PennDOT's Scheme will Help Nullify Conrail Split-Up Agreement

The expansion of Route 41 is being driven in large part by the large number of tractor trailers that travel on Route 41 to get to and from Norfolk Southern Railroad's (NS) Rutherford intermodal freight yard located about a dozen miles east of Harrisburg. In planning to build new highways along Routes 41 and 30, PennDOT has completely failed to consider the fact that expansion of highway capacity will effectively preclude investment in short-line rail infrastructure in Delaware and southern New Jersey and increase truck travel in the region, thereby defeating two of the principal justifications presented to the U.S. Surface Transportation Board (STB) in 1998 for the split-up of Conrail between CSX Transportation (CSX) and NS.

In its approval of the split-up of Conrail assets between CSX Transportation and NS, the STB based its decision in large measure on claims by CSX and NS that the transaction would generate greater investment in rail infrastructure in areas needing such investment (including the Port of Wilmington) and would eliminate growing dependence in the northeast on highway transportation of goods:

These features of the transaction will improve operating efficiency, reduce transit times and terminal delays, and provide logistics savings associated with single-line service that will make these companies more competitive with trucking and should, within 4 years of the transaction, shift over $400 million worth of traffic each year from highways to rail lines. Using 1995 data, applicants have demonstrated that they should be able to achieve quantifiable public benefits, including operating cost savings, logistics savings, avoided highway maintenance costs, and other public benefits, of approximately $1 billion annually within that same period. Other benefits include favorable safety and environmental consequences, and the improvement in the rail system in the Eastern United States that will result from the substantial additional investment that NS and CSX will make to take advantage of opportunities available on their newly restructured systems. . .

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Quantifiable Public Benefits. As noted, applicants project that the acquisition of Conrail will yield almost $1 billion in quantifiable public benefits during a normal year.(202) These include $562.6 million in operating efficiencies and cost savings, $340.1 million in shipper logistics savings and competitive pricing benefits, and $95.5 million in highway maintenance benefits resulting from fewer trucks being operated over public highways. . .

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Click here to see U.S. Surface Transportation Board, CSX CORPORATION AND CSX TRANSPORTATION, INC., NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN RAILWAY COMPANY--CONTROL AND OPERATING LEASES/AGREEMENTS--CONRAIL INC. AND CONSOLIDATED RAIL CORPORATION Docket No. FD 33388 0, July 20, 1998.

One of the commitments made by Norfolk in its proposed operating plan was to increase rail freight operations through Wilmington and to improve rail infrastructure at the Port of Wilmington by restoring the Shellpot Connection:

Wilmington, DE: Approximately $2 million will be allocated to bridge repair and restoration of the Shell Pot Connection to improve service and avoid additional freight movements on the Northeast Corridor at Wilmington, DE. See Norfolk Southern/Conrail System Lines Operating Plan, Section 7.1.2 Additional Track Upgrading.

The Shellpot Connection and the associated Edgemoor Yard is a rail line connecting the Port of Wilmington to Amtrak's Northeast Rail Corridor (NEC). It has been abandoned since the mid-1980's:

The former Shellpot Secondary is the rail equivalent to I-495 through the Wilmington area. Service to Delaware industries, including the Port of Wilmington, is adversely effected [sic] to the extent that the capacity and natural function of Edgemoor Yard is not being utilized. This is particularly the case with industries at Delaware City, whose rail service is degraded by the need for local trains to operate on the NEC [Amtrak's Northeast Corridor] between Edgemoor Yard and the Reybold Running Track, through the Wilmington passenger station on the NEC, with its 108 passenger train movements per day and a substantial increase in commuter trains planned through the year 2015. The order of magnitude cost of restoring the Shellpot route is about $20 million. (p. 55).

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Unlike New York-New Jersey, Philadelphia, Baltimore, and Hampton Roads, the Port of Wilmington is directly served by only one line-haul railroad, NS [NS]. This fact directly affects the competitiveness of the Port vis à vis other ports. . . service improvements that would benefit chemical and other merchandise traffic are more readily achievable with restoration of the Christina River swing-bridge since this traffic is less impacted by infrastructure restrictions. . . Without equal access to the Port by CSXT, both in terms of infrastructure and commercial position, CSXT and its customers necessarily view the Port of Wilmington as having significant limitations. These limitations do impact the ability of the Port to market its services to both existing and potential customers. In addition, the Port of Wilmington does not have extensive rail infrastructure support facilities. Much of the Port's rail infrastructure support capacity was lost with the Christina River swing-bridge being taken out of service, thus eliminating Edgemoor Yard as a convenient support facility for the Port . . . Restoration of the Shellpot route favorably alters Delaware's present circumstance of being a terminal at the end of a 90-mile branch from Harrisburg.

