Derailment in Pennsylvania

[erikem]

tree68

As noted, however, if I were to fear one of the two materials in the derailed cars, it would be the LP.

You're worried about a thin 12" diameter disk made of vinyl???

On a serious note, I'd also be a lot more worried about the propane than the crude oil and happy to note that the LPG tank cars stayed intact.

- Erik

[tree68]

erikem

You're worried about a thin 12" diameter disk made of vinyl???

Yeah - if you play 'em backwards they've got secret messages....

And that just went straight over the head of the under 30 generation...

[erikem]

Paul is dead...

- Erik

[mudchicken]

walrus

[Anonymous]

http://www.youtube.com/watch?v=UCsgZ9zU7IA

 

 

[matthew.brandley]

Heres something all of you have overlooked this weekend and was burried by the lame stream media.CN and CP starting 4/1 will be instituting a $325 per tanker car charge  for all tanker cars built before 2011 and a ceertain classification by DOT standards according to a reuters bussiness wire press release friday evening around 8 pm.  Also all pbf refineries are no longer accepting oil deliveries by said old reail cars effective that day since most oil comes from tar sands and bakken crude region. Other refineries on the east and west coast are now scrambling for new tanker cars since this will severely affect the bottom line

[Euclid]

.

[matthew.brandley]

I believe I would call this downright extortion. This was inststuted by the rr is canada. No word if the U S rr will do this > I am not sure if the rgeulatory red tape is neccesary for this also in the  u s

[henry6]

Every business will over charge for a commodity or service they are not equipped to handle, are fearful of its dangers, or which they just don't want to be bothered with because it will take too much away from what they are about.  Often their plant cannot handle the product either because of size and weight or how it would impair their regular service and operations to a point they would be disturbed beyond reason.  

[tree68]

matthew.brandley

I believe I would call this downright extortion. This was instituted by the RR in Canada. No word if the US RR will do this > I am not sure if the regulatory red tape is neccesary for this also in the  US.

Surcharges for premium service are common.  I would argue that this constitutes just that.  The question is what percentage of the overall charge for haulage does this represent?  Is it a gentle nudge to get the shippers to upgrade to new cars ASAP, or is it something that will force the shippers to find other means to move their product, or not ship it at all?

Is it possible that the shippers will work together to pool qualifying cars where needed, leaving everyone else (ie, railroads not charging the surcharge) to live with the older cars?

There's two ways to look at the revenue from said surcharge - it's a money grab by the railroad, or it represents what they feel is the additional liability and expense of moving the cars in question.

Once the fleet is finally completely upgraded, the surcharge will be a moot point anyhow.

[Euclid]

I would not call this a surcharge for premium service.  What is premium about it?    

If railroads cannot refuse shipments offered in legal cars (as we have been told), how can they be allowed to overprice shipping in those cars for the express purpose of discouraging their use?

What if a railroad decides that the liability of hauling oil is so high that they don’t want to haul it; so they place an exorbitant surcharge on hauling any type of tank car used for hauling oil?  I thought that we were all told that the railroads could not refuse to ship oil.    

[schlimm]

Euclid

What if a railroad decides that the liability of hauling oil is so high that they don’t want to haul it; so they place an exorbitant surcharge on hauling any type of tank car used for hauling oil?  I thought that we were all told that the railroads could not refuse to ship oil. 

I seem to recall being told that rather forcefully many times by the experts.  Apparently CN and CP had a different idea about liability exposure and found an angle to work it.

[Murphy Siding]

schlimm

Euclid

What if a railroad decides that the liability of hauling oil is so high that they don’t want to haul it; so they place an exorbitant surcharge on hauling any type of tank car used for hauling oil?  I thought that we were all told that the railroads could not refuse to ship oil. 

I seem to recall being told that rather forcefully many times by the experts.  Apparently CN and CP had a different idea about liability exposure and found an angle to work it.

   Or. their home offices are in  another country?

[tree68]

Euclid

I thought that we were all told that the railroads could not refuse to ship oil. 

And so we were.

The railroads were deregulated regarding rates.  They can charge what the market will bear.  I may be mistaken, but I think we've also been told that the railroads do impose surcharges for some other hazardous materials. 

If the shipper is willing to pay the price, the railroad will haul the load.  However, the shipper is obviously encouraged to ship in "approved" cars, which will be handled at the usual price.

