ASSOCIATION 0 OF AMERICAN RAILROADS

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1 ASSOCIATION 0 OF AMERICAN RAILROADS 6/25/2013

2 Overview of the AAR for The 2013 DP&FC Conference Jim Grady Assistant Vice President Technical Services

3 AAR IS A Trade Association Based in Washington, DC AAR IS NOT A Government Agency 2

4 AAR Represents Class I, Amtrak & Other Full Member Railroads 3

5 AAR Represents Associates Suppliers Car owners Engineering firms Communications and signal firms Affiliates Non-Class 1 freight railroads Commuter railroads International railroads 4

6 What does AAR do? Seeks to advance sound public policy that supports the freight rail industry Promotes the railroad industry as a safe, costeffective, efficient and environmentally friendly transportation system, highlighting its importance to the economy and U.S. jobs Prepares weekly, quarterly and annual statistical reports providing comprehensive insight into the operations of North America's freight railroads Helps to establish safety, security and operating standards for the seamless operation of an over 140,000 mile network 5

7 AAR Departments President s Office Communications Government Affairs Law Department Policy & Economics Finance & Administration Safety & Operations 6

8 AAR Governance Board of Directors Safety & Operations Management Committee Policy & Advocacy Management Committee Standards, Operations, Safety & Security Committees Policy & Communications Committees AAR staff support the work of the committees through direct committee support, communications and lobbying 7

9 AAR Subsidiaries 8

10 The Transportation Technology Center Pueblo, Colorado 9

11 Transportation Technology Center, Inc. TTCI World-class research & testing facility Located in Pueblo, Colorado Engages in leading edge railroad research Behind many technological advances in our industry Used by freight and passenger railroads from around the world 10

12 Strategic Research Vehicle-Track System Wheel / rail asset life extension Vehicle track performance Train condition monitoring New Tech Implementation Heavy Axle Loads Heavy axle load implementation FAST/HAL operations HAL revenue Service Monitoring HAL Track Substructure Mechanical Advanced train equipment Improved car components Improved car performance Improved braking Engineering Track integrity Special track work Bridge research Improved track components Improved performance track Improved signal reliability TTCI/AAR, 2009, Filename p11

13 Rail Vehicle Test Tracks at TTC 12

14 How much for Strategic Research? 13

15 Railinc Corporation AAR s information technology arm Located in Cary, North Carolina Maintains one of the world s largest data networks Helps customers track railroad shipments in real time Provides a foundation for services between members, such as Car Repair Billing 14

16 Railinc Corporation Two Major Initiatives Comprehensive Equipment Performance Monitoring (CEPM) AKA Component Tracking Asset Health Strategic Initiative Information technology systems, processes, analytics, business rules, that will evolve industry-level collaboration on asset health beyond its current levels. 15

17 Technical Services 16

18 Background In 1871 there were 20 different railroad operations that had unique track gauge. This prohibited interchange of cars and locomotives. As a result passengers and goods had to be transferred from one carrier to another, one vehicle to another in order to travel long distances. 17

19 Background In those early days of our history, there were forward thinkers in the industry Master Car Builders Association Founded Developed 1 st Code of Interchange Rules 1897 American Railroad Association Founded 1934 Association of American Railroads Founded 18

20 Industry Scope 1.4 Million Freight Cars in Interchange in North America 25,000 (+) Locomotives in service in North America Parties Involved Signatory to Interchange Rules 600 Railroads Private Car Owners and Lessors Shipper Owners & Utilities Contract Repair Facilities 19

21 AAR Interfaces with Government Agencies Federal Railroad Administration (FRA DOT) National Transportation Safety Board (NTSB) Transport Canada Transportation Safety Board of Canada Pipeline & Hazardous Materials (PHMSA) Environmental Protection Agency (EPA) Surface Transportation Board (STB) Federal Highway Administration (FHA DOT) Secretario de Communicaciones y Transportes (SCT Mexico) Various State Agencies in US 20

22 Two Primary Areas of Responsibility Interchange of Equipment AAR Interchange Rules System of Rules for Handling Repairs to Rolling Stock Standards & Responsibility for Repairs Field Manual & Office Manual Standard and Equitable Payment Schedule (Car Repair Billing Rules) 21

23 Two Primary Areas of Responsibility Standards & Recommended Practices Form Basis of Interchange Rules Function to Maintain Interoperability Equipment design and repair standards Cover everything from Basic components and systems: e.g. Coupler & Draft Gear and Air Brake Systems To Complete Car Construction Locomotive Standards 22

24 Two Primary Areas of Responsibility Standards & Recommended Practices Established & Maintained by Committees Comprised of Railroad, Car Owner & Component Supplier Representatives The Subject Matter Experts Led and supported by AAR 23

