1 00:00:07,400 --> 00:00:11,039 Speaker 1: Hi everyone, and welcome to Bloomberg Intelligence Talking Transport Podcast. 2 00:00:11,080 --> 00:00:14,720 Speaker 1: I'm your host Lee Claskows, senior freight transportation logistics analysts 3 00:00:14,760 --> 00:00:18,959 Speaker 1: at Bloomberg Intelligence, Bloomberg's in house research arm. We're delighted 4 00:00:19,000 --> 00:00:22,720 Speaker 1: to have Ian Jeffries, President and CEO of the Association 5 00:00:22,920 --> 00:00:25,880 Speaker 1: of American Railroads or AAR, as our guest on the 6 00:00:25,880 --> 00:00:29,760 Speaker 1: podcast today. Prior to assuming the role on January first, 7 00:00:29,800 --> 00:00:33,519 Speaker 1: twenty nineteen, Ian was the Senior Vice president of aa 8 00:00:33,560 --> 00:00:37,879 Speaker 1: Government Affairs, where he led the development, promotion, and implementation 9 00:00:38,040 --> 00:00:43,400 Speaker 1: of legislative priorities for the AAR. Before joining AR, Ian 10 00:00:43,479 --> 00:00:47,080 Speaker 1: cultivated more than a decade of experience working within government. 11 00:00:47,120 --> 00:00:50,240 Speaker 1: From two thousand and nine to twenty thirteen, he served 12 00:00:50,240 --> 00:00:52,640 Speaker 1: as a senior policy advisor to the Chairman of the 13 00:00:52,760 --> 00:00:57,640 Speaker 1: US Senate Committee on Commerce, Science, and Transportation. Ian received 14 00:00:57,680 --> 00:01:00,960 Speaker 1: as Masters of Science and Public Policy and Management from 15 00:01:01,000 --> 00:01:04,840 Speaker 1: Carnegie Mellon University and his Bachelor of Science and Economics 16 00:01:04,920 --> 00:01:08,399 Speaker 1: from the University of Kentucky. So Go Wildcats, Welcome to 17 00:01:08,440 --> 00:01:09,039 Speaker 1: the podcast. 18 00:01:09,040 --> 00:01:10,920 Speaker 2: Ian, Thanks for having me, Lee, Good to see you. 19 00:01:11,080 --> 00:01:14,520 Speaker 1: My pleasure. So you know, the Association of American Railroads 20 00:01:14,560 --> 00:01:16,560 Speaker 1: may not be a household name for everybody. Can you 21 00:01:16,560 --> 00:01:19,160 Speaker 1: tell a little about what the organization does and is? 22 00:01:19,400 --> 00:01:24,200 Speaker 2: Yeah, absolutely So. We are the Railroad Industries Trade Association 23 00:01:24,360 --> 00:01:26,560 Speaker 2: in Washington, d C. And what does that mean. It 24 00:01:26,600 --> 00:01:30,080 Speaker 2: means we represent not only all of the Class one railroads, 25 00:01:30,120 --> 00:01:33,720 Speaker 2: which are the large railroads that cover the US, but 26 00:01:33,760 --> 00:01:38,280 Speaker 2: also smaller regional short line railroads. Amtrak's also a member, 27 00:01:39,319 --> 00:01:42,640 Speaker 2: So we represent really the freight rail or the rail 28 00:01:42,840 --> 00:01:47,440 Speaker 2: voice in Washington, d C. And whether that's on advocacy 29 00:01:47,480 --> 00:01:51,160 Speaker 2: issues in front of Congress, whether that's legal issues, whether 30 00:01:51,200 --> 00:01:56,920 Speaker 2: that's through communications efforts, whether it's through safety standard setting, 31 00:01:57,000 --> 00:02:01,200 Speaker 2: operational standard setting, we are the place to be when 32 00:02:01,240 --> 00:02:03,680 Speaker 2: it comes to that, and we are the voice of 33 00:02:03,720 --> 00:02:04,360 Speaker 2: the industry. 34 00:02:04,800 --> 00:02:07,840 Speaker 1: All right, Great, I took Amtrak coming down to DC. 35 00:02:07,920 --> 00:02:11,520 Speaker 1: We're in our DC offices today. You know, what are 36 00:02:11,520 --> 00:02:15,720 Speaker 1: the main priorities of the are for all those constituents 37 00:02:15,720 --> 00:02:16,440 Speaker 1: you just mentioned. 38 00:02:16,840 --> 00:02:18,960 Speaker 2: Well, I think if you want to boil it down 39 00:02:19,000 --> 00:02:20,480 Speaker 2: to one thing, we want to make sure that the 40 00:02:21,000 --> 00:02:24,799 Speaker 2: rail voice is heard. And our largest members, as I mentioned, 41 00:02:24,800 --> 00:02:27,520 Speaker 2: are the freight railroads, and so we want to make 42 00:02:27,560 --> 00:02:31,000 Speaker 2: sure that the policy agenda for the freight railroads, which 43 00:02:31,200 --> 00:02:36,600 Speaker 2: is generally being able to operate efficiently, safely, being able 44 00:02:36,680 --> 00:02:40,000 Speaker 2: to earn the revenues necessary to reinvest back into our networks. 45 00:02:40,080 --> 00:02:43,000 Speaker 2: Most people don't know this, but the nation's freight railroads 46 00:02:43,000 --> 00:02:46,120 Speaker 2: are almost entirely privately owned and maintained. We make our 47 00:02:46,160 --> 00:02:49,680 Speaker 2: own investments about twenty six billion dollars a year. So 48 00:02:49,720 --> 00:02:52,680 Speaker 2: it's very contrary to the US highway system, which is 49 00:02:53,120 --> 00:02:57,400 Speaker 2: very much publicly funded and subsidized. And so we want 50 00:02:57,440 --> 00:03:00,200 Speaker 2: to make sure that policies that are enacted by Congress 51 00:03:00,280 --> 00:03:03,560 Speaker 2: or policies that are enacted by the Administration really support 52 00:03:03,600 --> 00:03:07,040 Speaker 2: our ability to operate, to grow, to compete, and to 53 00:03:07,120 --> 00:03:10,160 Speaker 2: do so safely and efficiently in a way that allows 54 00:03:10,240 --> 00:03:12,560 Speaker 2: us to serve our customers and communities great. 55 00:03:12,600 --> 00:03:14,960 Speaker 1: And how would you characterize rail demand right now? 56 00:03:15,200 --> 00:03:18,839 Speaker 2: I would say it's it's kind of bebopping along. That's 57 00:03:18,880 --> 00:03:22,000 Speaker 2: a technical term. You know, this year has been been 58 00:03:22,040 --> 00:03:25,679 Speaker 2: pretty interesting. We really break it down into two big segments. 59 00:03:25,680 --> 00:03:30,200 Speaker 2: So you've got our car loads, which are things like grain, automobiles, 60 00:03:30,600 --> 00:03:36,000 Speaker 2: auto parts, sand rock, kind of all the industrial products. 61 00:03:36,040 --> 00:03:38,600 Speaker 2: And then we have intermodal, which is the container traffic 62 00:03:38,680 --> 00:03:41,280 Speaker 2: that often comes through the ports that's consumer goods and 63 00:03:41,360 --> 00:03:44,440 Speaker 2: so on the On the car load side, it's we're 64 00:03:44,640 --> 00:03:46,640 Speaker 2: just a little bit up as we head in through 65 00:03:46,680 --> 00:03:50,680 Speaker 2: the end of the year. Automotive segment has been really strong. 66 00:03:51,200 --> 00:03:54,360 Speaker 2: Grain has struggled, but it's starting to show some signs 67 00:03:54,400 --> 00:03:58,640 Speaker 2: of improvement here as the year closes out. And then 68 00:03:58,720 --> 00:04:01,400 Speaker 2: on intermodal, it's been kind of a rocky year. We're 69 00:04:01,440 --> 00:04:04,800 Speaker 2: down about five percent or so, about fifty percent of 70 00:04:04,840 --> 00:04:07,520 Speaker 2: our traffic is intermodal, about fifty percent is car load. 71 00:04:08,560 --> 00:04:11,080 Speaker 2: But on the bright side, over the past month or so, 72 00:04:11,320 --> 00:04:14,840 Speaker 2: intermodal year over years, shown a pretty decent level of improvement, 73 00:04:15,160 --> 00:04:18,239 Speaker 2: and so we're we're ready willing and able to continue 74 00:04:18,279 --> 00:04:21,359 Speaker 2: to move that traffic as demand continues to pick up, 75 00:04:21,400 --> 00:04:23,400 Speaker 2: hopefully into next year and further on. 76 00:04:24,160 --> 00:04:27,480 Speaker 1: And when you're talking about demand, you're talking specifically the US, 77 00:04:27,640 --> 00:04:30,560 Speaker 1: not not Canada, because a lot of your members have 78 00:04:30,800 --> 00:04:32,960 Speaker 1: operations in Canada and Mexico. 