At BNSF, passenger-rail relations take precedence

I spent the past two days visiting with senior BNSF Railway Co. executives — including top exec Matt Rose — at the Class I’s Fort Worth, Texas, headquarters. Needless to say, the Berkshire Hathaway Inc. deal was a main discussion topic. I amused Rose by opening my half-hour interview with him by quoting the Nazi henchman from the film “Raiders of the Lost Ark”: “Now, what shall we talk about?”

But I’m not going to delve into the deal — you’ll have to wait for our December issue to learn some of the things Rose said, and for the January issue to get full-blown coverage of the Berkshire-BNSF marriage.

I’m also not going to share anything I learned about the second-most discussed topic: positive train control. I don’t mean to keep throwing out teasers, but I’ll cover PTC extensively in the December issue.

So what will I relay about my visit in this blog? I’m thinking an interesting discussion I had with Assistant Vice President of Passenger Operations D.J. Mitchell, who outlined the ways BNSF attempts to take a different approach to passenger railroad relations than other Class Is. Basically, it comes down to employing a high level of cooperation.

“You don’t say, ‘No.’ You say, ‘Yes, but…,’” says Mitchell, describing how BNSF reacts to requests from passenger railroads.

The Class I generally is open to their ideas for expanding or establishing commuter- or high-speed rail service on its lines as long as “it does no harm to our freight service now and in the future,” says Mitchell. In addition, BNSF expects to be compensated for costs incurred to provide service and retain the same liability coverage as a public agency.

When a proposal is on the table — whether it involves a new or expanded commuter-rail or HSR service — the following questions need to be answered: Is it safe, competitive in marketplace, reliable, comfortable and convenient?

“If you don’t answer all those questions in the affirmative, then don’t make the change,” says Mitchell.

BNSF currently is employing its cooperative-at-all-times approach to negotiations with the Regional Transportation District on a formal agreement concerning the Denver agency’s Northwest Rail Corridor and Gold Line plans along the Class I’s Front Range Subdivision, as well as negotiations with Midwest Regional Rail Initiative parties concerning a portion of their planned HSR line from LaCrosse, Wis., to the Twin Cities.

Ultimately, there’s another question BNSF needs to answer before those negotiations bear fruit.

“Can we do what they want us to do?” asks Mitchell.

  • Nice job, Jeff, but with all due respect, I know that Norfolk Southern has much the same policy when it comes to dealing with passenger authorities.  I suspect the other members of the Big 4 Class 1s do, too.  The days of outright hostility are gone and that may be one of the smarter things the railroads have done.

  • I had a cordial conversation with Joesph Bateman , Vice President for Public Affairs of the Union Pacfic prompted by a reponse he made to an article in the Springfield , IL , State Journal & Register entitled "High Speed Rail Spending to be a boon to freight rail companies" . His response was entitled "Rail upgrade needed for passenger service, not freight" . He said that "if the time comes when we might require additional capacity , we will build and finance it ourselves , just as we have done throughout our 23 state , 32000 mile network for nearly 150 years.  He went on to list items that would legitamately be needed to upgrade the Springfield , IL corridor to 110 MPH . While I agree that the improvements should be 100% financed by the entity that would be the builder and operator of the High Speed Line , and that the UP should not have to contribute one penny to any infrastructure that would be needed, Mr. Bateman seemed to argue against the passenger propoal , rather than say, "This is what we need to allow the service on our line" .

    We know that grade crossing closings and signal improvements would benefit freight movement. I did point out to him and he admitted that improvements were made in California to the UP as a result of passenger needs.

    Since Amtrak legislation gives them the authority to operate over our Nation's railroads , the railroads should take the position that the AAR and One Rail are taking and present  their reasonable needs that can be attributed to High Speed service and begin to work in tandem with the passenger authorites . This seems to be the BNSF & NS positions .

  • When I visited the floor of the huge BNSF dispatching center in Forth Worth in 2006, I met the team that is dedicated to making sure that everyone involved in running BNSF take into account the needs of passenger operators - and their rights under federal law.

  • Clinchfield has some interesting points.  As for Joe Bateman, he's both a gentleman and a good representative of the interests of UP.  I'd expect a conversation with him to be cordial.