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26 Early Warnings & Maintenance Advisories Mechanism established to require corrective action by the ENTIRE Industry on freight cars or components that may pose imminent safety hazard. Corrective action ranges from immediate removal of the car from service to withholding an empty car from re-loading. Integrated with Car Tracking System to locate and advise railroad management personnel 25

27 Enforcement Repairs and Billing On the honor system. AAR Mechanical Inspection Department (MID) In place to keep everyone honest Trust but verify MID Audits Repair and Billing Practices Through Unannounced Facility Inspections Evidence of fraud can result in restitution of foreign car billing up to 18 months MID also conducts Facility Certifications 26

28 WHAT S HOT? 27

29 PTC Positive Train Control 28

30 PTC System Overview 29 6/25/2013

31 Railroads Affected Railroads that will have PTC 7 Class 1 Railroads Amtrak 21 commuter authorities Between 43 and 94 short-line and regional railroads A total between 71 and 112 railroads 30 6/25/2013 OF AMERICAN RAILROADS

32 Scope of PTC $8 -$10 billion 31,700 wayside units 19,747 locomotives 75% of the railroad locomotive fleet 4,900 switches in non-signaled territory 96,000 track miles will be mapped 80,000 miles have been mapped to date 473,000 field assets - database The largest combined effort in transportation history. Everyone is cooperating. 31 6/25/2013 TION OF AMERICAN RAILROADS

33 Human Resources 10,000 people devoted full time Best and the brightest in the industry Railroaders Manufacturers Designers System integrators 2,260 Signal employees hired or retained $242 million per year additional cost to the railroads 32

34 Training Locomotive Engineers & Conductors Train Dispatchers Communications & Signals employees Electronics technicians - locomotives Maintenance of way employees First line supervision of the above Essential and Just-In-Time training Additional operating rules Tens of thousands of hours for tens of thousands of people (over 100,000 people) 33

35 Progress Report 8 crew districts are currently in test mode Testing is underway at selected areas 25 train crew districts in testing by end of 2013 Onboard software, which runs on the TMC, is being tested with the final release in 3Q % of locomotives are partially complete 34 6/25/2013 RAILROADS

36 Progress Report Radio Requirements 220 MHz production radios began during 2012 with delivery underway 55,600 radios are required 19,747 on locomotives 34,000 wayside 4,200 base station 5% have been installed 35

37 Progress Report Signal System Projects 12,300 Signal Replacement Projects 1/3 are complete Most would not have occurred at this time if the mandate were not in force 8 Back office systems are in progress Hardware is being installed 36

38 THE AAR s ROLE MAINTENANCE OF STANDARDS AAR maintains and distributes standards Issues Circular Letters and MSRP manuals CONFIGURATION MANAGEMENT May be asked to assist railroads INDUSTRY OUTREACH PTC Forums for industry Short-line Association meetings Response to rail industry inquiries 37

39 AHSI Asset Health Strategic Initiative 38

40 Asset Health Strategic Initiative (AHSI) Multi-year strategy for improvement of asset health driven by yearly industry targets and measures for improvement, Solves problems with rolling stock that need a network view of asset information and industry coordination, Applies information technology solutions and processes Prevent Detect Plan SAFETY Settle Repair Move

41 Premise: Centrally Available Asset Information and Systems Enable Efficiencies Current State Future State Railroad 1 Railroad 2 Railroad 3 Asset history Train Consists Onboard and trackside detectors Line of road failures Consists Comprehensive repair information Consists Onboard detector information Consists Airbrake test requirements Industry Rolling Asset Data Warehouse Line of road failures Wayside detector Information Service interruptions Service interruptions Imbalance overload alerts Repair info

42 The AHSI Program is aligned with industry objectives Industry Targets Improve Safety Lower Train & Yard Operations Costs Lower Repair & Maintenance Costs AHSI Targets Reduce Mechanical Service Interruptions Improve Inspection Quality Increase Yard & Shop Efficiency These targets are already a focus at individual railroads. The AHSI will mature these beyond local benefits. Optimize Capital Expenditures These areas cost the industry nearly $640 million annually.

43 The Asset Health program has been identified by RR COOs as one of SOMC s 2013 strategic initiatives Industry Targets AHSI Targets AHSI Initiatives AHSI Scenarios Improve Safety Lower Train & Yard Operations Costs Lower Repair & Maintenance Costs Optimize Capital Expenditures Reduce Mechanical Service Interruptions Improve Inspection Quality Increase Yard & Shop Efficiency Asset Information Repository E-Train Inspection Quality Detector-based Brake Effectiveness Bad Actor Identification

44 Scenario: Detector Based Brake Effectiveness Related AHSI Initiatives: Asset Information Repository E-Train Inspection Quality

45 ASSOCIATION 44 OF AMERICAN RAILROADS 6/25/2013