79 00:04:32,640 --> 00:04:35,080 Speaker 2: Right Lee, that's a really good point. So we're the 80 00:04:35,200 --> 00:04:39,440 Speaker 2: North American Trade Association, our North American industry. We've got 81 00:04:40,160 --> 00:04:43,680 Speaker 2: we've got members Canadian members, some of which have US operations, 82 00:04:43,680 --> 00:04:46,960 Speaker 2: both CP and CN, but we also have Mexican members 83 00:04:47,000 --> 00:04:49,960 Speaker 2: as well. So we're very much focused on the North 84 00:04:50,000 --> 00:04:53,960 Speaker 2: American market and the flow of goods across the northern 85 00:04:54,040 --> 00:04:58,520 Speaker 2: and southern border. So while we concentrate when I talk 86 00:04:58,560 --> 00:05:02,560 Speaker 2: about traffic and demand, it's typically that within the United States, 87 00:05:03,520 --> 00:05:06,360 Speaker 2: it's very dependent on that cross border flow as well. 88 00:05:07,200 --> 00:05:08,480 Speaker 1: You know, one of the things that you know we 89 00:05:08,520 --> 00:05:11,840 Speaker 1: like about the railroads is the opportunity for motal share gains. 90 00:05:11,920 --> 00:05:14,600 Speaker 1: Can you talk about like how the rail industry is 91 00:05:14,640 --> 00:05:18,000 Speaker 1: positioned to win maybe share from trucking and what the 92 00:05:18,040 --> 00:05:19,560 Speaker 1: benefit is for shippers. 93 00:05:19,839 --> 00:05:23,560 Speaker 2: Yeah, absolutely, so, I think there are enormous opportunities, and 94 00:05:23,640 --> 00:05:27,360 Speaker 2: I'm really excited about what we're seeing in the freight 95 00:05:27,400 --> 00:05:31,200 Speaker 2: rail market right now. Service products are coming online, whether 96 00:05:31,240 --> 00:05:34,840 Speaker 2: it's one railroad with a trucking partner, whether it's multiple 97 00:05:34,920 --> 00:05:38,599 Speaker 2: railroads combining to provide a service product. What you're seeing 98 00:05:38,760 --> 00:05:42,760 Speaker 2: is this this ability to compete in lanes that maybe 99 00:05:42,880 --> 00:05:46,520 Speaker 2: railroads weren't traditionally able to compete in competitively, or at 100 00:05:46,560 --> 00:05:49,880 Speaker 2: distances that we weren't traditionally really in a position to compete. 101 00:05:49,920 --> 00:05:52,279 Speaker 2: I think the number used to be about once you 102 00:05:52,360 --> 00:05:55,640 Speaker 2: get below five hundred miles, it's really difficult for training 103 00:05:55,720 --> 00:05:58,800 Speaker 2: to compete with truck We're trying to really dig into that, 104 00:05:59,279 --> 00:06:03,360 Speaker 2: and so the opportunity is absolutely there to really claw 105 00:06:03,440 --> 00:06:06,479 Speaker 2: back and claw more of that share. I think in 106 00:06:06,600 --> 00:06:10,920 Speaker 2: eighteen nineteen we were at our peak intermodal traffic levels 107 00:06:11,160 --> 00:06:12,760 Speaker 2: and the goal is not to just get back to that. 108 00:06:12,800 --> 00:06:15,440 Speaker 2: The goal is to blow through those numbers and really 109 00:06:16,360 --> 00:06:19,080 Speaker 2: build on success, and I think we're poised to do that, 110 00:06:19,600 --> 00:06:24,200 Speaker 2: and you're seeing significant investment in intermodal facilities, especially out West. 111 00:06:24,360 --> 00:06:29,120 Speaker 2: But again, these products that are focused on hyper responsiveness 112 00:06:30,480 --> 00:06:35,839 Speaker 2: over ninety five percent on time, performance, predictability, visibility, because 113 00:06:35,839 --> 00:06:38,680 Speaker 2: that's what our intermodal customers expect and demand, and so 114 00:06:38,760 --> 00:06:41,280 Speaker 2: that's what we're providing to them. And the opportunities are 115 00:06:41,400 --> 00:06:44,400 Speaker 2: huge to continue to grow, and we're ready for that 116 00:06:45,360 --> 00:06:47,679 Speaker 2: opportunity to take our swings and win that traffic. 117 00:06:47,880 --> 00:06:51,000 Speaker 1: Right. So, it seems like there's two major factors that 118 00:06:51,080 --> 00:06:53,360 Speaker 1: go into you know, whether or not or how quickly 119 00:06:53,400 --> 00:06:56,880 Speaker 1: the cycular demand growth of modal share comes into play. 120 00:06:56,880 --> 00:07:00,440 Speaker 1: One as fuel prices and the other service there's really 121 00:07:00,520 --> 00:07:03,000 Speaker 1: nothing you can do where your members can do about 122 00:07:03,000 --> 00:07:05,560 Speaker 1: fuel prices, at least I don't think they can and 123 00:07:05,600 --> 00:07:08,760 Speaker 1: then there's service. So can you talk about, you know, 124 00:07:08,800 --> 00:07:12,760 Speaker 1: the rail network as it stands today. I know there's 125 00:07:12,800 --> 00:07:15,120 Speaker 1: been a lot of issues with service coming out of 126 00:07:15,120 --> 00:07:17,240 Speaker 1: the pandemic. You know, where are we today? Are we 127 00:07:17,280 --> 00:07:20,720 Speaker 1: by you know where we were before the pandemic. Just 128 00:07:20,760 --> 00:07:22,880 Speaker 1: talk a little bit about that and maybe what the 129 00:07:22,960 --> 00:07:26,080 Speaker 1: industry has to do to further improve upon service. 130 00:07:26,240 --> 00:07:29,320 Speaker 2: Certainly, so if you look at our primary service metrics, 131 00:07:29,400 --> 00:07:34,080 Speaker 2: kind of industry wide service metrics, whether it's velocity, terminal, dwell, 132 00:07:34,160 --> 00:07:37,480 Speaker 2: things along those lines, our metrics have dramatically improved over 133 00:07:37,520 --> 00:07:41,680 Speaker 2: the past six to nine to twelve months mid pandemic 134 00:07:41,760 --> 00:07:44,000 Speaker 2: and coming out of the pandemic. You know, we had 135 00:07:44,120 --> 00:07:48,040 Speaker 2: kind of a significant challenges across the entire integrated supply chain. 136 00:07:48,080 --> 00:07:50,040 Speaker 2: I don't think there's any secret about that. Whether it 137 00:07:50,480 --> 00:07:53,360 Speaker 2: was at the ports, whether it was in some of 138 00:07:53,400 --> 00:07:55,880 Speaker 2: the yards, whether it was a shortage of truckers long haul, 139 00:07:55,960 --> 00:08:00,200 Speaker 2: short haul, and so we certainly got got caught in 140 00:08:00,240 --> 00:08:03,240 Speaker 2: the in the middle of that, and railroads have taken 141 00:08:03,440 --> 00:08:07,040 Speaker 2: numerous steps over you know, the several months. We can't 142 00:08:07,040 --> 00:08:10,200 Speaker 2: just flip a switch. It takes time to uh to 143 00:08:10,360 --> 00:08:12,520 Speaker 2: to bring the folks online that we need to to 144 00:08:12,600 --> 00:08:16,320 Speaker 2: adequately source demand upwards of six months sometime from when 145 00:08:16,360 --> 00:08:18,880 Speaker 2: you hire on somebody before they're out on the railroad. 