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American Railways Chug Toward Automation (#GotBitcoin?)

U.S. rail-freight companies say automating tasks once handled by crew will create fluid networks more akin to a model train set. American Railways Chug Toward Automation

Mining giant Rio Tinto PLC calls it the world’s largest robot: mile-long driverless trains traversing the sparsely populated Australian Outback on roughly 1,000 miles of track. American railroad companies, seeking to boost network efficiencies, call it the future.

American Railways Chug Toward Automation (#GotBitcoin?)
A Train Loaded With Iron Ore Travels In 2011 Toward A Rio Tinto Facility In Western Australia.

U.S. rail-freight operators say greater automation will make their networks safer and more productive. They point to railroads owned by Anglo-Australian miner Rio Tinto as a blueprint for the 140,000-mile private U.S. network that moves vast quantities of everything from cars to corn.

A decade in the making, Rio Tinto’s driverless train system, called AutoHaul, now manages roughly 200 locomotives that move iron ore from inland mines to coastal ports in Western Australia. The trains are operated hundreds of miles away, in an office block in Perth.

Rio Tinto’s network, which began formally operating in driverless mode late last month, is the first fully autonomous, long-haul freight railroad. Rail-company executives from countries including the U.S. and Canada have visited to see the technology in action, said Ivan Vella, Rio Tinto’s head of iron-ore rail services.

American companies say automating tasks once handled by crew will create fluid networks more akin to a model train set. Around 5 million tons of goods are moved daily on the U.S. network, which freight operators share with passenger trains, generating more than $70 billion in revenue annually.

Drivers have variable skills, so a generous distance is kept between trains. In doing so, companies sacrifice valuable rail capacity. Also, the different ways that drivers run locomotives lead to inconsistent wear-and-tear and fuel use, while human error accounts for more than one-third of accidents, according to the Association of American Railroads, an industry trade group.

Last November, miner BHP Group Ltd. was forced to derail a 268-wagon runaway train in Australia’s Pilbara region, the origin of half the world’s iron-ore exports. The train rolled away after its driver disembarked to inspect a wagon and failed to secure the brake.

Labor unions and some lawmakers worry about risks to public safety, cyber threats and job cuts from increased automation. Rail-freight companies have typically offered some of the nation’s best-paid jobs, with an average annual salary of more than $125,000, said the AAR, which represents most major railroads. The country’s biggest Class I railroads employed roughly 147,000 people in 2017.

“Americans want a rail network and a transportation system that serves the people, not one that simply makes money for stockholders by eliminating good jobs and quality rail service,” Railroad Workers United, a coalition of unions, said in a statement submitted last year to the Federal Railroad Administration, which was seeking comments on the future of automation in the industry. RWU opposes crews of fewer than two people.

Reaching a consensus among companies, unions and regulators on how many drivers, if any, should remain on board will likely take a long time, said CSX Corp. Chief Executive James Foote.

U.S. rail-freight operators, whose trains are typically staffed by a conductor and engineer, say the goal isn’t to do away with drivers immediately. They contend there are many steps to reach the sort of driverless network Rio Tinto has created, although a shift toward more one-person crews is anticipated as new technologies are implemented.

“The lack of certainty makes investments in technology and innovation cautious endeavors that result in small gains, not leaps forward,” the AAR said in a filing to the Federal Railroad Administration last month.

Today, efforts to advance automation are being held back by regulations that haven’t kept pace with technological change, executives say. They fear falling behind as vehicle makers develop self-driving cars and autonomous trucks.

The Transportation Department released guidelines on autonomous vehicles in October, but didn’t address autonomous trains in detail.

Existing regulations typically dictate that tasks such as track inspections be conducted by people. Operators say this could be done better using an automated system.

The AAR has urged transport officials to grant waivers on what it says are outdated rules and allow railroads and manufacturers to create voluntary standards for safety technology, where possible. The Federal Railroad Administration was unable to comment because of the continuing government shutdown.

The 200-year-old industry has spent most of the past decade developing positive train control technology, designed to automatically stop a train to prevent collisions. That system, which uses GPS information and track data, has created a platform to operate trains more independently.

“The Rio Tinto example clearly shows the technology is here,” said John Scheib, chief legal officer at Norfolk Southern Corp. “It shows that our regulator needs to move more quickly to open the doors to such technologies,” he said.

Rio Tinto’s trains complete an average return journey of 500 miles in 40 hours. Previously, the miner had to shuttle nearly 100 drivers around these scrubby outlands to switch train drivers three times for each journey. That totaled almost a million miles a year and the changeovers added more than an hour to each return train trip.

