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S. HRG. 114–206 FREIGHT RAIL TRANSPORTATION: ENHANCING SAFETY, EFFICIENCY, AND COMMERCE HEARING BEFORETHE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS FIRST SESSION JANUARY 28, 2015 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PUBLISHING OFFICE 99–549 PDF WASHINGTON : 2016 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\DOCS\99549.TXT JACKIE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED FOURTEENTH CONGRESS FIRST SESSION JOHN THUNE, South Dakota, Chairman ROGER F. WICKER, Mississippi BILL NELSON, Florida, Ranking ROY BLUNT, Missouri MARIA CANTWELL, Washington MARCO RUBIO, Florida CLAIRE MCCASKILL, Missouri KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii JERRY MORAN, Kansas EDWARD MARKEY, Massachusetts DAN SULLIVAN, Alaska CORY BOOKER, New Jersey RON JOHNSON, Wisconsin TOM UDALL, New Mexico DEAN HELLER, Nevada JOE MANCHIN III, West Virginia CORY GARDNER, Colorado GARY PETERS, Michigan STEVE DAINES, Montana DAVID SCHWIETERT, Staff Director NICK ROSSI, Deputy Staff Director REBECCA SEIDEL, General Counsel JASON VAN BEEK, Deputy General Counsel KIM LIPSKY, Democratic Staff Director CHRIS DAY, Democratic Deputy Staff Director CLINT ODOM, Democratic General Counsel and Policy Director (II) VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\99549.TXT JACKIE C O N T E N T S Page Hearing held on January 28, 2015 ......................................................................... 1 Statement of Senator Thune ................................................................................... 1 Statement of Senator Nelson .................................................................................. 3 Prepared statement .......................................................................................... 4 Statement of Senator Blunt .................................................................................... 37 Statement of Senator Cantwell .............................................................................. 39 Statement of Senator Gardner ............................................................................... 40 Statement of Senator McCaskill ............................................................................. 41 Statement of Senator Fischer ................................................................................. 42 Statement of Senator Daines .................................................................................. 44 Statement of Senator Markey ................................................................................. 47 Statement of Senator Moran .................................................................................. 49 Statement of Senator Manchin ............................................................................... 49 Statement of Senator Klobuchar ............................................................................ 51 Statement of Senator Peters ................................................................................... 56 Statement of Senator Johnson ................................................................................ 58 Statement of Senator Blumenthal .......................................................................... 61 WITNESSES Frank Lonegro, Vice President, Service Design, CSX Transportation, Inc. ....... 5 Prepared statement .......................................................................................... 7 David A. Brown, Chief Operating Officer, Genesee & Wyoming Inc. ................. 16 Prepared statement .......................................................................................... 18 Bill Johnson, former Director, PortMiami; and former Chair, Florida Ports Council .................................................................................................................. 21 Prepared statement .......................................................................................... 23 Michelle Teel, P.E., Multimodal Operations Director, Missouri Department of Transportation ................................................................................................. 25 Prepared statement .......................................................................................... 27 Letter dated November 14, 2014 from the National Radio Passenger Corporation .................................................................................................... 28 Letter dated December 23, 2014 from the Missouri Department of Trans- portation ........................................................................................................ 29 Chris Jahn, President, The Fertilizer Institute .................................................... 30 Prepared statement .......................................................................................... 31 APPENDIX National Association of Railroad Passengers, prepared statement ..................... 63 Response to written questions submitted by Hon. John Thune to: Frank Lonegro .................................................................................................. 64 Chris Jahn ......................................................................................................... 