146 00:08:19,120 --> 00:08:22,680 Speaker 2: But through significant sustained efforts of hiring, we've gotten our 147 00:08:22,840 --> 00:08:27,480 Speaker 2: operating crafts, our engineers, and conductors, primarily getting that head 148 00:08:27,480 --> 00:08:31,080 Speaker 2: count to the right level to sustain demand or sustain service, 149 00:08:31,720 --> 00:08:33,719 Speaker 2: but also to be able to to ride out the 150 00:08:33,840 --> 00:08:36,400 Speaker 2: ups and downs. I think resiliency is a word that 151 00:08:36,440 --> 00:08:40,199 Speaker 2: became very much a focus word in the industry coming 152 00:08:40,200 --> 00:08:43,800 Speaker 2: out of the pandemic, because as we saw in the pandemic, 153 00:08:44,120 --> 00:08:46,679 Speaker 2: you know, we had a shock to the system. Traffic 154 00:08:46,679 --> 00:08:49,360 Speaker 2: fell through the floor, right, and then kind of unexpectedly 155 00:08:49,440 --> 00:08:53,240 Speaker 2: came roaring back. And railroads had employed what they had 156 00:08:53,280 --> 00:08:55,680 Speaker 2: been doing for decades, which is, when you you don't 157 00:08:55,679 --> 00:08:58,880 Speaker 2: have the demand, you temporarily furlow your your folks, and 158 00:08:58,920 --> 00:09:01,000 Speaker 2: when the demand comes back, call them back when you 159 00:09:01,000 --> 00:09:04,199 Speaker 2: have the business there. Well, when we called them back, 160 00:09:04,400 --> 00:09:08,600 Speaker 2: what used to be mid ninety percent return rates dropped 161 00:09:08,600 --> 00:09:11,840 Speaker 2: down to fifty percent return rates, and so we got 162 00:09:11,880 --> 00:09:14,840 Speaker 2: caught playing ketchup on head count in certain parts of 163 00:09:14,840 --> 00:09:18,319 Speaker 2: the country. And we've made the progress we need to 164 00:09:19,040 --> 00:09:21,280 Speaker 2: meet the demand for today. But I think railroads have 165 00:09:21,280 --> 00:09:25,480 Speaker 2: been very clear that they're going to be very pragmatic 166 00:09:25,800 --> 00:09:29,599 Speaker 2: and cautious about when and how to make adjustments to 167 00:09:29,679 --> 00:09:32,440 Speaker 2: workforce because you want to be ready for that traffic 168 00:09:32,480 --> 00:09:35,840 Speaker 2: when it comes back. And so building in resiliency, being 169 00:09:35,880 --> 00:09:38,040 Speaker 2: able to ride out the ups and downs of traffic 170 00:09:38,320 --> 00:09:41,360 Speaker 2: has allowed us to get our service to a level 171 00:09:41,440 --> 00:09:45,200 Speaker 2: that is dramatically improved. We're always looking to make it 172 00:09:45,200 --> 00:09:47,480 Speaker 2: even better because again, if we're going to grow that 173 00:09:47,559 --> 00:09:51,760 Speaker 2: intermodal market share, it's got to be you know, almost perfect. 174 00:09:52,200 --> 00:09:57,199 Speaker 2: And through operational changes, through additional investments, through appropriate hiring 175 00:09:57,280 --> 00:10:00,440 Speaker 2: where railroads do continue to hire in certain areas, positioned 176 00:10:00,440 --> 00:10:03,120 Speaker 2: ourselves to to provide that service that's going to be needed. 177 00:10:03,640 --> 00:10:06,240 Speaker 1: Right So, you know, when you think of service in 178 00:10:06,280 --> 00:10:08,520 Speaker 1: the rail industry, you know, I think of precision Scheduling 179 00:10:08,559 --> 00:10:11,920 Speaker 1: Railroading uh PSR. For those that don't know, it's pretty 180 00:10:12,000 --> 00:10:14,760 Speaker 1: much six sigma for the rail industry. It's been kind 181 00:10:14,760 --> 00:10:20,120 Speaker 1: of like a polarizing philosophy. You know, as a as 182 00:10:20,120 --> 00:10:23,040 Speaker 1: an analyst, you definitely see the benefits of ps R. 183 00:10:23,360 --> 00:10:26,960 Speaker 1: Two railroads that are implementing it, you're seeing more and 184 00:10:27,000 --> 00:10:30,600 Speaker 1: more US railroads implement it. You know Union Pacific, their 185 00:10:30,640 --> 00:10:34,440 Speaker 1: new CEO, Jim Venna, he's a PSR veteran. Could you 186 00:10:34,480 --> 00:10:37,560 Speaker 1: talk about the benefits of PSR and and maybe what 187 00:10:37,559 --> 00:10:40,400 Speaker 1: what you know some reports out there are getting wrong 188 00:10:40,480 --> 00:10:45,120 Speaker 1: about its impact to to railroads into service, into safety. 189 00:10:45,320 --> 00:10:49,679 Speaker 2: Sure, absolutely, And I think that term PSR gets probably 190 00:10:49,679 --> 00:10:53,240 Speaker 2: thrown around a lot, and maybe at times has become 191 00:10:53,480 --> 00:10:56,920 Speaker 2: a moniker for for anything. Somebody you know was upset 192 00:10:56,960 --> 00:10:59,959 Speaker 2: with the railroads about But I would I would venture 193 00:11:00,200 --> 00:11:02,640 Speaker 2: to guess that if you press somebody, okay, well what 194 00:11:03,400 --> 00:11:06,280 Speaker 2: does the term PSR mean, that they might be challenged 195 00:11:06,320 --> 00:11:09,080 Speaker 2: to articulate that. But if you look at kind of 196 00:11:09,080 --> 00:11:13,400 Speaker 2: the core high level tenants and one every railroad operates 197 00:11:13,440 --> 00:11:18,360 Speaker 2: its own network to meet it's its customer makeup, its 198 00:11:18,600 --> 00:11:23,040 Speaker 2: demand structure, it's terrain, geography, et cetera. And so there 199 00:11:23,080 --> 00:11:26,000 Speaker 2: is no one size fits all operating plans, so to speak. 200 00:11:26,520 --> 00:11:28,320 Speaker 2: But if you look at some of the core tenants 201 00:11:28,720 --> 00:11:33,559 Speaker 2: around PSR, it's reliable, predictable service, timely service, efficient use 202 00:11:33,600 --> 00:11:40,640 Speaker 2: of assets, running a safe railroad, maximizing employee productivity. It's 203 00:11:40,880 --> 00:11:44,320 Speaker 2: my point being it's core tenants that on the face 204 00:11:44,320 --> 00:11:46,800 Speaker 2: of it, pretty much any industry or any company in 205 00:11:46,840 --> 00:11:50,360 Speaker 2: any industry is trying to implement You want to make 206 00:11:50,360 --> 00:11:52,680 Speaker 2: the best use of your assets, you want to provide 207 00:11:52,679 --> 00:11:54,720 Speaker 2: a good service product, and you want to do it 208 00:11:54,720 --> 00:11:57,520 Speaker 2: safely and efficiently, and so at the face of it, 209 00:11:57,559 --> 00:12:03,160 Speaker 2: those are pretty understandable goals, and so I think every 210 00:12:03,200 --> 00:12:06,640 Speaker 2: high performing business is striving for those goals and implementing 211 00:12:07,120 --> 00:12:08,720 Speaker 2: various steps to reach those goals. 212 00:12:09,160 --> 00:12:11,720 Speaker 1: Can you talk about safety? You know, in East Palestine, 213 00:12:11,800 --> 00:12:16,160 Speaker 1: the Norfolk Southern derailment garnered a lot of headlines. Can 214 00:12:16,240 --> 00:12:19,320 Speaker 1: you talk about, you know, what the industry maybe is 215 00:12:19,400 --> 00:12:23,319 Speaker 1: doing to a ensure that something like that doesn't happen again, 216 00:12:24,200 --> 00:12:28,480 Speaker 1: and be just to improve the incremental safety of the 217 00:12:28,600 --> 00:12:29,920 Speaker 1: North America rail network. 