Today, a train controller at its Perth operations center sets the route, then computers both at the center and on-board take over to make decisions. Before the system was set up, the miner faced repeated setbacks. The project ran three years late and to almost double the original budget.

“What AutoHaul does,” though, “is drive it better than the best driver, every time,” Mr. Vella said.

Of course, there are many people in Australia “who love driving trains [and] they are disappointed they don’t get to drive trains anymore,” he said. “We are trying to give them alternatives.”

Updated 4-24-2019

Railroads Bolster Case For Slow Revolution

Implementation of new operating plan yielded benefits for Norfolk Southern, others in latest quarter.

Norfolk Southern Corp. became the latest U.S. railroad to show that a slower overhaul of its system can still yield immediate benefits, including higher profits, faster trains and speedy recovery from weather disruption.

The railroad, which operates in the Eastern U.S., on Wednesday reported that trains ran 14% faster on its network and railcars spent 23% less time idling in terminals in the first quarter compared with the same period last year. The company said steps to unclog rail yards helped move cargo quicker toward its destination, and the cleared-up yards and fewer railcars also meant the network rebounded faster from severe winter weather.

Norfolk Southern’s first-quarter operating profit rose 16%, while revenue rose 5% due to higher shipping rates.

“We are finding that the more we adopt new practices and ideas, the more we can drive bottom-line growth and shareholder value,” Norfolk Southern Chief Executive Jim Squires said on the company’s earnings call.

Norfolk Southern, along with rivals Union Pacific Corp. and Kansas City Southern , are all in the midst of implementing new operating plans modeled on the late railroad executive Hunter Harrison’s “precision-scheduled railroading” principles. That approach calls for fewer, longer trains that move faster across the network, and for initiatives to cast off any assets, including locomotives and railcars, that are no longer needed.

After streamlining operations at two major Canadian railroads earlier in his career, Mr. Harrison had moved to Jacksonville, Fla.-based CSX Corp. two years ago to put his ideas to the test in the U.S. He acted quickly to overhaul operations by closing yards, idling locomotives and railcars and eliminating thousands of jobs.

The moves initially were widely disruptive but CSX’s service and financial performance have vastly improved since.

The other railroads are executing their plans under a more watchful eye of federal regulators. Thus far, they have avoided any of the severe service issues that plagued the rollout at CSX.

Union Pacific, which operates west of the Mississippi River, did face struggles from harsh winter weather and widespread flooding in the Midwest during the first quarter. But with fewer cars on its tracks after streamlining, the company was able to reroute much of its traffic to other terminals and recovered quickly.

Union Pacific is also closing some yards that break down trains and sort railcars and pausing construction on another major facility because the changes it has made have eliminated the immediate need for the yard.

The Omaha, Neb.-based company reaffirmed its outlook for the year, including at least $500 million in cost savings even as it took on extra costs to respond to natural disasters.

The industry’s improvements extend beyond the networks where changes are being made. Keith Creel, chief executive of Canadian Pacific Railway Ltd. , which underwent its network overhaul under Mr. Harrison earlier this decade, said he is encouraged by the new strategies and results from the other railroads as the improvements help the broader rail network. He said that the more efficient networks help create more capacity to move cargo.

“I continue to be their biggest cheerleader and encourage each one of them to individually and collective stay the course,” Mr. Creel said Tuesday on the company’s earnings call.

Updated: 5-12-2019

Next-Generation Acela Rail Cars Taking Shape in N.Y. Factory 

Amtrak’s new $2 billion fleet of high-speed trains, built by France’s Alstom, will enter service in two years.

The future of American high-speed rail is sitting in a building older than the Battle of Gettysburg: a cavernous factory that holds the first shells of a $2 billion fleet of Amtrak Acela trains due to begin running from Washington, D.C., to Boston two years from now.

Even as Congress moves toward renewed debates over the future of both Amtrak and high-speed rail, the first of 28 new Acela train sets are starting to take shape here. They are the first new generation of passenger trains on the railroad since the Acela’s debut in 2000.

For Amtrak, that means a chance to relaunch a service that has been both a commercial success and a procurement headache—and still the nearest approximation in the U.S. to the high-speed trains that whisk travelers among major cities in Europe and Asia.

Amtrak is buying 28 new sets of power cars and passenger coaches from French manufacturer Alstom SA, which is assembling the trains at its complex of plants in New York’s Southern Tier. The train model, known as Avelia Liberty, is from a family of trains already in use in France and Italy, Amtrak executives say.

