Here's a headline from this week's batch of news clippings: "Train Kills Two Kids on School Bus." It continues, "A freight train struck a school bus at a crossing early today, killing two brothers and injuring three other children and the driver." The incident occurred on the BN in Montana and the press release used by the AP came from BNSF. The very next day there was an AP story on a federal proposal to suspend drivers licenses for commercial operators for ignoring or disobeying warning signs or devices, stopping on tracks and moving onto an intersection without sufficient room to clear the tracks. Moreover, "Employers knowingly allowing, permitting, authorizing or requiring a driver to [ignore crossing laws] would be subject to a fine of up to $10,000." It's about time.

The DM&E application to build in to the Powder River Basin has reached the STB. In a notice published Wednesday that agency says, "DM&E seeks authority from the Board to build a 262.03-mile line between DM&E's existing main line in western South Dakota and the coal producing region of the PRB south of Gillette, WY. Also sought is authority to build a 13.31-mile rail bypass at Mankato, MN and a new, 2.94-mile rail connection to the I&M.” DM&E had asked for an accelerated schedule, however the STB, as one would expect, is taking the more leisurely route, calling for up to 180 days.

In an interesting new twist to the UP/SP mess, both the Surface Transportation Board and Union Pacific have denied the congestion is related to the merger. The railroad blames the troubles on inadequate infrastructure in the Houston area, bad weather and installation of a new traffic system. Having made that point, UP then announced it may stop taking new shipments if it doesn't unsnarl more of the congestion on its rail network in the next 30 days.

The scheme is to beg, borrow, or buy some 300 locomotives to throw into the Texas fray. Along with the power will be a push to speed operations, improve communication in the Gulf region, and improve train crew efficiency. UP spokesman John Bromley said that congestion-relief measures have not improved the situation in recent weeks and train speeds have slowed. And the recent snowdrifts in the Midwest have cascaded the blockage south, further slowing the orderly and efficient progress of freight.

The joint dispatching center is now a reality, and we really have to give UP and BNSF credit for getting it together so quickly (in a month, to be exact). Starting 3/15 the center, located in Spring, TX, a Houston suburb, will control train operations between Houston and New Orleans over more than 340 miles of track to be jointly owned by both railroads. They also get the main line trackage formerly operated by the Houston Belt & Terminal Railroad and a portion of the Port Terminal Railroad Association in Houston.

This will truly be a Shared Asset Area (SAA) of the sort CSX and NS are proposing for Detroit, North Jersey, and South Jersey/Philadelphia. Both railroads will now have access to all customers, including chemical, steel, gas and other companies, along the entire line, including former SP branch lines and spurs along the route. The agreement carries out the Surface Transportation Board mandate that railroads operating in the Houston area work together to find joint solutions to rail congestion problems of the last several months.

Elsewhere, the FRA has fined UP $131,000 for a "fundamental breakdown in safety." The fine was originally more like $5 mm, however the FRA opted for a more "cooperative and non-adversarial" approach, saying "it's not really our focus to see how many fines we can rack up." That's good news, and it follows squarely on comments made by FRA head Jolene Molitoris. It ought to come as good news to shortlines because, if you put the UP fine in perspective, it amounts to 0.001% of UP's $11 billion in 1997 revenues. The fines allowed by 49 CFR Part 200 can easily run into five figures for a handful of violations. A shortline moving just 4,000 cars a year is probably only looking at a $million and change in revenue. A five-figure hit for just three FRA violations could exceed one percent of revenue, a thousand times the relative pain inflicted on UP by its fines.

The STB has set 10 AM June 4 as the date for oral arguments in the Conrail merger. The Board expects the process will take five hours, of which two will be allotted to the primary applicants to share. The remaining three hours will be allotted to all other participants in the merger case. If you’re interested in participating you must let the STB know in writing by 4/10/98. You’ll need to indicate the issue or issues you will address, whether you support or oppose the primary application, the responsive applications, or the various requests for conditions, and how much speaking time you require. Send the letter and 25 copies to Case Control Unit, Office of the Secretary, Surface Transportation Board, 1925 K St. NW, Washington, DC 20423-0001.

Thursday's JOC reports that a shortage of Panamanian rainfall is pushing previous Panamax business to land-bridge. What's the link? The canal uses lake water to raise and lower the canal water levels, and when the lakes are low so is the amount of water available for the canal. Less water in the canal means shallower ship drafts and so lighter loading. The economics of shipping favor heavier ships turned quickly, ergo more business for land- and mini-bridge moves. Given the UP's situation, are the rails ready?

For all the noise about the economics of single-line hauls, short shrift is given to any consideration of what to do when the single line can't haul the goods. If railroad A is so jammed it has to spill over onto railroad B, and railroad B has capacity problems of its own caused in part by Railroad A in the first place, what's a shipper to do? Makes one hanker for the bad old days of the "alphabet route," so named because the initials of all the lines in the route took up most of the letters in the alphabet. Like DLW-NKP-CRIP-SP or CNJ- RDG-NYC-CNOTP-KCS-TP-SP from northern NJ to LA. Do you think we might see a stringing together of regionals to do just that?

And just when you thought competitive access was a creature of the coal industry, now comes a grain group seeking same. At their annual meeting last week the National Grain and Feed Association (NGFA) members were preparing their own lists of legislative proposals. Among the complaints are the inflexibility of rail service, the dwindling number of competing railroads and concerns that the STB “is tilted too heavily in favor of rail carriers.” And so the group proposes “a private-based system [of arbitration] with no government involvement."

The task force also recommended changes in current law to give grain shippers what is known as competitive access, or the right to switch to competing carriers in markets where competitors operate. Small and medium-sized elevators have grown increasingly concerned about the power of railroads to set rates and require up to 108-car shipments amid rapid consolidation of the rail industry. Specifically, the NGFA is “working on defining the methodology by which individual shippers would have access to additional markets not on their primary railroad."

If you’re planning to be in NYC on 4/2, you can get a good lunch, meet some nice people, and hear me do a presentation on “Shortline Realities” at the Transportation Research Forum monthly session. The genesis of the talk was my January 1997 Railway Age article (link available from my website, www.rblanchard.com/corp/ on the relationships between what makes money for the railroad and what makes sense for the customer. Overlay that with some of the financial measurements we use in this paper and put it all in “value-added” terms and there it is. Meet at noon at Giovanni’s Atrium, 100 Washington St, a few blocks south of the WTC. Cost is $23 for TRF members, $28 for non-members, and $20 for students. E-mail Paul Gessner for reservations or additional information, pgessner@panynj.gov.

--Roy Blanchard