218 00:12:31,000 --> 00:12:34,680 Speaker 2: Absolutely well. I think it's important that you take we 219 00:12:34,720 --> 00:12:37,800 Speaker 2: take a step back and understand that that first and foremost, 220 00:12:37,800 --> 00:12:40,440 Speaker 2: that rail is, by far, by orders of magnitude, the 221 00:12:40,480 --> 00:12:43,000 Speaker 2: safest way to move any type of good over land, 222 00:12:43,160 --> 00:12:47,320 Speaker 2: especially when it comes to moving hasmat But as we've 223 00:12:47,360 --> 00:12:50,719 Speaker 2: seen as rare as a significant incident is when an 224 00:12:50,720 --> 00:12:53,440 Speaker 2: incident does occur, it can have a dramatic impact on 225 00:12:53,520 --> 00:12:57,880 Speaker 2: the community in which it occurs, and so railroads have 226 00:12:57,960 --> 00:13:00,600 Speaker 2: to learn from every incident that occurs to reduce the 227 00:13:00,640 --> 00:13:04,079 Speaker 2: likelihood of a future incident. And certainly East Palestine was 228 00:13:04,520 --> 00:13:09,720 Speaker 2: evidence of that very dramatic impact on a community, and 229 00:13:09,760 --> 00:13:12,360 Speaker 2: so we've got to take lessons learned. Now. The important thing, 230 00:13:12,600 --> 00:13:15,000 Speaker 2: One of the important things is that the National Transportation 231 00:13:15,120 --> 00:13:18,160 Speaker 2: Safety Board is doing its investigation. Those are the world 232 00:13:18,200 --> 00:13:23,160 Speaker 2: pre eminent experts on transportation safety matters, and so we'll 233 00:13:23,240 --> 00:13:25,840 Speaker 2: all await the final outcome of that report, with their 234 00:13:25,880 --> 00:13:28,360 Speaker 2: findings and any recommendations that we might be able to 235 00:13:28,400 --> 00:13:32,960 Speaker 2: put into practice. In the meantime, railroads aren't just sitting 236 00:13:33,000 --> 00:13:35,199 Speaker 2: on our hands, you know, waiting for others to tell 237 00:13:35,240 --> 00:13:37,720 Speaker 2: us what to do, and we have taken a number 238 00:13:37,720 --> 00:13:42,240 Speaker 2: of steps this year. So first and foremost, if there's 239 00:13:42,240 --> 00:13:44,520 Speaker 2: an incident, we want to make sure that first responders 240 00:13:44,559 --> 00:13:47,000 Speaker 2: have the information they need, the tools they need, and 241 00:13:47,040 --> 00:13:50,960 Speaker 2: the knowledge they need to respond safely to mitigate and 242 00:13:50,960 --> 00:13:55,319 Speaker 2: minimize the impact on a community. And we've developed software 243 00:13:55,679 --> 00:13:58,600 Speaker 2: and tools that allow a first responder to identify the 244 00:13:58,600 --> 00:14:01,000 Speaker 2: contents of a train as it's moved through its community, 245 00:14:01,400 --> 00:14:04,280 Speaker 2: if there is hasmat on that train, and if there 246 00:14:04,320 --> 00:14:07,080 Speaker 2: is a spill, how to respond and who to contact. Well, 247 00:14:07,120 --> 00:14:09,120 Speaker 2: we're really thrilled that we've been able to in the 248 00:14:09,120 --> 00:14:13,080 Speaker 2: past nine months expand access to this software application to 249 00:14:13,240 --> 00:14:17,160 Speaker 2: about two point three million first responders. That's dramatically higher 250 00:14:17,200 --> 00:14:19,240 Speaker 2: than where we were at the beginning of twenty twenty three, 251 00:14:19,400 --> 00:14:22,640 Speaker 2: and we'll continue to broaden that exposure so again first 252 00:14:22,640 --> 00:14:25,600 Speaker 2: responders have the tools they need to safely respond and 253 00:14:25,640 --> 00:14:28,160 Speaker 2: partner with us as we mitigate an incident should onet 254 00:14:28,160 --> 00:14:32,640 Speaker 2: occur in their community. We've also taken steps on wayside 255 00:14:32,640 --> 00:14:35,520 Speaker 2: detection units and so for the listeners that don't know 256 00:14:35,560 --> 00:14:39,320 Speaker 2: what wayside detectors are. Those are pieces of technology put 257 00:14:39,320 --> 00:14:43,920 Speaker 2: along the along the rail line that take measurements. They 258 00:14:44,280 --> 00:14:47,880 Speaker 2: do detections, inspections to a train as it's moving by, 259 00:14:48,040 --> 00:14:50,320 Speaker 2: so checking the health of the train in various ways. 260 00:14:51,360 --> 00:14:54,280 Speaker 2: And one of those types of detectors is called a 261 00:14:54,320 --> 00:14:58,000 Speaker 2: hot box detector that's literally taking the temperature of wheels 262 00:14:58,000 --> 00:15:01,000 Speaker 2: as they go by, because as bearing begin to fail, 263 00:15:01,480 --> 00:15:04,200 Speaker 2: the wheels get hotter and that can lead to a derailment, 264 00:15:04,320 --> 00:15:07,640 Speaker 2: which is what we believe and understand was the primary 265 00:15:07,640 --> 00:15:11,400 Speaker 2: cause of the derailment in East Palestine. And so railroads 266 00:15:11,400 --> 00:15:14,920 Speaker 2: have gotten together. There's no regulatory requirement. We've done all 267 00:15:14,920 --> 00:15:19,400 Speaker 2: this voluntarily, put up this nationwide network of detectors. But 268 00:15:19,440 --> 00:15:23,360 Speaker 2: we've established new criteria for temperature thresholds for if a 269 00:15:23,360 --> 00:15:25,680 Speaker 2: wheel gets to a certain temperature, the train gets pulled 270 00:15:25,680 --> 00:15:29,640 Speaker 2: out of service immediately, or various trending analyses, so if 271 00:15:30,040 --> 00:15:33,440 Speaker 2: a wheel temperature is showing a quick upward spike, pulling 272 00:15:33,440 --> 00:15:36,600 Speaker 2: the train out and so things along those lines. We're 273 00:15:36,680 --> 00:15:42,320 Speaker 2: adding more detectors to the nationwide network after doing a 274 00:15:42,400 --> 00:15:47,160 Speaker 2: gap analysis identifying areas that maybe spacing was insufficient between 275 00:15:47,160 --> 00:15:50,280 Speaker 2: different types of detection. And so at the end of 276 00:15:50,280 --> 00:15:53,080 Speaker 2: the day, it's important that we continue to take steps 277 00:15:53,080 --> 00:15:56,880 Speaker 2: as an industry because we can't afford to sit around 278 00:15:57,080 --> 00:15:59,920 Speaker 2: and wait for the government or wait for the regulator 279 00:16:00,080 --> 00:16:03,840 Speaker 2: to decide when it's time to require something if we 280 00:16:03,880 --> 00:16:05,640 Speaker 2: know there are steps we can take now that will 281 00:16:05,680 --> 00:16:07,920 Speaker 2: have a positive safety impact, and so that's what we're 282 00:16:07,920 --> 00:16:09,080 Speaker 2: doing every day, right. 283 00:16:09,160 --> 00:16:11,400 Speaker 1: And we are in d C. And you guys are 284 00:16:11,440 --> 00:16:13,240 Speaker 1: a trade group, so you know, I know there's some 285 00:16:13,320 --> 00:16:17,120 Speaker 1: bills in Washington right now about rail safety. Can you 286 00:16:17,160 --> 00:16:19,400 Speaker 1: talk about maybe a little bit about those bills in 287 00:16:19,600 --> 00:16:23,360 Speaker 1: what the AR maybe supports and maybe is kind of 288 00:16:23,560 --> 00:16:24,680 Speaker 1: we'd like to see changed. 289 00:16:25,200 --> 00:16:29,680 Speaker 2: Absolutely, So, you're right, there numerous handful of different pieces 290 00:16:29,680 --> 00:16:32,320 Speaker 2: of legislation that have been introduced in the House and Senate. 