The new trains will be slowly entering the existing Acela service and will have a top speed of 160 miles an hour, up from 150 miles an hour on the current fleet. The trains will be built to tilt up to 6.3 degrees, allowing trains to run faster in curves and save energy by avoiding braking for some turns.

Average speeds will be much lower, since the Acela will still run on the Northeast Corridor, whose curves will limit trains to top speed in just a few spots. And unlike high-speed trains in Europe and Asia, the Acela shares tracks with commuter trains and freight lines, requiring it to reduce speeds. The new trains will be capable of going up to 186 miles an hour if tracks are later upgraded, Alstom says.

The new Acelas will be just one meter (about three feet) longer than the current trains, but with shorter power cars and redesigned passenger cars. Amtrak says they will carry one-third more passengers with a maximum capacity of 378, up from the current 304.

Amtrak says the new trains will have upgraded interiors, including outlets and USB ports at each seat and wheelchair accessibility in every restroom. The railroad also said the lightweight design will improve efficiency by 20%, while a regenerative braking system will return some power to the overhead catenary wire system. Track improvements and the new trains’ suspension system will allow for a smoother ride, Amtrak says.

The first of the 28 new Acelas is scheduled to enter service in summer 2021, replacing the existing fleet of 20 trains by the end of 2022. Amtrak says the larger fleet will allow more frequent, half-hourly Acela service at peak periods.

Eventually, railroad officials say they could offer limited-stop and nonstop service between Washington and New York.

The railroad is hoping for a smoother launch than the first time around. The first Acela train set was delivered to Amtrak in October 2000, more than one year late, by a consortium of Alstom and Canada’s Bombardier Inc.

Amtrak pulled Acela trains from service in 2002 after cracks developed in critical shock absorbers. Amtrak and the consortium filed dueling $200 million lawsuits, which were later settled.

In 2005, Amtrak pulled the trains from service again after cracks were found in braking equipment. The trains returned to service after the trouble was traced to a supplier.

Despite the complications, the Acela became a success. Even without meeting the target time of two hours, 11 minutes between Washington and New York, the railroad succeeded in peeling passengers away from airline shuttles. Acelas carried more than 3.4 million passengers in fiscal 2018, and Amtrak said adjusted operating earnings for Acela trips was $318.8 million, more than 60% of the $524.1 million Amtrak earned overall on the Northeast Corridor.

For its new Acela fleet, Amtrak selected Alstom alone, using a $2.45 billion federal loan from the Federal Railroad Administration. Amtrak says it will pay back the loan entirely with revenues from its Northeast Corridor operations, with no need for federal grants.

Roughly $2 billion of the loan will pay for the 28 train sets, spare parts, management and contingency costs, and service upgrades, an Amtrak spokeswoman said. Other funds will go toward safety improvements and upgrades to tracks and stations.

Rolling On Out

A new fleet of Amtrak Acela trains is scheduled to begin entering service in 2021. The $2 billion, 28-train fleet will enable Amtrak to run more frequent peak service on the Northeast Corridor.

Alstom says 95% of the trains’ content are produced in the U.S., in keeping with the Buy America provisions of Amtrak’s loan. But the railroad did receive a waiver to import the extruded aluminum shells of the passenger cars, whose honeycomb structure helps limit the trains’ weight and improve efficiency, from Alstom’s factory in Savigliano, Italy.

In Hornell, the Amtrak contract is changing the face of a factory complex that dates to the dawn of the railroad age. Hornell has been a center for railroad manufacturing, and the boom-and-bust cycles of that industry, since the New York and Erie Railroad opened a locomotive plant in 1850.

One April morning, workers in a massive plant built in 1860 were working on an overhaul of a light railcar from Baltimore, while an adjoining building held the final few double-decker commuter coaches from a fleet Alstom is refurbishing for the Massachusetts Bay Transportation Authority.

Alstom is the largest employer in town. Its three plants around Hornell employ about 800 people, of whom about 250 are working on the new Acela fleet, a company spokeswoman said.

Alstom recently broke ground on a new building to house Acela equipment for its formal acceptance by Amtrak, bought a new shunter locomotive capable of pushing around the million-pound completed trains, and doubled the length of an existing test track, to 1.4 kilometers (just under a mile), including a new bridge over the adjacent, flood-prone Canisteo River.

At peak capacity, the Hornell factories will be producing a passenger car a day, one power car every five days, and one cafe car every 10 days, said Michael MacDonald, the company’s managing director for high-speed trains in North America.

