NS and the PTC deadline.

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ConrailMan5
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NS and the PTC deadline.

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From an email to all customers.
cid:image001.jpg@01CFCE8C.222D4850
Norfolk Southern Corporation
Three Commercial Place
Norfolk, Virginia 23510-2191



September 17, 2015



Dear Valued Norfolk Southern Customer:

I appreciate this opportunity to update you on an issue of importance to us both.

As you are aware, on October 16, 2008, Congress enacted the Rail Safety Improvement Act of 2008, establishing an unfunded mandate to implement an interoperable Positive Train Control (PTC) system by December 31, 2015. Despite massive efforts and already having spent nearly $1 billion toward meeting this arbitrary deadline, multiple issues outside our control make it impossible for Norfolk Southern, or any other Class I railroad, to meet the deadline.

U.S. Senate Commerce Committee Chairman Sen. John Thune wrote Norfolk Southern on August 28, 2015, asking us to explain how our railroad and stakeholders will be impacted if Congress does not extend the deadline. Jim Squires, our president and chief executive officer, responded in a letter September 9, 2015. In Jim’s letter, which you may access from our website, we explained that we face the risk of serious financial penalties associated with enforcement of the PTC deadline. In addition, enforcement of the PTC deadline exposes us to the risk of being deemed liable for any accident involving TIH traffic or passengers on NS after December 31, 2015, despite the fact that our railroad would remain every bit as safe after the arbitrary PTC deadline as we were before the deadline.

Most relevant to you as an NS customer, we outlined that we might be required to cease shipping TIH commodities and to decline to host passenger trains on our network effective January 1, 2016, as the only complete solution to the risks of non-compliance. Ceasing to haul TIH commodities would be disruptive to our customers and could have negative downstream impacts on supply chains that ripple through the U.S. economy. Of course, we are working diligently with Congress to avoid this potential shutdown of rail services, and we would not take such drastic action lightly.

NS remains committed to installing a fully functional and interoperable PTC system on our rail network as quickly as reasonably and safely possible. We deeply regret the impact this unrealistic deadline could have on our customers.

We appreciate your interest in the PTC issue and will keep you informed as this situation develops.


Alan Shaw
Executive Vice President and Chief Marketing Officer
The one thing that stood out to me is that the railroad would decline to handle TIH and passenger traffic after December 31St. I expect and hope that congress heed the warning of economic implications.
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Saturnalia
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Re: NS and the PTC deadline.

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NS joining the bandwagon (and for good cause). They can't move TIH after Dec 31, so they'd actually begin clearing the network sometime around Thanksgiving, embargoing all new shipments.

Then Amtrak will be shutout, starting with long-distance trains a few days in advance. Shorter and commuter lines would stop throughout the 31st.

Congress needs to realize that unlike the fiscal cliff and such, an extension needs to be passed BEFORE the final deadline, probably by Thanksgiving to save all shipments. If they wait until December, they'll start impacting service. One wonders how far they'd go before actually taking up the issue seriously. Hopefully sooner than later.

Congress Sucks.
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ConrailMan5
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Re: NS and the PTC deadline.

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so this could result in major crew cuts, and long term loss of business to truckers or other modes. The way oil is shipped by rail could result in a major spike in fuel costs nationwide.
The major thing I am thinking about at this point is what lines would not be effected at all by PTC? I can't think of any major lines that doesn't see TIH shipments.
And Alex, to your point I don't think they would cut back starting in December. In fact I think they would probably still ship up to the deadline. The customers are more responsible for whether or not they want to keep rail shipments going until they can't anymore. If they want to shift to truck pipeline whatever before, good for them. If they want to wait until they have time to make concrete arrangements (i.e it is clear rail is going to not be allowed) then I would ship rail as long as I can so as to have a good succession plan for my shipments.
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Saturnalia
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Re: NS and the PTC deadline.

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BNSF said they'd have to embargo TIH shipments starting in early December. They simply cannot move TIH cars after Dec 31, hence they need to be spotted by Dec 31. Since it takes time for them to move through the system, the shutdown would begin early.
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Re: NS and the PTC deadline.

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What is "TIH"?
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Re: NS and the PTC deadline.

