eNews • July 20, 2017
Promoting a Cost-Effective, Reliable and Competitive Transportation System

Railroads adding more cars to trains in effort to trim costs, raising some concerns about safety

The train that moved through downtown Council Bluffs late last month on a bright Saturday morning didn’t seem extraordinary at first glance — just another Union Pacific freighter with different types of cargo and railcars slowly crossing the railroad tracks in a town crisscrossed with railroad tracks.

But it was notable in one respect: It was 142 cars long. And for a manifest train — the industry term for trains with mixed cargoes and car types — it was 45 percent longer than the average Union Pacific manifest train in 2016.

The extra length was no accident. Trains are getting longer, as the nation’s freight railroads seek out greater efficiency — lower expenses mean higher profits — by grouping more railcars into fewer trains.

The railroads say their crews are well-equipped to handle longer trains, and that they spur a more flexible and productive transportation system, the cost of which ultimately gets passed on in the price of everything that gets moved on the nation’s rails, from auto parts to zinc.

“Union Pacific’s professional train crews receive detailed information for each train they operate, including train length and weight, and receive ongoing training to ensure they are prepared for unique train-handling situations,” said Calli Hite, a spokeswoman for Omaha-based Union Pacific, the second-largest U.S. freight railroad.

But safety concerns have been raised, so far mostly by the labor unions representing the engineers, conductors and other rail workers who toil on, in and around the steel behemoths. Some industry watchers say longer trains might mean less need for railroad labor, as more freight gets moved with fewer trains — which would be a negative for employees.

Railway labor groups still say their complaints are valid, ranging from the sheer physics of starting, stopping and handling a longer and heavier train to the amount of time that road-level crossings are blocked to emergency-response vehicles.

“The various railroads are running ever-longer trains, some as long as three miles,” said John Risch, national legislative director for the Sheet Metal, Air and Rail Transportation union, or SMART, which represents about 90,000 rail-industry workers. “Long trains create both safety and operational concerns, and we have asked the Federal Railroad Administration to investigate the problem of long trains,” he said of the government regulator.

Risch said longer trains spend more time blocking road-level crossings than shorter ones; the one in Council Bluffs late last month blocked traffic for about 11 minutes at the intersection of Second Avenue and South 12th Street.

“The longer the train, the more crossings you block, and they are blocked for a longer period of time,” said Risch, who spent about 30 years as a locomotive engineer for BNSF Railway. “This doesn’t just mean blocking people like you and me, but blocking emergency vehicles as well.”

Not all of the Class I railroads disclose train length information to investors (all are publicly traded or part of a publicly traded parent company). And among those that do, some do so by number of cars, others by overall length. Industry insiders say trains of 8,000 feet, or about 1.5 miles, are common, and anything longer is somewhat atypical.

But each of the seven Class I railroads — the largest freight carriers operating in the United States — has its own guidelines on making up trains into their final configurations.

And the Federal Railroad Administration, the nation’s train-safety regulator, doesn’t collect train-length data on a routine basis. Precise details on train length are part of accident investigations, spokeswoman Tiffany Lindemann said, such as after a derailment. But notably, there are no rules on length. It seems freight trains can be about as long as they want.

“Train length data is not collected by FRA regularly, and there are not regulations over the length of Class I freight trains,” Lindemann said.

What is known is that length has been increasing, albeit slowly, in some freight categories on an average basis, and on a trial basis in others.

>> At Union Pacific, the average grain train last year was five cars longer than in 2013, at 101 cars; coal trains rose by two cars to 130. The manifest trains, which accounted for almost one-third of the company’s freight volume last year, climbed by nine cars to 98 cars. (Railcars come in varying lengths, from about 40 feet to about 80 feet.) Train length hit an all-time record in four of the six major freight categories last year, according to the 2016 Investor Fact Book published by Union Pacific, which employs about 8,000 in Nebraska, 42,000 people overall and operates 32,100 miles of track west of the Mississippi River.

>> In August 2016, Florida-based Class I freight railroad CSX announced “the average length of CSX trains” would increase on a route in Indiana due to track and signal improvements. In September, CSX said 14,000-foot trains would begin running between Louisville, Kentucky, and Seymour, Indiana. For comparison, 14,000 feet is about 2.7 miles, or the distance via roads from TD Ameritrade Park in downtown Omaha to Eppley Airfield.

>> At Texas-based BNSF Railway, owned by Omaha’s Berkshire Hathaway and the largest U.S. railroad by ton-miles, longer trains are being tried out on an experimental basis, spokeswoman Amy Casas said. She said the railway is “still exploring what types of productivity and efficiency gains” can be achieved.

