Current Issues – Private Railcars
Association of Car Accounting and Car Service Officers
May 14, 2015
Darrell Wallace
North America Freight Car Association
Objective
• NAFCA background
• Issues being addressed by NAFCA
• Issues of importance to private car owners and
operators
• Issues to look for in the future
NAFCA
• NAFCA organized to protect the interests of the owners and
non-railroad operators and manufacturers of private railcars
• NAFCA currently made up of 35 members who collectively
own or operate in excess of 687,000 railcars
–
–
–
–
Railcar manufacturers
Railcar owners and lessors
Shippers who own and/or lease railcars
Associate members
NAFCA Mission Statement
• Promote the safe, efficient and economical use of
private railcars
• 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 rail cars
NAFCA Goals
• Educate the public and lawmakers regarding
operational, regulatory, economic and legal matters
that affect private cars and private car owners and
operators
• Work with carrier and legislative bodies seeking
areas where we can work together to improve the
safe operation of private rail equipment while
protecting the rights of private car owners and
operators
Current Issues
• NAFCA filed complaint against the AAR with the STB
(October 2012)
– Truck hunting rules tolerances
– Balance costs based on benefit received
• NAFCA and AAR Settlement resulted in new AAR
rules
– CBA required when cost to implement revision
• Exceeds $5.0 million in calendar year, or
• $50 million net present value over 15 years, or
• Upon written request of any member of the Committee sponsoring the
proposal
Current Issues
• Implementation of Rule Revisions
– Rule revisions can only be implemented
• Aggregate benefits exceed 75% of cost of implementation and
– Total Equipment Maintenance Improvement benefit is at least 65% of cost, or
– Total Safety benefit is at least 30% of cost, or
– Combined Equipment and Safety benefit is at least 65% of cost
– If thresholds not met
• Implementation of new rule not allowed unless
– AAR and Associated Advisory Boards Car Owner Committee agree to funding
of implementation
Current Issues
• NAFCA and AAR Settlement resulted in new AAR
rules
– CBA not required
•
•
•
•
•
•
Product defect
No cost effect of private car owners
Car Repair Billing Rates
Billing Repair Data Requirements
Editorial changes
Rules mandated by Government regulation
– Appeal procedure in place for CBA process
Current Issues
• NAFCA filed complaint with the STB against the
Union Pacific (March 31, 2015)
– Other complainants
•
•
•
•
•
•
•
Chlorine Institute
The Fertilizer Institute
The American Chemistry Council
American Fuel and Petrochemical Manufacturers
Cargill
Poet Ethanol
Poet Nutrition
– Complaint based on recent UP Tariff publication
•
•
•
•
•
UP began charging for empty tank car movements to and from shops on 1/1/15
Violation of statutory obligation to compensate for use of private tank cars
UP does not provide tank cars
UP does not compensate tank car owners for the use of their tank cars
UP tariff imposes new cost of ownership without compensation
Current Issues
• PHMSA Notice of Proposed Rulemaking – Enhanced
Tank Car Standards
– PHMSA ruling issued May 1, 2015
• Enhanced tank car standards
– New cars built after October 1, 2015
– DOT 117 design
– 9/16 inch normalized steel
• Aggressive retrofit schedule
• Established braking standards
– ECP requirement
• Operational protocols
– Restricted speeds
• Sampling and testing
– Petroleum based products
Current Issues
• PHMSA Ruling Challenges
• Speed Restrictions and Routing
– Adverse effects for rail shippers
– Public disclosure of routing information
• Retrofit compliance
–
–
–
–
–
Shop capacity
Materials shortages
Idle railcars
Product movement issues
Plate C clearance issues
• Judicial challenge likely
– Industry stakeholders
– Environmental groups
– Communities
Current Issues
• 2 Wear Wheels vs Single Wear Wheels
– Application of 2 wear wheels
• Running repairs by carriers
– Single wear wheels replaced by 2 wear wheels on private cars
– Cost imbalance created
» New wheels applied to private cars
» Turned wheels applied to carrier cars
– NAFCA position
• Generally support application of 2 wear wheels
• Support contingent upon
– Industry wide requirement for equitable use of new vs turned wheels
– Objective and measurable standards developed and codified
– Penalty established for not meeting standards
• NAFCA does not support application of Class D wheels
Current Issues
• OT-5 Approvals
– OT-5 Circular clear on reasons to deny OT-5
“Application for approval of shipper provided cars cannot be denied by
carrier(s) except for reasons of safety, mechanical factors or inadequate
storage space.”
– Carriers delaying, refusing and cancelling existing OT-5 Application
•
•
•
•
Requesting additional information on storage plans
Requesting track layouts at all facilities
Requesting detailed mechanical specs and diagrams of equipment
Requesting information on how many cars at any one time will be on
carrier
• Denying all car on OT-5 application if one car has a open DDCT warning
– CP rule change announced – Eff: 5/1/15
• $500 per car charge for failure to obtain OT-5 approval
– AAR TAG group established to review current system
Current Issues
• FDA Required Safety Reflectors
– 10 year phase in – November 28, 2015
• Potentially 149,000 cars not in compliance
• Completed cars need to be updated in UMLER
• Early warning will be issued and car will not be allowed in interchanged
– Tests on Reflector Effectiveness
• 10 year replacement requirement may be modified
• Texas A&M doing research
– First method is a comparison test
» Subjective test
– Second method check the luminosity of reflector
» Allows for establishment of performance limits
Current Issues
• Exclusion of Empty Tank Miles
– Empty tank mileage to and from shops for mandated
repairs
• Not to be included in mileage equalization formulas
• AAR requested to consider special coding of movements
• Car Repair Agent Billing Rates
– Should be included in AAR Labor Rate and Materials
Calculation
• McKinzie Valve issue
– 3” valves to be replaced by 5/12/15
– 1” and 2” valves to be replaced by 6/11/15
Current Issues
• Slack Adjuster Issue
– Water freezing in slack adjusters and causing derailments
– FRA wants change out prior to winter 2015
• Liability issues for private car owners and operators
– Continued push by carriers to shift liability
• Continued erosion of compensation for private cars
• Continued push for safety
– Safer rail equipment
– Safer rail operations
Thank you for your attention