291 00:16:32,600 --> 00:16:36,240 Speaker 2: There is a bill in the Senate that's gotten most 292 00:16:36,240 --> 00:16:40,240 Speaker 2: of the attention and as a priority for the Ohio 293 00:16:40,320 --> 00:16:44,520 Speaker 2: Senate delegation, and we've worked very hard to try to 294 00:16:44,840 --> 00:16:48,200 Speaker 2: be a productive part of that process. We think it's 295 00:16:48,240 --> 00:16:53,440 Speaker 2: important that we look for ways to be supportive or 296 00:16:53,520 --> 00:16:57,760 Speaker 2: provide feedback to help make a piece of legislation have 297 00:16:57,800 --> 00:17:01,200 Speaker 2: the desired outcome. And we think there's absolutely a space 298 00:17:01,320 --> 00:17:05,080 Speaker 2: for a common sense, targeted piece of legislation that all 299 00:17:05,119 --> 00:17:08,879 Speaker 2: stakeholders can support and push to get across the finish line. 300 00:17:09,760 --> 00:17:11,800 Speaker 2: At the moment, you know, the bill in the Senate 301 00:17:12,400 --> 00:17:15,680 Speaker 2: has a few things that we think need continue work. 302 00:17:15,720 --> 00:17:17,840 Speaker 2: There are plenty of other things we can support, whether 303 00:17:17,880 --> 00:17:22,160 Speaker 2: again it's first responder notification information, whether it's some sort 304 00:17:22,160 --> 00:17:28,560 Speaker 2: of federal nexus around wayside detection, whether it's additional rules 305 00:17:28,600 --> 00:17:32,399 Speaker 2: around certain types of trains that are carrying a significant 306 00:17:32,400 --> 00:17:34,920 Speaker 2: amount of hasmat. We think that it makes sense to 307 00:17:35,320 --> 00:17:37,320 Speaker 2: take a look at that sort of thing, absolutely, and 308 00:17:37,359 --> 00:17:39,679 Speaker 2: there's a way to do that that is data driven, 309 00:17:39,880 --> 00:17:43,600 Speaker 2: that is pragmatic and as results oriented versus inputs oriented. 310 00:17:44,480 --> 00:17:46,800 Speaker 2: And so we'll see where that legislation goes. But that's 311 00:17:46,840 --> 00:17:48,960 Speaker 2: why it's important to us in the meantime to continue 312 00:17:48,960 --> 00:17:51,919 Speaker 2: to evaluate what we can do to continue to get safer, 313 00:17:52,760 --> 00:17:56,800 Speaker 2: because we can't wait on Congress to act. Anyone who's 314 00:17:56,840 --> 00:17:59,639 Speaker 2: waiting on Congress act on anything often is waiting for 315 00:17:59,680 --> 00:18:02,720 Speaker 2: a long time, as we've seen and continue to see. 316 00:18:02,960 --> 00:18:06,160 Speaker 2: But also even though the regulator has authority to do 317 00:18:06,240 --> 00:18:08,640 Speaker 2: most of the things that are in the Senate Rail 318 00:18:08,680 --> 00:18:12,080 Speaker 2: Safety Bill right now, you know, we can't wait on 319 00:18:12,119 --> 00:18:15,000 Speaker 2: the regulator either. The regulatory process is very slow. So 320 00:18:15,080 --> 00:18:18,480 Speaker 2: if there are data supported things that make sense to 321 00:18:18,720 --> 00:18:21,160 Speaker 2: us that will have a positive impact on safety, we're 322 00:18:21,160 --> 00:18:23,960 Speaker 2: going to look to do those, whether or not there's 323 00:18:23,960 --> 00:18:25,000 Speaker 2: a requirement there or not. 324 00:18:25,359 --> 00:18:28,280 Speaker 1: Right and in one of your regulators, a Service Transportation Board, 325 00:18:30,000 --> 00:18:35,439 Speaker 1: there's been some hearings recently at the STB about about 326 00:18:36,760 --> 00:18:41,960 Speaker 1: reciprocal switching. What what is the ar's position on reciprocal 327 00:18:42,000 --> 00:18:46,479 Speaker 1: switching or maybe can you just also explain basically what 328 00:18:46,600 --> 00:18:48,440 Speaker 1: recipical switching is to our listeners. 329 00:18:48,600 --> 00:18:53,200 Speaker 2: If there's one thing the STB, the Service Transportation Board, specializes, 330 00:18:53,280 --> 00:18:57,800 Speaker 2: and it's in you know, non simple things. So so 331 00:18:57,920 --> 00:19:02,440 Speaker 2: reciprocal switching in a very high level nutshell is when 332 00:19:02,520 --> 00:19:06,240 Speaker 2: when one railroad opens up its facilities for a competing 333 00:19:06,320 --> 00:19:10,520 Speaker 2: railroad to access. Right, so, you know, Lee has a 334 00:19:10,640 --> 00:19:13,840 Speaker 2: has a line of tracks and there's a customer there 335 00:19:13,840 --> 00:19:16,480 Speaker 2: and I wish, yeah, he allows he allows me to 336 00:19:16,800 --> 00:19:19,800 Speaker 2: to access that to serve that customer. And so what 337 00:19:19,920 --> 00:19:24,400 Speaker 2: the Board has been contemplating for some years now is, 338 00:19:24,560 --> 00:19:27,440 Speaker 2: you know, we call it forced access, whether it can 339 00:19:27,480 --> 00:19:31,320 Speaker 2: be compelled to require a railroad to allow a competing 340 00:19:31,400 --> 00:19:35,720 Speaker 2: railroad access for a customer. And there there had been 341 00:19:35,720 --> 00:19:39,160 Speaker 2: a proposed rule on the books since twenty sixteen that 342 00:19:39,320 --> 00:19:43,480 Speaker 2: would have allowed the board, you know, largely unfettered ability 343 00:19:43,560 --> 00:19:46,200 Speaker 2: to just order one railroad to open up its line 344 00:19:46,240 --> 00:19:49,080 Speaker 2: to another. And to us, that was you know, an 345 00:19:49,119 --> 00:19:53,200 Speaker 2: absolute disaster of a proposal because, as we mentioned earlier, 346 00:19:53,600 --> 00:19:57,000 Speaker 2: railroads invest their own money, their own capital uh to 347 00:19:57,080 --> 00:19:59,760 Speaker 2: serve their customers. And if I know, at any given 348 00:19:59,760 --> 00:20:04,800 Speaker 2: moment a regulator could require me to allow you to 349 00:20:04,880 --> 00:20:09,680 Speaker 2: serve my customers, it could result in a real disincentive 350 00:20:09,720 --> 00:20:13,280 Speaker 2: to make those investments that are necessary. And on top 351 00:20:13,320 --> 00:20:16,280 Speaker 2: of that, adding switches adds complexity to the system, it 352 00:20:16,280 --> 00:20:18,080 Speaker 2: adds risk to the system, and we're trying to take 353 00:20:18,119 --> 00:20:20,880 Speaker 2: that out of the network. And so the board very 354 00:20:20,880 --> 00:20:24,840 Speaker 2: wisely throughout the twenty sixteen rule through it in the 355 00:20:24,840 --> 00:20:27,399 Speaker 2: garbage can. We think that was a very prudent, wise 356 00:20:27,480 --> 00:20:29,600 Speaker 2: move by the Board and has a new proposal that's 357 00:20:29,880 --> 00:20:34,359 Speaker 2: really based on service and sets up some conduct standards 358 00:20:34,400 --> 00:20:37,359 Speaker 2: so that if a railroad is not providing a level 359 00:20:37,400 --> 00:20:42,080 Speaker 2: of service that its customer needs and it's within its 360 00:20:42,080 --> 00:20:44,639 Speaker 2: own power, deemed within its own power, so you know, 361 00:20:44,720 --> 00:20:48,159 Speaker 2: taking out things like natural disasters, et cetera, the Board 362 00:20:48,359 --> 00:20:53,679 Speaker 2: has the ability to order that railroad that is not 363 00:20:53,920 --> 00:20:58,480 Speaker 2: adequately serving its customer to open up its line to 364 00:20:58,640 --> 00:21:01,440 Speaker 2: a competing railroad. It has the ability to take on 365 00:21:01,520 --> 00:21:04,960 Speaker 2: that business and provide good service. And so the devils 366 00:21:04,960 --> 00:21:09,439 Speaker 2: in the details these proposals are very long, but we think, okay, 367 00:21:09,520 --> 00:21:11,320 Speaker 2: you know that makes some sense. We want to provide 368 00:21:11,359 --> 00:21:13,919 Speaker 2: good service. The Board wants us to provide good service, 369 00:21:14,040 --> 00:21:16,200 Speaker 2: Our customers want us to provide good service. And so 370 00:21:16,600 --> 00:21:18,720 Speaker 2: if a railroad is failing to do that within its 371 00:21:18,760 --> 00:21:21,919 Speaker 2: own power, then there might be a good argument to 372 00:21:21,960 --> 00:21:24,480 Speaker 2: be made that it should have to open up and 373 00:21:24,480 --> 00:21:26,879 Speaker 2: allow a competing railroad to come in. The board is 374 00:21:27,040 --> 00:21:30,120 Speaker 2: churning through what are thousands of pages of comments from 375 00:21:30,160 --> 00:21:33,560 Speaker 2: both sides about, you know, changes that might be able 376 00:21:33,560 --> 00:21:36,280 Speaker 2: to be made to make the proposal makes more sense. 