Wednesday, August 24, 2011

Rail Freight Carriers Sue Government

Claim that Metrics and Standards Rules are Slanted Against Them
Shipping News Feature

US- An interesting case came before the District of Columbia Court last week when Secretary of Transportation, Ray LaHood, found himself on the wrong end of a lawsuit brought by the Association of American Railroads (AAR) as the rail freight carriers’ representatives accused the Federal Government, in league with passenger carriers Amtrak, of colluding to present regulations detrimental to their business at a time when the battle for cargo with road haulage truck groups is at its fiercest.

The suit (see HERE) accuses the DoT, along with the Federal Railroad Administration (FRA), of unconstitutional action stating that the 2008 Passenger Rail Investment & Improvement Act was cobbled together after the two needed to regulate Amtrak, described as ‘a private, for profit corporation’ with an ‘historically poor record of on time performance’ and a ‘chronic inability to generate revenues sufficient to cover its operating costs’.

The nub of the problem is that Amtrak’s continuing poor performance meant that the authorities required a system to lay blame for the unacceptable delays. Outside the North Eastern corridor Amtrak trains run of tracks owned by the freight carriers and the new rules meant that, if a train was late, rules devised beyond their control meant the rail freight companies had to pay compensation to Amtrak, and thus the Government.Nice work for Amtrak and the Federal authorities, but unfair says American Railroads who say schedules imposed on Amtrak are unachievable on numerous routes.

The plaintiffs point out that Amtrak is not an organ of the government yet it has been allowed to collude with the FRA to form the Metrics and Standards body to set the rules for passenger carriers.The freight interests say the measures to establish blame for delays are deplorable, passengers often being advised that delays are caused by freight traffic on the line simply to raise a plausible excuse and it is these ‘Conductor Delay Reports’, prepared by Amtrak staff, which form the basis of any judgement and thus allocate blame.

The time performance standards required of Amtrak are set over consecutive quarters and, should they fail to achieve the performance levels required investigations are largely based on old evidence prepared by Amtrak. With allegedly lamentable performances, particularly in the Eastern and Southern States, it is plainly in Amtrak’s interest to pass the buck, and the fine, to their cargo carrying cousins.

American Railroads, although itself a non profit making body, is bringing the case on behalf of its Class I members BNSF, Canadian National, Canadian Pacific, CSX, Kansas City Southern, Norfolk Southern and Union Pacific. The crux of its case is that having to operate around passenger services to limits beyond its control has a direct detrimental effect, either in the form of fines or on its own operating schedules, passenger schedules directly affect the ability to carry time sensitive freight, maintenance slots become unworkable, the higher speed and safety considerations of passenger traffic utilise a disproportionate amount of capacity.

The freight carriers have some reason to be annoyed by the situation as they consider themselves to have been ‘railroaded’ into a situation over which they have no control. Historically many of Amtrak’s passenger services might have been discontinued long ago and the AAR point out in their suit that only the 1970 Passenger Service Act, by insisting services be maintained and reinstated, assured the future of passenger carriage and that 97% of the tracks the company utilises are owned by the freight carriers.

In addition for 2008 Amtrak received subsidies of $1.3 billion whilst the contracts between AAR members and Amtrak have been mutually agreed and adjusted. Now with the threat that a mere 15 hours delay for every 10,000 miles travelled will give cause for a fine the AAR plainly feel that a fine for Amtrak will be funded by taxpayers whilst their shareholders will suffer from a situation over which they have little, or no, control.