Railroad Industry Has Its Wish List of Legislative, Policy and Regulatory Changes at the Ready

Christmas is 10 months away, but the railroad industry has a long wish list of what it wants from Santa Claus, who in this case is the federal government

The industry will send representatives to Washington on March 7 for its annual Railroad Day on Capitol Hill to push policy makers in Congress, the executive branch and federal regulatory agencies to grant those wishes.

In an analysis, Progressive Railroading magazine said some items on the list are perennial wishes, meaning the industry has still yet to see them granted.

These include a permanent extension of the Section 45G tax credit for short lines railroads; maintaining existing truck-size and weight restrictions; shoring up the federal Highway Trust Fund; and knocking out the U.S. Surface Transportation Board’s proposed “competitive switching” rules.

A recent wish that has been added to the list concerns the Trump administration infrastructure program proposal that Congress is now considering.

Railroad industry trade groups said they will push for rail projects to have priority in funding programs.

This will include increased federal funding for Amtrak and commuter-rail agencies to complete positive train control implementation.

They also want to argue that rails need to be on the same level as other modes of transportation.

“We are very concerned about modal parity,” said Nicole Brewin, vice president of government affairs for the Railway Supply Institute. “We are concerned that rail should have a bite of the apple, so to speak.”

NAFTA

Going back to the 2016 presidential election, railroads have expressed concern about the fate of the North American Free Trade Agreement, which then-candidate Donald Trump used to decry at every opportunity.

Since being elected, Trump has pushed to renegotiate the treaty, but encountered resistance from Canada and Mexico.

The railroad industry has generally supported the talks to negotiate new terms to NAFTA, but doesn’t support Trump’s pledge to withdraw if he doesn’t get the terms he wants.

That’s because railroads benefit from moving goods between the United States and Canada and Mexico. This includes some goods that are manufactured elsewhere around the world, but routed through those countries.

“Economic growth tied to NAFTA has allowed railways to invest tens of billions of dollars into their infrastructure while improving productivity and customer service, and fostering innovation,” a coalition of railroad trade groups wrote in an open letter issued on Jan. 22. “Collectively, these improvements have enabled railways to maintain the low rates that are required to provide shippers with access to global supply chains to support their success.”

The letter said that NAFTA has since it went into effect on Jan. 1, 1994, helped develop an integrated economy in which a continental rail network is essential for the flow of goods across North America.

Trade between the U.S. and Canada between 1993 and 2016 increased by 157 percent to $544.6 billion. During the same period, U.S.-Mexico trade skyrocketed 543 percent to $523.8 billion and Canada-Mexico trade jumped 776 percent to $30.8 billion.

The letter was signed by the heads of the Association of American Railroads, the Railway Association of Canada, and the Asociacion Mexicana de Ferrocarriles.

The AAR said about 42 percent of rail carloads and 35 percent of rail revenue are directly associated with international trade.

“We’re not saying NAFTA can’t be updated,” said AAR CEO Edward Hamberger. “There will be changes in it. But you can’t just withdraw from it.”

Worrying the railroad industry is a Trump administration proposal to dramatically increase the amount of content from NAFTA nations in automobiles to 85 percent from 62.5 percent.

The administration wants to see 50 percent of the content of vehicles come from companies in the United States.

Much of the auto traffic in North America, including parts, moves by rail and the industry fears that the administration’s proposed formula could interrupt the supply chain and make it more difficult for vehicles and parts to move within the United States or between Mexico and Canada duty-free.

Short Line Tax Credit

The short-line railroad tax credit has long been on the wish list of the American Short Line and Regional Railroad Association.

The credit, which expired on Dec. 31, 2016, allowed regional and short-lines railroads to claim a 50-cent tax credit for each dollar they spend on track rehabilitation and maintenance projects. That credit is capped at $3,500 per mile of owned or leased track.

Although Congress is considering extending the credit until the end of this year, ASLRRA President Linda Bauer Darr said her group’s members want a 10-year deal.

Class I railroads recently benefited from the Tax Cuts and Jobs Act, which cut their corporate taxes. Now short-line railroads want relief of their own.

Truck Size

The trucking industry, of course, has its own wish list that it circulates in Washington and that includes loosening federal restrictions on the size and weight of trucks allowed on interstate highways.

Truckers would like to see the allowable length restriction on double trailers extended from 28 feet to 33 feet.

“Our biggest concern [with the truck-size and weight issue] is the size and shape of the opposition,” says ASLRRA’s Darr. “As we see companies like Amazon coming on board and aligning themselves with FedEx, UPS and others, it becomes an even larger challenge to hold our ground on what is an existential threat to our industry.”

