, I can contribute to some of my generational goals by improving and helping in the rail industry.’”

The knock on the current generation, ironically, is also what will help them the most in furthering the railway industry, according to Zarembski. “We’re getting people who have a lot better analytical and computer skills,” he says. “As the railroad industry moves into sophisticated technology, you’ll see more and greater and increased use of sophisticated data acquisition, data analysis algorithms.

We need a new generation of people savvy in these areas.”

Final Bell When it comes to recruiting people to the railway industry, it should be more about community and less about competition, according to Barkan. “It’s not that BNSF is competing with Union Pacific for employees,” he notes. “It’s that the railroad industry is competing with much-more-visible sectors and elements of the engineering and technology community. And it’s really important that the railroads continue to reach out to talk about what they’re doing that makes them 21st century high-tech as well.”

One final enticing employment fact about the railway industry, courtesy of Little: “The industry, being made up of companies that have many different dimensions, can offer careers to people with many different skills—from civil engineering to finance and accounting, mechanical and electrical engineering, sales and marketing, human resources and purchasing.

“The target audience is people who are going to be excellent at the job they do.

You want to try and get people who are star performers into the industry because that’s what’s going to make it a lot more competitive in the future. It’s all about the people.

They are the biggest asset that any organization can have, whatever the industry. And there has to be a realization that investing in that asset is absolutely critical if it’s going to perform really well and keep you ahead of the competition.”

Class dismissed. railwayage.com

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PRECISION SCHEDULEd RAILROADING

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Promise or Peril?

For rail customers, Precision Scheduled Railroading is a mixed blessing. At a North East Association of Rail Shippers conference earlier this year, PSR’s promises and perils took center stage. he North East Association of Rail Shippers (NEARS) April 2019 Spring Conference in Baltimore saw the second-largest attendance ever since the organization began holding the conference. That, observed NEARS President Jason Seidl, Cowen and Co. Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl, 30 Railway Age // September 2019

had largely to do with CSX and Norfolk Southern—with CN and Canadian Pacific, the Class I’s serving the U.S. Northeast— adopting Precision Scheduled Railroading.

“Shippers spoke volumes about PSR,” Seidl noted. “Despite an initial bias against PSR driven by CSX’s early service failures, they seem to be cautiously optimistic that PSR implementation on the part of NS, Union Pacific and Kansas City Southern

will have a more balanced approach.”

Six months after the NEARS Spring event, it’s still unclear how PSR—a buzzacronym much of the Wall Street sell-side community has embraced with predictable gusto, because it appears to be based on generating short-term “shareholder value” (an equally popular buzz-term) and not on long-term, sustainable top-line business growth—is impacting shippers. Most railwayage.com

William C. Vantuono

T

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“The jury is still out on whether PSR is delivering its promised benefits. At mature PSR railroads such as CN and CP, service has stabilized and even improved in some lanes.”

—FTR Associates Vice President Rail and Intermodal Todd Tranausky

likely, more will be revealed at the upcoming NEARS Fall Conference in Burlington, Vt., next month.

“The jury is still out on whether PSR is delivering its promised benefits,” said FTR Associates Vice President Rail and Intermodal Todd Tranausky. “At mature PSR railroads such as CN and CP, service has stabilized and even improved in some lanes. Weather impacts have muddied results at non- or newly implemented carriers, making it hard to draw a firm conclusion on the impact of PSR. Shippers are not entirely happy with the changes that have occurred, even though PSR has not been the only influence on railroad behavior and modal dynamics.”

“It’s a damn important time for the railroads,” noted MidRail LLC Chairman Gil Lamphere, who many years earlier in his

32 Railway Age // September 2019

long career as a railroad entrepreneur and investor dealt with the late Hunter Harrison. Lamphere’s message to the NEARS attendees was critical of what has been occurring in the rail industry since PSR— largely driven by the influence of hedge funds and their short-term-ROI focus— emerged to become, for better or worse, the industry’s modus operandi.

“The future of railroads is not about taking a slice out of the pie, but growing the pie,” Lamphere said. “Hunter implemented PSR on CSX way too fast. He broke a lot of eggs. It’s better to make changes much more carefully over a longer time, without cracking the eggs.”

As to where short lines fit into the new railroad order, “It’s a challenge for the Class I’s today as to how they integrate short lines into PSR,” Lamphere noted. “PSR can be

very disruptive to short lines. Many do not believe the Class I’s are paying attention.

Trying to reach the right person at headquarters is a shot in the dark.”

Lamphere talked about the “cult of operating ratio, which began on Wall Street.

OR is the inverse of operating profits, which should be based on price times volume, not on reducing expenses. This isn’t about expenses. It’s about sustainable growth. The Class I railroads have become oligopolies. Money paid out to shareholders is money that’s not being re-invested into the network.”

One exception, Lamphere said, is CN, “the newest iteration of PSR. CN is investing capital and adding capacity. JJ Ruest (Railway Age’s 2019 Railroader of the Year) is doing this strategically, intelligently. If the U.S. Class I’s don’t do PSR intelligently and together, the government is going to get involved. The Class I’s have to respect the short lines and their interchange points.

The Surface Transportation Board is watching this very carefully. STB is sensitive to shipper needs (see p. 10).”

“Railroads,” Lamphere concluded, “are the future of transportation. Success and growth involves the right people working safely, with the right amount of assets. Railroads begin and end with railroad workers.

We need to value the workers and front line supervisors, because they are the first measure of reliability for our customers.

The future lies somewhere in between OR and growth. PSR needs to serve the customers—not the other way around.”

Intellitrans Intelligence One of the most comprehensive presentations

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PRECISION SCHEDULED RAILROADING at the NEARS conference came from Ken Sherman, Vice President and General Manager of global supply chain logistics provider Intellitrans.

Shipper concerns with PSR revolve around “planning, smart execution, change management and financials,” Sherman stressed.

“Planning,” Sherman said, “is really order management. The top priority for shippers is to fill customer orders on time.

This results in shipper anxiety when trying to plan for potential change in carrier service. ERP (enterprise resource planning) systems build average transit times into the planning process, so changes in transit time can negatively affect order fulfilment capability. Changes to ERP planning cycles leave shippers secondguessing their ability to meet their customers’ demands. Some of our customers have added up to six extra days into their transit plans for PSR implementation.”

As for asset (railcar) management, “Switch service changes, decreases, specifically, put a strain on empty car supply,” Sherman noted. “Decreased fleet utilization requires acquisition of additional assets to make commitments or keep the plant running. Railroad-supplied equipment capacity is currently stressed.”

Inventory management? “Existing inventory management plans are built on transit ‘norms,’” Sherman said. “Inconsistency, or changes in these norms, result in inventory

“The top priority for shippers is to fill customer orders on time. This results in shipper anxiety when trying to plan for potential change in carrier service.”

—Intellitrans Vice President and General Manager Ken Sherman

replenishment issues. Too much inventory, and working capital increases. Too little inventory tends to expedite cost controls, which can lead to plant shutdowns and lost customers. Perceptions of pending service disruptions can result in wild swings in orders and cause further problems.”

As to PSR’s so-called “smart execution,” Sherman said shipper concerns have to do with origin-switch schedule changes, BOL (bill of lading) charges for missed switches, destination switch schedule changes and the inability to retrieve cars from storage quickly. The effects on shipment tracking are “increased use of non-primary routes, resulting in increased transit time, which is really a method to avoid yard congestion problems on initial rollout of PSR; junction

dwell time increases; sporadic occurrences of in-transit terminal dwell increase; outof-route false positives created by nonprimary routes; and alerts on exception ‘norms’ that may no longer identify exceptions properly.”