    Joe is right in his position that UP can and will fund any upgrades or expansions necessary to provide freight service.  That is essentially true of all the Class 1s.  They are private companies and as long as they have access to capital markets, they will fund themselves.  As for high speed passenger rail, obviously, if it cannot pay its own way, it is the public that should fund it.  You may find that public funding will be difficult to obtain, so difficult that HSR may not amount to much more than the rhetoric we've seen to date.  Clinchfield says: Mr. Bateman seemed to argue against the passenger propoal , rather than say, "This is what we need to allow the service on our line" .Perhaps that is a matter of interpretation of what actually was said.  The passenger proposal, as Clinchfield puts it, would use UP right-of-way, but at 110 mph would be incompatible, as I understand it, with freight operations or needs.  Speed soaks up capacity at a very rapid rate.

    Yes, grade crossing closings and signal improvements would benefit freight operations, but enough to justify UP putting its stockholders' money into it?  

    Amtrak legislation gives it authority to operate over freight  railroads, but the same legislation requires only that Amtrak pay avoidable cost.  It does not now pay the full cost of the lines it uses in most of the country; railroads absorb those costs.  As for whether or not UP should take a specific position, don't forget it is a member of the AAR, and therefore, also a member of One Rail.  It's fine to say UP or any other railroad should work in tandem with passenger authorities . That may happen when they show up at the table with some real money and not just the words of politicians.  As the old saw goes:  In God we trust; all others pay cash.

  • Larry Kaufman's comments are right on. For years prior to dereg ,the AAR put out brochures on how their competition was being subsidized to the determent of the rails and to passenger rail in particular. It is good to see that the AAR is once again aggressively vying for equal treatement , and altho if ideally all modes were operated by the private sector, until that even playing field is attained , I am a supporter of Amtrak as the only viable High Speed operator. I would suggest we passenger advocates read an article in National Review On Line by the late William F. Buckley entitled "Yes to Railroads" .

    Yes I agree with your positive comments on Mr. Bateman and his arguements for the UP's position especially the capacity required for high speed to the determent of freight capacity. This was an educational moment for me .  High Speed Rail can be a win win for the rail industry both freight & passenger if the requirements of both segments are acknowledged and the costs are separated so that the costs are paid entirely by the specific benefactor.

    My suggestion to the freight railroad industry , and to fine persons such as Mr. Bateman , is to use the "olive leaf" approach to High Speed Rail rather than an adversarial approach .

  • "Precedence" over what?

    Given BNSF's recent investment in capacity on the Transcon, current business levels, west coast port growth / loss  potential, government policy, etc., etc., maybe passenger is their best bet. "The Berkshire Ltd" maybe.......

  • Dream on.  The Berkshire Ltd, if it ever exists will be the name attached to a higher speed all-trailer premium intermodal train on the BNSF Transcon.  

    It will not be a passenger train of slow, higher, or high speed for the simple reason that passenger service does not pay its way anywhere in the world.  If it is to be expanded in the U.S., it is going to take significant public support.  This the American public - and certainly American politicians - have shown no inclination to do.  The real benefit of the Berkshire Hathaway purchase of BNSF is that the railroad's management will be free of Wall Street pressure to deliver quarter by quarter results even if it creates problems for the railroad in the future.  Example:  BNSF was forced by Wall Street to suspend its double-tracking of the Transcon a decade ago.  Then, when traffic exploded in the earlier years of this century, no capacity, unhappy customers, and lost revenue opportunity, to say nothing of higher costs.

  • Anybody have an idea to get passenger service back to my wife's hometown (Amarillo) on the BNSF?  East /West service would miss

    Albuquerque and the Denver/Ft Worth line is ripe with coal traffic .

  • Sorry, Clinchfield, but you seem to be missing the one fundamental answer to your question about getting passenger service back to Amarillo.  WHO WILL PAY FOR IT?  Trains don't just run because some or even a lot of people want them to.  There are costs involved, which the rail fans have a tendency to ignore or forget.  Passenger fares, at best, cover avoidable cost, sometimes referred to as variable cost, but nowhere in the world does passenger service pay its own way, including covering the fixed cost involved.  Some lines have heavy coal traffic.  That's because utilities that burn coal are willing and able to pay the cost of getting coal to their generating plants.  