Darr said twin 33-foot trailers would hurt the carload market of railroads by causing a significant amount of freight diversion from rails to trucks.

Railroads and a lobbying group fighting longer trucks beat back the trucking industry’s proposals last year, but the truckers are back.

Railroad lobbyists say the congressional appropriations process is always a battleground because appropriations bills are the primary vehicles for bigger-truck proponents to advance their proposals.

Highway Trust Fund

The solvency of the Highway Trust Fund has been an issue in recent years because of falling revenue from federal taxes on gasoline and diesel fuel.

The trust fund is used for surface transportation improvements, including at transit-rail agencies.  Congress last increased fuel taxes in 1993 and many in the transportation sector have long argued that the trust fund isn’t keeping pace with the cost to maintain and repair infrastructure. Since 2008 Congress has bolstered the highway trust fund with $143 billion a year from general revenue.

The railroad industry argues that this has represented a subsidy to the trucking industry, which doesn’t cover the cost of infrastructure damage caused by heavy trucks.

The AAR said that freight railroads have invested $25 billion a year in their own infrastructure networks.

“We think our competition should have to pay their way as well,” said AAR Senior Vice President of Government Affairs Ian Jefferies.

The AAR has proposed finding new ways to shore up the highway trust fund, including raising the gas tax or instituting tolls or new fees based on vehicle miles traveled.

Railroad Regulation

So long as railroads and their customers continue to have disputes there will continue to be calls by shippers to impose new regulations on railroads.

The railroad industry is heartened by the Trump administration’s approach to federal regulation, including the U.S. Department of Transportation’s repeal late last year of a Federal Railroad Administration rulemaking proceeding pertaining to the installation of electronically controlled pneumatic brakes on certain tank cars.

The railroad industry has called Trump’s efforts to streamline the infrastructure project approval process a welcome sign.

Still, railroad industry executives worry that some proposed regulations being considered by the STB might discourage railroad investments.

This includes competitive access, also known as reciprocal switching, which is being pushed by some shippers.

The railroad industry view is that competitive switching would force them to surrender their privately-owned property for use by competing railroads, said Sean Winkler, director of advocacy at the Railway Engineering-Maintenance Supplier Association.

For their part, shippers counter that reciprocal switching would increase price competition.

The railroad industry is also eyeing how the STB defines “revenue adequacy” for Class I railroads, a concept that describes whether a railroad is earning enough revenue to cover its costs and earn a return that’s sufficient to attract capital.

The STB is currently awaiting the seating of three more members before moving forward on some rulemaking decisions.

The Board has two members, Acting Chair Ann Begeman and Vice Chair Deb Miller, since a third member, Daniel R. Elliott III, resigned last September.

The railroad industry wants to see those open seats filled by members with direct rail industry experience.

Infrastructure Plan

The railroad industry is pleased with the Trump administration’s focus on rebuilding infrastructure but fears that partisan fighting will result in little or nothing getting done.

The administration has proposed spending $200 billion over the next decade as matching grants for projects that would be primarily financed by state and local governments, or the private sector.

Trump has claimed that the plan will lead to $1.5 trillion in infrastructure spending.

“Picking a number to spend on infrastructure is the easy part; the hard part is figuring out how to pay for it,” said Chuck Baker, president of the National Railroad Construction and Maintenance Association.

Baker said he is “hopeful but not optimistic” about whether Congress will be able to agree on a program that “spends real money and in any way moves the dial on infrastructure.”

Instead, he believes what is more likely is a smaller bill that calls for regulatory reforms, shortens the environmental permitting process and fixes financing programs for infrastructure projects.

The railroad industry hopes that any infrastructure program included grants for freight-rail projects.

It could also be used to extend longer term the short-line railroad tax credit, freeze current truck size and weight restrictions, and provide grants for transit and intercity passenger rail.

CN Plans to Boost Capital Spending in 2018

Canadian National plans to boost capital spending this year by greatly expanding its track capacity.

The bulk of that expansion will occur in Canada, although CN is planning to expand capacity of its route between Chicago and Winnipeg.

Jim McLeod, CN’s chief engineer, structures, design & construction, described CN’s capital spending during a presentation at the National Railroad Construction & Maintenance Association conference as moving from “steady as we go” to a cycle of “the gangbuster variety.”

This year CN will add 49 miles of double track tracking, four new sidings, and three siding expansions.