Furthermore, at the time of NS's take-over of Conrail in 1998, the Delaware Department of Transportation had expressed concerns about the impact of the merger on rail access to the Port of Wilmington and its ability to compete with the Port of Philadelphia/Camden:

DEDOT is generally supportive of the CSX/NS/CR transaction but has raised several issues. (1) DEDOT, which is concerned that the Port of Wilmington will be placed at a disadvantage vis-à-vis the Ports of Baltimore, Philadelphia, and New York, asks that we either: (a) extend the South Jersey/Philadelphia SAA south to the Port of Wilmington; or (b) allow CSX to provide rail service to the Port of Wilmington.

Apparently in response to DelDOT's concerns and NS promise to increase rail freight traffic at the Port of Wilmington, the STB conditioned its approval of NS's acquisition of Conrail's assets on NS's restoration of the Shellpot bridge and its associated rail infrastructure at the Port of Wilmington:

Condition 15. NS shall not alter the historic integrity of the Shellpot Bridge in Wilmington, Delaware, until completion of the Section 106 process of the National Historic Preservation Act (16 U.S.C. 470f, as amended). NS shall conduct a feasibility study including preliminary design for the rehabilitation of the Shellpot Bridge. NS shall provide the Delaware State Historic Preservation Office a copy of this study for its review within 180 days following the effective date of the Board's final decision. Ibid.

Amtrak notes that NS' operating plan projected increased freight operations through Wilmington, DE, and expressed the intention to restore a former Conrail bypass around Wilmington known as the Shellpot Connection in order to accommodate this expected traffic increase. Amtrak notes, however, that the additional traffic NS anticipated has not yet materialized, so there is no current need to restore the Shellpot Connection. If NS' plans to increase freight traffic through Wilmington come to fruition, Amtrak states that restoration of that connection will be necessary. While the restoration of the Shellpot Connection would not benefit Amtrak, freight shippers in Delaware would benefit from the improved access to the Port of Wilmington and other Wilmington-area facilities that would result from this project. Amtrak understands that NS is seeking public funding to cover costs associated with the restoration of the Shellpot Connection, and Amtrak supports NS' efforts.

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NS-6 reply. NS states that Amtrak's comments express no complaints but merely comment on two matters: on-time performance and restoration of the Shellpot Connection in Wilmington, DE. In its reply, NS states that it will continue to work cooperatively with Amtrak to address on-time performance issues and that it understands that Amtrak will recommend that the Board's on-time reporting requirements be suspended as to NS. NS also confirms that Amtrak correctly noted that the additional traffic NS anticipated has not yet materialized, that there has thus been no need to restore the Shellpot Connection, and that NS is seeking public funding in for the restoration of the connection.

What is really happening, however, is that NS has decided to rely exclusively on the roadways to transport freight to and from its Rutherford Yard from Delaware and southern New Jersey. The only reason the additional rail traffic has not yet materialized is because NS has not restored the Shellpot Connection, as it had promised the STB. Unfortunately, subsequent events have proven that DelDOT's concerns were justified. Rather than investing in new rail facilities at the Port of Wilmington (as did the Commonwealth of Pennsylvania and CSX at the Port of Philadelphia) NS has renigned on its promise with the help of PennDOT.

The Rutherford facility, which was funded with a $15.5 million appropriation from the Commonwealth of Pennsylvania (see Act 35, Pennsylvania Chapter Laws of 1999) has generated a substantial increase in tractor trailer trips along Route 41, because NS is routing a huge quantity of its freight through the hub at Rutherford:

Instead of trying to force intermodal shipments into already congested facilities in northern New Jersey and near Philadelphia, NS now can pick and choose which traffic is routed to what terminals. In April, NS joined Burlington Northern and Santa Fe in transcontinental intermodal service that takes a full day out of transit times because BNSF is able to build entire trains with traffic for Rutherford and points east. This allows a steel-wheel connection at Chicago, eliminating a costly and time-consuming rubber-tire interchange.

Thus, it is apparent that NS has made a strategic decision to resolve the rail congestion problem in northern New Jersey and Philadelphia by using the highways. At least with respect to the Delaware and New Jersey market, it appears that NS's long-range plan is to be nothing more than a trucking firm:

BOB BAILEY spoke on a recent presentation he attended on railroads attempting to capture freight business on the I-81 Truck Corridor. This truck traffic would be of various bulk commodities and would terminate at the NS Rutherford Yard near Harrisburg, Pa., from there the traffic would be hauled by truck to destinations in New Jersey and the New York Metropolitan Area. This method of rail/truck transfer results in increased highway congestion and pollution. NS also feels that this method will reduce the need for additional rail infrastructure investments in New Jersey.

