Intermodal ups and downs in a mixed first half for North American railroads
North America’s intermodal operators experienced something of a mixed bag over the three months to ...
AMZN: APPEAL UPDATEDSV: PRESSURE BUILDS AAPL: OPENAI FUNDING INTERESTCHRW: ANOTHER INSIDER CASHES INHLAG: GRI DISCLOSUREMAERSK: HOVERING AROUND FOUR-MONTH LOWSTSLA: CHINA COMPETITIONDHL: BOLT-ON DEAL TALKAMZN: NEW ZEALAND PROJECTDHL: SURCHARGE RISKKNIN: LEGAL RISKF: 'DEI' HURDLESPLD: RATING UPDATEXOM: DISPOSALS
AMZN: APPEAL UPDATEDSV: PRESSURE BUILDS AAPL: OPENAI FUNDING INTERESTCHRW: ANOTHER INSIDER CASHES INHLAG: GRI DISCLOSUREMAERSK: HOVERING AROUND FOUR-MONTH LOWSTSLA: CHINA COMPETITIONDHL: BOLT-ON DEAL TALKAMZN: NEW ZEALAND PROJECTDHL: SURCHARGE RISKKNIN: LEGAL RISKF: 'DEI' HURDLESPLD: RATING UPDATEXOM: DISPOSALS
It sounds like a script from a TV melodrama. A Norfolk Southern (NS) train derailed around 6.45 am yesterday in Alabama – hours before NS CEO and president Alan Shaw was due to appear before the US Senate to testify about the derailment of one of the company’s trains in East Palestine, Ohio last month.
That incident sparked a fire and led to the evacuation of 4,700 residents, as some of the derailed cars were carrying vinyl chloride, a flammable and highly toxic chemical.
The accident yesterday in Alabama, in which nobody was hurt and no hazardous materials were involved, followed another derailment of an NS train in Ohio last month.
The rail industry has come under the spotlight over the spate of accidents, following rising frustration over deteriorating service and delays as the Class I railways struggled with congestion, after they had laid off too many employees. Critics have blamed accidents and service decline to staff shortages and lack of investment, as carrier management appeared more focused on operating ratios as the central measure of ‘precision scheduled railroading’.
Lawmakers have become increasingly strident on rail safety after the crash in East Palestine on 3 February, accusing the railways of massive lobbying to prevent the implementation of more stringent safety measures.
In Washington, momentum has built towards a raft of regulations to raise safety measures. Legislation known an the Safe Freight Act of 2023 was introduced in the Senate on 1 March, which includes the accelerated phasing out of older tank cars and a two-staff minimum crew requirement for freight trains, as well as a requirement for railways to place heat detectors every ten miles of track, performance standards, maintenance records requirements and temperature ranges that trigger warnings.
Heat sensors are a major focus of the debate on how to improve rail safety. The crash on 3 February was triggered by an overheated wheel bearing, which also sparked a fire. Two sensors on the track, 30 and 20 miles before the accident site, registered overheating but did not trigger an alarm, as the temperature was below the current critical threshold. A third sensor near the derailment site registered a dramatically increased temperature and did set off an alarm shortly before the derailment.
Jennifer Homendy, chair of the National Transportation Safety Board, said last month if there had been more frequently placed detectors, the derailment might not have occurred.
The railways pledged this week to increase the number of sensors on their tracks, with the Association of American Railroads announcing on Wednesday that all Class I carriers had promised to install about 1,000 new ‘hot bearing detectors’ to achieve an average spacing of 15 miles between them. They also commited to stopping trains to inspect bearings whenever the temperature reading from a sensor exceeded 170 degrees Fahrenheit.
In addition, all seven Class I railways will adopt the Confidential Close Call Reporting System, which enables staff to report safety issues anonymously.
At the hearing in Washington yesterday, Mr Shaw admitted NS’s safety mechanisms were not enough, despite an annual spend on safety of $1bn, and pledged improvements, including investment in detectors and digital train inspection.
He added: “In a significant departure from the railroad industry’s recent past, we deliberately moved away from a singular focus on operating ratio, which is a common industry measure of efficiency. Instead, we are taking a more balanced approach to service, productivity and growth.”
As one practical ramification of this, he said, during periods of economic downturn the company would provide additional training instead of furloughing workers.
Mr Shaw expressed deep regret over the derailment and its repercussions felt by the residents of East Palestine and pledged long-term financial support to the community.
His company is under particular scrutiny from the authorities. On Wednesday, the Federal Railroad Administration announced a 60-day supplemental safety assessment of NS.
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