70 (III) VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\99549.TXT JACKIE VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\99549.TXT JACKIE FREIGHT RAIL TRANSPORTATION: ENHANCING SAFETY, EFFICIENCY, AND COMMERCE WEDNESDAY, JANUARY 28, 2015 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 10:03 a.m. in room SR–253, Russell Senate Office Building, Hon. John Thune, Chair- man of the Committee, presiding. Present: Senators Thune [presiding], Nelson, Blunt, Fischer, Moran, Johnson, Gardner, Daines, Cantwell, McCaskill, Klobuchar, Blumenthal, Markey, Manchin, and Peters. OPENING STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM SOUTH DAKOTA The CHAIRMAN. This hearing in the Commerce, Science, and Transportation Committee will come to order and we’re delighted to have a great panel here to talk about railroad issues. As 2013 and 2014’s freight rail delays and service challenges highlighted, rail service is absolutely critical to our Nation’s economy. South Dakota farmers scrambled to find rail cars and watched as rail turn times worsened, delaying shipments and cre- ating grain shortage challenges for the record-breaking wheat, corn and soybean crops that we’ve had in our state. However, those delays were not just limited to the north central United States; they also extended across the country and impacted every shipping sector and industry. Thankfully, this winter’s rel- atively mild weather and better service have provided some improvements, but there’s still work that needs to be done. I was pleased that Genesee & Wyoming, the parent company of South Dakota’s Rapid City, Pierre and Eastern Railroad has joined us for today’s hearing. I look forward to hearing from Dave Brown, the Chief Operating Officer of Genesee & Wyoming, which is the largest Class II railroad in the country with over 100 short line and regional railroads, about the opportunities and challenges the RCP&E and other short line railroads face. From automobiles, to coal, to ethanol, to agriculture, rail service moves goods from farm and factory to consumer marketplaces across the country and across the globe. The U.S. Department of Transportation notes that freight rail moves roughly 40 tons per person each year. As a Nation, we rely on cost-efficient, timely (1) VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\99549.TXT JACKIE 2 service to move food, consumer products, and energy resources on a daily basis. The private infrastructure that makes up our Nation’s freight rail system is costly, as old tracks and equipment require ongoing maintenance and investment. Our nation’s railroads continue to invest in new track, sidings, locomotives and car resources with the goal of serving their customers. Class I railroads and short lines alike face increasing demands for prompt, reliable and safe service. In 2014, freight traffic increased nearly 5 percent over 2013 lev- els, and we should seek solutions that foster an even stronger freight rail network to meet this increasing demand. The Federal Railroad Administration has proposed or finalized over 15 new freight rail safety rules since the passage of the Rail Safety Improvement Act of 2008, and many of these regulations will take effect in 2015. Not only is the Positive Train Control, or PTC, mandate looming with its December 31 deadline, but the DOT has announced that it expects a crude-by-rail regulation to be published around May of this year. Although the PTC deadline is quickly approaching, it remains unattainable. Through the end of 2014, railroads have invested over $5 billion in PTC, and they expect to spend billions more in the coming years. They have begun installation of the radio towers, locomotive technology, and other PTC infrastructure, but full compliance with the statutory requirements cannot be achieved by the end of this year. The FRA and the Government Accountability Office have doc- umented the immense technical and programmatic challenges with implementing PTC. As a result of these challenges, the DOT has reported that the deadline will not be met and has offered a proposal to ensure the benefits of PTC are realized. I look forward to working with my colleagues on a legislative fix to ensure that we can set a more realistic implementation timeline for this important safety improvement. I’m also closely monitoring the proposed crude-by-rail requirements and I have expressed concerns to the Office of Management and Budget as well as to the DOT about the unintended harms that could result from the proposed rule. The DOT estimates its proposed crude-by-rail rule could cost nearly $6 billion, and it ac- knowledges the rule would increase network delays and out-of-service time for rail equipment. Without question, we must improve the safety of our Nation’s rail system, but I am concerned about the unattainable deadlines that the rule proposes. Like the PTC mandate, there are very real impacts when Federal agencies set unreasonable and, in many times, unachievable deadlines. Among other things, the DOT issued this proposed rule without analyzing the potential tank car shop capacity needed to retrofit or replace over 100,000 DOT–111 tank cars. Shippers have raised concerns about a tank car shortage with a disruption in energy supply transportation if DOT finalizes this rule with an unattainable deadline. I look forward to working with my colleagues, stake- VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\99549.TXT JACKIE 3 holders and the Secretary of Transportation on a realistic timeline for such a phase-out. While safety can and should be improved, we certainly do not need to build in system-wide delays and congestion like we wit- nessed during the past year and a half. Our transportation network connects port to rail to truck. Delays and burdensome regulations, and failing infrastructure disrupt our Nation’s economy and cost jobs, so we must work together to find workable solutions. In addition, we must ensure that the Surface Transportation Board, which is tasked with resolving railroad rate and service dis- putes and reviewing proposed railroad mergers, can provide effec- tive and efficient oversight to the rail industry. This Committee has a great deal of work to do in addressing freight rail service and safety in addition to passenger rail reau- thorizations. I hope members will bring forward thoughtful solutions as we address these challenges. I’d like to turn now to my distinguished Ranking Member from Florida, Senator Nelson. STATEMENT OF HON. BILL NELSON, U.S. SENATOR FROM FLORIDA Senator NELSON. Thank you, Mr. Chairman, and did you know that most of the witnesses are from Florida? The CHAIRMAN. I did