  • Larry's reply sounds like he thinks I'm rooting for a return of passenger rail. Nothing could be further from the truth. I have a lot of respect for BNSF management and believe that if passenger is in its future they'll see to it that its on a profitable basis. I also agree it makes sense to not appear obstructionist, especially in the current political climate. From my knowledge of things, NS, not BNSF has been in the lead here. All that said, my question remains -- over what, at BNSF do "passenger rail relations take precedence"?

    An intelligent national transportation policy, (hopefully not an oxymoron), would encourage each mode to do what it does best. That means more freight by rail, more intermodalism, more commuters and some corridor passengers by rail and bus, al of which would make highways safer, faster and less expensive for automobiles -- and taxpayers.

  • FSAdams:  If I misinterpreted your earlier comment, I apologize.

    Your question about "precedence," is a good one.  As for the lack of a national transportation policy, we actually have one, only we don't call it that, and it wasn't developed at all thoughtfully.  It's what you get when you produce a surface transportation program two years late, promise not to let that happen again, and immediately are late on the successor legislation.  It's what you get when no one is prepared to pay for the public benefits conferred (heavy trucks that don't pay fuel taxes or other fees commensurate with their cost-assessment for the public facilities they use.)  The same applies to inland waterway operators and airlines.  

    The growth of domestic intermodal is the way markets make policy in a vacuum.  Those who have to get goods from where they are to where they are needed are finding ever more efficient and economic ways of doing so, and for the most part they simply ignore the existence of government.  I think this is one of the principal motivators of Buffett's decision to buy BNSF - belief in the future of the U.S. economy, as he said, and belief that government is likely to be a null factors, which he didn't say, and that carriers will find ways to carry out their functions.  Transportation policy is not an oxymoron, but "national" or "government" transportation policy probably is.

  • I was in no way Larry advocating a passenger train via one route or another . Since we were talking about the Transcon Line , I thought our fellow bloggers with their insight might have an idea on which would be the most practical route .

    To answer your question on funding , Amarillo for a period of time and might still be subsidizing American Airlines to serve their airport. As a right wing conservative, both socially & fiancially , I feel the government should quit subsidizing all modes and let user fees and transportation firms pay for their infrastructure. I am excited that the BNSF has healthy intermodal & coal traffic on the lines in question. That is the result of good management using private enterprise principals.

    With the recent meltdown of the air traffic control system this past week , betcha someone will want the government to fix the system at taxpayers expense over and above the air ticket taxes and other user fees. Well if they do that then the rails deserve help to upgrade their signal systems . So the socialistic policies that caused Amtrak to be created in the first place , by the government artifically taking passengers off privately run trains in the 1950's & 1960's , and putting them on airlines continues . Let's put all modes on notice that the free ride is over.  Don't hold your breath in the era of

    TARP and "Stimulus". Bottom line is an even playing field for ALL modes.  

  • Given the expected lower frequency of HSR trains in longer corridors- why would we not conclude that freight movements could use the new lines on off peak times - to say nothing of the advantages of having alternate routes in cases of derailment etc. I'd argue  -yes we have to subsidize pax rail like every other country( never mind the pax aviation subsidies right left and center) BUT rail freight operators benefit too- so I think this is a very logical oppty for Public-Private partnership.

  • An interesting proposition, Mercury.  Just noodling about it, would HSR freight be expected to pay a fully-allocated cost for its use of lines built for passenger service?  If so, just how would you apportion the cost, and more important, would the freight railroads be able to justify the cost through the rates they could charge freight shippers?  Besides, who would own the HSR passenger lines?  We might end up with a freight version of passenger service -- something that must be subsidized by someone because the beneficial owners choose not to pay, just as passenger now must be subsidized because the recipients won't/can't pay the fully allocated cost.  Let the debate begin.

  • Mercury has it right I previously suggested that here in Florida that a new proposed link between  Orlando East to the FEC , be built to

    freight standards . This should apply to any high speed lines that are built. The Pennsy figured that out and did it with

    private capital , long before HSR was even thought about .

    Happy Thanksgiving . Larry is right that the users , not the taxpayers should fund these projects. We don't want our National debt to get any higher .

    Just a thought. Did someone propose a private toll road from Canada to Mexico thru Texas for truckers. Possibly those entrepenures could fund these high speed lines.