Activity in the rail market continues, with sizable portfolios being made available for sale in the secondary market. Profit taking and earnings management are driving those initiatives. New car orders for second-quarter 2016 are logging in at 7,500 cars (that’s 30,000 cars annualized). While surprising, that quarterly total is a number many in the industry are hoping will improve in the short term.
Last month, the Financial Edge discussed the disconnect between expectation and reality regarding implementation of new-design tank railcars. The importance of the ongoing discussion on car design and safety returned to the foreground after the June 3 derailment on Union Pacific in Oregon. What grabbed attention was the post-derailment discussion about the value and impact of adding electronically controlled pneumatic braking (ECP brakes) to trains hauling crude and other Class III flammable commodities in tank railcars.
FRA Administrator Sarah Feinberg told Oregon Public Radio, “We believe that [electronically controlled] brakes would have led to fewer cars derailing and potentially no fire.”
The AAR and Union Pacific had pointed responses. From the AAR: “(ECP) will not provide significant safety benefits and is technology that does not prevent derailments.” From UP: “The train involved in the Mosier accident was equipped with distributed power, which has a braking capacity very similar to ECP… It is speculative to suggest that ECP brakes would have prevented cars from derailing.”
Whew. As a friend says, “Can’t we all just get along?”
What’s at issue here? This is a dispute between the nature of perception and the field-level application of technology. The UP’s position makes sense: ECP braking may be significantly faster than conventional air braking. However, distributive power, placing locomotives mid-train and at the rear end, would shorten the application time of the air brakes by decreasing the length of the air brake line.
From the FRA point of view, the derailment presents an excellent opportunity to revisit the requirement for ECP brakes contained in the DOT 117 tank railcar spec issued almost a year ago and still under scrutiny for several issues, including, you guessed it, the requirement that all DOT 117 tank railcars have ECP brakes.
Railroad accidents (including crude oil train derailments) have stayed fairly level, averaging 2.6 train accidents per million train-miles from 2009-2015. ECP braking is technology that has been around since the 1990s. Its implementation is expensive, so it makes sense that if ECP braking is going to be mandated, the need and benefit have to be correct and quantifiable. So how can there be such diverse opinions about its applicability and its potential results?
I asked a few industry veterans this question. Some of the responses I got were, “ECP brakes don’t equate to accident (derailment) prevention and the cost benefit analysis is not supportive of its implementation.” From another source, “While ECP makes sense, I don’t imagine the railroads embracing the technology while they embark on the expenditures for PTC (Positive Train Control).” Railroad industry analyst Tony Hatch answered “politics,” and quipped that the regulatory bodies governing railroads continue to focus on train crew minimum sizes while simultaneously advocating for driverless technology for trucks on the nation’s highways. (That’s a high-profile topic for another column.)
Money and politics—who would have guessed? The shield of safety is something easy to hide behind. After speaking with experts in the industry, the factual support for ECP braking vs. other current and soon-available future technology seems flimsy. Perhaps the FRA’s support of ECP brakes is the low hanging fruit of deflecting criticism regarding railroad derailments and safety. Point a finger, make a statement and hide behind the veil of public safety—facts be damned. Without ECP brakes to point to, only the facts support consistency in railroad operational safety. As Railway Age Contributing Editor David Thomas has pointed out, the ongoing refusal to stabilize volatile Bakken crude being moved in tank railcars (by removing natural gas liquids) remains at hand to discuss. Lacking province over the decision of how crude is loaded into tank railcars, the FRA seems to be deflecting to safety down the ECP road.
At a cost of roughly $4,000 per car, many industry watchers hope that the FRA efforts fall flat. Political watchers might not have the same confidence.