This Critical Railroad Will Shut Down Dec. 31st – You’ll Never Guess Why

bnsfIt could be a scene taken from Atlas Shrugged. BNSF Railway’s CEO, Carl Ice, has stated BNSF will shut down most of its network due to the inability to comply with regulations from the Federal Railroad Administration. The company will not knowingly violate laws it won’t have time to comply with, nor will it ask its employees to either.

What many Americans down’t understand is the importance of the railroads in keeping the US economy moving. Products are imported into the US and then transported by train and truck to their destination. If there are no trains, products don’t move, and a backlog, or stall, ensues. According to Trains.com:

In his letter to Senator John Thune (R-South Dakota), chairman of the U.S. Senate Committee on Commerce, Science and Transportation, Ice says that the railroad has already spent $1.5 billion to deploy PTC and will likely spend another $500 million. Ultimately, this new technology will be deployed on half of BNSF’s network, the portion that handles 80 percent of its traffic.

But portions of both transcontinental routes will not be operational by the December 31 deadline set by Congress in 2008. Nor will commuter zones in Chicago, Seattle and Minneapolis. Ice says that to avoid operating on PTC-mandated subdivisions where PTC will not be installed before the deadline would force traffic on secondary routes unequipped to handle it and lead to a paralysis of the railroad.

Ice goes on to explain the railroad’s position. First, BNSF reads the law as saying no train can legally operate on a PTC-mandated line if PTC is not in service by December 31, rather than no train carrying hazardous substances. Then he goes on to say: “BNSF, as a matter of law, corporate policy and principle, does not willfully violate safety statues or regulations or ask our employees to do so. The announced enforcement policy by the [Federal Railroad Administration] of imposing fines for non-performance puts BNSF in a position that will be difficult to reconcile with our aforementioned unwillingness to willfully violate safety laws or regulations. BNSF does not believe that it can pick and choose which safety rules must be followed.” Ice adds that were his railroad to operate over lines where PTC is not in place and an accident occurs, the exposure to legal claims and punitive damages would be significant.

The CEO does not say BNSF will shut down, just that based on current requirements, the company will have no choice but to shut down to avoid violating existing laws and regulations.

That brings up an interesting showdown with the Federal Railroad Administration. Stand its ground and shut down the economy, or perhaps show a little flexibility and either change regulations, timelines or grant extensions.

What do you think of BNSF CEO’s position? Leave a comment with your thoughts below.

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