The trains of BNSF, which employs about 5,000 in Nebraska, remain about 8,000 feet long on average, and longer ones aren’t “something that we are looking at strategically for our railroad,” Casas said. According to the SMART union, BNSF ran a train in April from Superior, Wisconsin, that had 246 cars and was almost 14,000 feet long.

>> At Canadian Pacific Railway, train length has risen more than 1,000 feet since 2011, to 7,143 feet this year. The railroad, once considered one of North America’s least efficient, has garnered investor approbation for turning things around via such productivity maneuvers.

>> Virginia-based Class I Norfolk Southern said in January 2016 train length rose 2.2 percent from a year earlier, and reached a corporate all-time record.

Risch said all the talk and statistics are one thing, and what his union members see on the ground is another: trains of up to three miles long, sometimes with hazardous materials, such as chlorine or ammonia. This year, the SMART union sent a letter to the Federal Railroad Administration asking for an investigation and an order ending “excessive train length.”

The letter cited what the union said was higher likelihood of mechanical failure, difficulty maintaining brake pressure when a trains exceed three miles and communications problems. A loss of brake pressure, the letter said, would require the conductor to inspect the entire length of the train — a six-mile round trip.

“If a conductor must walk to the rear of the train that is two-and-a-half miles long, he is oftentimes no longer able to communicate via portable radio with the locomotive engineer due to the long distance,” reads the April letter from SMART to the federal regulator. “Portable radios regularly lose communications beyond a mile-and-a-half, depending on the terrain.”

That communications gap, the letter states, has led railroad managers to order crews to use their personal cellphones to supplement the portable radios, orders SMART says are at odds with company policies banning mobile phones that are set higher up in the management chain.

The SMART union isn’t alone in its objections. As long ago as 2014, the Railroad Workers United, a coalition of union-represented train employees from many different unions, passed a resolution condemning long trains for many of the same reasons cited by SMART.

“There are so many ways that trains of greater size are more hazardous than one of lesser size that it would be like writing a novel to try to categorize all the issues with long, heavy trains,” said Jeff Kurtz, a recently retired BNSF engineer working with Railroad Workers United. What is truly amazing to me is that the FRA has never really addressed the size issue.”

The Federal Railroad Administration has taken no position on train length amid the objections by the labor groups, spokeswoman Lindemann said.

And even though it is only inching up at Union Pacific in some freight categories, the company talks a lot about train size. Spokeswoman Hite said in response to World-Herald inquiries about train length that increases improve productivity because more cars can be moved with fewer individual trains.

“For example, it is more efficient to add a few railcars to every train rather than holding all of those same railcars to build an additional train,” Hite said. “This has a networkwide impact by adding capacity and increasing velocity. In short, longer trains equals fewer trains and allow us to provide better service for our customers.”

It also adds to the bottom line, a topic Union Pacific executives have often mentioned to analysts and investors at conferences and on quarterly earnings teleconferences. One reason is the company’s goal of achieving a 55 percent operating ratio, a cost-control benchmark closely watched by Wall Street.

Operating ratio measures a company’s operating expenses as a percentage of revenue. Said another way, an operating ratio of 70 percent would mean 70 percent of the company’s revenues were used for operating expenses — so the lower, the better.

Union Pacific is currently one of the leaders in the field among the seven Class I railroads operating in the United States, with an operating ratio of 63 percent last quarter, trailing only Canadian Pacific and Canadian National, which are the leaders at both just under 60 percent.

But the drive now is for a 55 percent ratio at Union Pacific, and increasing train size appears to be one path to the destination.

“There is plenty of headroom inside our network, almost across the board between our three regions, for more train size opportunities, and we will, on a case-by-case, line-by-line basis, take advantage of that,” Union Pacific Chief Operating Officer Cameron Scott said on a conference call with investors and analysts in May.

Scott also said on the call discussing first-quarter earnings that Union Pacific “continued realizing gains in other key productivity initiatives such as train size,” with records attained for the length of trains carrying grain, mixed cargoes and vehicles and vehicle parts.

Union Pacific Chief Financial Officer Rob Knight told an investor conference in June that the company’s efficiency ratio has improved 24 points in the past 13 years, to 63 percent, good for the industry’s top tier. Productivity, or getting more done with less, has been the way forward, Knight said.

“For example, if we can find ways, which is usually not just our own decision — it’s working closely with our customer base — to run longer trains,” Knight told attendees at a conference sponsored by Deutsche Bank in Chicago last month.

The motivation behind rail-network efficiency drives is perfectly rational, said Daniel Sherman, a transportation industry analyst for St. Louis-based wealth adviser Edward Jones who follows Union Pacific and other railroads. He said longer trains mean more cargo can be handled by fewer people and less time railcars full of valuable freight spend idling about in terminals and yards.

