Just How Does That Work?

I'm a little guilty here. I've bought into some of the hype from the freight railroads, Amtrak, and several big-city commuter railroads. Heck, I've even posted a countdown timer on this blog to support those railroads who believe that some services will have to be curtailed by the end of October, 2015, in order to avoid violating federal law on January 1, 2016, if PTC is not fully implemented. Why? Because the freight railroads do not want to have any hazardous materials cargo on the rails (those cargo items subject to the PTC mandate) at 12:01am on New Year's Day. Big fines are at stake. Will it really happen? Let's look into the nuts and bolts of it.

Let's start with Amtrak. Amtrak doesn't particularly want to shut down, but the freight railroads are threatening to refuse track to Amtrak trains, because they carry another class of cargo subject to the mandate--people. There was a time when I would have said Amtrak would act like a real railroad, which it isn't, and make contingency plans, find alternate routing where possible, keep the trains running as much as possible, and go to federal court, if necessary, to force continuance of service. Today, based on experience with other forced and unforced outages--weather and landslides, for example--I think Amtrak will fold like a bad wallet and simply stop running those trains that run on tracks Amtrak doesn't own. It's not quite that simple, because of the hodgepodge of operating arrangements with the various state transportation departments, but that's the gist of what I think will happen.

The freight railroads are, on the other hand, not in a namby pamby mood. They are flush with cash, even though traffic in coal and petroleum/oilfield products is down. They have had monumental CAPEXs (that's capital expenditures) for the past several years, and stockholders won't want that to go to waste. No small amount of those CAPEX budgets have gone toward PTC. It's no secret that the "countdown" is part of the pressure the freight railroads are putting on Congress to resolve this mess, and do so quickly. And they have to money to put on a lot of pressure.

Will the freight railroads pull an Obama and let the sand cover the red line? I don't think so. They are not a Republican-controlled Congress, and they are unafraid of a shutdown and perfectly financially capable of surviving one. What you have to realize, however, is that they don't have to shut down completely. There are many classes of cargo that don't require PTC and won't violate federal law. It may even give the railroads an opportunity to untangle service delays and other service related problems to show what they can do if given a few days respite from transporting more heavily regulated goods. Meanwhile, the customers who rely on the rails for transportation of haz goods will scramble to find alternates. Barges might pollute rivers. Trucks carring crude through the middle of town? Uh-oh! That's right. It's all part of the pressure on Congress.

So the railroads are telling Congress that, if they're going to pass an idiotic law, they better remember that there are constituents that can see idiots coming a mile away. The railroads actually do want PTC, or they wouldn't have spent money to have it where it is today. It will eventually make human crews obsolete and computerize the rail system to a degree only imagined ten years ago. As idiotic laws go, this one's not so bad. (See Obamacare.) But somebody's got to be the adult.

So--will the shutdown happen? Stay tuned.

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