Components: New-build or rebuild?

Railroad engineering, purchasing, and quality assurance departments weigh this question using reliability, cost, and environmental conditions as guides.

By Marybeth Luczak, Associate Editor

	Typically, locomotive components-which are most expensive new-are rebuilt, and freight car parts-whose wear rates tend to be higher-are replaced with new. Photo by CSX Transportation

When it comes to new vs. remanufactured components, whoever responds the quickest and offers the best quality and reliability wins, according to many in the railway supply community. Though initial cost is still a main factor in the purchasing process, the real challenge for suppliers is lowering the cost of ownership. Reliability and productivity over time, even at a higher initial cost, is becoming more important.

The path to determining life-cycle cost of new vs. rebuilt components is not clearly defined. It is dependent upon the type of component and its application. Although prices are readily available, specific reliability data is not. Class I's often have their own testing facilities and component life-tracking programs to perform tests and analysis, while short lines and regionals are forced to rely on supplier statistics, the experience of other roads, and Association of American Railroads standards.

Getting at the core
Just about any component from air brake equipment and end-of-car cushioning devices to couplers, bolsters, and side frames can be remanufactured. "Many remanufactured components are standard," says Robert Singleton, vice president-marketing and product support for Engine Systems, a Wabtec Corp. subsidiary. Typically, locomotive components-which are most expensive new-are rebuilt, and freight car parts-whose wear rates tend to be higher-are replaced with new (two exceptions are wheels and bearings).

AAR sets minimum standards for remanufactured parts. Such standards are fundamental to interchange rules, according to AAR Assistant Vice President-Technical Services Patrick T. Ameen. For example, with coupler parts, shank bending or wear and knuckle wear beyond a certain limit, a crack in coupler body (depending on where the crack is), and a coupler body having a section broken out in any area are causes for renewal. Remanufactured couplers must comply with AAR Specification M-212 at certified facilities, and the body or core of the coupler must be rebuilt at a facility that has a quality assurance specification under AAR M-1003 standards. All components must be replaced in kind or upgraded, although AAR does not require that a specific component be new, remanufactured, or second-hand.

Remanufacturing, which can save railroads up to 30% of the cost of buying new, "virtually brings components up to OEM or like-new standards," says James Kingerski, president of FMIndustries, a subsidiary of Progress Rail Services. "In some instances," he says, "there are more check points and gauges on remanufactured components than on new."

How can a remanufactured part be "as good as new" if it is 20 to 30 years old? Not everything in a remanufactured component is used. Coupler bodies are often recycled, explains ABC-NACO Technologies Executive Vice President Steve Becker, while such internal components as knuckles are changed out with new ones for increased strength and reliability.

Recycling a component's core is common practice. Not only do railroads save on the cost of buying new, but they only pay for the remanufacturing service. Railroads and suppliers set up unit exchange programs so that when a component breaks down, the railroad can send it to the supplier for repair while the railroad replaces it with an in-stock rebuilt component. A core inventory or pool allows railroads to minimize equipment downtime.

The cost factor
"There is an increasing pressure to reduce cost in our business, which keeps us looking at every component," says Burlington Northern and Santa Fe Chief Mechanical Officer-North Warren Cross. "We make the first cut by cost," adds CSX Transportation Chief Mechanical Officer-Locomotives Mike Wall. "Typically, we agree on a purchase price based on our quality specification, and have found that rebuilding [components] is generally more cost effective. We have a long-standing practice to rebuild traction motors and air brakes since the core, normally, is adequate to be rebuilt. We also reuse axles and reprofile wheels and send them back out into the field."

What gauge do railroads use to determine a reasonable rebuilding price? "If the cost of a rebuilt component is 65% or more than the cost of a new one, railroads generally buy new," says Dale Bradley, director-fabrication sales for Texas Rail. When looking at price, railroad engineering, quality assurance, and purchasing departments also take into account such hidden costs as delivery, handling, volume discount, and warranties. "Railroads must consider transportation costs from the point of removal to the remanufacturer," says Stanley J. Cieslak, vice president-sales and marketing for McConway and Torley Group, a subsidiary of Trinity Industries. Large parts like freight car yokes, which weigh approximately 210 pounds, are expensive to transport, so buying new can make sense, he says. However, delivery schedules may outweigh cost. Depending on how long delivery will take, a railroad may pay more for a component-new or rebuilt-that is ready sooner.