not. Senator MCCASKILL. There’s one from Missouri. [Laughter.] Senator NELSON. Three of the five. And just like your state is so dependent upon railroads, so are so many of our states. And my state of Florida actually developed a railroad. It was Henry Flagler that brought his railroad south. And as he brought it down the east coast of Florida, so developed Florida. Said back in the old days, when they would, Henry Flagler would bring it as far south as a place like Saint Augustine, he built a hotel, which is now the Flagler Hotel. It is part of Flagler College in Saint Augustine; the oldest continuous settlement in the United States, by the way. We are celebrating 450 continuous years. And then, he would move it further south and he would build another hotel. Palm Beach, The Breakers, a place that the two gentle- men to my right have been many times. [Laughter.] The CHAIRMAN. Now, I would say to the Senator from Florida, how does he know that? Senator NELSON. Because I know the pattern of other Senators who like to come to Florida. And so, it used to be said in the old days—the old-timers in Flor- ida, back in the early part of the last century, would say that all the natives, which are called ‘‘Florida Crackers,’’ of which I am one, they’d live off of fish and alligators during the summer and they’d live off the tourists during the winter as Flagler would bring them further south. And so, I’m going to submit my statement for the record. You have covered it; most of it. Mr. Chairman, I would say that U.S. Department of Transpor- tation estimates that the tonnage of freight moving by rail is going VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\99549.TXT JACKIE 4 to increase by 88 percent through 2035, and if we’re going to handle this future growth we have to prepare and improve starting today. And some recent events highlight the challenges that we’re going to have to overcome. In the past year, high demand and a harsh winter has resulted in several delays in several parts of the country. Railroads have responded by investing record amounts to expand capacity, to expand equipment and to hire more crew. And so, I want to hear from our witnesses. Do you think the situation is improving? And I want to hear about what you think about the industry’s progress on safety. Rail is already one of the safest ways of moving people and goods, but there are challenges. Positive Train Control, to prevent collisions and enforce speed restrictions; first recommended by the NTSB way back in 1969. Well, Positive Train Control will even make this industry even safer. And so, we’ve got a lot to do. Mr. Chairman, I’ll just short-circuit my comments so we can get right into the witnesses. [The prepared statement of Senator Nelson follows:] PREPAREDSTATEMENTOFHON. BILLNELSON, U.S. SENATORFROMFLORIDA I want to thank everyone for being here today. I especially want to welcome several of the witnesses from Florida: • Frank Lonegro, the Vice President for Service Design at CSX in Jacksonville, who has a significant amount of experience working on positive train control technology; • David Brown, the Chief Operating Officer for Genesee & Wyoming, Inc., also in Jacksonville; and • Bill Johnson, the former Director of the Port of Miami. Your presence here today underscores the importance of freight rail not only to Florida, but also to our country. Historically, railroads played a critical role in developing and uniting our growing nation. Florida developed around railroads built by the likes of Henry Flagler, a pattern that was repeated around the country. Today, freight railroads remain the backbone of the Nation’s economy. About 40 percent of all freight in the U.S. moves by rail, more than any other way. That amounts to an average 5 million tons of goods delivered by rail every day. Freight railroads haul all types of goods that we depend on, from grain for our food to the clothes that we wear. Railroads also connect thousands of communities to the global economy by bring- ing American goods to ports, like Port Miami, where they are exported abroad. For our country to remain competitive, freight railroads must deliver goods safely, reliably, and efficiently. But there’s more to the story than just moving freight. The freight rail industry employs more than 180,000 highly-skilled and well-paid professionals—nearly 25 percent of which are veterans. Moving freight by rail also has other benefits like reduced highway congestion and cleaner air. And, in many parts of the country, passenger rail service is provided over tracks owned and maintained by freight railroads. While this hearing isn’t focused on passenger rail, it will also be an important issue for me this Congress—especially when it comes to the development of high- speed rail. Simply put, freight railroads are fundamental to the American experience and our daily lives. Florida is a key example. CSX alone operates more than 2,800 miles of track and employs over 5,000 people in Florida, while moving 1.1 million carloads of freight. VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00008 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99549.TXT JACKIE 5 They are an integral part of Florida’s entire economy—serving 12 ports and thousands of businesses. Despite freight rail’s great success story, we need to keep improving our system, and that’s why I’m pleased the Chairman called this hearing today. The U.S. Department of Transportation estimates that the tonnage of freight moving by rail will increase by 88 percent through 2035. To handle this future growth, we’ve got to start preparing and improving today. Some recent events highlight challenges we will have to overcome. Over the past year, high demand and a harsh winter resulted in severe delays in several parts of the country. Railroads responded by investing record amounts to expand capacity, buy new equipment, and hire more crew. I look forward to hearing if our witnesses think the situation is