presentation to
Association of Car Accounting
and Car Service Officers
Objective
• Outline goals and objectives of North
America Freight Car Association (NAFCA)
• Describe past work done by Association
• Review current issues and items of
concern
• Discuss issues of concern for the future
NAFCA
• NAFCA organized 15 years ago to deal with issues
related to private rail equipment
• In 1997 LOSAC (organization formed to obtain
better mileage compensation for covered hoppers)
merged into NAFCA
• NAFCA inherited LOSAC’s antitrust immunity to
meet and discuss compensation for private cars
• NAFCA membership is open to manufacturers,
owners, lessors and lessees of rail cars not owned
by railroads
NAFCA Membership
• Currently made up of 32 members who
collectively own or operate in excess of
656,000 rail freight cars
– 536,000 privately marked rail cars
– 120,000 leased to railroads
– Members include:
• All major railcar manufacturers
• Major railcar owners and lessors
• Shippers who own and/or lease railcars (AG and Petro
Chem)
• Over 55% of all railcars in the US are
privately owned and operated
NAFCA Mission Statement
• Promote the safe, efficient and economical use of
private cars
• Investigate and educate regarding operational,
regulatory, economic and legal matters that affect
private cars
• Secure the establishment and maintenance of
reasonable, equitable and lawful practices and
rules affecting the use of, repair of and principles
of compensation for all private cars
NAFCA Goals
• Educate the public and lawmakers regarding
operational, regulatory, economic and legal
matters that affect private cars and private cars
owners and lessees.
• Work with carriers and legislative bodies and seek
areas where we can work together to find ways to
improve the safe operation of private rail
equipment while protecting the rights of private
cars owners and lessees.
NAFCA Actions
• In addition to monitoring and advising our members
regarding industry issues we will take the lead in protecting
the interests of private car owners and lessees when
deemed appropriate
– We performed a study comparing AAR labor rates to independent
car shop labor rates and negotiated with AAR to obtain a reduction
in AAR labor rates
– Worked closely with the AAR and other groups seeking voting
memberships on many of the AAR committees that develop rules
and regulations for railcars and maintenance issues
– Correspond directly with railroads, Senate and Congress regarding
issues of importance to our members
•
•
•
•
Rule 91 service interruptions
Railroad pool rules and regulations
Car registration rules (OT-5) and regulations
Preemption of Federal law contained in H.R. 1401
NAFCA Actions
• Work to protect our members interests
regarding mechanical and safety
standards and operations of private rail
equipment
– Recently changed bylaws to allow NAFCA to get
involved with issues surrounding deprescription
– Seek to work directly with carriers and AAR to
resolve issues
– File complaints before the STB and/or Federal
Courts
NAFCA Actions
• NAFCA filed a complaint against the BNSF regarding
storage charges for private rail cars
– Issue: BNSF began charging demurrage and storage on empty
private cars which were in the railroad yards waiting to be spotted
• NAFCA filed request with the STB seeking institution of a
declaratory order proceeding to determine if an individual
railroad can deny OT-5 based on a railroad’s individual
standards for equipment that meets all AAR and FRA
standards and safety requirements
• NAFCA became concerned about the AAR’s efforts to create
a centralized database for OT-5 registration of private cars
– Tank cars to be included in OT-5 process
– Concern about interchange safety and mechanical standards
– Lack of definition/understanding of what “adequate storage”
encompasses
NAFCA Actions
• NAFCA made proposal to AAR OT-5 TAG
– Proceed forward with centralized database for OT-5 registration
– Mechanical and safety standards to be those defined in the AAR
Interchange Rules
– Adequate storage requirement satisfied by shipper having a storage
plan in place
• Defined as cars not used in the normal business cycle
• OT-5 Tag accepted proposal
• NAFCA and AAR working together to jointly
develop the centralized OT-5 registration database
– System will be of benefit to shippers and carriers alike
– System will be a significant improvement over current system and
will be user friendly
– User testing in October 2008
– Completed and in use by December 2008
NAFCA Watch Items
• Carrier control of AAR Interchange and Car Service Rules
– Imposing maintenance costs on car owners that are mainly aimed at
reducing carrier operating and track maintenance costs
• Shippers have minimal input
• Costs paid by car owners
• Benefits accrue to railroads
– Hollow worn wheels
– WILD wheel detectors
– Constant contact side bearings
– Electronic brakes
• Distribution of costs
• Lengthy conversion process and issues
• What corridors, commodity would benefit most
– Continued need for increased car owner voting rights at AAR
Committee meetings
• Liability shift to car owners
You cannot relax in any business……
It’s been quite a ride…………