Massive Railroad Shutdown Looms In 2016

By: Tom Chatham

In 2008 Congress passed Positive Train Control (PTC) legislation to reduce train collisions and over speed accidents. These new electronic control systems can activate train braking systems when dangerous conditions are detected. These new systems were to be installed by Dec. 31, 2015. After this effective date it is a violation of federal law to operate trains on certain sections of track not controlled by PTC systems.

BNSF Chief Executive Carl Ice, advised Senator John Thune (R-South Dakota) in a Sept. 9 letter that BNSF would shut down most of its network by Dec. 31 rather than violate a new law mandating that positive train control be operational by Dec. 31. CSX has also questioned whether it should violate federal law and other Class I carriers may follow suit. This presents the real possibility of a transportation shutdown at the beginning of 2016. Most of the public is unaware how much the national distribution system relies on rail transport and without it how quickly we would cease to function normally.

BNSF has spent $1.5 billion so far on the upgrades and will likely spend another $500 million to fit about half of its track that handles 85% of its traffic. Portions of both trans continental routes will not be operational by the Dec. 31 deadline set by Congress in 2008 nor will commuter zones in Chicago, Seattle and Minneapolis.

BNSF reads the law as saying no train can legally operate on a PTC mandated line after Dec 31 if the system is not operational by that time. Ice is careful in his letter to state BNSF will not refuse to run their trains in violation of the law just that he does not see how they can due to exposure to potential legal claims should an accident occur.

Everyone thought the six years given to implement the system was sufficient but implementing it has been a nightmare. Most of the system components are new, FRA was slow to issue new rules, signal engineers to build the system and make it work are few and everything was kept on hold for a year while they waited for the FCC to issue permits for the construction of new towers and antennae. They are also having problems with the new system activating braking systems unnecessarily causing rail delays. Of the 82,043 miles of track that must be equipped with the new technology only about 5,151 miles have been completed. As of 2014 only 3,376 locomotives have been equipped with the technology which is about 15% of the nationwide fleet.

The railroads have sought an extension but Congress has thus far failed to issue one. In July the Senate passed a highway funding bill that extends the deadline but so far the House has failed to pass it. If they do not act soon the bulk of the rail system will come to a screeching halt on Dec 31. A shutdown of the rail system is a critical link that can wreak havoc on the just in time delivery system which is critical to many functions in society such as food distribution and energy supplies such as coal.

There are only three possible outcomes to this problem.
– Congress will amend the law
– Congress will give an extension to the railroads
– The railroads will shut down

If the railroads shut down the majority of their rail shipments the shelves across America will start to go bare within a few months. It will take this much time for most of the durable goods currently in the distribution system to be delivered and sold to end users. Perishables such as fresh and frozen food items will be affected much faster and shortages will show up within a few weeks. It would also be a problem for the bulk agricultural products people depend on such as corn and wheat. Even if the system is only shut down for a short period it can create a dead zone in the distribution system that will take time to refill. Railroads are warning customers to prepare for a worst case scenario according to Association of American Railroads President Edward Hamberger.

In all likelihood Congress will issue an extension for the railroads but due to the dysfunctional nature of the government these days, we cannot count on that so you should plan ahead just in case the worst does happen and rail traffic stops.

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Posted on September 28, 2015, in Economics, Preparedness and tagged , , . Bookmark the permalink. Comments Off on Massive Railroad Shutdown Looms In 2016.

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