We don't know why they chose to impose a surcharge - only that they did.  Without knowing the actual rationale, all we can do is speculate, which is what I am doing.

[blue streak 1]

Exactly how does the UP chlorine hauling decision apply to surcharges ?

[schlimm]

Murphy Siding

schlimm

Euclid

What if a railroad decides that the liability of hauling oil is so high that they don’t want to haul it; so they place an exorbitant surcharge on hauling any type of tank car used for hauling oil?  I thought that we were all told that the railroads could not refuse to ship oil. 

I seem to recall being told that rather forcefully many times by the experts.  Apparently CN and CP had a different idea about liability exposure and found an angle to work it.

   Or. their home offices are in  another country?

Try reading.    http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/cn-raises-shipping-rates-on-older-oil-tank-cars/article16842251/

[Euclid]

tree68

Euclid

I thought that we were all told that the railroads could not refuse to ship oil. 

And so we were.

The railroads were deregulated regarding rates.  They can charge what the market will bear.  I may be mistaken, but I think we've also been told that the railroads do impose surcharges for some other hazardous materials. 

If the shipper is willing to pay the price, the railroad will haul the load.  However, the shipper is obviously encouraged to ship in "approved" cars, which will be handled at the usual price.

We don't know why they chose to impose a surcharge - only that they did.  Without knowing the actual rationale, all we can do is speculate, which is what I am doing.

Well the CN seems to have added the surcharge to discourage the use of a class of cars, as indicated by the fact that the surcharge is tied to that class. However the cars that are at issue are “approved” for use in an official sense. It should not be up to railroad companies to override that decision. The regulators dictate car design, and if they say it is okay, who are the railroads to say otherwise?

[daveklepper]

Look, flat cars are approved and so are gondola cars.   Suppose as a shipper owning a lot of flat cars I decide I want to ship fraking sand in loose piles on flat cars and say this is an approve car.   Could the railroad refuse to handle the shipment.   Maybe not.   But they could quote a rate so high that I might consider buying gondola cars for these shipments.

[Euclid]

Are the railroads free to charge any rate they want?  Maybe they are, but I don't know the anwser.  But earlier, experts on this forum were assuring us that railroads have no responsibility for the dangers of shipping Bakken oil because they cannot refuse to ship it.  The law requires them to ship it. 

So the obvious question is this: 

If the railroads do not want to ship something, can they get around the legal requirement to do so by charging an artificially inflated rate for the purpose of discourging the shipper from shipping?

[daveklepper]

I think the answer is YES, and the thrad on Wisconsin rail traffic gives evidence.

[dehusman]

Euclid

Are the railroads free to charge any rate they want?  Maybe they are, but I don't know the anwser.  But earlier, experts on this forum were assuring us that railroads have no responsibility for the dangers of shipping Bakken oil because they cannot refuse to ship it.  The law requires them to ship it. 

Nobody has said that.

 

If the railroads do not want to ship something, can they get around the legal requirement to do so by charging an artificially inflated rate for the purpose of discourging the shipper from shipping?

 

Yes.  then the shipper takes the railroad to the STB (in the US) and there are hearings on whether the rate is legitimate  and the rate either stands or not.

 

The other way to do it is to raise the rates for all shipments of crude oil then offer a lower rate if you use the newer designs.  Same result different direction.

 

Probably the other roads are evaluating whether that strategy will stand up in court and after there has been some initial legal maneuvering they will take positions based on how well the first attempts go.

[Euclid]

dehusman

Euclid

If the railroads do not want to ship something, can they get around the legal requirement to do so by charging an artificially inflated rate for the purpose of discourging the shipper from shipping?

 

Yes.  then the shipper takes the railroad to the STB (in the US) and there are hearings on whether the rate is legitimate  and the rate either stands or not.

 

You say the answer is YES, but according to your explanation, it seems that the answer is NO.  How are the railroads free to refuse a shipment by raising the rate if the STB gets to decide whether the rate is "legitimate," as you say?

[dehusman]

Euclid

You say the answer is YES, but according to your explanation, it seems that the answer is NO.  How are the railroads free to refuse a shipment by raising the rate if the STB gets to decide whether the rate is "legitimate," as you say?

 

Welcome to regulated industry. 

 

First I never said they can refuse a shipment.  I said they can set a rate and if the shipper thinks its too high, they can appeal.  That's not refusing a shipment.  It might be discouraging it.