First-mile/last-mile service consistency is critical, but turnover in local train and engine crews results in what Sherman called “relationship erosion,” involving local service inconsistencies—incorrectly placed railcars at facilities, missed switches, BOL corrections, and increased origin and destination dwell times.”

Then there is “change management,” yet another buzz-term that has entered the rail industry lexicon. “Customer order changes result in a reduced ability to

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“The future lies somewhere in between operating ratio and growth. Precision Scheduled Railroading needs to serve the customers—not the other way around.”

—MidRail LLC Chairman Gil Lamphere

divert shipments in-transit, an increase in ‘dropped’ diversions, and a reduced ability to move cars from SIT (storage in transit) yards to quickly respond to order changes,” Sherman said.

PSR’s reductions in manifest service “has created the perception that the railroads no longer want this business,” Sherman said.

“But for some shippers, in some cases, the perceived ‘hassle’ is not worth the effort to switch to truck until rail service smooths out. Under PSR, railroads have virtually no reserve capacity for special situations.

This includes a lack of special train/switch availability for hot-car situations. There is also a perception of lack of sufficient CSRs (customer service representatives) to answer increased volume of inquiries. And, if a railcar is blocked on the wrong train, it travels further, limiting or eliminating the railroad’s ability to get it turned around.”

Shipper financial concerns resulting from PSR have to do with cost impacts, Sherman noted. These are “an increase in railcar fleet size and lease costs; lastminute truck coverage; a decrease in truck capacity resulting from a decrease in rail service; high levels of forward-deployed inventory; increases in accessorial charges to drive carrier efficiency, such as BOL fees for cars billed but not ready for switch, demurrage and detention; and increases in labor costs to manage through problems.

For example, for some of our customers, the supply chain budget did not forecast PSR service impacts. All this means that the cost to serve customers increases, and profitability decreases.”

Immediate post-PSR implementation results have been mixed, Sherman said. The positives include “decreases in in-transit dwell time; fewer lost cars and intra-carrier mishandled cars; decreased transit time; improved transit consistency; and a reduced need for customer service intervention.”

The negatives include increases in diversion request rejections; increase in re-bills and time to respond to BOL changes; less flexibility to arrange special trains/switches in shut down situations; crew reduction/ power problems that seem to be more common reasons when in-transit issues are encountered; reduced service schedules in lower-volume locations; and an increase in mishandled cars between carriers, specifically, interchanges to incorrect railroads at incorrect junction points.”

Sherman concluded his remarks by citing an example of one Class I that encountered numerous shipment exceptions per day across all its customers. “The historical data did not capture shipments moving, schedule changes, demarketing and other non-in-transit impacts. There is much caution surrounding some PSR implementations.” railwayage.com

William C. Vantuono

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BY WILLIAM C. VANTUONO, EDITOR-IN-CHIEF

Momentum

Siemens has been operating in North America for generations.

What are market conditions like in these turbulent times?

T

he passenger rail market in the U.S. is, in a word, “challenging.” Many would say “problematic.” Aside from funding that’s entirely dependent on government, today’s market is deeply affected by partisan politics and stringent manufacturing requirements— who builds what, and where—among other concerns. Railway Age Editor-in-Chief William C. Vantuono spoke with Siemens Mobility President USA and Canada Marc Buncher about how this Germany-based but undeniably North American supplier views the market.

RAILWAY AGE: How are North American market conditions? In what sectors are you seeing growth? Where do you see opportunity? What sectors are problematic?

BUNCHER: We’ve experienced tremendous

38 Railway Age // September 2019

growth over the past two years. Our big rolling stock contracts garner a lot of attention—Amtrak long-distance Charger locomotives for VIA Rail and Virgin Trains—but our other businesses, which consist of Rail Automation, Electrification, Intelligent Traffic Systems and our aftermarket business have also had good years. North America remains focused on urbanization and that keeps interest levels high in intelligent trains and infrastructure. For us, that’s adaptive traffic control, connected vehicle tech, energy-efficient locomotives, improved availability and capacity (i.e. predictive maintenance, CBTC) and multimodal connectivity for trip planning, ticket purchases and a better passenger experience.

We’re also benefitting from a resurgence of interest in both accessibility of mass transit to underserved commuters and luxury train travel. There are big projects in the U.S. and Canada that aren’t too common for

us: The RER project in Toronto, California High Speed Rail and Virgin Trains’ new Los Angeles lines are incredibly exciting prospects for our industry and our company As far as areas that are problematic, our business pretty much reflects the industry, which is still pretty siloed! I’m constantly amazed at the surprised reaction from customers in one area of our business, like rolling stock, who have absolutely no idea that we also provide signaling and automation for some of the biggest railway lines on the continent. For Siemens Mobility, we’re now one of the largest, if not the broadest transportation company in North America: locomotives to streetcars, signaling to traction power substations, Connected Vehicle to Adaptive Control Street Traffic. We’re seeing more and more synergies as technology moves the needle toward a more centralized, collaborative control model. railwayage.com

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PASSENGER RAIL RAILWAY AGE: Given that passenger rail agencies are dependent upon government support, whether it’s federal, state or local, how is the current political climate affecting your customers? How is that affecting business? Are there any real concerns, going forward, about transit funding?

BUNCHER: We have a broad range of customers across the U.S., and for many, federal funding availability is critical. They don’t want to rebuild. They want to build, to innovate and, more often than not, they’re unable to get the funding when they need it.

RAILWAY AGE: There is a movement to get a meaningful “rail title” in longterm transportation funding. How is Siemens participating?

BUNCHER: I spend quite a bit of time in Washington, D.C. with policymakers, trade associations and industry colleagues to make recommendations for policies that will ensure that Americans can enjoy the latest,

40 Railway Age // September 2019

safest and most efficient transportation technology. The law was last updated in 2015, and a tremendous amount of innovation has occurred since then—things like making 100% availability of rail vehicles a reality thanks to modern digital capabilities. A big part of our role is sharing this kind of technological advancement so that Congress can focus on the “art of the possible” as it drafts the rail section of the bill. I think being Buy America helps in the U.S. too. Our products have to be local. We have 2,000-plus suppliers in the U.S. and we’re working to build a larger supplier network in Canada too.

RAILWAY AGE: There is a serious misconception, perpetuated by the general media, that there are “no U.S. passenger railcar builders” since most companies— despite having major U.S. operations employing thousands of U.S. workers—are domiciled in Europe, Japan, South Korea, etc. How are you dealing with this?

BUNCHER: I’m happy you asked this.

Every time I am on The Hill I hear this. Our Rolling Stock plant has 1,500-plus employees. I have seen rolling stock plants all over the world and I have never seen anything as comprehensive as our plant in Sacramento.

We make everything there. Usually you see a plant that specializes in locomotives or passenger cars, or even one that just does streetcars. We do it all in one plant: locomotives, passenger cars, LRVs and streetcars … the full build, not just final assembly. We even fabricate the bogies there. We also have 1,000 or so additional employees in engineering, manufacturing, assembly and testing in plants in Marion and Louisville, Atlanta, Portland, New Castle, McClellan, New York City and Pittsburgh that many don’t realize exist. Siemens has been in the U.S. for more than 150 years.

RAILWAY AGE: Regarding CRRC and China: Some believe that China’s goal is to dominate the global railway equipment market, and that CRRC is able to undercut competition by low-bidding on contracts, as

railwayage.com

PASSENGER RAIL

BUNCHER: Yes, these are difficult questions, and we’re not sure we have the answers. We are eager to compete against any company in the world and confident that our value proposition is unique and compelling.

Everyone needs to be concerned with a situation where subsidized state-owned companies can distort a market. We believe we need to focus on the facts and retain a fair, competitive environment for all.

RAILWAY AGE: What advanced technology is Siemens offering?

