Defining Private Railcar Storage Best Practices

Written by William C. Vantuono, Editor-in-Chief
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Safety first? Photo: Jim Allen/FreightWaves

There are things the regulators don’t tell you about marshaling and storing freight cars, such as how to detect rail head wear. Most railroad executives would not know how to do this. This commentary will include a few pointers that your favorite Class I railroad salesperson won’t typically pass on as business intelligence. Bad things can and do occasionally happen in rail yards. Therefore, it is prudent risk management to consider these matters ahead of time.

Railroad yards owned by the big railroads are subject to inspections by trained and skilled Federal Railway Administration (FRA) safety inspectors. Did you know that most privately owned industrial rail yards are not? Did you know that railroad operations officers know that they “might” more often derail in a private rail yard during a switching move than they would back out on their own Class I lines and yards?  

Source: Jim Blaze rail accident investigation PowerPoint notes 1999-2015.

Most industrial track yard accidents are minor and never are officially reported to regulators or entered into the national FRA database. Yard accidents do not meet the threshold reporting criteria. They do sometimes result in extreme damages—and occasionally there are deaths and high property damages in such yard accidents. Resolution of damages and control of the public-image damages are then resolved in civil proceedings.

A “well-decorated” freight car. Photo: Jim Allen/FreightWaves

Therefore, please consider this commentary as a risk reminder. As a contractor or perhaps as a production plant manager overseeing an adjacent private rail yard, you face certain practical rail maintenance requirements. Here is a market view that briefly suggests how you might address those issues and how to be the best you can be at performing that railway oversight role.

Be First In Safety

Photo: Jim Allen/FreightWaves

You’re in charge of the plant rail safety. The title normally comes from your company. So when you adopt your rail yard security plan, don’t just have a general plan. The first rule is to have a plan that you as a non-railroader understand—and that you feel comfortable enforcing from a technical perspective. If you are going to do it, do it well. In fact, execute it as effectively as you can. Here are simple safety tips to get you mentally into the task.

  1. Everyone obeys the yard safety rules. Example. A “No Hunting” posted sign means exactly that. Here is one failure to communicate. A recent safety audit discovered a man on top of one tank car using it as a deer stand. Turned out, he was the local sheriff!
  2. Technically, the track lessee is supposed to have the security plan. However, often the on-site railroad subcontractor your firm hires has the track and car switching expertise. Manufacturing is your “gig.” My recommendation is to share the risks via a technical collaboration.
  3. With modern heavy axle loadings, ensure that your yard track structure can withstand the weight of those 286,000-pound GRL (gross rail load) railcars moving over it. Old, unsecured track structure (ballast + ties  + fasteners + rails) might seem like an ideal place to store cars and generate revenue.  However, there can be associated derailment risks to be mitigated.
  4. If you are storing tank cars, you’ll need to make regular tank leak inspections, especially during large swings in ambient temperature. For example, cars loaded in the winter that sit for months may leak in summer temperatures. Make sure this is covered in your subcontractor agreements.
  5. Seal your cars. Leakage can foul your track structure. Make hatches, protective housing covers and bottom outlet valves a priority for daily to weekly inspection. Avoid the risk of tampering. These cars sitting alone on miles of yard track can be a hazardous nuisance. Limit that exposure risk.
  6. Work with the railcar owners to do any railcar repairs while the cars are stored. It is cheaper that way since the railcars are assembled in one spot. Cutting out cars for emergency repairs later just prior to a movement can cost you one to two added yard switching charges. That might add up to $400 or more each time.

Taking Care Of Yard Infrastructure

Photo: Jim Allen/FreightWaves

Beyond the railcar safety program, here are a few practical best-practice tips from the engineering and accident investigation part of my rail career.

Training is especially critical. Do you have in-house inspectors and supervisors trained to recognize track problems when all the maintenance work is performed by outside contractors? If not, then train them, or outsource the job. Class I railroads do this training on a regular basis.

First, the basic training deliverable is to make sure that the plant supervisor knows how to direct the local yard maintenance workforce for preventive maintenance work. Second, the inspectors must be able to recognize potential derailment sites before they become critical, and of course, the maintenance supervisor should be able to tell if the contractor is performing at an acceptable level.

After training, track inspection is the first line of defense in yard maintenance. While most of the track within the facility does not come under the jurisdiction of the FRA, it is recommended that FRA procedures be used as a safety net series of metric guidelines. All active yard railroad track should be inspected once a month. That is not a best practice—it is a minimum requirement.

Inspection photo from an industrial complex yard. Photo: Jim Blaze

Here is what you are going to inspect:

Ballast and tie renewal are a starting point. You want to attack the track asset service life by managing normal wear and tear and replacing defective and/or failed ties. As an example, assume yard traffic movement level of about 1 MGT (million gross tons) of traffic per year. As a rule of thumb, plan for about 100 tie renewals per year per mile of running track in your yard.

