I live but a hundred yards from the tree lined BNSF tracks, and it’s been a colorful fall. I’m not just talking about the fall colors, I’ve been seeing a rainbow of colors of locomotives pass by this fall and all summer- Besides BNSFs latest colors, I’ve seen Santa Fe “warbonnets”, BN green, CSX blue, NS black, CIT Leasing blue, CP candy apple red, Mexican TFM, and even locomotives in primer with their numbers spray painted on. You’d think BNSF was running out of locomotives… And they are! Despite buying new locomotives as fast as they can be built, BNSF is having to lease anything and everything that can move itself and a few freight cars down the tracks under it’s own power. And when BNSF or any railroad is short of locomotives, carloads full of freight sit.
But gee, aren’t all the delays on BNSF caused by those new oil trains?
Well partly, as oil by rail grew from almost nothing to several unit trains a day these last few years. But look through the last few years of American Association of Railroads (AAR) reports and you’ll note new record rail freight volumes set repeatedly as our economy recovered from the recession and shippers switched freight from trucks to more economical rail. The railroads running through the Bakken oilfields, CP and BNSF, got hit too with a double whammy of oil trains out and pipe and frac sand in. CP had a simple strategy to deal with this “problem”, chase the customers away. But BNSF, ever faithful to their common carrier obligations, took on the challenge.
I hear somebody in the back row muttering “BS, it’s all the oil trains fault!”
The effects are being seen far from the oil train’s routes from the Bakken to, largely, the densely populated coasts and ports. In northeastern Minnesota a mining company is hiring trucks to move a hundred truckloads a day of taconite from a processing plant on the iron range to the port of Duluth. No oil trains run on those tracks, in fact it’s almost a whole separate railroad from the rest of BNSF, used almost exclusively by unit taconite trains shuttling from the range to Duluth and back. On the Minnesota-South Dakota border, the Big Stone power plant is complaining that BNSF isn’t delivering enough coal… But the rail line they’re on carries no oil trains, and most of the couple trains a day the line sees carry coal to the power plant. It takes workers, freight cars, tracks, and locomotives to keep a railroad running. Workers can be hired and trained, and BNSF was doing that all through the recession. Same with rolling stock and tracks, with BNSF never skimping on maintenance.
There’s only two manufacturers that build them in any volume, and volume in this case means a thousand total units in a good year. Those two “volume” producers are EMD and GE, with a handful of glorified rebuilders cranking out the odd new locomotive or three a year. EMD was bought up by GM in 1930 and virtually invented the diesel-electric locomotive with their characteristic two stroke engine, at one time building a couple thousand a year. GE is a relative upstart that got into the freight locomotive biz in the 60s with an iffy product that was sold mostly by easy credit. But GE gradually improved their product, passing EMD in sales a few years back. Over a year before the tighter 2015 locomotive emissions standards took effect, GE demonstrated a locomotive that met the tough new standards.
Meanwhile, GM first tore down the EMD locomotive assembly plant at “the home of the diesel locomotive” in LaGrange, Illinois and shifted assembly to a smaller plant in Canada. That plant was so small that large orders had to be subcontracted out, and one railroad even assembled their locomotives themselves. Then in the ongoing GM liquidation that was eventually formalized by bankruptcy filing, in 2005 GM unloaded EMD on “private equity” investors. Said “private equity” raiders then cashed out, selling EMD to arch rival Caterpillar in 2010. Cat proceeded to do what all poorly run modern corporations do… Set up a new assembly plant staffed with non union workers, then lock out the skilled union workers at the Canadian assembly plant. Following that poor example, GE opened a new assembly plant in Fort Worth while threatening to lay off veteran union workers at their old locomotive assembly plant in Pennsylvania. At least GE took the new emissions standards seriously…
But it appears that the “private equity” raiders and Cat were too busy asset stripping and union busting to be bothered with making their locomotives meet the 2015 emissions standards. Wasn’t like they hadn’t been warned- the new locomotive manufacturers were give near a decade’s notice. Cat ‘fessed up this summer that they’ll meet the standards by 2017… After they’ve been off the market for two long years! T’ain’t the first time Cat slept while emissions standards changed- Their truck engines built to meet the 2007 standards were such lemons that owners are filing class action suits against Cat. And when the tighter 2010 truck emissions standards went into effect, Cat pulled out of the market and nearly five years later still doesn’t have a truck engine that can meet the standards.
So the legendary EMD two stroke diesel is just about down for the count… Cat can use engines built before 2015 and emissions credits to build new freight locomotives for a bit into 2015, and they’ve got a contract to build a few passenger locomotives that use a Cat “high speed” diesel that meets the 2015 standards. Competitors Cummins and MTU have “high speed” diesels in the desired 4000 horsepower range that meet the standards too, but the railroads have a bad taste from Cat repowers of EMDs a couple decades ago, and an engine that turns at the “high speed” of 1800 RPM instead of the traditional locomotives 900 doesn’t sit well with railroad mechanical departments that expect a couple decades service and millions of miles before rebuild. Cat already list EMD as a division of their Progress Rail division, a smaller outfit that makes railway maintainence equipment. The EMD website is in need of updating, and I suspect it and EMD will soon disappear and join Alco and Baldwin in the graveyard of american locomotive manufacturing.
Now with a recession proof market with little competition and high profitability, you’d thing new manufacturers would jump into the ring… Not likely, given that you need 100 ton plus overhead cranes and metal melding equipment capable of cutting and welding two inch thick slabs of steel just to build locomotive frames, never mind a few hundred thousand square feet of space just to cover today’s monster locomotives. So GE will likely have a lonely but profitable future as america and pretty much the world’s sole volume locomotive manufacturer. And thanks to the Wall Street whiz kids that have been filleting our once great manufacturers, instead of two locomotive manufacturers that can’t keep up with the demand for locomotives, we’ll soon have one manufacturer that in no way, shape, or form can keep up with the demand.