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AARR wrote:What is "TIH"?
Toxic Inhalation Hazard

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ConrailMan5
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Re: NS and the PTC deadline.

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Saturnalia wrote:BNSF said they'd have to embargo TIH shipments starting in early December. They simply cannot move TIH cars after Dec 31, hence they need to be spotted by Dec 31. Since it takes time for them to move through the system, the shutdown would begin early.
Right but do empty TIH cars count? Because in what I'm saying as long as they are unloaded by dec 31 then there should be no issue. The only issue then would be finding storage space.
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Re: NS and the PTC deadline.

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ConrailMan5 wrote:
Saturnalia wrote:BNSF said they'd have to embargo TIH shipments starting in early December. They simply cannot move TIH cars after Dec 31, hence they need to be spotted by Dec 31. Since it takes time for them to move through the system, the shutdown would begin early.
Right but do empty TIH cars count? Because in what I'm saying as long as they are unloaded by dec 31 then there should be no issue. The only issue then would be finding storage space.
IDK about residue cars.

You said "could still ship up to the deadline". I take it at this point that you meant they could transit, while I was using the term specifically for origination.

You can MOVE loaded TIH cars until Dec 31 only. Hence you must have all the cars received by Dec 31 and hence they'll start embargoing new loads sometime around early December, to make sure they're purged from the system by the end of the year.

I think NS made to great point that just because a line in the sand is crossed on Jan 1 doesn't mean the railroad is suddenly less safe.
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Re: NS and the PTC deadline.

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Saturnalia wrote:NS joining the bandwagon (and for good cause). They can't move TIH after Dec 31, so they'd actually begin clearing the network sometime around Thanksgiving, embargoing all new shipments.
That is absurd. If I was a customer and NS stopped moving my cars in November I would have them in front of the STB explaining their actions within hours. NS cannot refuse to move the traffic as a common carrier. If you read the statement, they aren't refusing to move it, just saying they may not legally be able to. At which point they don't know what is going to happen. Every one of these statements from the major carriers has said the same thing, we're still moving the stuff, until we can't legally do it. They CANNOT refuse to move it . Embargoing in November doesn't solve anything, unless you think it takes a month for a car to move across the NS system? If it takes a month to move a car off the network, they have far bigger problems than just not being able to move PIH and TIH after Jan 1st 2016.

Come the end of December (maybe as late as the 30th or 31st), they'll just type in a few key strokes in the computer, and turn all the 'bad stuff' into "hold" cars. That way when they reach the next terminal where they're switched, they will be switched out. We did it for the week of the Superbowl in Indy. All the PIH/TIH that was scheduled to come through Indy were turned into "hold" cars. Other terminals had "indy hold" cars for the duration of the 'festivities'. Once the events wrapped up, the 'holds' were released, tracks re-switched, and cars continued their journey.

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Re: NS and the PTC deadline.

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[quote="CSX_CO Embargoing in November doesn't solve anything, unless you think it takes a month for a car to move across the NS system? If it takes a month to move a car off the network, they have far bigger problems than just not being able to move PIH and TIH after Jan 1st 2016.[/quote]

I monitored inbound center beams last year and tracked them on line this year for the customer on the C&M. (About 12 a year). It takes anywhere from 3-4 weeks to get a load from the mills in Alabama to the customer in Grand Rapids. They will sit in the yard 5-6 after being pulled from the mill before "leaving town". They will sit in GR 3-4 days before being transferred to the GRE and the transfer runs 5 nights a week. Add in 2-3 days at each intermediate terminal and it adds up. CP keeps them rolling from BC with less than 24 hours in the intermediate terminals until they hit Chicago :( . It can take a loonnngggg time to get thru Chicago :(

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Re: NS and the PTC deadline.

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Raildudes dad wrote: I monitored inbound center beams last year and tracked them on line this year for the customer on the C&M. (About 12 a year). It takes anywhere from 3-4 weeks to get a load from the mills in Alabama to the customer in Grand Rapids. They will sit in the yard 5-6 after being pulled from the mill before "leaving town". They will sit in GR 3-4 days before being transferred to the GRE and the transfer runs 5 nights a week. Add in 2-3 days at each intermediate terminal and it adds up. CP keeps them rolling from BC with less than 24 hours in the intermediate terminals until they hit Chicago :( . It can take a loonnngggg time to get thru Chicago :(
Are they moving from Alberta, or from Alabama?

