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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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