CHICAGO Shipping scrap by
rail poses a variety of challenges, and some new stumbling
blocks could emerge in the near future, an executive at one of
North Americas largest providers of rail products and
More rail cars are being built
to move supplies in and out of energy plays, leaving less
capacity to build scrap gondolas, Jeffrey Miller, business
development manager at Albertville, Ala.-based Progress Rail
Services Corp., said at the Platts 2nd Annual Scrap Seminar in
"Steel mills manage as best as
they can with large shippers," he said, but fewer foundries are
getting scrap in by rail because while they use less material
than mills, the timing of deliveries can be less reliable.
Additionally, its often
necessary to clean rail cars because gondolas can be one-third
filled with dirt that needs to be removed before the car can be
reloaded with scrap, Miller said, noting that proposed new
reciprocal switching rules could also cause delays in the
These regulations could require
shippers or receivers to switch rail cars that dont
belong to themat their own expensein order to
hasten the return of those cars to the railroads
customers. That would increase dwell time in receivers
yards and potentially push equipment, labor and insurance costs
A rail safety regulatory bill
approved in 2008 and up for renewed authorization this fall
could also have an impact, Miller said. It caps employee
working hours, just as hours-of-service rules have done for
truck drivers, and requires more training for employees.
The industry is also worried
about a new Transportation Department study on rail car loading
that might lead to new compliance standards, Miller said.
The positive train control (PTC)
mandate, which integrates command, control, communications and
information systems in order to safely manage train movements,
will require the railroads to invest roughly $15 billion over
the next three to four years, he said.
"How will PTC affect you on your
siding or your customers on their siding?" Miller asked,
suggesting that the industry doesnt know.