Who will protect the French Fries?

Written by David Nahass, Financial Editor
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CSX June 23, 2018 derailment near Princeton, Ind. Photo courtesy the Evansville Courier.

Financial Edge, November 2018: In mid-September, CSX filed a report to the FRA stating that its June 2018 derailment near Princeton, Ind., (about 150 miles south of Indianapolis) was caused by buckled track. The derailment included 23 freight cars and caused the evacuation of nearby homes (within a radius of about one mile from the crash site) as a precautionary measure. Some of the derailed cars were carrying liquid petroleum gas (LPG or NGLs) and liquid propane (LP). 60,000 gallons of liquid NGLs were released. One tank railcar filled with leaking propane was on fire.

Burning propane is not harmful (explosive but not air-quality-hazardous). LPG and LP move in pressure-style tank railcars (DOT112J340s, considered a stronger design than the DOT117J crude oil car). Billowing black smoke from the derailment was caused not from the flammable commodity but from the burning of—wait for it—French Fries loaded in some of the derailed cars. The derailment cost is estimated at $1.8 million.

Reading the CSX report confirming that the derailment was caused by buckled track was reminiscent of the BNSF derailment in Doon, Iowa (also in June 2018). In that derailment, the National Transportation Safety Board’s preliminary findings report notes the following:

“FRA determined the train speed was about 48 mph when the train encountered the emergency brake application. A total of 10 tank cars were breached, releasing about 160,000 gallons of crude oil. The area received five to seven inches of rain during the 48 hours prior to the accident, washing out track and flooding a tributary of the Little Rock River and farm fields adjacent to the derailment location.” (See https://www.ntsb.gov/investigations/AccidentReports/Pages/HMD18LR002-preliminary-report.aspx.)

What is the similarity? Track conditions causing derailments that end up leaking hazardous commodities. Yet, the industry redirects the focus of derailments from the condition of the track causing the derailment to the design of the cars operating on the track.

Since earlier this year, rail industry interests (regulatory, railroad, car owner and shipper) continue to pivot around which tank railcar should move which commodities. (See Financial Edge, August 2018; https://www.railwayage.com/regulatory/tempest-in-a-tank-car/.) Industry watchers are waiting for the other shoe to drop when it becomes clear that attempts to regulate car design cannot, of their own accord, prevent post-derailment commodity discharge. When an explosive CBR (crude by rail) accident occurs with a DOT117J (and it is “when” and not “if,” unfortunately) what will the railroads do then? The CSX Princeton derailment shows that even pressure tank railcars are not immune to puncture or release of hazardous/explosive commodities.

The CSX train was traveling at 38 mph, versus 48 in the BNSF derailment. However, railcar derailment damage involves not just train speed. The puncturing of a railcar during a derailment is determined by the amount of energy generated by the derailing railcars. It is primarily a function of speed and weight (the loaded railcar), and then the terrain and timing. The second car coming off the track likely causes the most damage to the first car.

How railroads and their customers perceive operational risk and its connection to railcar design is important. The idea that continually increasing the structural strength of a tank railcar’s design will prevent commodity discharge in a derailment is, for people that understand railcar design, the Emperor’s New Clothes of railcar manufacturing. This is the lesson from these two derailments. At a difference of 10 mph, the pressure tank railcar still has a conditional release of commodity and a conflagration.

In both cases, however, the cause of the derailment was not the railcars (tank or otherwise), but the condition of the track. No one will argue that maintaining literally thousands of miles of track is easy. Frankly, it sounds downright impossible, but it is the central issue. There is no safe speed on flooded-out track, and there is clearly danger on a track that has been buckling. Every train cannot move at a speed of 10 mph. This point of critical focus often withers while the spotlight is on railcars.

This is not a call for less-safe railcars. All parties agree that safer, well-maintained equipment leads to a better railroad and improved safety. This is true for crude, NGLs, chlorine and yes, even for French Fries burning on an Indiana summer afternoon. But the derailment evidence shows that, even with well-maintained cars, track condition is the circumstance that drives whether a car derails, its integrity get compromised and the French Fries get ruined.

No one wants French Fries that have been in a derailment.

David Nahass

Financial Editor David Nahass is an authority on all areas of railroad equipment finance and leasing. Nahass writes our monthly Financial Edge column and produces our annual Railroad Financial Desk Book and Guide to Equipment Leasing. He is President of Railroad Financial Corp., a financial advisory firm. He also serves as Chairman of Rail Equipment Finance, an annual industry conference addressing critical developments concerning North America’s railcar and locomotive fleet.

Categories: Class I, Finance/Leasing, Freight, Freight Cars, Mechanical, Regulatory, Safety, Short Lines & Regionals Tags: , , ,