Date: Wednesday, March 8, 2023
Source: Sourcing Journal
The Norfolk Southern train derailment and ensuing toxic chemical spill in East Palestine, Ohio has brought national attention and outrage to an industry that rarely is given a second thought in the public eye. But with so much scrutiny now concentrated on rail transportation and the Class I freight railroad operators that keep the lights on, the question remains: where are improvements needed, and how will they affect the flow of goods in the supply chain?
On Wednesday, a bipartisan group of senators introduced legislation aimed at enforcing tighter railroad safety regulations months after Congress and the White House struck down a national rail worker strike.
The Railway Safety Act of 2023 would create stricter safety requirements for trains carrying hazardous materials and increase the frequency of rail car inspections. The proposed legislation would also require trained, two-person crews to work aboard every train carrying hazardous materials and levy more aggressive fines for rail carriers’ negligence. Rail companies would need to create emergency response plans and provide information to state officials before they transport hazardous materials.
“It shouldn’t take a massive railroad disaster for elected officials to put partisanship aside and work together for the people we serve—not corporations like Norfolk Southern,” said Sen. Sherrod Brown, D-Ohio, in a statement.
On the same day, Federal Railroad Administration (FRA) administrator Amit Bose announced a national initiative calling for focused inspections on routes that carry high-hazard flammable trains (HHFTs) and other trains carrying large volumes of hazmat commodities. FRA inspectors, using a combination of human visual inspections and technology, will assess the overall condition of rail infrastructure and railroads’ compliance with regulatory requirements. Information will be shared with railroads and rail labor organizations, and it will be periodically published for the public to increase transparency.
Whether or not government regulation turns out to be the necessary step to facilitate change, one industry expert is bullish on rail’s reaction to the Ohio disaster.
Dr. Thomas Goldsby, professor and Haslam Chair of Logistics at the University of Tennessee’s Global Supply Chain Institute, told Sourcing Journal that he expects Class I rail companies, which include giants like CSX and Union Pacific, to volunteer to step up without FRA and other regulatory bodies forcing them to.
“I’m going to be expecting the industry itself to step up, and it’s going to be those major Class I carriers that are going to say, ‘A share of our investment needs to go toward technology in terms of monitoring the track, in terms of monitoring the rolling stock,’” said Goldsby. “It’s not going to be just Norfolk Southern. I think it’s going to be the Class Is as a fairly unified sector of our economy. They already carry a very substantial overhead burden, and they have been focused on enhancing productivity in recent years. I think they’ll say, ‘Maybe our productivity is where we need it, but we need it to be a safe productivity.’”
But Goldsby warned that the rail sector may face short-term productivity hurdles as safety measures ramp up. In particular, inspections from organizations like the National Transportation Safety Board (NTSB) are likely to interfere with productivity, as more cargo would be rerouted around impact areas.
This means added safety protocols or inspections could slow down rail service and extend supply chain lead times. Additionally, Goldsby said there are implications on the total hours of service for rail employees, in that rail operators would have personnel on the line on duty for shorter periods of time so they could be more alert—meaning less work for an already embattled labor force.
“I know the rail carriers have been trying to increase their capacity and increase the speed and get more finished goods to move on the rail, but if we see slower speeds and less reliability, that’s going to probably be a significant detraction from that effort,” Goldsby said. “It’s conceivable that as we talked about putting more safety overtures in place, it could impact speed and reliability of the service, which would maybe give some shippers pause. But again, if you’re shipping commodity, there’s just no other viable way to go about it. You’re going to continue to use it.”
In the decades since 1980, when the U.S. rail industry was deregulated, Class I rail investments have typically been focused on cutting costs and delivering efficiency—many of which have frustrated rail workers over the years. Some points of contention labor unions have in their ongoing contract negotiations include the Precision Scheduled Railroading (PSR) freight movement model, the lack of paid sick time, deploying more automation within the trains and expanding transport capacity within their own networks.
“We don’t see new rail lines really being built. But here in the eastern half of the United States, they might be creating double stack capacity, which means that you have to create bigger tunnels and maybe more parallel lines,” Goldsby said. “It’s not really adding mileage to it, but it’s adding capacity. The railroads have realized for a long time now that it’s incredibly expensive to maintain a mile of track. So let’s just try to make what mileage we have more productive, and hence more profitable.”
Despite last month’s derailment, Goldsby offered some perspective on the relative health of the current freight railroad infrastructure, describing it as “a super-efficient means of transportation” which “day in and day out…operates quite safely,” especially compared to intermodal trucking.
The Association of American Railroads says that more than 99.9 percent of all hazardous materials moved by rail reach their destination without being affected by a train accident.
When compared to trucks, railroads are much safer for moving hazardous materials, the association says, pointing to internal data showing that that railroads face approximately 10 percent of the hazmat accidents that trucks have despite roughly equal hazmat ton-mileage. Between 2000 and 2021, train accident rates plummeted 33 percent, while the hazmat accident rate fell 55 percent from 2012 through 2021.
One tank car on a train that holds a standard capacity of 30,000 gallons would be equivalent to five or six large trucks on the road, according to Goldsby.
“I’d rather have those trains operating on the rail tracks where I’m not interacting a lot with them,” Goldsby said. “I’ve got to go through rail crossings from time to time, where you maybe sometimes get held up by the one-or-two-mile-long train. But I’d rather have 100 or 200 rail cars on a train that usually operates very safely than have thousands of trucks on the roads that I’m sharing the highways and byways with. Each one of those drivers could present a point of failure that could be fatal.”