May 21, 2008DTE Rail Services, Inc. Railcar 1011 Railcar 101 The Basics of Railcars: Car Types, Components and Rules Overview and Basics Ken Henman

May 21, 2008 DTE Rail Services, Inc. Railcar 101

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Railcar 101 The Basics of Railcars: Car

Types, Components and Rules

Overview and BasicsKen Henman


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The Cost of Railcar Maintenance

*According to the Surface Transportation Board 2004 Railway Operating Expenses Annual Report the Class I railroads spent $1,145,888,000 on freight car repairs and maintenance $305,898,000 was for repairs billed to others

*2004 STB Form R-1 Schedule 410


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Why Do You Need to Manage Railcar Maintenance?

Regulatory requirements for U.S. freight cars Federal Railroad Administration Association of American Railroads


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Why Do You Need to Manage Railcar Maintenance?

This is purely “Corrective Maintenance” to your equipment per the FRA and AAR Rules

The current hourly rate for repairs done by railroads is $94.81

But Class I railroads are in the transportation business, not the repair business


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A Shift in Ownership and Maintenance Responsibilities

In the past everyone called them “railroad” cars Ownership of today’s railcar fleet has shifted to

private car owners *As of January 1, 2007 freight car ownership by Class

I railroads is only 35.3% of all freight cars in U.S. *1,346,507 Freight cars in service, all U.S. owners *475,415 Freight cars in service, Class I railroads

Railroads have encouraged customers into ownership of railcars in exchange for reduced freight rates

*AAR Policy & Economics Dept, 1/15/2008


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The Standards by Which Railroad Cars Must Be Maintained

The AAR Equipment Engineering Committee, which is made up primarily of railroad officials, sets the mechanical requirements for cars in interchange service

Car owners are required to maintain their equipment to this standard


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The Future and Why You Need to Manage Railcar Maintenance?

A change of philosophy As far as the railroads are concerned equity interests

and financial liabilities no longer need to be balanced against railroad operating efficiencies and/or capital improvements

A new plan Implementation of Advanced Technology Safety

Initiative A proactive approach and opportunity to perform

railcar maintenance for car owners


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The Future and Why You Need to Manage Railcar Maintenance?

Owners who ignore the trends in today’s industry do so at their own peril

Again- The current hourly rate for repairs done by railroads is $94.81

Thus the need for proactive maintenance management


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Industry Terminology

AAR (Association of American Railroads)- Association made up of railroads

AAR Field Manual- The AAR Interchange Rules which specify inspection, repair and handling requirements of interchange freight cars

AAR Office Manual- The AAR Interchange Rules which specify labor and material pricing, sale, acquisition and settlement for interchange freight cars

ABD- Acoustic Bearing Detectors ATSI- Advanced Technology Safety Initiative Bad Order Car- An interchange freight car which is in

need of mechanical attention


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BRC (Billing Repair Card)- Detailed repair record/invoicing

CBA (Counter Billing Authority)- A document that issues authorization to collect or deduct an overcharge from a bill

Contract Shop- A repair facility designated by car owner to perform repairs

Data Exchange System- The AAR’s system of collecting, sorting, analyzing and distributing freight car repair information

Defect Card- A document accepting responsibility for damage to an interchange freight car


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Delivering Line- Subscriber offering a freight car in interchange

Depreciated Value- The reproduction value of a freight car adjusted for depreciation up to the date of damage according to AAR rule 107

Early Warning- A directive issued by the AAR for interchange freight cars having mechanical defects or potential safety problems

EHMS- Equipment Health Management System Foreign Car- Any car not owned by the subscriber


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Foreign Repair- Any repair performed to an interchange freight car by a company other than the car owner or owner’s agent (contract shop repairs)

FRA- Federal Railroad Administration Handling Line- The railroad of record having possession

of the interchange freight car Home Shop- A repair facility designated by the car

owner


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Interchange Service- A freight car placed in the North American interchange system that meets all interchange requirements

InteRRIS- Integrated Railway Remote Information Service Jacking- Raising the car body by any means necessary to

safely accomplish repairs Job Code- A four digit number that identifies the

inspection, repair or testing performed on the car component applied or removed


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JIC (Joint Inspection Certificate)- A document detailing unfair usage damage or loss or extensive owner’s defects as outlined in AAR Rules 95, 108 and 103

Maintenance Advisory- An informational notice issued by the AAR for cars having minor mechanical defects or which preventative/corrective maintenance is to be performed

Opportunistic Repair- Specific authorized repairs identified in Section A of any AAR Interchange Rule


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Private Car Owner- Any non-railroad owner of an interchange freight car

Private Marked Cars- An interchange freight car registered in the Umler file with stenciled reporting marks assigned by the AAR ending with the alpha character “X”