improving and the prospects for 2015. I also look forward to hearing about the industry’s progress on critical safety issues. Rail is already one of the safest ways to move people and goods. The past two years for which data are available were the safest years on record. But challenges remain. Implementing Positive Train Control to prevent collisions and enforce speed restrictions—first recommended by the National Transportation Safety Board in 1969—will make an already safe industry even safer. Despite the industry’s efforts, however, this year’s deadline for implementation will not be met, so we must create a workable path forward. Another key safety issue we need to address is the shipment of crude oil by rail. Finally, Florida and the Nation cannot continue to grow unless we’re moving freight efficiently. Achieving this goal will also require connecting rail to other ways of moving goods, especially our ports. I hope the Commerce Committee will continue examining these challenges and the solutions our country needs. I thank Chairman Thune for calling this hearing and all of the witnesses for being here today. I look forward to your testimony. The CHAIRMAN. Thank you, Senator Nelson. And appreciate the important role that railroading played in the state of Florida, likewise in South Dakota. I’ve got deep family ties, as I’ve mentioned before in this committee, to railroading as they kind of made their way across the country and in our state of South Dakota. We’ve got a great panel to talk about some of these issues today and I want to welcome all of you. Thank you for being here. We’ve got Mr. Frank Lonegro. He’s the Vice President of Service Design at CSX Transportation. Mr. Dave Brown, as I mentioned earlier, is the Chief Operating Officer of Genesee & Wyoming Railroad Services, which serves our state of South Dakota. Mr. Bill Johnson is the former Director of PortMiami and former Chair of the Florida Ports Council. And, Ms. Michelle Teel. Ms. Teel is the Multimodal Director of the Missouri Department of Transportation. And we have Mr. Chris Jahn who is here on behalf of The Fer- tilizer Institute where he serves as President. So thank you so much for being here. I look forward to hearing from you. And we’ll start on my left and your right with Mr. Lonegro. STATEMENT OF FRANK LONEGRO, VICE PRESIDENT—SERVICE DESIGN, CSX TRANSPORTATION, INC. Mr. LONEGRO. Good morning, Mr. Chairman, Mr. Ranking Mem- ber, and members of the Committee. I’m Frank Lonegro, Vice VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00009 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\99549.TXT JACKIE 6 President of Service Design at CSX and Chairman of the AAR’s PTC Interoperability Committee. Thank you for the opportunity to appear here today. I’m here to represent CSX as well as the freight rail industry and our views on the current state of Positive Train Control. Safety is the highest priority of every American railroad. In pre- serving the safety of our workers, the safety of our communities, where we operate and the safety of rail passengers is the over- riding factor in the thousands of decisions that we make every day. Our steadfast safety focus has resulted in dramatic safety improvements. Since the year 2000, the freight train accident rate has fallen 42 percent. One way we achieve improvements in safety is through the consistent investment and infrastructure and in new technologies. America’s railroads invest more than $25 billion an- nually to ensure the safety, reliability and efficiency of the rail network. For the last 6 years, we have also been investing in a key safety technology known as Positive Train Control, or PTC. PTC is not a single system but rather is a large number of subsystems that are linked together. Those components are designed to stop a train before certain types of accidents occur. The Rail Safety Improvement Act of 2008 requires Class I railroads to install PTC by the end of 2015, on main lines used to transport passengers or certain toxic materials. PTC is being designed to prevent accidents in four specific situa- tions: trains traveling beyond the allowable speed; trains traveling beyond their authority; trains traversing a misaligned switch; and trains entering a work zone. To do so, PTC most be able to deter- mine the precise location, direction and speed of trains, warn train operators of potential problems, and stop the train if the operator does not respond. This is not an easy task. Such a system requires the creation, and I do emphasize creation, of highly complex technologies that are able to analyze the many variables that affect train operations. As you can imagine, the length of time that it takes to stop a train depends on the train speed, the terrain, the weight and length of the train, the number and distribution of locomotives and the number of loaded and empty freight cars on that train. PTC must take all of these factors into account reliably and accu- rately in order to safely stop the train. The task of deploying PTC in the United States includes: equip- ping 23,000 locomotives with onboard computers designed to know exactly when to take control of a train and bring it safely to a stop; completely rebuilding tens of thousands of miles of railroad sig- naling systems to be capable of interacting with the ultra-modern PTC system; deploying 35,000 sensors to communicate the status of signals and switches to the PTC system; completing a geospatial survey of 60,000 miles of rail infrastructure; building a new nation- wide communication system designed for the massive data trans- mission requirements of PTC; and developing back office systems to feed the precise data requirements of PTC. And each railroad’s PTC system must be interoperable with each of the 40 railroads that are developing PTC on their main lines since locomotives and VerDate Nov 24 2008 11:37 Apr 04, 2016 Jkt 075679 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\99549.TXT JACKIE