BUNCHER: We’re proud to be able to offer some of the most innovative technologies out there: predictive digitalized maintenance, autonomous capabilities, remote operations and maintenance connectivity.

Our customers are certainly aware of and eager to embrace some of the new technologies. But at the end of the day, it’s about funding: The heart is willing, but the wallet is unable. It’s often a choice between vehicles or new technology, rarely both.

BUNCHER: Autonomous vehicles are here to stay. The convenience and savings that this technology provides is hard to ignore. We’re seeing a lot of pilots roll out, including an autonomous shuttle that our connected vehicle technology is helping to run. That said, it’s something that is bound to be very disruptive on a lot of different levels.

Elsewhere in the world, automated train operations are becoming commonplace— London, Paris, Nuremberg, Bangkok, the list goes on. I’d say we’ll shortly start to see some momentum in smaller railroads starting to use these in the U.S., with larger railroads taking a close look. More mainstream acceptance could happen within 5-10 years.

Marc Buncher President, USA and Canada

RAILWAY AGE: What is Siemens’ viewpoint on autonomous or semi-autonomous rail vehicles? Is this the future? If it is, what sort of timeline are you envisioning?

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the Chinese government provides CRRC with financial support. Many in the industry feel that this is unfair and monopolistic. As well, there is a movement afoot in Congress to ban CRRC (and possibly other Chinese companies) from the U.S. market. Do you agree with these viewpoints? Is Congress’ attempt to enact legislation a political stunt, or is it something worth considering, perhaps in a measured way? Many feel that this would be a form of economic protectionism, which in the long-term may be detrimental to the economy. If the Chinese are banned or restricted—and this is already occurring with trade tariffs—could this spill over into other companies like Siemens, Alstom, CAF, Kawasaki, etc.? What’s at stake? What could be the unintended consequences? These are difficult questions.

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September 2019 // Railway Age 41

analytics

VISUALIZE, ALLOCATE,

EXECUTE, REPORT Using Big Data, algorithms and IoT tools to manage locomotive assets.

F

reight volumes on North American railroads have been showing reductions on monthly year-onyear comparisons throughout 2019. The AAR reported that in the first half the year, cumulative volume was down 3.1% from the same point last year and intermodal units were down 3.5% from last year.

While this economic situation continues to play out, the railroads are in the midst of a revolution in the availability of massive amounts of data being produced and captured. Expanding sets of information flow into organizations daily from GPS systems, signaling, Positive Train Control (PTC), Internet of Things (IoT) sources and locomotive on-board event recorders.

42 Railway Age // September 2019

These huge volumes of data cannot be processed effectively with most planning or operational software that exist in the rail industry today. So-called Big Data, combined with the appropriate tools, can be used to uncover new insights, which will lead to better decisions and strategic business outcomes. This collection and use of data is now supported by advanced IoT solutions, data warehousing and processing tools, which will allow the railroad to analyze and act on the data.

Data for data’s sake can be a drag on an organization. If info is collected and stored without governance, it only adds costs and confusion. But when used to manage assets, operating and capital costs can be reduced and powerful levers are made available for

management to make a difference in real time.

Big Data is being managed by many analytical tools, and they don’t have to be expensive. Hadoop is a widely used open source technology that was developed to manage Big Data and discover patterns and hidden relationships in data. A newer technology, Apache Spark, supports analytics on streaming real-time data rather than the big one-off style jobs that Hadoop supports.

Other new and significant technologies have become available to manage and analyze data and the costs related to this have dropped dramatically in recent years. A good example is in the cost of building and operating software, and maintaining databases in the cloud. Today, most large businesses have made a commitment to moving IT assets to railwayage.com

Biarri Rail

By Tom Forbes, CEO, Biarri Rail

analytics

providers such as Amazon’s AWS, Microsoft’s Azure and Google Cloud. This reduces costs, expands internal availability and provides redundancy, in a secure environment.

Also important are the software tools to build apps and manage data. The availability of high-level software development languages such as Python make it easier and cheaper to deploy data interfaces, so that data can be integrated and analyzed in all parts of an organization. It has also become more cost effective for capital intensive businesses such as railroads, to have specialized algorithms developed for analyzing data and optimizing assets—from the network, to rolling stock and crew. Additionally, the newest advances in artificial intelligence (AI) and machine learning are starting to railwayage.com

make an impact in asset management.

A great example of where the new technologies are now impacting railroads is in the management of locomotives, both from the planning and allocation, to the real-time dispatching in a large complex network.

A freight railroad’s locomotive fleet is one of its main sources of capital costs and operating expenses. Planning the allocation of locomotives to trains is a complex task.

Current locomotive planning methods often rely on “top down” methods of developing locomotive allocation plans by adapting old plans over and over again. Over time, this approach can introduce significant inefficiencies leading to oversized fleets and excessive fuel consumption. New technologies allow railroads to deploy optimization

tools to build allocation plans using a “bottom up” approach, perform scenario analysis, such as locomotive procurement plans, and to minimize the ongoing locomotive requirements for a train schedule.

Integrated data provides the necessary framework for developing algorithmic solutions for apportioning locomotives in an operating plan and for dispatching locomotives in real time. Based on work that my company has done with freight railroads in Australia, North America and the U.K., we believe there are four steps to using data and systems to improve locomotive operations.

Visualize: Most railroads allocate their locomotives using a manual process, often involving Excel or “home grown” software with a basic user interface. The centralized September 2019 // Railway Age 43

analytics

Train Management System (frequently a mainframe-based system) acts as the “database of record� for locomotive allocations but provides limited functionality outside of that. Scenario testing and what-if analysis are hard to perform on the central system.

Locomotive planners must also refer to multiple additional systems, which are often

44 Railway Age // September 2019

separate, to collect all of the data required for locomotive planning (e.g. current location, fuel level, maintenance status, existing planned future allocations). Any notes or calculations required by the locomotive manager, while pulling all this information together, must be done external to these systems.

Railroads now have access to technology

and tools to pull all of this data together and visualize it within a single integrated user interface. I believe that this ability, the visualization of the data, along with providing a high-quality user experience (UX), can be as important as the algorithms and analytic tools and indeed are a valuable and necessary first step in the journey to more sophisticated application of algorithmic decision support.

Allocate: Locomotive allocation is at the core of the asset planning and management processes. Once all the relevant data has been collected, the locomotive operations team can allocate locomotive units to train services, and determine how the units should transfer between those services. With the appropriate software, these allocations are updated in real time and the locomotive operations team can then respond to the changing operational environment.

Currently, most rail operations teams only have Excel models to make these decisions.

Given new methods for data accumulation and analysis and the tools to build the necessary user interfaces (UI) and optimization

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analytics engines, the users can make the difficult decisions that consider complex interactions between train services in the past, present and future. In the case where sophisticated decision support tools are not available, locomotive allocation decisions tend to fall back to guidelines or rules-of-thumb when faced with a variable real-time environment.

Execute: The quality of the locomotive plan is irrelevant if the plan isn’t able to be implemented. The execution of the allocation plan requires clear and concise communication to yard managers and locomotive operators. Currently, most communication is managed through a very manual and time-consuming process that takes away from the time that the locomotive operations team could be using to decide locomotive allocations more efficiently.

An improved tool for execution must: • A llow information to be distributed quickly, to keep everyone up-to-date.

• Generate and send reports automatically, to remove manual effort.

• A llow for feedback if the selected

locomotive allocation has problems or issues (e.g. if a locomotive is positioned inconveniently within a yard, the yard manager can be given a tool to suggest an alternative).

Review and Report: A review of the plan execution is needed for future planning. An important part of running efficient operations is a focus on continuous improvement, to ensure that future planning and operations benefit from experience. This requires that reports and summary data of operations are readily available.

An important component of the review phase is integration of planning and forecasting with actual events and inventory.