Railroad Marked Cars- An interchange freight car registered in the Umler file with stenciled reporting marks assigned by the AAR ending with the alpha character other than “X”


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Running Repair- Any repair performed to an interchange freight car according to AAR Interchange Rules

Service Interruption- A train delay that is caused by a specific AAR condemnable defect that causes a delay on the line of the road

THD- Truck Hunting Detector TPD- Truck Performance Detector Universal Machine Language Equipment Register

(Umler)- A computer file which contains specific details such as internal and external dimensions

WILD- Wheel Impact Load Detector


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Concept of AAR Rules

“The Association of American Railroads has played a continuous role in developing and maintaining a comprehensive set of industry rules and standards aimed at ensuring a safe and efficient freight rail network in North America”

*Safety, Interchangeability Go Hand-in Hand, Railway Age,July 2000, Pat Ameen, Association of American Railroads


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”AAR's Rules of Interchange, commonly known as the "Field Manual" and "Office Manual," provide a common set of mandatory practices for the proper handling of interchange freight traffic.”



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”These rules include the basic mechanical requirements, conditions governing delivery and acceptance, responsibility for unfair usage/damage, disposition of defective equipment, and a requirement that cars be equipped with AAR approved components that affect car interchangeability. The AAR Interchange Rules prescribe standard repair practices, define the cost recovery procedure, and include an arbitration process.”



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In essence the Rules provide safe seamless railcar interchange throughout the North American rail system, outlining responsibilities for mechanical condition while setting equal standards for all equipment providers

*Safety, Interchangeability Go Hand-in Hand, Railway Age,July 2000, Pat Ameen & David Meeks


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Field Manual of the AAR Interchange Rules

Rule A Outlines the Rules, responsibilities and who must subscribe

Rule B Qualifies the standards for component manufacturer and reconditioning

Rule 1 Care of Freight Cars, Inspection, repairs to foreign cars, disposition for

unacceptable cars, gages and publications required and car classification

Rules 3 – 82 Specific to components and repairs, Air Brakes through Welding

A. Cause for Attention B. Correct Repairs C. Reconditioning Requirements D. Welding Requirements E. General Information F. Billing Repair Car Requirements Job Codes


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Field Manual of the AAR Interchange Rules

Rule 83 Preparation of Repair Records Car Part Codes Why Made Codes Responsibility Codes Car Symbols Repair Facility Symbol

Rules 84 and 85 Use of Advertisements and Routing Cards and Furnished Material

Rules 88, 89 and 90 Mechanical Requirements for Acceptance Conditions Governing Delivery and Acceptance Acceptable in Interchange Cars and/or Car Parts Prohibited In Interchange

Rule 91 Service Interruption


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Field Manual of the AAR Interchange Rules Rule 92

Transfer or Adjustment of Lading Rule 95

Handling and/or Delivering Line Responsibility Rule 96

Owners Responsibility Rules 102 and 103

Defect Cards and Joint Inspection Certificates Rule 107

Handling of Damaged or Destroyed Equipment Rule 108

Cars Requiring Extensive Repairs Rule 120

Rule Compliance and Enforcement Appendix A – H

Various definitions, specifications


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Office Manual of the AAR Interchange Rules

Price Matrix Qualifies every Job Code for

Why made Responsibility code Condition code Material value Labor time standard and labor value Applicable credits

Provides information concerning specific Job Codes not covered in the Field Manual

Rule 88, Mechanical Requirements For Acceptance Specifies the requirements for new, newly acquired, rebuilt, modified,

increased gross rail load, extended service status, increased life status and the documentation required for all rail equipment in interchange service


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Office Manual of the AAR Interchange Rules

Rule 93 Train II and UMLER Reporting Procedures, Equipment Management

Information System - EMIS Rule 94

Equipment Health Management System - EHMS Rule 102

Defect Card procedures Rule 103

Joint Inspection Certificate, format and procedures Rule 107

Handling of Damaged or Destroyed Equipment Disposition/Settlement, depreciated value or settlement value

Rule 111 Car repair pricing procedures, basis for labor and material values


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Office Manual of the AAR Interchange Rules Rule 112

Car repair billing requirements and procedures, invoicing and auditing Rule 113

Data Exchange Rule 120

AAR Rule Compliance and Enforcement, covers inspections and investigations

Rules 121 and 122 Arbitration and Rules Committee, Interpretation and Settlement of

Disputes Rules 123 and 124

Revision of Rules and participation in “AAR Interchange Agreement” Rule 125

Early Warning/Maintenance Advisory System Appendix A – H

Definitions and procedures

Documents

May 21, 2008DTE Rail Services, Inc. Railcar 1011 Railcar 101 The Basics of Railcars: Car Types, Components and Rules Overview and Basics Ken Henman