Remarks AS DELIVERED

Federal Railroad Administrator Sarah Feinberg

RailTrends 2015 Annual Conference

New York City

Thursday, November 19, 2015

Good morning.  Thank you for having me here today.

I know we have folks here representing many companies and stakeholders involved in the railroad industry, so glad to see all of you. I want to thank my fellow panelists for joining me today:

• Linda Bauer Darr who is the head of the American Short Line and Regional Railroad Association (ASLRRA).

• Michael Bourque, President and Chief Executive Officer of the Railway Association of Canada (RAC)

• Ed Hamberger, President and CEO Association of American Railroads (AAR)

• Tom Simpson, President, Railway Supply Institute (RSI)

It is good to be with all of you this morning.

This is actually a group that talks often, that trusts each other and tries to work together.

The topic of today’s panel is the state of the rail industry.

And when I was thinking about this this morning I was thinking about wow, I mean look at the landscape compared to where we were just a year or two ago.

It is a harder and more complicated topic than it would have been, say at the beginning of 2014 or the beginning of 2013.  

Some would argue that the industry today is experiencing a downturn.  

I disagree with that, but the numbers are that:

Coal shipments are down. Way down.

Crude prices are down, meaning less crude is moving by rail.

And the impact on each company varies on each company, but no one would argue that it hasn’t had an impact at all.

An industry that was hiring as fast as it could 1, 2, 3, years ago, is seeing in some cases some downsizing but certainly a change in the feeling that’s out there in the rail industry.

But from my view, it is not an industry that is maybe experiencing its best day economics-wise, but what an incredibly bright future.

This is an industry that serves the public, and is focused on its service to the country. Without railroads, the country simply doesn’t move forward.

I think all of us, from the FRA to the railroads to the suppliers, know that ultimately, it is the public that we serve.

We serve customers and clients as well.

But ultimately it is the public.

And it is the public that ultimately drives both demand on the industry, and the delivery of goods and services, and it is the public that holds us accountable as well.

Demand drives industry and demand keeps the railroads operating.

But more than ever, the public is demanding increased passenger rail options and the efficient and cost-effective transport of goods.

That’s the good news – they know the value of the products and the services that the rail industry is delivering – and they appreciate it and they want more of it.

But they’re also demanding that we do it in an even safer way than we ever before:

• Without damaging rivers and streams with hazardous materials.
• Without accepting the risk of train-to-train collision
• And other incidents stemming from human factors
• And, they’re asking that we do all this without bureaucratic roadblocks that stretch on for years

POSITIVE TRAIN CONTROL

The good news is that we are in a moment when technology is moving into the transportation space at a rapid rate—giving us the opportunity to develop new solutions to old challenges.

Just this week, I met with a technology company developing data analytics that I believe will actually change the face of the rail industry. Change the outlook of the rail industry.

When I say no one wants us to take years to regulate for bureaucratic roadblocks to stretch on for years in front of us. I believe that’s absolutely true on the side of industry but the public doesn’t want that either.

And the more this industry is using technology and data to drive outcomes and solution, ultimately the less necessary regulations are. Because this industry will be able to get to 99 and 100 percent detection rates on defects and flaws before they become broken rails.

And you won’t need us to tell you what the railhead standard needs to be when you’re determining it on your own.

So I actually think that the more this industry turns to technology, the better off it will be, but the better off we in the public will be because things can move so much faster and we won’t be waiting for years for regulations.

But of course, one of the most—if not the most—significant advance in technology in the rail industry during the last 100 years has been Positive Train Control.

When we talk about PTC, we are really talking about saving lives.

That’s why FRA has been advocating for—and that railroads have been working to implement—Positive Train Control.

I appreciate the work that the rail industry has done to implement this technology and we remain your partner in implementation.

Congress recently extended the PTC implementation deadline by three years. And I know many in this room were probably relieved by that.

I’ve said this before, I’ve said this several times over the past few weeks, and I will say it again: I would not make the extension the primary focus. The focus has to remain on getting PTC up and running and implemented as soon as possible.

As I started my remarks I said we are called to serve the public.

And I believe that:

If we are serving the public…

If you are serving your shareholders…

If you are delivering what the Congress intended…

2018 has to be the goal!

I recognize that the legislation allows 2018 to be the goal and there to be a potential extension beyond 2018 to 2020.

But the deadline is 2018. If you need to get to 2020, there are certain boxes that have to be checked in order to get there.

And the best path forward to serve the public, to serve shareholders, and to serve the Congress is to make 2018 the goal, to make every effort to get there, and to reevaluate as necessary as the Congress intended.

Do not aim for 2020! Do not assume that the Congress will give in and provide another extension.  

Again, we will do our part as regulator and partner to both aid the companies working toward implementation and to take enforcement actions as necessary.

But as always, we are here to provide expertise, partnership, and support towards our common safety goals.

I have a feeling that we may get some questions on PTC during the Q & A and I welcome that.

CLOSING

In closing, I’m optimistic and hopeful about this industry because it is one of the most American of American industries and has helped this country move forward time and time again.

For more than 150 years, rail has spurred this country’s growth and economic prosperity.

It made settling the West possible, it ushered in the Industrial Revolution, it helped build America as an economic powerhouse, it has created millions of high-paying jobs along the way.

I know that an industry that can achieve all of this can achieve anything it wants and has a strong future ahead of it.

Thank you again for having me here today. I am glad to be with all of you. I look forward to the remarks of the other panelists and look forward to taking your questions.