The data collected during operations can be used to further train an optimization algorithm for making automated suggestions in the Allocation part of the process, to improve the quality of the suggestions. New AI techniques in machine learning can also be applied, to identify patterns that are nonintuitive to a human, which will support better decision making.

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This step has a dual function of both collecting a larger data set to improve suggestions in general, and ensuring that the optimization algorithm stays up to date as network conditions and cargo volumes change.

I have had first-hand opportunities to see the results of the confluence of Big Data and the explosion of decision support tools to interpret the data, and the use of algorithms to improve asset utilization. In one such case, Biarri Rail was able to help a Class I railroad by integrating data from many sources (locomotive event recorder, fuel data, train planning system, GIS and other sources) to successfully analyze the causes for differing fuel usage patterns in regions of the networks.

This success is not limited to Biarri Rail, as there are more than a few railroads and software firms exploring the use of recently available data to provide decision-making tools to railroads. Freight volumes may soon start to rise again, but we are just seeing the beginning of Big Data, AI, deep learning and other advanced techniques in supporting more efficient railroading.

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www.stratoinc.com 46 Railway Age // September 2019

Celebrating

Years railwayage.com

Transit Focus:Class Seattle-Tacoma 1 Focus: Omnitrax CN

On the left, the upper deck of a prime-mover running 20W40 engine oil. Sludge, ash and dry conditions prevail. On the right, the same prime-mover treated with zMAX®: A nice, even lubricant coating, no ash or sludge.

NO SOUP, NO FIRES, NO FINES

I

How OmniTRAX, deploying zMAX®, is cleaning up its diesel locomotive fleet. BY WILLIAM C. VANTUONO, EDITOr-IN-CHIEF

n extremely cold weather, poor combustion sealing can cause diesel engine lube oil to get past piston rings in the power assemblies and pushed out the exhaust stack.

Locomotive mechanical officers call the condition “souping.” It’s a messy environmental problem, with oil-coated carbodies that need to be cleaned, at high labor and disposal costs.

In all weather conditions, incomplete combustion can cause another environmental problem: trackside fires lit by hot embers belching from locomotive exhaust stacks, not to mention soot buildup, with ash deposits and sludge accumulating in the primemover’s upper deck and airbox. Two years ago, an OmniTRAX short line in Washington State amassed $43,000 in state Department of Environmental Protection fines.

Two years ago, OmniTRAX, at the behest of Director Mechanical Services Troy Allen, began evaluating zMAX® micro-lubricant in about a dozen EMD GP38-2, GP39-3, GP40-2 and SD50 units (RA, April 2017, p.

41). Today, the trackside fires in Washington State have disappeared, along with the DEP fines, and the oil-coated carbodies that were railwayage.com

a common sight during Chicago’s “Arctic Blasts” of extreme cold are clean. And, as of late August, 94 of OmniTRAX’s 102-unit fleet have been treated with zMAX®.

It wasn’t an easy sell for Allen, especially to skeptical senior-level railroaders. But eventually, seeing was believing. “I had the opportunity to show Senior Vice President of Operations Gord Anutooshkin a locomotive treated with zMAX® at our Chicago Rail Link location,” Allen says. “We looked at the upper deck and air box of a GP38-2, and Gord was impressed with the cleanliness and overall coating that we observed on this unit.

Composite Mechanic Dennis Sabo, a 25-year veteran, talked about how he thought we were introducing another ‘snake oil,’ and that he was impressed to see a product that actually works in cleaning up the engine and exhaust. Gord agreed with my plan to keep utilizing zMAX® on our fleet.”

Chicago Rail Link began using zMAX® in January 2017. 20W40 oil sample analysis reports from Tribologik Corp. conducted in November 2016 and May 2018 revealed the following before/after zMAX® results: Soot, a measure of combustion efficiency, dropped dramatically from 1.08% to 0.75%. Copper

levels dropped nearly 50% from 35 PPM (parts per million) to 19 PPM, as did aluminum, from 4 PPM to 2 PPM. Kinematic viscosity at 100 degrees C stayed in check, dropping slightly from 15.78 cSt (centistokes) to a stable 13.90 cSt, well within tolerance. “Oil stays cleaner longer,” Allen notes. “Oil consumption is reduced. Engines are cleaner, and zMAX® provides extra protection during start-up.

Engine components are better protected, and seals are more pliable and effective.”

OmniTRAX also evaluated upper and lower rod bearing wear during a repair procedure. The bearings, after seven years of run time, three of them with zMAX®-treated oil, at first glance showed normal rotational wear. Upon further inspection, “there was no damage or flaking of the soft overlay lead on the bearings, which looked almost new except for initial rotation break-in marks.

The upper bearings had very limited wear.

Usually, the upper blade rod has polished the surface by this time, but with zMAX® use, all test locomotive engines are showing very limited wear. The bearings could be used again if need be.”

(More illustrations: https://www.railwayage.com/news/no-soup-no-fires-no-fines/) September 2019 // Railway Age 47

MISSED OPPORTUNITIES? The industry has technology. But without technologists, it may be for naught. BY RON LINDSEY, CONTRIBUTING EDITOR

S

ince Harvard Business Review’s publication of “Six IT Decisions Your IT People Shouldn’t Make” in November 2002, I have occasionally referenced the article in presentations and publications.

The article’s key summary: “Top executives often feel uncomfortable making hard choices about information technology. But when they abdicate responsibility, they set their companies up for wasted investments and missed opportunities.”

Since PTC’s mandate in 2008, top managements of U.S. freight railroads have largely abdicated their responsibility relative not only to IT, but to key PTC issues, thereby resulting in compromised investments and missed opportunities. The Interoperable Train Control (ITC) Committee manned by Class I technicians and charged with designing an interoperable PTC system across the 48 Railway Age // September 2019

U.S. has made less-than-optimal investments in three primary ways of which I am aware, as follows: •T wo Class I’s apparently “persuaded” the other Class I’s to install a 220 MHz wireless infrastructure without even attempting to construct an appropriate data model to justify the necessity of that network, thereby ignoring the consideration of more-effective alternatives. The “data model” that was put forth was reportedly based on vital traffic control systems such as ATCS and/or ETCS-2, instead of the intermittent, minimal wireless data requirements for enforcement functionality. Why? Prior to the mandate, those two railroads had purchased that spectrum for purposes unknown to me, but not in anticipation of the PTC mandate.

•T he ITC decided it was necessary to

include intermediate signals for enforcement. Why? ITC’s technicians apparently didn’t understand how PTC functions as to enforcement, and since intermediate signals are used by locomotive engineers, monitoring them is not necessary for PTC enforcement.

• The ITC let a contract to develop an onboard “positioning engine” to provide accuracy of 18cm (one foot) with a very high confidence level for freight trains, or even passenger trains. Why? The technicians didn’t distinguish the difference in positioning accuracy between enforcement and the vitality of traffic control.

Perhaps they were caught up in the thencurrent mindset that PTC is vital.

• To the credit of several Class I’s, I understand that the ITC’s design was challenged and thereby mitigated with the partial deployment of more cost-effective railwayage.com

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PTC solutions for wireless data and positioning. To ITC’s credit, it did perform well in those areas important to interoperability, e.g., a common Book of Rules.

Installation of an industry-wide wireless data network to serve PTC’s interoperability requirement can provide for a major paradigm change for railroad operations, both individually and as an industry, with or without the implementation of Precision Scheduled Railroading (PSR). With that said, I now believe the ITC’s selection of the 220 MHz platform for PTC could prove to be very appropriate for advanced asset management. But in defense of ITC as to its lack of a visionary perspective for wireless data use, that was not its responsibility.

Instead, this was and remains the responsibility of the Class I’s top executives to develop the vision for the technicians who provide technology solutions for railroads, both individually and industry-wide.

