DETERMINATION of
“SOLELY ATTRIBUTABLE” COSTS
Calculation of Savings
Associated with a Strategic Plan
To Change Freight Train
Operating Speed
By Reductions in FRA Track Class
Executive Summary
In
this analysis, Zeta-Tech quantified the potential savings to a heavy freight
railroad client from reducing speed limits (and therefore FRA track class) system
wide. In addition, the additional cost
of providing higher class of service and speed for Amtrak trains was also
calculated
To
determine these costs, the following data were used:
·
Track
files indicating degree of curvature, length of curve and speed for all curves
on The freight railroad mainlines
·
Traffic
files listing traffic by STCC code.
From this data, traffic was divided into six categories:
1.
Passenger
2.
Intermodal
3.
Heavy
mixed freight
4.
Light
mixed freight
5.
Unit
trains
6.
Empty
cars
Specific
railroad company unit costs for rail, ties, and ballast were used.
Engineering
equations were used to determine the curve damage by each traffic type at
speeds corresponding to FRA Class 3, FRA Class 4, and (where appropriate) FRA
Class 5.
Ten
million in annual savings were identified for the case in which the freight
railroad reduced track class to FRA Class 3 systemwide. The annual savings were as follows:
Savings
from reduced Amtrak speeds on curves: $625,000
Savings
from reduction to Class 3 track $9,424,000
--------------
Total
annual savings $10,049,000
An
additional $3.8 million in savings would follow from a reduction from Class 5
to Class 4 on this business case.
Savings
from reduced Amtrak speeds on curves: $216,000
Savings
from reduction to Class 4 track $3,623,000
---------------
Total
annual savings $3,839,000
Introduction
A special WSAC Zeta-Tech study
applied an engineering-based methodology to determine the share of current
freight railroad MOW spending to be borne by Amtrak. It was assumed in that WSAC analysis that track class,
maintenance practices, and timetable speeds would remain the same.
However,
Amtrak operates at higher speeds than the freight trains. In addition, Amtrak is allowed higher speeds
on curves. These higher speeds
have a cost, above and beyond Amtrak's share of track maintenance
expenditures. This higher cost
component is solely attributable to Amtrak. This additional cost which is due to the difference in loads
applied to the high and low rails on curves, and the different speeds, is the
first subject of this business case review.
A
second cost quantified in this report is the additional cost of maintaining
track to higher standards in order to provide Amtrak with relatively high
operating speeds. Absent passenger
train operations, the freight railroad might wish to operate trains at much
lower speeds (possibly as low as 40 m.p.h.). At lower operating speeds, track maintenance costs might be
substantially reduced. Freight
customers might be satisfied with the lower train speeds as long as reliable
service and delivery patterns are maintained.
I. Background
For
many years, railroads were free to establish maintenance standards and speed
limits for track, without government involvement or regulation. Following a series of major derailments in
the 1970s, however, the Federal Railroad Administration was given statutory
authority to define track safety standards for all U.S. railroads. These standards defined six track classes,
with Class 1 being the lowest and Class 6 the highest. Specific geometry and condition standards
were established for each class of track, and speed limits (defined separately
for freight and passenger traffic) were also defined.
The
FRA was given a staff of safety inspectors, and enforcement power. Functionally, this enforcement power meant
that, while railroads were free to set speed limits on their tracks, the FRA
could order speeds reduced if track did not meet the requirements for the
appropriate FRA track class. For
example, a railroad might have a freight speed limit of 50 m.p.h. FRA standards define a freight speed of 40
m.p.h. for Class 3 track, and a freight speed of 60 m.p.h. for Class 4
track. To qualify for the freight train
speed limit of 60, the track would have to meet all requirements for Class
4. If not, the FRA could reduce the
speed limit to 40.
FRA
track standards imply varying frequencies for track maintenance activities. Geometric standards for FRA Class 2 track
are much less stringent than for Class 4.
It follows that track surfacing will be required less frequently on the
Class 2 track, even if traffic volumes are equivalent. A minimum number of sound ties per rail length
(39 feet) are defined for each class.
Again, at the lower track classes tie replacement cycles can be less
frequent, or the number of ties replaced in each cycle can be less.
Of
course, lower speeds result in lower dynamic loads from traffic. However, even after adjusting for this
effect, it is less costly to maintain a Class 3 railroad than to maintain a
Class 4 railroad. If market conditions
permit operations at 40 m.p.h. rather than at some higher speed, a railroad
might save a significant annual sum by maintaining track to lower
standards. Alternatively, the
additional cost of higher track class might be billed to a third party (Amtrak
or another passenger train operator) requiring the higher speeds.
II. Scope and Objectives of the
Analysis
Because
track class determines speed of operation for both freight and passenger
trains, the analysis presented here answers two separate but related questions:
1)
What
is the additional MOW cost associated specifically with Amtrak operations, and
2)
What
savings might be available to the freight railroad if all mainline tracks were
reduced from the current Class 5 or Class 4 maintenance standard to FRA Class
3?
1. Quantification of Additional
Costs, Amtrak Operation
Amtrak
conducts operations over 1,700 miles of this freight railroad’s mainlines.
The
freight railroad establishes superelevation based on the maximum freight (not
passenger) speed on each line.
Superelevation, to a maximum of four inches, is based on balance speed
plus 1.5 inches, allowing 1.5" of unbalance for freight trains on curves.
Amtrak
is allowed higher speeds than freight trains, by FRA track standards. The freight railroad also allows Amtrak to
travel at speeds as high as 79 m.p.h. On certain lines where the fright railroad’s
own intermodal trains operate at a maximum of 70 m.p.h. Amtrak also is allowed somewhat higher
speeds on curves, based on 3" of unbalance rather than the 1.5"
standard set for the freight trains.