377 00:21:37,920 --> 00:21:40,480 Speaker 2: But we're going through the process and I expect the 378 00:21:40,480 --> 00:21:42,920 Speaker 2: board will issue a final rule, you know, first quarter 379 00:21:42,960 --> 00:21:46,200 Speaker 2: of next year. The Chairman of the Surface Transportation Board 380 00:21:46,200 --> 00:21:52,800 Speaker 2: has been very adamant and very diligent about consensus in 381 00:21:52,880 --> 00:21:56,280 Speaker 2: his decisions and major decisions for the board. And the 382 00:21:56,280 --> 00:22:00,760 Speaker 2: board's made up of five very smart, very independently minded individuals, 383 00:22:00,760 --> 00:22:03,960 Speaker 2: and so it's a it's a kudos to him that 384 00:22:04,000 --> 00:22:06,800 Speaker 2: this proposal was the unanimous decision, and I'm sure he 385 00:22:06,800 --> 00:22:08,680 Speaker 2: wants to keep it that way, and so I think 386 00:22:08,760 --> 00:22:10,720 Speaker 2: any changes he makes will be made in a way 387 00:22:10,720 --> 00:22:12,320 Speaker 2: that that keeps everybody on board. 388 00:22:12,760 --> 00:22:16,119 Speaker 1: And it's worth noting Canada they have they have some 389 00:22:16,359 --> 00:22:19,400 Speaker 1: rules on reciprocal switching that goes on today. Very very 390 00:22:19,400 --> 00:22:23,600 Speaker 1: little freight UH is actually moved via reciprocal switching, So 391 00:22:23,680 --> 00:22:25,640 Speaker 1: it'll be interesting to see what ends up playing out 392 00:22:25,880 --> 00:22:27,800 Speaker 1: in the US and and what kind of impact it 393 00:22:27,840 --> 00:22:32,879 Speaker 1: has on not only service but also the rail's ability 394 00:22:32,960 --> 00:22:36,840 Speaker 1: to you know, provide provide good service. I guess really 395 00:22:36,880 --> 00:22:38,760 Speaker 1: that that that's where. 396 00:22:38,400 --> 00:22:40,160 Speaker 2: That's the goal at the end of the day for everybody, 397 00:22:40,240 --> 00:22:41,040 Speaker 2: right right. 398 00:22:41,400 --> 00:22:44,119 Speaker 1: You know, you mentioned that the railroads you don't have 399 00:22:44,160 --> 00:22:45,960 Speaker 1: to pay their own way in terms of their own 400 00:22:46,080 --> 00:22:51,000 Speaker 1: own infrastructure. You know, there's sometimes forced to do. So 401 00:22:51,400 --> 00:22:54,520 Speaker 1: positive train control with something that was mandated by the 402 00:22:54,600 --> 00:22:57,800 Speaker 1: US government, can you talk about what that is and 403 00:22:58,640 --> 00:23:01,719 Speaker 1: you know, were there any benefits because it was it 404 00:23:01,760 --> 00:23:02,680 Speaker 1: was a huge cost for. 405 00:23:02,680 --> 00:23:07,920 Speaker 2: The oil industry certainly. So positive train control is a technology. 406 00:23:08,359 --> 00:23:14,879 Speaker 2: It's it's a fail safe technology, overlay technology that really 407 00:23:15,160 --> 00:23:18,959 Speaker 2: can help prevent some of the most catastrophic types of 408 00:23:18,960 --> 00:23:23,240 Speaker 2: incidents that could occur. And so that means head on collisions, 409 00:23:23,280 --> 00:23:26,959 Speaker 2: that means overspeed, that means running signals. And what the 410 00:23:27,080 --> 00:23:30,800 Speaker 2: technology does is if if a train is overspeed or 411 00:23:30,880 --> 00:23:35,280 Speaker 2: runs a signal, it automatically shuts the train down. And 412 00:23:35,359 --> 00:23:40,240 Speaker 2: so if an engineer is not missing direction or something 413 00:23:40,480 --> 00:23:43,199 Speaker 2: that that override shuts the train down, doesn't allow it 414 00:23:43,240 --> 00:23:47,080 Speaker 2: to proceed. And so absolutely it reduces risk in the 415 00:23:47,119 --> 00:23:52,000 Speaker 2: system from as rare very rare as they are and worse, 416 00:23:52,280 --> 00:23:56,040 Speaker 2: you know, potentially catastrophic incidents. You're right. It was an 417 00:23:56,119 --> 00:23:59,080 Speaker 2: unfunded mandate to the tune I believe, of about twelve 418 00:23:59,080 --> 00:24:03,720 Speaker 2: billion dollars. But since the end of twenty eighteen, railroads 419 00:24:03,720 --> 00:24:06,560 Speaker 2: have been fully implemented on PTC. It's on about sixty 420 00:24:06,640 --> 00:24:11,560 Speaker 2: thousand miles of our mainline networks, basically over any line 421 00:24:11,640 --> 00:24:17,679 Speaker 2: that moves passenger or hazardous materials, and even beyond that 422 00:24:17,720 --> 00:24:20,480 Speaker 2: a little But that was the regular or the statutory mandate, 423 00:24:21,280 --> 00:24:26,040 Speaker 2: and so PTC is but sure, and absolutely there are 424 00:24:26,200 --> 00:24:29,720 Speaker 2: I think other benefits that railroads are looking at and 425 00:24:31,920 --> 00:24:36,399 Speaker 2: implementing that will create more efficiency, looking at how to 426 00:24:36,480 --> 00:24:40,440 Speaker 2: leverage what is basically a sixty thousand mile five G 427 00:24:40,600 --> 00:24:43,240 Speaker 2: network that we're built out, and so of course that's 428 00:24:43,240 --> 00:24:46,560 Speaker 2: going to provide lots of opportunities for exploration about how 429 00:24:46,600 --> 00:24:48,879 Speaker 2: do you improve safety in other ways and how do 430 00:24:48,880 --> 00:24:50,680 Speaker 2: you improve business operations as well. 431 00:24:51,119 --> 00:24:53,800 Speaker 1: I'm assuming it makes the addition of those hot box 432 00:24:53,880 --> 00:24:59,080 Speaker 1: that you mentioned easier and let's communicate with the central 433 00:24:59,080 --> 00:25:01,600 Speaker 1: command easier because of that five G network. 434 00:25:01,640 --> 00:25:03,840 Speaker 2: Yeah, it's absolutely a game changer when it comes to 435 00:25:04,000 --> 00:25:06,800 Speaker 2: communicating with what's going on out on the network. So, 436 00:25:07,920 --> 00:25:10,520 Speaker 2: like any I think any sensible businesses, you're you're taking 437 00:25:10,520 --> 00:25:13,040 Speaker 2: advantage of this and looking to see again how you 438 00:25:13,080 --> 00:25:17,040 Speaker 2: can further improve safety or make additional business improvements as 439 00:25:17,040 --> 00:25:18,480 Speaker 2: well to better serve your customers. 