It also plans to begin renewing the St. Charles Air Line in Chicago, which is used by Amtrak trains between the Windy City and New Orleans. Some bridges on the St. Charles Air Line were built in 1899.

In total, CN plans to spent $85 million in 2018 and $100 million in 2019 on bridges.

Basic track infrastructure spending will rise from $1.18 billion in 2017 to $1.2 billion in 2018, $1.23 billion in 2019 and $1.27 billion in 2020.

The work includes replacement of 1.1 million crossties, a 20 percent increase, and replacement of 446 track miles of rail, which would be equal to what the railroad did in 2017.

Some Doubt Private Investment Will Help Rails

Private sector investment in railroad projects is unlikely, a congressional committee was told this week.

The comments were made at hearing held by the U.S. House Transportation and Infrastructure subcommittee hearing on rail infrastructure on a proposed Trump administration infrastructure renewal plan.

The Trump plan would rely on private investment as well as public funding.

The witnesses at the hearing said that the federal and state governments can be expected to play a role in sustaining and expanding the nation’s rail network, but the private sector is unlikely to be much of a player when it comes to railroad investment.

“What you’re talking about clearly goes beyond what the private sector at this point is prepared to do,” said Ed Hamberger, president of the Association of American Railroads.

In particular, Hamberger referenced the capital needs of Amtrak. The carrier’s co-CEO, Charles “Wick” Moorman had told the committee that the critical, huge infrastructure projects that Amtrak faces will require federal investment.

Without that, Moorman said, the system runs out. “We can do a lot of work on state of good repair, we can improve the way we spend money, but it’s going to take a lot of federal investment,” he said.

“I think Mr. Moorman’s needs go far beyond what the private sector can do,” Hamberger said.

One news report said that Democrats on the subcommittee pushed for public funding of intrastructure projects while Republicans members remained silent about that.

Even President Trump has reportedly expressed doubt about the scope of the private sector’s role in infrastructure rebuilding.

Trump reported said during a closed meeting of the House Ways and Means Committee that public-private partnerships were not the solution for repairing the nation’s roads, bridges, and ports.

The Trump administration has been talking investing $200 billion in federal fund to leverage $800 billion of private investment. However, details about that plan have yet to be announced.

“I understand that the private sector has a role, the states have a role, but I think the federal government has to have a bigger role,” said U.S. Rep. Albio Sires, D-N.J. “Without the support of the federal government, I don’t think these projects can be done. Does anyone here believe that the private sector is the sole answer to this? If you do, please tell me, because I don’t believe this.”

What We’ve Lost over Time on the EL in Kent

Sometimes when a railroad becomes a fallen flag, much of the rails and other infrastructure disappear and only memories are left. Compare this view of the Erie Lackawanna trackage in Kent in the late 1960s with what the Wheeling & Lake Erie operates now. We are looking toward West Summit Street and into downtown Kent. What a difference almost half a century makes.

Article and Photograph by Bob Farkas

 

The Fascination of Railroad Infrastucture

The surviving leg of the wye leading into the Bald Eagle Branch crosses the Little Juniata River in Tyrone, Pennsylvania.

Mention railroads and most people, including those who call themselves railfans, will think of trains.

But there is more to a railroad than trains. I find nearly as fascinating the intricate details of railroad infrastructure.

When I travel I make it a point to photograph the infrastructure that I see.

Such was the case last December when a friend and I spent time in Tyrone, Pennsylvania, along the Pittsburgh-Philadelphia mainline of the former Pennsylvania Railroad.

In the PRR days, Tyrone was a junction point with a branch that ran up the Bald Eagle Valley.

That branch still exists in the Norfolk Southern era, but it is now operated by a short line railroad, the Nittany & Bald Eagle.

In Tyrone, the Bald Eagle Branch ended at the mainline on a wye. One leg of that wye is gone, but the other is part of the interchange between N&BE and NS.

I like to study infrastructure for clues as to how things might have been. For example, in Tyrone, there is a narrow street that dead ends shortly after it passes beneath the still-active leg of the wye.

It seems likely that at one time this street continued to the PRR passenger station,  which has since been razed.

The narrowness of the streets suggests a time when people would have driven Model T cars to the depot.

Surrounding the tracks in Tyrone are the remains of what probably used to be an active industrial district.

There still may be some small industry in those buildings or perhaps they have been re-purposed for other uses.

Whatever the case, it is a reminder of times past and the people who went before who worked and traveled here.

Article and Photographs by Craig Sanders

Where there are railroad tracks there will be industrial buildings in urban areas.

