INTERNATIONAL RAILWAY JOURNAL, JANUARY 2020 ISSUE: A stagnant North America freight market is set to continue in 2020. However, technological advances and potential growth in intermodal and heavy-haul offer Class I railroads room for optimism.
Author: Jim Blaze
Premise: The golden age of railroads taking trucks off of the highways might be over. Why? Because the low-hanging fruit may already have been harvested. Translation: Most rail intermodal traffic may be in fewer than two-dozen origin-destination lanes across the United States. That was the low-hanging fruit. Now, It’s mostly in growth hypostasis.
There is a great deal of technology and data science that can help extend track and bridge structure life. But the railroads are not always out in front in exploiting the opportunities. Engineers can see the practical uses of bridge “micro movement” sensor technology. But at the big executive table that allocates the budget resources inside railroads, identified economic opportunities point to the need for the chief financial officer and his or her risk management staff to get directly involved in examining the identified options not seen before sensor data analytics entered the tool box. Perhaps as many of one-half of all visual inspection-based bridge capex decisions are wrong. Why? Because the visual data entered into the sophisticated engineering spreadsheet formulas isn’t accurate enough.
Here is a different perspective regarding the decline in U.S. rail carloads, and how long ago it may have started. Lee A. Clair, Managing Partner at Transportation and Logistics Advisors (T&LA, Highland Park, Ill.) originally authored these observations.
A headline story says that U.S. Sen. Dick Durbin (D-Ill.) has introduced a bill that would allow Amtrak to sue the freight railroads for preventing Amtrak from meeting suitable on-time performance standards. The senator alleges, “By empowering Amtrak to hold the freight railroads accountable … we can improve Amtrak’s on-time performance and save taxpayer dollars. The people of Illinois—and Amtrak riders nationwide—deserve assurance that they can arrive at their destination in a safe and timely manner.”
Dr. William Huneke, Consulting Economist, offered his opinion in the Railway Age report STB “Whack a Mole.” As he pointed out, the Surface Transportation Board in the past rarely had time or staff to do more than react to the latest rate case, stakeholder petition or Congressional request. He described a sense of Whack a Mole in the flurry of STB regulatory reform proposals, particularly STB’s tinkering with the industry cost of capital calculation.
There are reports that the Alameda Corridor, the heavily used, 20-mile-long, grade-separated railroad intermodal corridor connecting the Port of Los Angeles and Port of Long Beach with the BNSF and Union Pacific main lines, has been seeing year-over-year maritime container volume drops, with a resulting decrease in rail traffic. The Alameda Corridor Transportation Authority (ACTA) oversees the corridor, which was built through a public/private partnership (PPP) and opened in 2002. One outlook is that perhaps “if current trends continue, ACTA will experience significant cash flow deficits beginning in 2024 … growing in size out toward 2038.”
WilmingtonBiz.com reports that CRRC Yangtze Co. Ltd., owner of 22% of Vertex, claims nearly all of the $45.4 million in debt listed in the petition filed in U.S. Bankruptcy Court in Delaware. Two other Chinese companies—Wuhan Kemai Machinery Manufacturing Co. Ltd. and Wuhan Flying Free Logistics Co. Ltd.—list debts of $92,561 and $373,273, respectively.
KPIs are shorthand for linked Key Performance Indicators. Not all railroad industry KPIs are internalized data. In fact, the best KPIs come from non-railroad sources. Internal railroad data is important. But its value appears when cross-checked with other sources. Here, the prime research source is the Association of American Railroads (AAR) monthly report card.
Safety is important. Yet, we can do safety research and development a lot faster. It’s timely to ask why the regulatory process takes so long. Today in transport logistics, our society seems to lack a sense of urgency. As one example, it now takes regulatory agencies (and non-regulatory bodies like the National Transportation Safety Board) as long as 18 to 24 months to complete an accident investigation report. Why so long? It’s a mystery.