To develop and move forward with such vision requires individuals that are unlikely to be found in either the railroads or their

conventional suppliers. As I have written before in Railway Age, there are few, if any, technologists. By that, I mean individuals that understand the parameters of technologies and can, in concert with primary business processes, identify the value-added business cases for alternative technologies.

Such a methodology requires rethinking a railroad’s primary business processes, given a change in technologies. This was the basis for the ‘90s fad of “re-engineering the corporation” introduced by Michael Hammer and James Champy in their so-named 1993 book. Except perhaps with very few exceptions, the railroads with their century-old technologies and associated business processes proved to be an insurmountable barrier to such changes.

It is my understanding that some Class I top managers have significantly relied on prestigious management consultants to shine the light on markets, organizational issues and various asset management systems. However, to my knowledge, there are few if any management consultants

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

that can or will proactively engage technologists to challenge the four core technologies required by railroads to operate both efficiently and safely: positioning, IT processing platforms, communications, and IT architecture. PTC deployment has addressed the first three of these core technologies, respectively. For example, thanks exclusively to the PTC mandate, the Class I’s are deploying an industry-wide wireless data network. Prior to the 2008 mandate, the Class I’s technicians were unable, if not truly unwilling, to do so.

However, the issue of IT architecture is very late to the table for most railroads, if even welcome. I am referring to developing an Enterprise IT Architecture (EITA), instead of the “silo” based IT architecture that is the case for many railroads across the globe. By silo, I refer to the development of disparate systems by individual railroad departments for their specific purposes.

Such a structure continues to result in duplication in the generation, processing, storage and distribution of key data that can

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PTC negatively affect efficiency and safety.

EITA is the means to prevent release of such of critical data by its use of a Single Source of Truth (SSOT) discipline that requires data to be generated by only one business process for each. To this end, my team at Strategic Rail LLC developed EITA for Kazakhstan’s railroad.

With the shift to PSR by most Class I’s, re-engineering business processes is even more critical, not only for the individual railroad, but also from an industry perspective. The simple point here is that, given the extensive interchange of cars and locomotives among freight railroads in the U.S., how does a PSR-based railroad operate efficiently if the railroads with which it interchanges are not operating to a reliable schedule? Perhaps one way to motivate those railroads not operating reliably to schedule is to have a significant portion of their management team’s bonus be based upon the efficiency of interchange.

Even deeper, from an industry perspective, is re-engineering business processes

railwayage.com

to address interchange of trains including locomotives and rolling stock, e.g., management and maintenance of locomotives not on their owning railroad. But who will do that? It’s not the responsibility of the AAR. Rather, it will require a version of the ITC that deals with industry-wide solutions and engages technologists who can make such business cases. Arguably, the motivation could be similar to that used with AEI implementation to tag rolling stock for tracking. In other words, participate, or those declining to do so will be prevented from doing some level of interchange.

Accepting that railroad top management abdicated their vision responsibility for PTC deployment and the potential business value of having an industry-wide wireless data network, there is a major paradigm shift for traffic control that stands little chance of being implemented in the near future for the same reason: Virtual CTC (VCTC, my term) that for the past 7 years I have reported on in conference presentations, classes and Railway Age articles. As designed

by Strategic Rail LLC for the railroads of Egypt and Kazakhstan, VCTC eliminates the extensive, antiquated positioning technologies of CTC (track circuits and control points), as well as wayside signals. Additionally, VCTC provides for train integrity as well as expanded PTC functionality.

While VCTC has yet to be tested as to its maximum traffic throughput, it is a viable candidate for a major portion of Class I railroads as well as many railroads across the globe limited to the use of CTC or ETCS-2.

But other than in this article, railroad top management probably won’t be exposed to the possibilities of VCTC to greatly reduce capital investment in and ongoing maintenance of traffic control by replacing dark territory and selected CTC corridors.

Traditional suppliers most likely won’t offer VCTC because it may reduce their revenue.

Versions of VCTC are in revenue service outside of the U.S., but management will need to bring in technologists to make the business case here. Can railroad or supplier technicians be expected to make such analyses?

September 2019 // Railway Age 51

TOd in In Chicago

Effectively Leveraging

I

Dynamic, walkable, higher-density urban neighborhoods in proximity to transit can improve quality of life. Here’s how it’s done in the Windy City. By Todd Meyer, Stantec

n the fourth installment of our ongoing series on transit-oriented development (TOD), we’ve focused on Chicago. Our previous articles looked at how New York got TOD right, how California is doing something different in TOD and the key role P3s can play in booming Toronto.

Chicago has long been considered a significant rail hub in the U.S., including freight 52 Railway Age // September 2019

and passenger service. As an early adopter of transit investment, Chicago’s first raised “L” line (L is short for “elevated”) began service in 1892. It took less than a decade for the L to expand to include multiple lines and neighborhoods, including Chicago’s downtown core, known locally as “The Loop.” This name was derived from the multiple elevated train lines that encircle the city’s primary business district.

Chicago’s adoption of mass transit was necessary in order to efficiently move large numbers of people in a growing city that served as a crossroads of goods and services nationally. In part, the existing rail lines that facilitated the movement of freight also helped to create a modern, robust and multimodal transit system. With that system, America’s largest Midwestern city had the foundation to build TOD as a matter of railwayage.com

All illustrations: Solomon Cordwell Buenz

Rail Infrastructure

Tod IN Chicago

Clark and Newport TOD.

normal course, as evidenced in buildings of all shapes and sizes throughout town.

While the Chicago Transit Authority’s (CTA) urban network of trains and buses can get passengers within a block or two of almost any destination in the city, Metra commuter lines connect farther out to Chicago’s suburban communities. Daily ridership on these lines approaches 300,000 on weekdays. Because of the prevalence of these rail lines reaching farther regional destinations, neighboring communities have also benefitted from TOD by way of their rail connections to Chicago.

Many of these suburban municipalities have evolved through the decades, some from being small industrial outposts and bedroom communities, to corporate headquarters and bustling communities of their own. Motorola moved its headquarters from Chicago to Schaumberg in 1976, and McDonald’s decided to establish its global railwayage.com

headquarters in Oak Brook.

However, along with Kraft and other large corporations, both companies have responded to recent talent trends and relocated their headquarters locations downtown. In addition to relocating back to walkable, urban neighborhoods where many people want to live and work, convenient transit access is commonly cited as a critical element for companies choosing an office location and individuals making decisions of where to live.

TOD in Chicago The City of Chicago has always employed TOD as an approach to ongoing densification and development. In 2013, the city introduced its TOD policy around Chicago’s many train stations to “encourage lower carbon transportation choices and reduce household costs associated with car ownership.” The policy allows developers to build

more dense, multi-family residential projects without parking structures, and under a streamlined approval process. This removes one of the major obstacles to building dense urban projects—costly parking. This makes absolute sense financially, but also because cities are looking to increase transit ridership and move people more efficiently, as we consider a future of reduced car ownership through the advent of autonomous vehicles.

Developments that meet the TOD requirements must also comply with the city’s Affordable Requirements Ordinance, which mandates projects dedicate a percentage of units to affordable housing.

In 2015, Chicago’s Zoning Committee approved a measure to expand the areas where TODs can be built in the city’s north end. The ordinance more than doubled the area of land where developers can build projects with reduced parking requirements. In 2018, the city expanded its TOD policy to high-ridership bus lines. This is one of the first initiatives in the country to pursue a citywide policy that encourages TOD around bus lines. A well-traveled bus route can carry thousands of people every day, and incentivizing their use is a good way to expand a network of connectivity throughout the city, while addressing affordable housing needs.

While these are big positive steps to increase TOD, they will make even more sense in the future as mobility choices shift through the advent of autonomous vehicles (AVs).

