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Current Issues – Private Railcars Current Issues – Private Railcars

Current Issues – Private Railcars - PowerPoint Presentation

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Current Issues – Private Railcars - PPT Presentation

Association of Car Accounting and Car Service Officers May 14 2015 Darrell Wallace North America Freight Car Association Objective NAFCA background Issues being addressed by NAFCA Issues of importance to private car owners and operators ID: 670068

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Presentation Transcript

Slide1

Current Issues – Private Railcars

Association of Car Accounting and Car Service OfficersMay 14, 2015

Darrell Wallace

North America Freight Car AssociationSlide2

Objective

NAFCA background

Issues being addressed by NAFCA

Issues of importance to private car owners and operators

Issues to look for in the futureSlide3

NAFCA

NAFCA organized to protect the interests of the owners and non-railroad operators and manufacturers of private railcars

NAFCA currently made up of 35 members who collectively own or operate in excess of 687,000 railcars

Railcar manufacturers

Railcar owners and lessorsShippers who own and/or lease railcars

Associate members Slide4

NAFCA Mission Statement

Promote the safe, efficient and economical use of private railcars

Secure the establishment and maintenance of reasonable, equitable and lawful practices and rules affecting the use of, repair of and principles of compensation for all private rail carsSlide5

NAFCA Goals

Educate the public and lawmakers regarding operational, regulatory, economic and legal matters that affect private cars and private car owners and operators

Work with carrier and legislative bodies seeking areas where we can work together to improve the safe operation of private rail equipment while protecting the rights of private car owners and operatorsSlide6

Current Issues

NAFCA filed complaint against the AAR with the STB (October 2012)Truck hunting rules tolerances

B

alance costs based on benefit received

NAFCA and AAR Settlement resulted in new AAR rules

CBA required when cost to implement revision

Exceeds $5.0 million in calendar year, or

$50 million net present value over 15 years, or

Upon written request of any member of the Committee sponsoring the proposalSlide7

Current Issues

Implementation of Rule RevisionsRule revisions can only be implemented

Aggregate benefits exceed 75% of cost of

implementation and

Total Equipment Maintenance Improvement benefit is at least 65% of cost, or

Total Safety benefit is at least 30% of

cost, or

Combined Equipment and Safety benefit is at least 65% of

cost

If thresholds not met

Implementation of new rule not allowed unless

AAR and Associated Advisory Boards Car Owner Committee

agree

to funding of

implementationSlide8

Current Issues

NAFCA and AAR Settlement resulted in new AAR rules

CBA not required

Product defect

No cost effect of private car ownersCar Repair Billing Rates

Billing Repair Data Requirements

Editorial changes

Rules mandated by Government regulation

Appeal procedure in place for CBA processSlide9

Current Issues

NAFCA filed complaint with the STB against the Union Pacific (March 31, 2015)

Other complainants

Chlorine Institute

The Fertilizer Institute The American Chemistry CouncilAmerican Fuel and Petrochemical Manufacturers

Cargill

Poet Ethanol

Poet Nutrition

Complaint based on recent UP Tariff publication

UP began charging for empty tank car movements to and from shops on 1/1/15

Violation of statutory obligation to compensate for use of private tank cars

UP does not provide tank cars

UP does not compensate tank car owners for the use of their tank cars

UP tariff imposes new cost of ownership without compensationSlide10

Current Issues

PHMSA Notice of Proposed Rulemaking – Enhanced Tank Car StandardsPHMSA ruling issued May 1, 2015

Enhanced tank car standards

New cars built after October 1, 2015

DOT 117 design9/16 inch normalized steelAggressive retrofit scheduleEstablished braking standards

ECP requirement

Operational protocols

Restricted speeds

Sampling and testing

Petroleum based productsSlide11

Current Issues

PHMSA Ruling ChallengesSpeed Restrictions and Routing

Adverse effects for rail shippers

Public disclosure of routing information

Retrofit complianceShop capacityMaterials shortagesIdle railcars

Product movement issues

Plate C clearance issues

Judicial challenge likely

Industry stakeholders

Environmental groups

Communities Slide12

Current Issues

2 Wear Wheels vs Single Wear Wheels

Application of 2 wear wheels

Running repairs by carriers

Single wear wheels replaced by 2 wear wheels on private carsCost imbalance createdNew wheels applied to private cars

Turned wheels applied to carrier cars

NAFCA position

Generally support application of 2 wear wheels

Support contingent upon

Industry wide requirement for equitable use of new vs turned wheels

Objective and measurable standards developed and codified

Penalty established for not meeting standards

NAFCA does not support application of Class D wheelsSlide13

Current Issues

OT-5 ApprovalsOT-5 Circular clear on reasons to deny OT-5

“Application for approval of shipper provided cars cannot be denied by carrier(s) except for reasons of safety, mechanical factors or inadequate storage space.”

Carriers delaying,

refusing and cancelling existing OT-5 Application

Requesting additional information on storage plans

Requesting track layouts at all facilities

Requesting detailed mechanical specs and diagrams of equipment

Requesting information on how

many cars

at any one time will be on carrier

Denying all car on OT-5 application if one car has a open DDCT warning

CP rule change announced –

Eff

: 5/1/15

$500 per car charge for failure to obtain OT-5 approval

AAR TAG group established to review current systemSlide14

Current Issues

FDA Required Safety Reflectors

10 year phase in – November 28, 2015

Potentially 149,000 cars not in compliance

Completed cars need to be updated in UMLEREarly warning will be issued and car will not be allowed in interchanged

Tests on Reflector Effectiveness

10 year replacement requirement may be modified

Texas A&M doing research

First method is a comparison test

Subjective test

Second method check the luminosity of reflector

Allows for establishment of performance limitsSlide15

Current Issues

Exclusion of Empty Tank Miles

Empty tank mileage to and from shops for mandated repairs

Not to be included in mileage equalization formulas

AAR requested to consider special coding of movementsCar Repair Agent Billing Rates

Should be included in AAR Labor Rate and Materials Calculation

McKinzie Valve issue

3” valves to be replaced by 5/12/15

1” and 2” valves to be replaced by 6/11/15Slide16

Current Issues

Slack Adjuster IssueWater freezing in slack adjusters and causing derailments

FRA wants change out prior to winter 2015

Liability issues for private car owners and operators

Continued push by carriers to shift liability

Continued erosion of compensation for private cars

Continued push for safety

Safer rail equipment

Safer rail operationsSlide17

Thank you for your attention