Safety deadline may exempt U.S. railroads from freight obligations

By | September 10, 2015

(STRIKE THREATS FROM THE BOSSES?) U.S. railroads may not be obligated under federal law to carry freight including crude oil and hazardous materials from Jan. 1 if they fail to meet a year-end deadline for implementing new train safety technology, according to a top federal regulator.

In a Sept. 3 letter to the Senate Commerce Committee, U.S. Surface Transportation Board Chairman Daniel Elliott says the common carrier obligation requiring freight railroads to honor reasonable requests for service from shippers “is not absolute, and railroads can suspend service for various reasons, including safety.”

The letter, reviewed by Reuters, presents the most tangible sign yet of what could lie ahead for rail carriers and their customers, if Congress fails to extend its Dec. 31 deadline for railroads to implement positive train control, or PTC.

The National Transportation Safety Board, which has been calling on railroads to adopt PTC since the late 1960s, says the technology would prevent major rail accidents such as the May 12 Amtrak derailment that killed eight people and injured more than 200 others.

The approaching deadline has prompted at least one major railroad company to look seriously at suspending service: billionaire investor Warren Buffett’s BNSF Railway Co (BRKa.N), the No. 2 freight railroad operator and the leading carrier in the $2.8 billion U.S. crude-by-rail market.

“BNSF confirmed that it will not meet the deadline and offered the possibility that neither passenger nor freight traffic would operate on BNSF lines,” Elliott said in the letter, which was addressed to the committee’s Republican chairman, Senator John Thune of South Dakota.

In a July 24 letter provided to Reuters by BNSF, railroad president and chief executive Carl Ice informed Elliott that BNSF is analyzing the possibility of a service shutdown and actively consulting with customers.

CSX Corp (CSX.N), the No. 3 U.S. freight handler, also told the board that it would not meet the PTC deadline but did not discuss possible decisions on whether to continue service, Elliott said. (…)

(Read more) from Reuters

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