Drainage of surface water is a continuing yard problem. Some yard locations might require laying of filter fabric along with sections of perforated pipe within water retention yard areas.

When surfacing and replacing railroad ties, consider adding a 2-inch layer of fresh ballast. Crushed granite ballast is an excellent type. Ballast is cheap.

Track can become fouled by several things, including accidental commodity spills. That spill works its way into the ballast and causes problems that can be solved by maintenance practices.

Track geometry repair is another yard work task. What you want to maintain or improve is the track cross-level and profile through resurfacing or tamping of the ballast and tie/rail structure.

Track gauge is critical. You should be checking for gauge tolerance. Wide gauge is often the most recurring problem in rail yards. You’ll often find gauge problems in sections with road crossings, turnouts and areas where ties and fasteners are deteriorated.

Rail maintenance requires surface and internal checks. Internal rail flaw detection is not mandatory for private yard tracks, but it is a best safety practice. Rail flaw detection and repair is one of those factors that makes you a best-practice company. Rail in yards has often been cascaded down from main line track use to secondary branch line or passing tracks, and then into yard tracks. A rare but occasionally seen poor rail maintenance condition is a “Dutchman’s” rail condition, where there isn’t much holding the two-piece broken rail section in place.

Inspection photo from a Class I railroad site two decades ago. Photo: Jim Blaze

Steel eventually wears out from fatigue, wear and environmental conditions. Quite often, yard rail is pretty old and of light weight, but with a usable head wear profile. With slow train movement speeds, it is still likely useful and safe. Lighter rail—perhaps 100# RB sections—most likely consists of jointed rail instead of welded rail. That’s still okay for yard marshaling purposes.

Industrial track inspection in Delaware, 2007. Photo: Jim Blaze

Turnouts within a rail yard are most likely to require special inspection attention  and repairs. Here is what to look for:

  • Missing or broken bolts and cotter pins.
  • Misaligned switches and switch points on the turnout.
  • Broken or worn connecting rods.
  • Broken or cracked joint bars.
  • Misaligned rail ends and rail-end batter.

Some yard limits extend well beyond what is normally considered the geographic gates of a Class I railroad yard, like this yard limits track that’s is actually part of a branch line serving a port market yard:

Tracks located in rural North Carolina, 2018. Photo: Jim Blaze

Big Business In Rail Yards

Now that we covered best business practices, here is why railroad private yards are an important business market. Today, in mid-2020, storage yards are an interesting business sector, since between 25% and 33% of the North American railcar fleet is technically in some kind of storage until the uncertainty of the COVID-19 pandemic crisis stabilizes. 

Many of these yards are called by the market term SIT (storage in transit) yards, a growing business sector. SIT rail yards are privately owned and operated. They are found across the U.S. and Canadian network, and in strategic market locations within Mexico. Their role is to provide a ready-to-use railcar supply near clusters of manufacturing facilities. Examples of locations near SIT yards are the New Jersey “chemical coast” or the vast Louisiana to Texas Gulf petrochemical coast. That is the supply side yard pattern for SIT facilities.

On the market demand side, SIT yards are strategically placed downstream close to clusters of consignees/customers. The use of SIT yards is a widespread and profitable business model sometimes described as offering rail freight customers the flexibility of “a bulk yet specialized commodity warehouse on wheels.” Over time, a well-defined pricing structure for railcar parking has developed. By subscription or private negotiations, one can digitally access prices by different regions and different yard space vendors to examine parking spot prices. Two pricing structures are typically offered. One is for empty railcars, the second for railcars stored with commodities on board. 

Pricing for railcar movements (switching and pulling) and separate maintenance services are also widely quoted in the marketplace. Rates are usually contracted for a monthly or longer time period.

If you need to store your railcars, one of the selection criteria reflects back to the safety and inspection image that’s important to your corporation. Do you buy cheap storage? Or are you more interested in best-practice providers? How do you value best-practice yard services?


Independent railway economist, Railway Age Contributing Editor and FreightWaves author Jim Blaze has been in the railroad industry for more than 40 years. Trained in logistics, he served seven years with the Illinois DOT as a Chicago long-range freight planner and almost two years with the USRA technical staff in Washington, D.C. Jim then spent 21 years with Conrail in cross-functional strategic roles from branch line economics to mergers, IT, logistics, and corporate change. He followed this with 20 years of international consulting at rail engineering firm Zeta-Tech Associated. Jim is a Magna cum Laude Graduate of St Anselm’s College with a master’s degree from the University of Chicago. Married with six children, he lives outside of Philadelphia. “This column reflects my continued passion for the future of railroading as a competitive industry,” says Jim. “Only by occasionally challenging our institutions can we probe for better quality and performance. My opinions are my own, independent of Railway Age and FreightWaves. As always, contrary business opinions are welcome.”

Categories: Class I, Finance/Leasing, Freight, Freight Cars, M/W, Mechanical, Short Lines & Regionals, Switching & Terminal Tags: ,