Regardless, if I was a customer and NS starts embargoing my cars in November, a Federal Regulating body is going to hear about it. Absolutely no reason for that. Start parking the shipments as they reach the intermediate terminals on the 30th or 31st, unless someone blinks and a new agreement is reached.

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Re: NS and the PTC deadline.

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Customer gets spruce from Quebec, CN - CSXT ,SYP from South Carolina CSXT, SYP from Alabama NS -GDLK, Doug fir and larch from BC CN-CSXT or CN-GDLK (I was mistaken on the Canadian origination's, they are on CN not CP.) If the CN's come from the east, less than 24 hours in Chicago, from the west ................. not so good.

It's been very interesting tracking the cars now that I have access to "AccessNS" and "ShipCSX". 8)

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Re: NS and the PTC deadline.

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The railroads better be careful parking and holding inhibited monomers. That will become a big problem. Boom. :shock:
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Re: NS and the PTC deadline.

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I tend to agree with Alex on this one. Michigan Shores policy (Genesse & Wyoming) is no hazmats in the yard. They are either in transit to and from the customer or on the customer's property. They will not hold them in their yard.

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Re: NS and the PTC deadline.

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12 a year isn't much but it's double what they were getting. I think their high was 8 in a year when they first opened. IIRC they had one year during the recession they got two in a year. However, it's still far lower than the 10 a month projections when they first opened (does a railroad ever "under estimate" anticipated carloads :lol: )
Raildudes dad wrote:I monitored inbound center beams last year and tracked them on line this year for the customer on the C&M. (About 12 a year).
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Re: NS and the PTC deadline.

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Raildudes dad wrote:I tend to agree with Alex on this one. Michigan Shores policy (Genesse & Wyoming) is no hazmats in the yard. They are either in transit to and from the customer or on the customer's property. They will not hold them in their yard.
As someone in the industry embargoing someones shipment a month before a deadline is not the answer. Railroads get paid very well to move those cars. Plus, those TIH aren't just sitting around. Styrene Mononer has a 30 day "shelf life". Hazmat rules for those say they're moving on the next available train. If I'm a shipper and they park my cars in November I would be very upset. To me that sounds the railroad is refusing to move my cars. I'm looking at a couple PIH cars and they're plan is 2 weeks from origin to spot (NY to MS). Another pair were released from customer in TX on the 11th. They're scheduled to be spotted in WV on the 23rd. So, if NS doesn't think they can execute a car plan in a month, they have bigger network issues. If my cars plan puts it spotted before the end of the year, and they refuse it, there will be penalties and someone will have to explain their decision. Using some lumber cars is an apples to oranges comparison, the PIH and TIH are handled with a bit more urgency.

In addition, the STB has said the railroads can't refuse to move the cars, and I also think they've said the railroads can't impose a special tarriff for handling them either. Parking your customers cars isn't the solution...you're punishing the wrong people.

You keep moving the cars, and when the deadline hits, you park them if need be.

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Re: NS and the PTC deadline.

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It's not like the company won't be paying you to move them into December so move them until you can't. It would cost a railroad a lot of money to just stop shipping cars early. I'm also better the deadline will be extended again in the 11th hour.. But I could be wrong
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Re: NS and the PTC deadline.

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Congress needs to stop thinking they can run a railroad. There is a reason they are at Capitol Hill & not in Ft. Worth, Jacksonville, or Omaha.
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Re: NS and the PTC deadline.

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Matt Short Line H wrote:Congress needs to stop thinking they can run a railroad. There is a reason they are at Capitol Hill & not in Ft. Worth, Jacksonville, or Omaha.
Its the other end of the double edged sword. Railroads want government money, they better be willing to be able to play nice with the government. Simple as that.
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Re: NS and the PTC deadline.

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Add all of Metra and South Shore to the list to stop service Jan. 1st of deadline is not extended... http://m.wsbt.com/news/South-Shore-coul ... 1/35489442

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