Amtrak and Alstom officials both say they hope that the railroad’s big investment will help foster the growth of an American supply chain for high-speed rail equipment. The absence of such a supply network raised costs and limited design choice for the original Acela, and railroad officials blamed reliance on a narrow, specialized supplier base, in part, for the 2005 disruption in Acela service.

Alstom says the Amtrak contract is helping seed new expertise in their industry.

Mr. MacDonald noted the example of TTA Systems LLC, which has worked with Alstom in Hornell for years. TTA Systems is now building the tilting “bogies”—the crucial assemblies that connect to train cars and carry their wheels.

“They’ve overhauled 30-year-old bogies for years that are on a metro car that’s going 30 miles an hour,” Mr. MacDonald said. “This is going to 170 miles an hour, and it’s going to tilt. It’s a different animal.”

Updated: 11-9-2019

Amtrak, Seeking to Break Even, Sees Some Light at the End of the Tunnel

The passenger-rail operator cut losses as ridership hit a record 32.5 million trips in 2019 fiscal year.

Amtrak inched closer to breaking even last year, the company reported Friday, as rising ridership and cost cuts continued a multiyear improvement in the railroad’s financial performance.

Amtrak reported an adjusted operating loss of $29.8 million across the entire national railroad network, significantly beating a previous target of a loss of $75 million in the 2019 fiscal year, which ended Sept. 30. Its operating loss in fiscal 2018 was $170.6 million.

Operating revenue rose to $3.3 billion, the company said, an increase of 3.6% over fiscal 2018.

The railroad’s fortunes were boosted by rising ridership in a strong economy. The railroad recorded 32.5 million customer trips, a record that surpassed the previous year by 800,000.

Ridership on the premium Acela service on the Northeast Corridor grew more than 4%, and was up almost 3% on Northeast regional trains. Ridership on long-distance trains—which have been plagued by delays and unreliability—also grew by almost 1%, the company said.

Amtrak Chief Executive Richard Anderson has told Congress that the railroad will break even on the operation of its rail network—not counting the significant amounts it spends maintaining physical infrastructure such as trains, tracks and tunnels—by next summer.

It would, if achieved, be the first time in Amtrak’s nearly 50-year history that the national passenger railroad has reached the break-even point in the traditionally money-losing business of moving people by rail.

“The best five years of Amtrak’s history have been the last five,” said Anthony Coscia, the chairman of Amtrak’s board of directors, in an interview. “We’re within visibility of earning a profit for the first time in the company’s history.”

Mr. Coscia credited the leadership of Mr. Anderson, previously the CEO of Delta Air Lines Inc., and his predecessor Charles “Wick” Moorman, the former chief of Norfolk Southern Corp., for helping the railroad grow its operating revenue while cutting costs.

The company said it had boosted its capital investment by more than 9% to $1.6 billion in the past fiscal year. The company goal is to eventually spend $2 billion annually on improvements to Amtrak-owned tracks and trains, relying on a blend of funds from ticket sales and grants from the federal government.

Amtrak is a private corporation, chartered by Congress to operate the national passenger rail network, and almost fully owned by the government.

Critics of the railroad’s management have long challenged Amtrak’s accounting.

The company says it makes money on the Northeast Corridor between Washington and Boston, and loses money on long-distance routes that crisscross the rest of the country. Supporters of the long-distance routes, which Mr. Anderson seeks to overhaul or cut, say that Amtrak understates the expense of maintaining the rail corridor in the Northeast, and inappropriately attributes costs of the corridor to the long-distance system.

Amtrak highlighted the money it has spent on the rail network in the 2019 fiscal year, saying it has improved performance and helped to drive ridership.

Amtrak spent $713 million on infrastructure improvements, such as new concrete rail ties, helping to improve travel speeds and ride quality in the Northeast Corridor. The company also introduced a safety-management system that was influenced by the airline industry—from which Mr. Anderson has recruited top executives—and finished installing a federally mandated anticrash signal system, with the exception of a small section of low-speed track in Chicago.

Amtrak has also upgraded the interiors on regional and Acela trains, started construction of a new Acela fleet, launched a procurement process to replace cars on the regional train fleet, and awarded a contract for 75 new diesel locomotives for the national network.

In the interview, Mr. Coscia said the improving financial performance at Amtrak would help the railroad as it prepares to approach Congress, and possibly private investors, to support its enormous capital needs, including new tunnels in Baltimore and New York and major upgrades along the entire Northeast Corridor.

“The stronger we become as a company, the better we are at convincing people that we have ability to take their capital and invest it in a way that’s good for the company and good for the country,” he said.


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