“That does not mean that train is actually going at higher speeds or that crews are working faster,” Sherman said. “Instead, it means better planning and physical changes to the network,” such as longer sidings, or subsidiary tracks where long trains can pull over and let other trains pass.

He said the guts of the system is car planning, or grouping railcars into trains, cargoes and destinations that maximize each train trip. Rail companies are now attempting to get it down to a cold science, like FedEx and UPS do with packages.

“Better car planning means physically reworking yards and using more technology in tracking and planning routes,” Sherman said. “The end result of the changes should be shipping more freight on fewer trains, meaning fewer crews are needed.”

A lot of it just common sense, said Larry Gross, a consultant at FTR Transportation Intelligence. He said the cost of staffing a freight train is the same regardless of how many cars are in it. “So, the bigger the train, the lower the crew-cost per car,” Gross said.

Managing costs is something the railroads excelled at during the recent freight slump — quarterly shipments at the seven Class I railroads fell for two straight years, a skein that ended only last quarter. Though shipments fell, trains got longer, productivity was boosted and profits remained as the companies furloughed workers, mothballed locomotives and raised prices to remain in the black.

Union Pacific, for example, remained solidly profitable throughout 2015 and 2016, when volumes fell 6 percent and 7 percent, respectively. Despite the slack demand, in 2015, the company had net income of $4.8 billion, and $4.2 billion last year. At BNSF, 2015 net income was $4.2 billion, on shipments that were little-changed from a year earlier, while 2016 profit was $3.6 billion on a 5 percent drop in volume.

But the law of diminishing returns is important when it comes to train size, Gross said: Going from 10 cars to 11 reduces the per-car cost by 10 percent, but going from 100 cars to 101 cars reduces the per-car cost by only 1 percent, he said. Longer trains are often slower trains, Gross added, because they take longer to move through curves and other areas where speed limits are lower than on open track.

But Gross said he sees no inherent safety dangers to longer trains. Unmanned, radio-controlled locomotives in the middle or rear of trains can supply power as needed, reducing the physical forces bearing on longer trains and improving braking over what can be provided without them.

“Big trains can be operated safely,” Gross said. “But at the risk of stating the obvious, mega-trains are generally unpopular with the towns that they pass through to the extent that there are highway-grade crossings as they take considerably longer to clear.”

And as with train length, there is no federal limit as to how long trains are permitted to block traffic crossings. Cities and states often have statutes prohibiting trains from blocking a crossing for more than 10 minutes, but they are considered to be unenforceable as the matter is considered to be one of federal jurisdiction that pre-empts state law.

“The issue of a state’s authority to legislate or regulate blocked crossings is highly contentious and still being defined in the courts,” is how the Federal Railroad Administration sums it up in a Q&A on its website.

As for emergency response — as in if a blocked crossing prevents a firetruck from crossing the tracks — the new trend toward longer trains hasn’t posed a problem so far. That is according to Council Bluffs Fire Chief Justin James, whose city is festooned with railroad tracks on the surface streets operated by Union Pacific and BNSF.

James said that while the department works closely with the railroads on responding to accidents involving hazardous materials, there hasn’t been any discussion on train length. He said planning and training are an emergency crew’s best response to a blocked crossing.

“Obviously, being in a city where train tracks basically divide our territory both north to south and east to west, we have become accustomed to dealing with them during an emergency response,” James said. “We spend a lot of time with our personnel on understanding both the streets and rail layouts in an effort to ensure we are not delayed.”

Likewise, the issue of longer trains doesn’t seem to have percolated throughout the emergency response community. The International Association of Fire Chiefs, based in Washington, hasn’t developed a position on the matter, a spokesman said.

Some of the objections — and the railroad industry’s response — to running longer trains

BrakingThe distance of the train as it relates to braking is an operational issue, not a safety one. Distance in no way impacts the safe application of brakes. The relationship between distance and maintaining pipe pressure pertains to releasing brakes after the train has stopped. Getting the train moving again after it has stopped is fundamentally an operational matter. There are a number of ways to improve train air and train handling that railroads use based upon their models such as locomotive power distribution, which improves brake control.

RadioThe question of communications pertains to the specific radios in use by a railroad. There are handheld radios available that have sufficient wattage for longer distances. In terms of what specific radios are in use, that is a better question for individual railroads, as the AAR is not involved in their day-to-day operations.

Blocked crossingsWarning devices at crossings activate about 25 seconds before the train occupies the crossing. Combining two trains will allow the passage of the train with one crossing start instead of two. A train that is one mile long moving at 60 mph would occupy a crossing for approximately one minute, plus the crossing start time of 25 seconds. A two-mile-long train at 60 mph will block the crossing for two minutes and 25 seconds. This means that running one two-mile train through the crossing rather than two one-mile trains through reduces the total time the crossing is occupied by 25 seconds.

Source: World-Herald


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