While AVs are not going to replace personal cars, buses or trains in the near future, they are going to provide an additional mobility option that does not require parking on location. Urban car ownership is already declining in most major centers; this will likely continue as ridesharing and other mobility options become better ingrained in the way we get around. As a company that advises clients on how to best approach development, we are already looking at ways to repurpose or redevelop existing parking structures and surface lots that could be sparsely used within a decade. We’re also advising clients to wait as long as possible to build new parking structures to leverage walking, biking and transit, but also to see the impacts of AVs as they gradually come online.

Equity and Inclusion One of the biggest challenges in cities across the country is to ensure that housing September 2019 // Railway Age 53

TOd In Chicago

Wilton Street TOD.

policies are inclusive of all socio-economic groups and do not exclude certain geographies or segments of the population. As normal market forces continue to gentrify various neighborhoods in Chicago, we see the “price of success” where many TODs yield luxury apartments in neighborhoods that have historically been more affordable or traditionally had lower rents. The concern is that many existing residents are displaced as an increasing number of wealthier people seek walkable, mixed-use urban neighborhoods that are connected to transit lines.

Many civic leaders are trying to address this issue, but it’s clear that the popularity of these neighborhoods is in part due to access to good transit options. These are complicated issues to solve for certain, but with the right balance of policy, incentives and infrastructure, the future holds promise for fair and equitable housing that includes all segments of the community.

Civic leaders in Chicago are working to promote more equitable TOD by increasing the number of required affordable units to 15% of each project, up from 10%.

In addition, there is strong support to spur more TOD on the economically challenged South and West sides of town. Regarding transit itself, the following measures are currently being debated to increase accessibility and ridership in Chicago, as 54 Railway Age // September 2019

indicated by John Greenfield, transportation reporter for the Chicago Reader and editor of StreetsBlog Chicago: • A reduction of transit fares for lowincome residents of various ages.

• A goal that every resident can live within a 15-minute walk of reliable 24-hour transit service.

• Encourage CTA to implement all-door bus boarding to increase operational efficiency.

• Work with state legislators to permit fair camera enforcement of bus lanes.

• Revisit Bus Rapid Transit (BRT) corridors in the city, such as Ashland Avenue.

• Create 50 miles of dedicated bus lanes (Chicago currently only has 4.1 miles).

• Support the creation of dedicated transit lanes as part of North LSD reconstruction.

• Develop a strategy for transitioning Chicago’s bus fleet to electric-only by 2030 or earlier.

• Upgrade the Metra Electric District line with frequent service and discounted CTA transfers.

Investment and Sustainability Chicago’s Regional Transit Authority (RTA) has laid out a plan and identified $37.7 billion in capital projects for the CTA, Metra and Pace (the RTA’s suburban bus and regional paratransit division). Transit investment by nature makes sense from a

sustainability perspective: Reducing traffic congestion, reducing vehicle-miles traveled and greenhouse gases are a priority for many cities. Maintaining, modernizing and expanding transit service makes it that much more attractive, and makes any transit-adjacent development that much more valuable. A larger strategy that links transit investment and development makes TOD initiatives significantly more effective.

The Red and Purple Modernization Program (RPM) is one way that transit is already being prioritized in Chicago.

The $2.1 billion design-build project will reconstruct, modernize and build 1.9 miles of elevated tracks, including bridges and support structures, along Chicago’s busiest transit corridor. Led by Walsh-Fluor DesignBuild Team, Stantec and our design partners are working on plans that include reconstruction and modernization of four of the oldest stations on the Red Line. In addition, a new bypass or “flyover” structure will relieve congestion at a century-old rail junction north of Belmont Station, alleviating service delays at a portion of the system that carries more than 150,000 daily riders.

As part of the RPM Phase 1 project, a TOD plan was prepared for several parcels adjacent to the rail corridor that have been acquired to accommodate the infrastructure improvements. Led by Chicago-based Solomon Cordwell Buenz, a multi-disciplinary railwayage.com

Tod IN Chicago Roscoe Street TOD.

consultant team created a TOD plan as part of the Federal Transit Administration’s (FTA) pilot program for TOD. CTA’s goal was to promote redevelopment in neighborhoods along the Phase 1 project that is feasible, thoughtfully designed, contributes positively to the community and promotes a transit-rich lifestyle. Once the infrastructure construction is complete, this plan will be used to create a community-driven guide for future development on TOD sites.

Future Opportunities for TOD One of the fascinating aspects of TOD is that while the idea is generally supported, opinions about the right level of density vary by community. While residents of Chicago’s Loop wouldn’t be surprised that a TOD project reached 40 to 50 stories in height, that would not typically be the case in one of Chicago’s suburbs such as Evanston, Oak Park or Arlington Heights, where 10-20 stories is more common. Since public support for these projects is key to their success, gauging this type of input from local residents is an important part of the process.

Interestingly, many of these suburban communities—which are often referred to as “villages”—are generally on commuter rail lines, making them good candidates for TOD projects. In fact, Metra often has large Park-and-Ride lots next to their railwayage.com

stations that provide convenient access for passengers. These surface parking areas could easily be developed to facilitate the Park-and-Ride users in structures, while maximizing the real estate value by placing mixed-use buildings above. The additional multi-family residential, hotel or office uses would help to support the restaurants and retail stores that residents in these communities enjoy and desire more of.

Of course, scale and context are also important considerations. Some municipalities are certainly more welcoming to high-density development than others.

Residents in the various Chicagoland villages are likely to be much more supportive of TOD that transitions gracefully from station areas in a downtown core to lowerdensity existing buildings, as well as buildings that reflect the image and character of the community. As an increasing number of people realize that we need to increase our urban densities over time, TOD holds some promise as Chicago and cities like it look to alleviate congestion, impacts on the environment and affordable housing challenges.

Another innovative idea in TOD—alternative financing methods—is also on the rise across the country. In our previous installment in the series, we outlined how P3s are a more developed tool in Europe and Canada than they are in the U.S. But we’re quickly catching up, navigating financing

models that work to bring projects on line more quickly by using a capital stack that consists of public and private sources that result in a win-win for all parties. Continuing to explore how we can bring diverse funding sources to serve public and private sectors is a worthwhile endeavor and a key element in unlocking the potential of TOD. It takes a holistic approach to design and build a city with a world-class transit system that works for all members of the community. In the same manner, municipalities should continue to work with transit authorities and private investors to develop the housing we need. The more we can work together to promote dynamic, walkable and higher-density urban neighborhoods in proximity to our transit infrastructure, the better it will be for our collective quality of life. Residents of our urban communities deserve access to quality housing, interesting commercial areas, usable open spaces and mobility options that are independent from car ownership.

About the author: Todd Meyer is a consultant based in Chicago and a Principal with Stantec’s Urban Places practice, a network of experts that provide professional services focused on public realm and private development strategies for clients across the U.S. and Canada. He is currently part of the design management team for Phase 1 of the RPM project with the CTA. September 2019 // Railway Age 55

People / 100 years / Events september 11-13, 2019

ASLRRA Central/Pacific Region Meeting

RUSS GEHL RECO

HIGH PROFILE: Railway Equipment Co. (RECO) has named Russ

Gehl as Chief Operating Officer, with leadership responsibility for all operations at the company’s headquarters in Minnesota. He rejoins RECO after serving as Vice President of Maintenance-ofWay Sales at Holland Company, “where he drove consistent growth for Class I and International,” the company said. Gehl previously held a sales position at RECO, “where he contributed greatly to our relationships with Union Pacific, CN and Canadian Pacific, and we are excited to have him back,” said RECO President Dave Fox. “He is a seasoned and trusted leader who consistently delivers results. Russ’s wealth of experience will be a valuable asset as RECO continues to accelerate growth across our company and bring our industry-leading products and rail solutions to customers on a global scale.” “I am thrilled to again become part of an organization that offers such innovative solutions,” said Gehl.