"The real focus now and in the future is reliability," says Dale Engelhardt, vice president and general manager of Engine Systems. "Railroads are using fewer locomotives to haul more freight, so they have to be absolutely sure that components will operate properly. An unforecasted failure in a locomotive is more devastating now than in the past."

Risk analysis is a necessary part of the decision-making process, says Allen Zarembski, president of consulting firm Zeta-Tech Associates, Inc. "What is the risk of a rebuilt component's failure over that of a new component? Does the present cost offset future costs?" This is where life-cycle costs come into play. BNSF's coal fleet uses bearings with premium quality seals in high-tonnage, high-mileage applications where downtime is expensive. Even though the initial cost is higher, says BNSF Vice President and Chief Sourcing Officer Jeff Campbell, "history has shown they offer better performance over time."

Service factors
Selection is also based on a part's service environment. With the increase in 286,000-pound, heavy-axle load (HAL) service, components must withstand tougher conditions.

While AAR standards have not changed completely to accommodate HAL service, they do specify particular types of components to be used, such as heat-treated, curved-plate wheels and a specific type of roller bearing, says AAR's Ameen. But AAR's minimum standards, says Howard J. Bush, vice president-marketing and sales at Brenco QBS, allow bearings with spalling (an indication of fatigue), denting of raceways, and peeling/smearing or scuffing of raceways to go back into service.

"There is a big difference between a remanufactured bearing going back on a plastic pellet car that is used 10 times a year, and one that's used on an intermodal car or coal car [in HAL service]," Bush says. Brenco offers premium remanufactured bearings that eliminate all defects and provide longer service life. It is up to the railroad, however, to make the final determination.

Sometimes a railroad may not want to invest in longer-life components if it is remanufacturing a locomotive for a specific project with a limited time span, says Zeta-Tech's Zarembski. Minimum standard components would be acceptable in this situation. "An analogy is buying a used car," says Rick McIsaac, director-service centers for Wabtec Corp. "If a railroad plans on using a component for 10 years, it is a good option in some cases to buy rebuilt. But in others, new is better, depending on the application and the budget."

Troubleshooting
Besides performing laboratory tests, BNSF chooses a group of 30 locomotives on which to install a particular component and then tracks performance over a period of six to 12 months. In contrast, smaller railroads often look to suppliers and other rail properties for information on the history and performance of a new or rebuilt component. Wisconsin Central, for example, chooses components based on experience with vendors, says Bob Nadrowski, WC vice president-mechanical. "We have not done studies on how long a new part lasts vs. a rebuilt part; we don't have a huge staff," he says.

Class I's like BNSF also let suppliers make some decisions for them. Locomotive contract maintenance allows BNSF to pay a supplier a flat rate to remanufacture components or replace them with new ones at a quality standard the railroad sets. "In the past, if we asked "what type of part should go into a locomotive, new or rebuilt?" says BNSF Chief Mechanical Officer-South BJ Ryan, "the supplier would clearly say new. Now, rebuilt is generally standard."

Don't wait until it breaks
Traditionally, railroads replaced components after they failed. Today, they are taking a more proactive approach. "We look at failure rates, and replace components in the mean time between failures instead of performing complete overhauls," says BNSF's Campbell. For example, most Class I's track and test components through vibration patterns and infrared analysis when a locomotive or car goes into a repair shop. ABC-NACO, under contract with Union Pacific, performs ultrasonic inspections beyond AAR requirements to ensure high performance.

Engine Systems has established a measure to help railroads periodically check on the health of their remanufactured turbochargers. Before shipment, Engine Systems records the vibration signature of the turbocharger. Any change signals a need for maintenance. Each health test allows a railroad to create an inspection history to show trends. "Such periodic maintenance should be standard," says Wabtec's McIsaac. "Currently, maintenance schedules are recommended by the component manufacturer, but are not always followed."

Large and small roads have different formulas to choose between new and remanufactured components, but both follow a circuitous route to reach an optimal purchase decision.