Is advanced train control worth the cost?

Frank N. Wilner

If you wish to bring a grin to Chuck Dettmann's face, remind him of the 1993 Association of American Railroads board meeting when he sought to deliver an hour-long briefing on advanced train control. Dettmann, senior vice president-operations for the AAR and a former Union Pacific operating officer, was accosted by CSX President Pete Carpenter, who demanded the presentation last no more than five minutes. Major rail systems were on the precipice of reducing themselves to twin duopolies in the East and the West and there was no stomach to spend another billion dollars for intelligent trains.

With hindsight, some might argue that money spent on acquisitions should have been spent on intelligent trains. The essence of Union Pacific's 1997 meltdown and the post-Conrail carve-up service stumbles of CSX and Norfolk Southern were an inability to superintend traffic growth. Too few crews in too few places with too few locomotives and too few freight cars is the too-often-heard complaint that induced demarketing of traffic.

Four decades ago, Yale economist Kent Healy said giant, economy-sized railroads are too big to manage efficiently. Two decades ago, Conrail's Stanley Crane said he didn't "cotton to the idea" so long as sound management principles are applied. Technology was the answer, said the AAR in launching development of advanced train control technology in 1982. Predicted was a god from the machine and within financial reach of even small railroads because the systems would be modular, like stereo systems, permitting piecemeal additions and improvements. Then came new urges to merge.

The former Burlington Northern, with its ARES (Advanced Railroad Electronics System), moved a few steps beyond the AAR project with digital communication networks, integrated cab displays, and locomotive health monitoring that survive but fall considerably short of meeting the promise of advanced train control. So while truckers invested in technology to track freight in real time, schedule pickups and deliveries, and guarantee consistent ontime performance, railroads invested in each other.

Today, 50% of track is dark territory, about one-third has centralized traffic control, and the objective of using satellites, computers, transponders, and fiber optics to devise trip plans, schedule meets and passes, forecast the weather's effect on operating plans, design flow control, predict track maintenance windows, and run scheduled railroads remains an unfunded vision.

UP attorney Michael Hemmer says it best: "Customers continue to tell us, 'We want better service and not more mergers.'" In fact, shippers say they'd pay more for reliable railroad service. Surely the reciprocal is true: When service declines, shippers bolt to trucks where they can.

When former Federal Railroad Administrator Jolene Molitoris advocated advanced train control, she was told by railroad CEOs to keep her nose in safety statistics. Technology designed to avoid collisions-Positive Train Control-couldn't provide benefits exceeding costs. So Molitoris had the temerity to suggest that if elements of advanced train control were added, benefit/cost analysis would turn positive. She was convinced that safety and operational efficiency are inseparable. Railroads have said as much themselves, but Molitoris did not press forward. Her successor might demand another look.

For sure, the cost of advanced train control could be in the tens of billions of dollars. Railroads estimate that just PTC would cost $8 billion on a systemwide basis, and PTC still comes up short on safety. PTC cannot, for example, distinguish between a coal train and an intermodal train, much less anticipate safe stopping distances. But then nobody ever claimed running a railroad is cheap-unless it is run into the ground.

The evidence is compelling that scheduled railroads please customers and cause operating ratios to tumble. Witness Canadian National's ability to post operating ratios in the mid-60s.

But perhaps it won't be today's railroad officials who will adopt advanced technology. Tucked into a Y2K Department of Transportation study was this nugget: "There is the possibility that non-railroads could acquire railroad systems and operate them very differently than they are operated today. Innovative transportation companies, such as UPS, could acquire railroads to strengthen their multimodal operations and control the railroad's operation rather than be a customer of that railroad as we have historically seen." One way or another, the customer always is right.