Today this is a pedestrian bridge but at one time it may have been the street to the PRR passenger station. It must have been a one lane bridge over the Little Juniata River.

The tracks have been removed from the other leg of the wye that once led into the Bald Eagle Branch.

INRD to Spend $17.5M on Capital Projects in 2015

The Indiana Rail Road plans to spend $17.5 million this year for infrastructure improvements including laying new rail and ballast, undercutting select sections of roadbed and bridge replacement. The work will be conducted between March and October.

Two timber bridges on the Chicago Subdivision will be replaced at MP 221.07 and 221.35 in the White River floodplain between Linton and Elnora, Ind.

The northernmost bridge will be replaced by two concrete culverts but the southernmost bridge will be replaced with a 159-foot steel and reinforced concrete structure. That existing bridge is 184 feet in length.

Work will continue to replace the 117-year-old bridge over the White River north of Elnora. That $14 million project is expected to be completed by August. The bridge is stable, but has a 10 mph slow order and a 263,000 pound weight restriction.

Looking ahead, the railroad plans to replace a 112-foot timber bridge near Newton, Ill., in 2016.

In 2017, INRD expects to replace eight timber bridges on the Indianapolis Division with new bridges of steel and reinforced concrete decks.

Shuffle Creek trestle northeast of Bloomington will be rebuilt with some components of its 75-foot tall towers being replaced. The INRD system has 208 bridges.

The 2015 capital expenditures will be about a quarter of INRD annual revenues.

In other news, INRD President and Chief Operating Officer Tom Hoback sold his remaining shares of INRD stock to CSX on January 2. Hoback, who was one of the INRD’s founders, will retire later this year.

Indiana Rail Road to Replace 19th Century Bridge

The Indiana Rail Road will replace a bridge over the White River in Southern Indiana that was built in 1898.

The $14 million project calls for building a 450-foot steel plate girder bridge to be completed by October 2015.

The Indiana Department of Transportation helped secure an $8 million Transportation Investment Generating Economic Recovery grant to help fund the project.

The new bridge will use the existing bridge piers in the river, which will be rehabilitated and receive a reinforced concrete casing prior to the placement of the bridge sections. Wood pile approaches will be replaced with precast concrete and steel decks. INRD said the new bridge will allow its heaviest trains to cross it at 40 mph. Currently, the tracks on the bridge have a 10 mph speed limit. The bridge also has a weight limit of 263,000 pounds per car, which is less than the rail industry’s 286,000 pound standard.

The bridge is also used by the Indiana Southern Railroad via trackage rights.

INRD was said that 2014 capital spending will enable the railroad to reach a milestone this year whereby its cumulative capital spending since being formed 28 years ago will surpass $180 million. “To put that in perspective, in less than 30 years, we have reinvested from earnings nearly 35 times the initial purchase price of our railroad,” said INRD President and Chief Executive Officer Tom Hoback.

NS Ohio River Bridge Marks 100 Years

A bridge carrying Norfolk Southern’s Pocahontas Division over the Ohio River between South Point, Ohio, and Kenova, W.Va., observed this week the 100th anniversary of its rebuilding.

Construction crews met at the bridge’s midpoint on March 4, 1913, to connect the ends of the main channel truss.

The first train passed over the bridge on the morning of June 9 and construction wrapped up in September when workers finished painting the structure. At the time, the bridge was owned by the Norfolk & Western Railway.

The bridge was the longest structure on the N&W. Designed in 1892 as a single-track structure, burgeoning coal traffic led the N&W to rebuild and double-track the bridge. The renovations included pier modifications and new trusses that were built around the existing structure to allow rail traffic to continue during construction.

The project cost $1 million and required 21.6 tons of steel. When completed, the bridge was 4,000 feet long and stood 82 feet above the normal water level of the river.

“The bridge has undergone major upgrades several times over the past century and its excellent condition is a reflection of the industry’s continual investment – without taxpayer dollars – to give the nation an economic competitive edge,” said Jim Carter, an NS chief engineer based in Atlanta. “Like everything on the railroad, it is well-designed and systematically well-maintained. We fully expect it to be serviceable for another 100 years.”

The bridge has had some notable occurrences throughout its service history. During World War II, saboteurs were caught nearby and a Coast Guard unit was assigned to stand guard.

The world’s longest, heaviest freight train traversed the bridge on Nov. 15, 1967, when N&W operated 500 loaded coal cars and six locomotives as part of a contest with the Pennsylvania Railroad. The N&W train was five miles in length.

Today some 35 NS trains cross the bridge daily. The traffic includes intermodal, grain, coal, and general merchandise.