Greetings;
What a long strange – and frightening – trip it’s been. Frightening for the citizens of East Palestine first and foremost (made a great deal worse by their being fed rumors and hype and being told not to trust the EPA). But also frightening for the railroad industry overall, as misinformation, hyperbole, panic, and lies combine to cause what could be an existential threat. OK, that’s probably over-hyping the matter, but when you read Freightwaves (2/18) calling “the derailment one of the worst rail disasters in freight history”. Wow….in freight history. I bet Casey Jones would beg to differ.
Oh, the insanity! There have also been calls to nationalize the industry (!) in Vice or to look back at deregulation in Huffpost, or a full-page opinion piece in the Times. So, after all of that nonsense yesterday, as I looked at my daily papers (yes, hard copy) this morning, I saw….nothing in the Times….nothing in the WSJ! Could it be? No, it couldn’t for the FT had this: Norfolk Southern faces mounting anger over Ohio toxic waste spill | Financial Times (ft.com) – actually a pretty balanced piece. Both NYT & WSJ weighed back in today, although Steven Colbert took the night off. So the right-wing states that the EPA (etc) is lying, cows are dying in Iowa, etc, and stirs mistrust; the left wing says this is “profits over people” – so we must look to our government officials, of both parties, for leadership.
The official responses – measured, prudent, thoughtful….not. We knew the government had to do something. The EPA just announced that NS must pay for the cleanup, something the railroad pledged to do days ago, The Governor of Pennsylvania made a criminal referral to the PA AG!!!! Which is ridiculous, especially before any NTSB findings. I know we live in a soundbite/Twitter world, but this has to stop or there will be permanent damage to the industry and to the nation.
And Mayor Pete joins the fun: Here is what USDOT Secretary Buttigieg had to say. Note first of all that virtually nothing of the 15 recommendations pertains – at all – to what happened at East Palestine, and all to the wild claims and not-so-hidden agendas of stakeholders, with some outright mistakes. But, he meant well. Here are highlights.
For NS/Railways:
- Protect workers who spot safety workers from reprisal….sure, of course.
- Deploy new inspection technologies without (abandoning human inspection). Silly, but gets at the heart of the government’s safety issues – jobs protection. The rails have never focused on this as a job reduction initiative, even in Canada where it is employed successfully. But the AI technology makes human inspection simply “make-work”, like the Sopranos boys sitting on beach chairs by the docks….
- Require the owners of tank cars to….expedite phase-in of the safer/117 tank cars. In the words of the sage – “You can't be serious?!?“ Isn’t that the job of….the DOT? In fact, the rails have tried to do this via pricing, etc, and had their heads handed to them by the government. The owners of those cars and the shippers of the product are not under rail control. Maybe this letter was sent to the wrong address. The major media picked this up as something like “a call for railroads to speed up their adoption of” 117s. (WashPo) sheesh.
- Provide proactive advance notification….(of hazmat train consist). This was debated after 9/11 and rejected….by the government. On obvious national security grounds. But, OK
- Provide paid sick leave. Seriously? Relevant? Two rails have (keyword) negotiated advances in that regard, UNP and especially CSX. But that is not relevant here. But it’s another sign of the mask slipping….
Meanwhile, the DOT will continue to:
- Advance the Train Crew Staffing Rule (ie; 2-man crew requirements), despite actual evidence and the fact that, again, there is no connection to East Palestine (only the engineer works the brakes). I suppose it’s better than the suggestion of adding more crew members (Rubio, who I assume think all trains are like the Starlight Express and the crew members roam freely from front to back). I wonder – will DOT now recommend ceasing all work (and subsidy) towards autonomous trucking?
- Initiate (?) focused safety program on routes carrying hazmat….in place now, not related to the accident, but sure, knock yourself out.
- Initiate a “focused inspection program” of legacy tank cars….again, in place, but sure. That’s between DOT and the tank car owners (again, not railroads) and not directly relevant.