The
freight railroad’s total MOW spending can be divided between Amtrak trains and
freight trains based on axle load and speed.
However, if the railroad is superelevated for freight speed and
unbalance, and Amtrak is permitted both higher operating speeds and a higher
unbalance, additional maintenance costs are incurred (beyond what the freight
railroad would have spent on a freight- only railroad). It is not correct to divide these additional
costs between passenger and freight trains, since the costs are in fact solely
related to passenger train operation.
Note, however, that these additional costs must be subtracted from total
MOW spending (assigned to Amtrak) and the remaining dollars divided between
passenger and freight operations.
In
this project, a curve-by-curve analysis was carried out to identify the
additional costs assignable to Amtrak due to higher speed operation. An additional Amtrak cost was calculated for
every curve on Amtrak routes The total
additional cost of additional curve maintenance (fully assignable to Amtrak)
was calculated by Zeta-Tech as $625,156 per year when track class was reduced
to FRA Class 3.
2. Savings Available from a Reduction in Track Class
The
freight railroad maintains its mainlines for relatively high-speed
operation. In a number of locations,
Van or intermodal trains are allowed 70 m.p.h., which requires maintenance of
Class 5 track. In others, maximum speed
is 60 m.p.h. or less and track is maintained to FRA Class 4.
In
this analysis, track class was determined by the highest freight speed limit on
any part of each segment included in the analysis. For example, a speed of 70 m.p.h. for intermodal trains implied a
FRA Class 5 track. A maximum speed of
50 m.p.h. implied a FRA Class 4 railroad.
The same track class was assumed to apply for the length of each
segment, even in areas (such as yards or heavily curved sections) where speed
limits were low enough for a lower class of track. The freight railroad’s engineering personnel indicated that
maintenance standards were uniform on each line.
This
portion of the study applied a methodology developed by Zeta-Tech to determine
the additional savings available under two scenarios:
·
Entire
railroad maintained to Class 4
·
Entire
railroad maintained to Class 3
Reduction
in track class requires lowering speed limits, to as low as 40 m.p.h. in the
Class 3 case. The possible marketing
implications of this were not addressed in this analysis.
Amtrak
operations would be unaffected by a decision to lower track class from FRA
Class 5 to FRA Class 4, since in either case Amtrak could continue to operate
at 79 m.p.h. However, reduction to FRA
Class 3 would require changes to Amtrak schedules, since maximum speed would
be reduced to 60 m.p.h. on the entire freight network.
Savings
were based on a reduction in the frequency of maintenance cycles, made possible
by the less stringent FRA standards for geometry and for number of good ties
per rail length. Savings were also
realized from longer rail life at the lower speeds. A detailed description of the methodology is included in the
next section of the report.
III. Quantification of
Additional Amtrak Costs
A
separate analysis ( see WSAC Business Case) was used to form the basic cost
allocation method for distribution of costs among the various types of traffic
along specific routes. This permitted
an allocation of costs for passenger traffic based on key operating and
maintenance parameters of the track and traffic. However, it did not address
the costs associated with maintaining the track to a higher standard than that
required by freight traffic alone, nor did it address the additional cost of
higher unbalance and consequent higher speeds on curves for passenger
trains. These latter items are not cost
allocation issues, since they entail additional (or reduced) costs for any
increase (or decrease) in class of track or change in policy regarding
passenger train unbalance on curves.
This section of the business
case review addresses the development of a methodology for the determination of
this additional (reduced) cost associated with both a change of class of track
and a higher allowed unbalance for passenger trains.
This
methodology can be applied to any operation in which a railroad wishes to
estimate the costs or savings from a change in the class of track. Specifically this methodology can be used
to:
a)
Provide
supplemental costs for existing passenger train operations. These costs are in
addition to those developed in the cost allocations covered by WSAC.
b)
Allow
for the estimation of additional costs associated with changes in track class
to accommodate the operation of passenger traffic over routes not currently
used by Amtrak. (Note; the effect of the additional traffic is obtained using
the WSAC methodology. These costs are
additional costs as noted in (a) above.)
While
the Weighted System Average Cost (WSAC) methodology accounts for most major
maintenance areas, it assumes that the railroad is maintaining the track to an
appropriate standard for all traffic types.
With higher-speed passenger operations, the general level of
expenditures is higher than it would be if passenger trains operated at the
same speed as freight trains.
Therefore
it is necessary to identify and separate the solely related costs of passenger
train operation. The solely
attributable costs for this client included the following items:
a)
Effect
of superelevation associated with the operation of passenger and freight
traffic at different operating speeds over the same curves (in this analysis,
this cost is calculated separately from the cost of changing track class).
b)
Effect
of track class.
a)
Effect
of superelevation associated with the operation of passenger and freight
traffic at different operating speeds over the same curves (again, calculated
separately).
b)
Effect
of track class.
(1)
Difference
in allowable bad ties between FRA classes.
C.
Geometry (Ballast)
a)
Effect
of superelevation associated with the operation of passenger and freight
traffic at different operating speeds over the same curves (again, calculated
separately).
b)
Effect
of track class.
a)
Turnouts
(included in surfacing cost).
b)
Upgrade
of track components (not addressed here).
c)
Track
inspection.
As
information, the maximum allowable speed limits for these track classes are
identified in the table below:
Passenger Freight
Class
3 60 40
Class
4 80 60
Class 5 90* 80
*Limited
to 79 m.p.h. except in cab-signal territory