 

Railroads have had supervision over their rates since the late 1800's, early 1900's.  The railroads have more pricing freedom now (which has over time resulted in net lower rates), and there are whole other debates on whether the STB regulates rates enough (I make no comment on that) but the railroad can set a rate and if the shipper thinks its excessive they can appeal.  If you search for articles on railroad rates in Montana and N Dakota you will find shippers accusing the railroads of overcharging.  Various coal utilities have taken various railroads to the STB for overcharging on coal rates (and some have won). 

[Euclid]

I see.  I did not mean to accuse you of saying that a railroad has the right to refuse a shipment.  When I used the phrase, “refuse a shipment,” I meant doing so by overpricing it, but not coming right out and saying that they refuse to ship. 

I guess what surprises me is the fact that railroads can add a surcharge that is clearly intended for the purpose of discouraging the use of a certain type of car.  We were told by people here that the cars are legal, and therefore the railroads must accept them.  I am pretty sure I recall hearing that position stated several times here.

[daveklepper]

The Staggers act gave railroads the pricing freedom that they need to impose this kind of surcharge.   It is OK for DOT to say the cars are legal but DOT lacks the power to say they must be priced at the same rate as an obviously safer car.  And they won't do it anyway, because lhey are with the railroads in wishing to promote the use of safer cars.

[Murphy Siding]

schlimm

Murphy Siding

schlimm

Euclid

What if a railroad decides that the liability of hauling oil is so high that they don’t want to haul it; so they place an exorbitant surcharge on hauling any type of tank car used for hauling oil?  I thought that we were all told that the railroads could not refuse to ship oil. 

I seem to recall being told that rather forcefully many times by the experts.  Apparently CN and CP had a different idea about liability exposure and found an angle to work it.

   Or. their home offices are in  another country?

Try reading.    http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/cn-raises-shipping-rates-on-older-oil-tank-cars/article16842251/

  OK.  Have it your  way.  The article doesn't answer the question though.  As I've read on these forums, American shippers of hazmat have challenged American railroads wanting to greatly raise the rates of, or refuse shipment of some hazmat material.  The American regulators and the courts(?) said no way.

      I'm saying, that perhaps the Canadian railroads may be  able to do what the American railroads cannot, based on Canadian regulations.  Maybe?

[cefinkjr]

Paul_D_North_Jr

Per the Reuters article cited/ linked in the Original Post: 21 tank cars of a 120-car general cargo freight train derailed.  19 carried oil, 4 of which leaked between 3,000 and 4,000 gallons; the other 2 had LPG on board. 

Comments to that article are kind funny . . .  

- Paul North.  

 

YOU think it's kind of funny?  I grew up in that area and could hardly finish the article.  It wasn't funny; it was downright silly.  I really laughed at "The clean-up was under way on Thursday as a heavy winter storm gathered pace, leaving about 4 inches of snow on the ground by midday Thursday."  4 inches in an hour is a heavy winter storm in that area.  (That's one major reason I now reside in Texas!)

[greyhounds]

Euclid

I see.  I did not mean to accuse you of saying that a railroad has the right to refuse a shipment.  When I used the phrase, “refuse a shipment,” I meant doing so by overpricing it, but not coming right out and saying that they refuse to ship. 

I guess what surprises me is the fact that railroads can add a surcharge that is clearly intended for the purpose of discouraging the use of a certain type of car.  We were told by people here that the cars are legal, and therefore the railroads must accept them.  I am pretty sure I recall hearing that position stated several times here.

The railroad can post a surcharge.  But, if the total rate to the shipper (including surcharge) exceeds 180% of a magic imaginary number that is spit out by a government formula the shipper can protest the surcharge to the STB.

So then the surcharge is in limbo.  Until the lawyers and bureaucrats get done.  Of course, any STB decision can be appealed to a Federal court.  So it's going to take a whole lot of years until the lawyers and bureaucrats get done.

By the time the L&Bs get done the issue will have been settled by the replacement of DOT-111s with 111As.

I understand that the CN is not a major player in the movement of Bakken oil.  So their surcharge doesn't mean much.  They are potentially a major player in the heavier oil from Alberta.  So it is in their own self interest to do what they can to discourage movement of Bakken oil so it can be replaced with Alberta oil.