440 00:25:19,000 --> 00:25:22,440 Speaker 1: And when people you know, think about transportation, usually the 441 00:25:22,760 --> 00:25:26,439 Speaker 1: fact that you know, one might be greener than the 442 00:25:26,440 --> 00:25:28,840 Speaker 1: other really doesn't come into play in many people's mind. 443 00:25:28,880 --> 00:25:31,199 Speaker 1: But the reality is is that the rail industry is 444 00:25:32,680 --> 00:25:37,480 Speaker 1: a better, uh, you know, a better better for shippers 445 00:25:37,480 --> 00:25:40,200 Speaker 1: if they're looking to reduce through overall carbon footprint. Can 446 00:25:40,240 --> 00:25:42,679 Speaker 1: you talk about you know, the rail's ability to do that. 447 00:25:42,840 --> 00:25:46,160 Speaker 2: Absolutely, and that's becoming more of a marketing tool I 448 00:25:46,160 --> 00:25:49,160 Speaker 2: imagine as well as as customers look to to decrease 449 00:25:49,200 --> 00:25:52,640 Speaker 2: their overarching carbon footprint, we can be a key part 450 00:25:52,680 --> 00:25:54,800 Speaker 2: of that. You know, if you if you want to 451 00:25:54,840 --> 00:25:59,000 Speaker 2: reduce some emissions in the transportation sector right now, take 452 00:25:59,040 --> 00:26:00,879 Speaker 2: trucks off the highway put them on the railroad to 453 00:26:00,920 --> 00:26:04,840 Speaker 2: get a seventy five percent decrease in emissions. We have 454 00:26:04,920 --> 00:26:07,520 Speaker 2: this old saying that just has the benefit of being true. 455 00:26:08,000 --> 00:26:10,400 Speaker 2: It's updated every year but you can move one ton 456 00:26:10,400 --> 00:26:13,800 Speaker 2: of freight about five hundred miles on one gallon of diesel, 457 00:26:14,000 --> 00:26:17,919 Speaker 2: So we're emissions efficient, we're incredibly fuel efficient, and of 458 00:26:17,920 --> 00:26:21,040 Speaker 2: course all the associated environmental benefits that come from there, 459 00:26:21,119 --> 00:26:24,320 Speaker 2: and so absolutely that's it's not only good for the environment, 460 00:26:24,400 --> 00:26:27,200 Speaker 2: it's good for our customers, it's good for society, and 461 00:26:27,560 --> 00:26:30,560 Speaker 2: railroads will continue to look for ways to further reduce 462 00:26:31,240 --> 00:26:35,080 Speaker 2: their use of fuel. Fuels are number two largest cost 463 00:26:35,119 --> 00:26:39,080 Speaker 2: in the industry, and so we're absolutely looking at battery 464 00:26:39,080 --> 00:26:45,040 Speaker 2: electric power, hydrogen power, increasing increased use to biofuels, really 465 00:26:46,560 --> 00:26:50,960 Speaker 2: exploring all the options out there in a way to 466 00:26:51,480 --> 00:26:54,480 Speaker 2: continue to drive down our environmental footprint for all the 467 00:26:54,520 --> 00:26:57,640 Speaker 2: reasons I mentioned. On top of that, in our yards 468 00:26:57,680 --> 00:27:01,320 Speaker 2: and in our facilities, there are opportunities whether it's UH 469 00:27:01,400 --> 00:27:05,160 Speaker 2: you know, moving to zero missions cranes or electric cranes, 470 00:27:05,320 --> 00:27:08,560 Speaker 2: or reducing idling of even trucks waiting to pick up 471 00:27:08,600 --> 00:27:11,520 Speaker 2: containers in our innermotial yards. You know, it's a it's 472 00:27:11,520 --> 00:27:16,960 Speaker 2: a broad portfolio of steps. Some maybe singles, doubles, triples, 473 00:27:17,000 --> 00:27:19,680 Speaker 2: home runs, but it takes all the different steps to 474 00:27:19,680 --> 00:27:23,480 Speaker 2: to make continual improvements to your UH to your emission's profile. 475 00:27:23,520 --> 00:27:28,280 Speaker 2: But even today, to our earlier conversation about growing that 476 00:27:28,359 --> 00:27:31,359 Speaker 2: market share and that truck competitive traffic. The more we 477 00:27:31,400 --> 00:27:34,520 Speaker 2: can pull onto the rail off the highway, the better 478 00:27:34,600 --> 00:27:36,400 Speaker 2: impact we'll have on reducing emissions. 479 00:27:36,480 --> 00:27:38,240 Speaker 1: Right. And I know some of your members are looking 480 00:27:38,280 --> 00:27:42,160 Speaker 1: at alternative fuels, uh for for for driving locomotives. 481 00:27:42,200 --> 00:27:42,400 Speaker 2: Yep. 482 00:27:42,440 --> 00:27:43,720 Speaker 1: Can you talk a little bit about that. 483 00:27:43,960 --> 00:27:46,640 Speaker 2: Yeah, So we've had a couple of railroads who put 484 00:27:46,680 --> 00:27:50,320 Speaker 2: battery electric, hybrid, battery electric locomotives out in revenue service. 485 00:27:51,000 --> 00:27:53,439 Speaker 2: We have a partnership between two other railroads who are 486 00:27:53,480 --> 00:27:58,360 Speaker 2: developing hydrogen powered locomotives to put into revenue service, and 487 00:27:58,560 --> 00:28:03,520 Speaker 2: even simpler things like increasing the amount of biofuels into 488 00:28:03,520 --> 00:28:08,919 Speaker 2: our mix, reducing friction on between wheel and rail. But 489 00:28:09,440 --> 00:28:12,199 Speaker 2: so any number of activities going on out there not 490 00:28:12,240 --> 00:28:13,480 Speaker 2: only continue. 491 00:28:13,240 --> 00:28:17,840 Speaker 1: Right, And another major cost besides fuel's labor. Labor has 492 00:28:17,880 --> 00:28:21,199 Speaker 1: been in the headlines all of this year, you know, 493 00:28:21,240 --> 00:28:24,919 Speaker 1: whether it's the railroads ups, what have you. You know, 494 00:28:25,000 --> 00:28:29,800 Speaker 1: the rail industry had some new contracts ratified this year, 495 00:28:30,200 --> 00:28:32,679 Speaker 1: and one of the interesting things that came out of it, 496 00:28:32,920 --> 00:28:34,760 Speaker 1: I think for a lot of people that aren't familiar 497 00:28:34,800 --> 00:28:37,520 Speaker 1: with the rail industry, even for people that cover the 498 00:28:37,560 --> 00:28:41,200 Speaker 1: rail industry, is that, you know, sick days were added. 499 00:28:41,520 --> 00:28:45,840 Speaker 1: Could you talk about, you know, how they operated before 500 00:28:46,200 --> 00:28:49,400 Speaker 1: and how they're operating now, and what that change means 501 00:28:49,440 --> 00:28:50,600 Speaker 1: for the industry if anything. 502 00:28:51,560 --> 00:28:55,280 Speaker 2: Sure. So, So the last bargaining round, which which did 503 00:28:55,400 --> 00:28:58,680 Speaker 2: come to a final conclusion almost almost exactly a year ago, 504 00:28:59,560 --> 00:29:02,720 Speaker 2: it was like it was a long, challenging, Arjewish round. 505 00:29:02,880 --> 00:29:04,920 Speaker 2: You know, a good chunk of it occurred during the 506 00:29:04,920 --> 00:29:08,640 Speaker 2: pandemic and then coming out of the pandemic, and you know, 507 00:29:08,720 --> 00:29:12,640 Speaker 2: I think one of the things we learned near the 508 00:29:12,960 --> 00:29:17,720 Speaker 2: end of the round was that quality of life issues 509 00:29:18,600 --> 00:29:21,520 Speaker 2: really rose to prominence as a key priority for a 510 00:29:21,520 --> 00:29:23,080 Speaker 2: lot of our employees. 