C

anadian Pacific is making changes in some senior-level executive positions, following two retirements. Executive Vice President Operations Robert Johnson is retiring at the end of September. Effective Sept. 1, his replacement is Mark Redd, who joined CP in 2013 and has worked in a number of senior operating roles. These include, most recently, Senior Vice President Operations Western Region. Senior Vice President Operations Eastern Region Tony Marquis is also retiring in September. His replacement is Tracy Miller.

Greg Squires becomes Vice President Operations Western Region. Vice President Human Resources Chad Rolstad will add Chief Culture Officer to his title. James Clements, who has been with CP for more than 20 years, will become Senior Vice President Strategic Planning and Technology Transformation. Vice President and Chief Information Officer Mike Redeker will report to Clements.

Jason Yunlong Liu, Ph.D., P.E., recently

returned to HNTB Corp. as Senior Technical Advisor in the Seattle tunnel ventilation and fire life safety engineering group.

SEPTA General Manager Jeff Knueppel is retiring from the agency year-end 2019, following a 32-year career. Knueppel joined SEPTA in 1988 and has been General Manager since 2015. During his 32 years at the agency, he served as a civil engineer, climbing through the ranks of the 9,300-employee agency to become Assistant GM in the late 2000s. His predecessor, Joe Casey, named him deputy GM in 2012.

Knueppel ascended to the GM post in September 2015, replacing Casey.

Alvin “Pete” Carpenter, who worked his way up from railroad brakeman to President and CEO of CSX Transportation, died Aug. 20 following a battle with cancer. He was 77. Carpenter was President and CEO of CSX Transportation from 1992 to 1999 and Vice Chairman of the railroad’s parent company, CSX Corp., until his retirement in 2001.

100 years ago in railway age SEPTEMBER 1919

The Cummins Bill’s Proposed Limitation of Railway Profits The Senate probably will be a somewhat more important factor than the House of Representatives in determining the railroad legislation that will be passed. The Senate’s Committee on Interstate Commerce will frame the Senate bill. A sub-committee of this committee has drafted what is known as the Cummins Bill.

56 Railway Age // September 2019

San Antonio https://aslrra.org

SEPTEMBER 22-25, 2019

RAILWAY INTERCHANGE 2019, PRESENTED BY RSI, REMSA, RSSI, AREMA, and the CMA. Minneapolis https://railwayinterchange.org. info@railwayinterchange.org. exhibitionsponsorships@ railwayinterchange.org. aremaconferencesponsorships@ railwayinterchange.org.

October 8-9, 2019

UNIVERSITY OF WISCONSINMADISON Fundamentals of Railway Train Control and Signaling Philadelphia dmpeter5@wisc.edu. https://epd.wisc.edu.

October 14-16, 2019

UNIVERSITY OF WISCONSINMADISON Fundamentals of Railroad Bridge Inspection Madison, Wisc. dmpeter5@wisc.edu. https://epd.wisc.edu.

October 17-18, 2019

next-gen train control 2019, PRESENTED BY RAILWAY AGE and parsons Philadelphia https://www.railwayage.com/ nextgen/

NOVEMbER 12-13, 2019

UNIVERSITY OF WISCONSINMADISON Highway-Rail Grade Crossing Safety Des Plaines, Ill. dmpeter5@wisc.edu. https://epd.wisc.edu.

railwayage.com

Products Elma Embedded Services Router

Garlock TUFF-RAIL® Tank Car Manway Gaskets Garlock, a leading manufacturer of high-performance fluid sealing products, has launched TUFF-RAIL® 3504, a modified PTFE (Polytetrafluoroethylene) gasket that features superior compressibility and sealing for non-pressure tank car manway applications. TUFF-RAIL® 3504 utilizes Garlock’s proprietary GYLON® process and integral sealing ribs to seal a wider range of bolt torques and surface conditions compared to conventional PTFE. The modified PTFE material (filled with aluminosilicate microsphere) is designed for use in a variety of acids and caustics, as well as most hydrocarbons, refrigerants and more. TUFF-RAIL® 3504, a patent pending product, provides superior functional performance by combining a unique surface profile and industry proven GYLON® 3504 that is designed to seal under various loading conditions. “Manways are critical components for

the function of a tank car. According to 10 years of data tracked by the Association of American Railroads, manways are often a failure point during pressurized system testing, leading to non-accidental release (NAR),” said Matt Tones, Garlock Applications Engineer.

“Incorrect gasket selection and installation are two major culprits behind these events. By selecting a specialized part from the TUFFRAIL® family of products, service life will be extended and failure rates will significantly decrease or be eliminated altogether.”

TUFF-RAIL® 3504 is the latest addition to the TUFF-RAIL® line of manway gaskets from Garlock. It joins TUFF-RAIL® 3545, rounding out the portfolio for a variety of non-pressure tank car field conditions.

The line is characterized by superior bolt torque retention, chemical resistance and compression capabilities. www.garlock.com.

PDI Diesel Dehydrator Demonstration PDI will be at Booth 3137 at Railway Interchange 2019 to display the Diesel Dehydrator in action, separating water and particulate from fuel. The Diesel Dehydrator removes water and

railwayage.com

Elma Electronic Inc. offers a fully EN 50155-compliant NetSys-5304 that facilitates seamless, secure communication in rolling stock applications that involve vehicle positioning, monitoring, speed control and collision avoidance. The NetSys-5304 is part of Elma’s Ciscoenabled family of rugged systems.

Designed to deliver secure IP-based data to mobile rail and transportation applications, the NetSys-5304 is based on Cisco’s 5915 Embedded Services Router (ESR) with Advanced Enterprise IOS and Mobile Ready Net capabilities. An on-board hardware encryption engine ensures secure, uninterrupted handling of all data, video and voice. Layer 3 routing protocols quickly and seamlessly establish ad hoc networks as nodes shift relative to positioning in and out of the range of fixed networks. The NetSys-5304 also includes radio aware routing, quality of service (QoS) support and a dynamic link exchange protocol. These routing optimization protocols ensure sufficient bandwidth to critical wireless nodes in the time and sequence necessary to support network communications. It features a fanless design that provides passive conduction-cooling and reduces maintenance needs as well as possible component failures. Robust M12 connectors and an IP67 rating ensure that the system can withstand severe environmental conditions, such as intense shock, vibration and humidity. The unit comes equipped with front LEDs to quickly verify system status as well as link activity. http://bit.ly/NetSys5304R.

particulate; cleans fuel to ISO 11/8/6 standards, and improves fuel efficiency by removing 99.5% of water from fuel. It offers improved diesel engine performance, increasing power and creating maximum efficiency. Before you see it, hear Richard Elgin, Senior Technical Specialist, NRE, explain how the Diesel Dehydrator solved NRE’s problem of water-damaged fuel injectors.

September 2019 // Railway Age 57

equipment Sale/Leasing

PROFESSIONAL DIRECTORY

Lake Superior Eastern Rail Industries Limited

FOR SALE

195 tubular steel posts Can be bolted to the side sills of flat cars to make log cars.

Height 10 ft above deck.

Any reasonable offer accepted.