- Deploy grant money resources such as CRISI and RRIF towards rail safety. Hey! Something if not, again relevant, then at least positive!
- Pursue further rulemaking yada yada yada….blah blah blah.
--And I will add a sixth point here that I am sure must have just slipped the Secretary’s mind-- - Allow railroads to refuse at will hazardous materials transportation as they see fit. What’s that? It isn’t on the table? You must.
Congress can, in DOT’s opinion:
- Increase maximum fines…sure, have at it. Given the industry’s safety record, that wouldn’t be a burden.
- Change the legal definitions on hazardous trains “pushing past industry opposition”. That last bit is pure BS.
- Follow through on bipartisan support for ECP braking – again, car issue; again, not a part of this story.
- Speeding up phasing in of the new (117) tank cars, as always, supported by rails (somehow that didn’t make the cut).
- Expanding funding on hazmat for first responders….hey! that makes two (of 15) reasonable, applicable, and relevant suggestions!
Now I will add some suggestions for freight rail stakeholders
- While the AAR has been active and measured – we need to hear IMHO from other railroads. This is their fight too (don’t believe it? Here’s a question I got today from a Very Reputable News Outlet: “Do (I) think the Norfolk Southern train derailment could "derail" approval of the CP/KCS deal....?”). Maybe we will at some of the upcoming conferences. Defend industry practices such as long trains with facts.
- Don’t put out press releases highlighting dividend payouts! Sure that is normal business – but these aren’t normal times and the statement that “NS has spent ~2X on shareholder distributions versus capex” seems shocking even if the real question should be “Has NS spent enough on capex?” BTW the answer is yes.
- Analysts should think before they write, such as the recent Upgrade of NSC noting that the “near-term noise” of the derailment “obscured positive trends in terms of the company’s Operating Ratio”. Yes. That was written. And not by Martin Oberman.
- Other stakeholders should not use this opportunity for short-term gain while aiding long-term problems – this includes labor and shippers (looking at you, the chemical industry staying all quiet behind a hedge).
- Regulators should acknowledge their role in common carrier enforcement – and rails’ safety record.
Some additional thoughts:
- I thought that the rails were out in front on tank car issues so I asked a source at the AAR and he concurred: “On tank cars, we pushed ahead with voluntary tank car improvements in 2014 via our interchange agreements far in advance of any DOT regulation. We also did more via voluntary agreement with Sec Foxx before any regs as well, instead of waiting the 2+ years for the regulatory process. We also advocated that congress require the new tank car requirements for all class three flammable. DOT’s rule only required them for trains with 20+ oil/ethanol cars in a row, so it would have been possible to manipulate consistently to avoid new reqs. It’s all in the hazmat section of 2015’s FAST Act (the prior infrastructure bill to the big one in 2021).”
- Technology will lead the great leap forward in rail safety – if allowed by the FRA! Take a look at a TV report from Jax on a local company – Duos Technologies – that creates the Railcar Inspection Portal that I highlighted as used by CN in my last piece (attached) Southside company using artificial intelligence to make railways safer - YouTube.
- Learn more: See also the flyer, attached, for Progressive Railroading’s February 28 webinar on Rails & Technology featuring UP CIO (and RailTrends 2022 speaker) Rahul Jalali and also featuring Trinity and Rail Pulse’s Dan Smith
- Was the train really called 32-Nasty?
- If you want to see me on Ohio Sunday Morning TV (I don’t): Press Pass: Calls for stricter rail regulations - WFMJ.com
- When all is said and done, though I preach patience as we wait on the NTSB report, I would wager a lot that after an accident with no fatalities and even injuries, with actually rather minimal property destruction (that can and will be remedied) there will also be minimal – and fixable – environmental damage. Will that story be written?
And here I thought that 2022 was the railroad’s annus horribilis. How far are we from the sunny days of the “Railroad Renaissance”?
Anthony B. Hatch
abh consulting
http://www.abhatchconsulting.com
anthonybhatch@gmail.com
Twitter @ABHatch18