NS's short-sighted decision has further marginalize short-line railroads while placing a tremendous volume of trucks on roadways incapable of handling the increased demands of 80,000 pound vehicles, like Route 41:

Railroads help to address this Nation's growing congestion problems by keeping freight off the highways, and when it comes to moving freight, railroads are cost effective, burn less fossil fuel and emit less air pollution per ton-mile than trucks. Small railroads are doing a big job of relieving highway congestion. More than one-quarter of the carloads of rail freight in this country originate or terminate on a short line or regional railroad. If these small railroads weren't there, this freight would move in trucks - - many of them on rural roads that are not equipped to handle this influx of freight. Public money, and lots of it, will be used to repair the damage all that extra truck traffic creates. Transportation rates in these areas of the country, particularly for bulk commodities such as grain, stone and forest products, will increase because it is more expensive to move these commodities by truckload than by trainload.

In fact, it appears that NS's reliance on tractor trailers as the means to transport freight to points East of the Rutherford Yard has nullified the company's promise to the STB that its acquisition of Conrail would remove hundreds of thousands of trucks from the highways in the eastern United States:

In the late 1990s, as they sought federal approval to acquire Conrail's valuable freight lanes in the Northeast, CSX and Norfolk Southern made some diesel-sized promises: By putting more freight on the nation's rails, they would reduce some 1 million truck trips per year on the highways. This, in turn, would lead to $1 billion per year in savings, both to shippers and through reduced wear on the highways. CSX and Norfolk Southern's recent estimates show this hasn't happened and doesn't appear likely to occur soon. Even using the railroad's figures, the highways were filled with at least 14 million more truckloads during the past two years. . . [Linda] Morgan, the Surface Transportation Board official, conceded that some of the rail rhetoric may have been inflated - something she intends to guard against in the future. New federal rules for rail mergers, she said, "reflect the board's concern over claims that were overblown and the promises made. . . .[i]f they don't get trucks off the highway, then a key purpose of the merger is not being fulfilled . . ."

Moreover, there is little question that the Rutherford Yard has created a huge volume of new truck traffic on Routes 41, 30 and 283, which is emitting significant quantities of nitrogen oxide (NOx) pollution, a principal component to smog. We estimate that tractor trailers traveling between Wilmington and the Rutherford Yard on Route 41 annually emit upwards of 33,190 tons of NOx. On a per-mile basis, a typical heavy duty diesel truck traveling emits thirty-four (34) times more nitrogen oxides (NOx) (an air pollutant leading to the formation of ground-level ozone) than a passenger car. The high-NOx emissions from conventional heavy-duty diesel trucks result from the heavy loads these trucks transport. Nearly full engine power is needed to accelerate from a stop up to road speed as well as to travel up grades.

Click here to see South Coast Air Quality Management District Board, Recommendation to Cosponsor the Demonstration of a Propane-Fueled Hybrid-Electric Refuse Truck October 13, 1995.

A heavy-duty diesel truck traveling at 30 miles per hour emits about 13,513 grams of nitrogen oxides ("NOx") per mile. This converts into 29.8 pounds of NOx per mile. Click here to see Organisation for Economic Cooperation and Development, The Environmental Effects of Freight, 1997, Table 10. The distance from the Port of Wilmington to the Rutherford Yard is about 95 miles. Assuming, conservatively, that only 15% of the trucks traveling to the Rutherford Yard originate from the Port of Wilmington or points East (the actual number is likely much higher) and that these trucks take the PA 41--US 30--PA 283 route (as Lancaster County and the Pennsylvania Turnpike Commission both conclude is the case), this translates into additional annual NOx emissions in Chester, Lancaster and Dauphin Counties of 66,379,500 pounds or 33,190 tons.

Furthermore, this calculation does not account for NOx emissions from idling trucks during loading and unloading at the Rutherford Yard. The average tractor trailer truck idles about six hours per day and 1,830 hours per year, producing NOx emissions totalling 1,024 pounds annually. This yields NOx emissions during idling of 0.5596 pounds/hour. Assuming, conservatively, that each truck at the Rutherford Yard idles for three hours each day during loading and unloading, this yields an additional annual NOx emissions of 84.49 tons. Click here to see Argonne National Laboratory, Assessment: Reducing Heavy Vehicle Idling and Assessment: Truckers: Don't Let Your Profits Go Up in Smoke.

Based upon the foregoing, it appears that PennDOT's decision to subsidize trucking as the freight transportation option between the Port of Wilmington and Harrisburg is contrary to the STB's decision approving the split-up of Conrail. The expansion of Routes 41 and 30 will remove any incentive NS has to invest in rail infrastructure at the Port of Wilmington and in southern New Jersey, as it promised to the STB in 1997. By building a new highway for truck travel, PennDOT's Route 41 project makes for bad public policy by encouraging greater reliance on the highways as the means to transport goods in the region and by discouraging investment in rail infrastructure, the cheaper, safer, and environmentally sustainable alternative.