Contact: John Taylor

705-971-9345

Email: jdtaylor@lseri.com

Available for Lease 3000 cu ft Covered Hopper Cars 4650 cu ft Covered Hopper Cars 4300 cu ft Aluminum Rotary Open Top Gons 65 ft, 100-ton log spine cars equipped with six (6) log bunks 60 ft, 100 ton Plate F box cars, cushioned underframe and 10 ft plug doors 50 ft, 100 ton Plate C box cars, cushioned underframe and 10 ft plug doors 26,671 Gallon, 263k GRL, NC/NI Tank Cars Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

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58 Railway Age // Septmber 2019

www.railwayage.com

4/16/18 1:17 PM

railwayage.com

Ad Index Company

Phone #

Fax #

URL/Email Address

Page #

847-623-8800

847-623-6139

e-rail@aldonco.com

41

Amsted Rail Group

312-922-4516

312-922-4597

kskibinski@amstedrail.com

11

continental

314-580-5485

248-393-5840

greg.gajewski@continental.com

32

Danella Rental Systems, Inc.

561-743-7373

561-743-1973

SBolte@danella.com

25

Dixie Precast

770-944-1930

770-944-9136

fbrown142@aol.com

16

frauscher sensor technology

609-285-5492

office@usfrauscher.com

29

Aldon Company Inc

georgetown rail equpment

512-869-1542

512-863-0405

bachman@georgetownrail.com

C2

HARSCO RAIL

803 822-9160

803 822-8107

railinfo@harsco.com

21

Herzog Railroad Services Inc

816-385-8233

jhansen@herzog.com

51

Holland Lp

708-672-2300

708-672-0119

rgehl@hollandco.com

14

katahdin Railcar services

207-848-4287

207-848-4346

customerservice@krs-cleaning.com

24

LTK Engineering Services

724-864-8900

724-864-8909

bspringer@irwincar.com

33

Miner Enterprises

630-232-3000

630-232-3055

sales@minerent.com

27

next gen train control

212-620-7205

212-633-1165

conferences@sbpub.com

36-37

nrm

816-708-9088

tfrancis@nevedarail.com

34

Okonite Co.

201-825-0300

201-825-3524

info@okonite.com

17

plasser american corp

757-543-3526

757-494-7186

plasseramerican@plausa.com

15

POWER DRIVES INC

716-822-3600

716-824-4817

R.Panzica@powerdrives.com

3

Progress Rail A Caterpiller Co

256-505-6402

256-505-6051

info@progressrail.com

49

R.J Corman Railroad Group

800-611-7245

859-885-7804

www.rjcorman.com

31

rail movement plannerS

551931120950

railmp.com

40

RAILHEAD CORP

800-235-1782

708-844-5559

jdonnan@railheadcorp.com

C3

rails company

800-21-RAILS

973-763-2585

gburwell@railsco.com

16

railway equipment co

763-972-2200

763-972-2900

sales@rwy.com

7

railworks corporation

866-905-7245

240-397-4849

Efeliz@railworks.com

12-13

railway educational bureau

402-346-4300

402-346-1783

bbrundige@sb-reb.com

35,45,50

Road & Rail Services

502-365-5198

salco products inc

630-685-4661

SIEMENS

800-SIEMENS

STRATO INC

732-317-5406

TRAINYARD TECH LLC trinity rail

C4 sales@salcoproducts.com

9

www.USA.siemens.com

39

korozco@stratoinc.com

46

724-443-888

cra2@zooninternet.net

44

800-631-4420

trinityrail.com

18-19

630-7832590

732-981-1222

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

railwayage.com

September 2019 // Railway Age 59

Financial Edge

Rail Safety, Skateboards and Google

O

n Aug. 14, the ESPN show ¿Highly Questionable? showed a video clip of a skateboarder sliding underneath a moving passenger locomotive, riding the rail on the skateboard and then sliding back out from underneath the train before the second wheelset (1). (The clip can be seen starting at about 16:30 into the video.) The hosts were suitably shocked and aghast over the audacity of the act of sliding underneath a locomotive and unsurprisingly thoughtless about the carelessness of the rider.

The clip highlights the challenges faced by all railroads, freight and passenger, when it comes to maintaining safety on the rails.

There are roughly 137,000 miles of freight rail track in the U.S. alone. This does not include the passenger-only tracks and Canada and Mexico. Railroads do their best to prevent train hopping—a romanticized trope in children’s literature (Boxcar Kids), music (Boxcar Willie) and hobo culture. The sheer scale and number of track-miles make the task of policing the rails virtually impossible.

The ESPN broadcast roughly corresponded to the appearance of an article on Politico, “Tech Companies ignore pleas on rail safety” (2). The article highlighted the refusal of navigation apps such as Google Maps, Apple Maps and Windows Maps to include railroad crossings as areas of caution. The article noted that in 2016, the National Transportation Safety Board asked content providers to include grade crossings in their apps. NTSB’s actions followed a February 2015 accident where a fatigued truck driver confused the rail right-of-way with the road highlighted on his navigation app. The truck became lodged on the tracks.

The subsequent collision between the truck and an Amtrak train caused one death and 32 injuries.

NTSB (3) communicated with the major content providers, and Google indicated it would add crossings to Google Maps. However, no changes were made, even though NTSB continued to make the request. Google indicated concern about overwhelming users and negatively impacting the user experience.

That’s ridiculous. The majority of Railway 60 Railway Age // September 2019

Age readers use navigation apps (on cellular devices and in vehicles) that inform users of police cruisers ahead, availability of gas stations and fast food, and the ubiquitous presence of traffic. It is a challenge to understand how the platform does not have the additional bandwidth to accommodate something so closely tied to the safety of individuals.

David Lester, Managing Editor of Railway Age sister publication Railway Track & Structures, told me that he has always been fascinated by the contrast of how drivers respond to school bus stops vs. railway grade crossings. In the former, red lights flash, stop signs go up and automobiles come to a dead stop. In the latter, even after years of attempted education and improvement, people still think running a crossing is acceptable behavior.

As the safety connection seems more tangible (especially to parents waiting by the school bus for its discharge of passengers), it is more likely for a police cruiser to be near a bus, or for an offender’s license plate to be passed to police. Who is going to jot down the license plate of a fool running a grade crossing and pass it to police?

Which law enforcement will prioritize chasing down rail crossing scofflaws scattered around 137,000 miles of track?

Railroad safety is an economic issue.

In 2018 in North America, there were 841 deaths that resulted from some type of railroad incident. This data is publicly available on the Federal Railroad Administration Office of Safety Analysis website (4). The fatality rate is roughly 7% of the total number of accidents that occur on the rails. These numbers include derailments, events at crossings, equipment failures, etc. and the plethora of events that occur when the general population decides that a train is a really big automobile and can stop on a dime.

Using the FRA’s data and in making some generalizations about the economic impact of accidents on the rails, roughly 600 of 2018’s 11,611 accidents caused damage in excess of $300 million. Add a more nominal amount to the accidents causing less than $100,000 in damage, and the economic cost is well over a half-billion dollars, never

RAILROAD SAFETY, INCLUDING GRADE CROSSINGS, IS AN ECONOMIC ISSUE.” mind the lost productivity, the impact on rail customers due to shipment delays and passenger delays, and so on.

It would be a shame if the gap between idea and execution on this matter were solely tied to some type of requirement for a compensatory relationship between the navigation app providers and the railroads. One thing technology should be able to do with reasonable and consistent success is take care of the low-hanging fruits of the safety matrix for things that seem more than obvious. NTSB and FRA should reinstitute efforts to make this simple solution successful.

1. https://www.youtube.com/watch?v =s tTljH4moig& list=PLHUJOgXQUpVtgnW5t9rd-vPCd02sRLVp&index=2 2. h t t p s : / / w w w . p o l i t i c o . c o m / story/2019/08/10/tech-rail-safety-1412324 3. ht tps ://ntsb.gov/safety/safety-recs /_ layouts/ntsb.recsearch/Recommendation. aspx?Rec=H-16-015 4. https://safetydata.fra.dot.gov/OfficeofSafety/Default.aspx Got questions? Set them free at dnahass@ railfin.com.

DAVID NAHASS President Railroad Financial Corp. railwayage.com

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