511 00:29:22,640 --> 00:29:23,600 Speaker 1: Because it's a tough job. 512 00:29:23,600 --> 00:29:29,200 Speaker 2: They're outside, it's twenty four seven, three sixty five all weather, 513 00:29:29,880 --> 00:29:33,280 Speaker 2: so you know, these are tough jobs. Now they're very 514 00:29:33,280 --> 00:29:35,960 Speaker 2: well compensated jobs as well, you know, average ways and 515 00:29:35,960 --> 00:29:38,280 Speaker 2: benefits one hundred and sixty thousand dollars, some of the 516 00:29:38,280 --> 00:29:41,720 Speaker 2: best retirements, some of the best healthcare. But our employees said, look, 517 00:29:41,760 --> 00:29:45,840 Speaker 2: we value all of that, but work life balance and 518 00:29:45,880 --> 00:29:49,440 Speaker 2: making sure you know, we can take sick time off. Now, 519 00:29:49,480 --> 00:29:52,640 Speaker 2: some of our unions had negotiated and maintained a set 520 00:29:52,720 --> 00:29:55,960 Speaker 2: number of sick days. Others had had negotiated those away 521 00:29:56,160 --> 00:30:01,120 Speaker 2: rounds ago for for other benefits. But the round ended 522 00:30:01,160 --> 00:30:05,000 Speaker 2: and we made clear that look, different railroads with different 523 00:30:05,000 --> 00:30:09,320 Speaker 2: employees have different value sets or different priorities. So we're 524 00:30:09,320 --> 00:30:11,600 Speaker 2: going to continue the conversation at the local level, and 525 00:30:11,640 --> 00:30:14,360 Speaker 2: at the local level means railroad by railroad, union by union. 526 00:30:14,600 --> 00:30:17,400 Speaker 2: I'm pleased to say at this point, I believe we're 527 00:30:17,400 --> 00:30:21,400 Speaker 2: in the high nineties percentile as far as covered employees 528 00:30:21,480 --> 00:30:24,600 Speaker 2: with some sort of sick leave agreement, scheduling agreements in 529 00:30:24,640 --> 00:30:26,720 Speaker 2: place for set number of days on, set number of 530 00:30:26,840 --> 00:30:30,520 Speaker 2: days off. So really modernizing the way our employees are working. 531 00:30:30,560 --> 00:30:33,040 Speaker 2: And that's the expectation, and we've got to continue to 532 00:30:33,080 --> 00:30:34,680 Speaker 2: evolve to make these jobs attractive. 533 00:30:34,920 --> 00:30:37,560 Speaker 1: Okay, So is there anything that's going on in the 534 00:30:37,720 --> 00:30:41,400 Speaker 1: rail industry or that keeps you up at night in 535 00:30:41,560 --> 00:30:42,800 Speaker 1: your position at. 536 00:30:42,680 --> 00:30:47,800 Speaker 2: The AR Well, certainly you're always focused on safety and 537 00:30:47,880 --> 00:30:51,360 Speaker 2: you're always want to make sure that you know, even 538 00:30:51,920 --> 00:30:54,320 Speaker 2: sitting in my role in Washington, DC, that our employees 539 00:30:54,360 --> 00:30:56,280 Speaker 2: are going to work and coming home safely every day 540 00:30:56,280 --> 00:30:59,160 Speaker 2: that we're operating as safely as possible through our communities, 541 00:31:00,120 --> 00:31:02,320 Speaker 2: and so that's that's always going to be the priority, 542 00:31:02,400 --> 00:31:04,760 Speaker 2: that's always going to be the front of mind focus 543 00:31:04,760 --> 00:31:07,320 Speaker 2: on the On the more business side, you know, we're 544 00:31:07,360 --> 00:31:11,200 Speaker 2: we're moving a lot of traffic across the northern southern border. 545 00:31:12,120 --> 00:31:15,760 Speaker 2: The ability to to keep goods moving safely and securely 546 00:31:16,320 --> 00:31:19,640 Speaker 2: across the borders is really critical right now, especially with 547 00:31:19,680 --> 00:31:22,200 Speaker 2: the influx of near shoring and on shoring that we 548 00:31:22,280 --> 00:31:24,560 Speaker 2: have seen and frankly are going to continue to see. 549 00:31:24,880 --> 00:31:27,360 Speaker 2: And just at the end of the day, it's data driven, 550 00:31:27,480 --> 00:31:32,200 Speaker 2: smart pragmatic regulations. You know, we want to be a 551 00:31:32,200 --> 00:31:37,120 Speaker 2: partnership with our regulator UH incentivizing technological deployment while at 552 00:31:37,120 --> 00:31:39,720 Speaker 2: the same time striking that right balance with our employees 553 00:31:39,760 --> 00:31:43,480 Speaker 2: to evolve those jobs as well. And so there's a 554 00:31:43,520 --> 00:31:45,400 Speaker 2: lot of issues on our plate at all times. I'll 555 00:31:45,400 --> 00:31:46,360 Speaker 2: just I'll just say. 556 00:31:46,200 --> 00:31:48,360 Speaker 1: That right that Mexican cross border business should be a 557 00:31:48,400 --> 00:31:51,200 Speaker 1: nice tailwind for the industry for for years to come. 558 00:31:51,840 --> 00:31:55,400 Speaker 1: So you know, just, uh, is there a book on 559 00:31:55,600 --> 00:31:58,520 Speaker 1: railroading that you know, you kind of like you would 560 00:31:58,560 --> 00:32:00,960 Speaker 1: recommend people to read if if if they want to 561 00:32:01,040 --> 00:32:02,760 Speaker 1: learn more about the industry. 562 00:32:02,560 --> 00:32:05,520 Speaker 2: Well, a couple a couple of things come to mind there. 563 00:32:06,400 --> 00:32:08,600 Speaker 2: You mentioned it from the outset. I was fortunate enough 564 00:32:08,600 --> 00:32:11,600 Speaker 2: to go to Carnegie Mellon University for my graduate work. 565 00:32:11,640 --> 00:32:15,920 Speaker 2: Obviously named after Andrew Carnegie. You know, there's some pretty 566 00:32:15,960 --> 00:32:18,520 Speaker 2: darn interesting bios about him, and certainly he played a 567 00:32:18,600 --> 00:32:22,480 Speaker 2: role in the rail industry many many moons ago. Very 568 00:32:22,520 --> 00:32:26,880 Speaker 2: fascinating individual, huge impact. There's also a really good one 569 00:32:26,920 --> 00:32:30,200 Speaker 2: about it's called I think Last Train to Paradise and 570 00:32:30,280 --> 00:32:35,720 Speaker 2: it's about Henry Flagler and the rail line to Key West, 571 00:32:35,760 --> 00:32:38,920 Speaker 2: which it only lasted very long. They got hit by 572 00:32:38,920 --> 00:32:41,640 Speaker 2: a hurricane and that was that. But there's any number 573 00:32:41,680 --> 00:32:43,920 Speaker 2: of great books out there. As you know, railroading has 574 00:32:44,040 --> 00:32:47,960 Speaker 2: woven into American history and part of the American tapestry. Yeah. 575 00:32:48,000 --> 00:32:49,920 Speaker 1: One of my favorites is a little Engine. 576 00:32:49,600 --> 00:32:52,120 Speaker 2: That could even that it might be long lessons. 577 00:32:52,200 --> 00:32:54,680 Speaker 1: Yeah, it certainly is. I remember my parents treating me 578 00:32:54,760 --> 00:32:57,560 Speaker 1: that one. Well, I think that's all the time we have. Well, 579 00:32:57,600 --> 00:32:59,880 Speaker 1: that was a great conversation. Thanks for your timing. 580 00:33:00,120 --> 00:33:02,640 Speaker 2: Yeah, absolutely ly. Thanks for having me all right. 581 00:33:02,480 --> 00:33:04,320 Speaker 1: And I also want to thank you for tuning in. 582 00:33:04,440 --> 00:33:07,280 Speaker 1: If you liked the episode, please subscribe and leave a review. 583 00:33:07,680 --> 00:33:10,560 Speaker 1: We've lined up a number of great guests for the podcast. 584 00:33:10,840 --> 00:33:15,760 Speaker 1: Check back to hear conversations with C suite executives, shippers, regulators, 585 00:33:15,800 --> 00:33:19,479 Speaker 1: and decision makers within the freight transportation markets. Also, if 586 00:33:19,520 --> 00:33:22,040 Speaker 1: you have any idea for future episodes, please hit me 587 00:33:22,080 --> 00:33:25,000 Speaker 1: up on the terminal or on Twitter at logistics Late. 588 00:33:25,240 --> 00:33:26,840 Speaker 1: Thanks everyone, be safe out there.