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April 2015
— by Daniel Niepow, Associate Editor
Fuel costs continue to consume a significant portion of Class I railroads' budgets. Even as diesel prices dropped slightly, all but three of them spent more on fuel in 2014 than they did in 2013.
For Union Pacific Railroad and Kansas City Southern, fuel expenses took up nearly a quarter of their total operating expenses in 2014, with UP absorbing $3.5 billion in fuel costs for the year and KCS spending around $4.2 million.
BNSF Railway Co.'s total annual fuel costs came in at $4.5 billion — a sum that surpassed every other Class I's fuel spend for 2014. While that figure was relatively flat compared to the previous year's total, it still took up just under 30 percent of the railroad's total operating expenses. For their part, CSX Transportation and Norfolk Southern Railway each spent roughly $1.5 billion on fuel in 2014.
Across the board, fuel ranked as the second- or third-costliest chunk of operating expenses for each large railroad.
Continued efforts to rein in fuel costs remain a major focal point for all Class Is, especially in the face of unpredictable diesel prices and increasing cargo volumes. A combination of employee education and emerging technologies rank among their top priorities.
For several Class Is, working directly with their employees is a large part of their fuel management strategy. CSX Transportation, for example, uses a simulator program to help new locomotive engineers gain a firmer understanding of effective train handling and safety "before [they] really start burning fuel," says Meaghan Atkinson, CSX's manager of environmental programs and sustainability.
At CSX's Railroad Education and Development Institute in Atlanta, newly hired locomotive engineers spend 24 to 26 hours behind simulators before beginning actual runs.
The simulators, which are near replicas of CSX's locomotives, afford new employees an opportunity to perform virtual practice routes while mentors provide feedback, Atkinson says.
"Using the simulator technology has just been, in my mind, a huge help, and a huge improvement," adds Carl Gerhardstein, CSX's assistant vice president of health, environment and sustainability.
Although nothing can replace the knowledge and experience gained from actually operating trains, the simulator continues to be a crucial component of employee training, he says. Training on the simulators helps new employees develop the necessary muscle memory for a train's controls and brake levels, in addition to helping them learn to plan a trip based on speed, weight and grade.
Aside from educating new employees on effective fuel management techniques, the simulators also function as an effective way of engaging with the railroad's younger employees, who tend to be more comfortable with and interested in technology-based training, Gerhardstein says. As the rail industry continues to see demographic shifts, that's becoming an increasingly important component of recruitment and retention.
But learning to properly manage fuel is an ongoing process for CSX engineers. Once they begin making runs on the lines, Event Recorder Automated Download (ERAD) technology gives feedback to crews about their runs and gauges their overall operating efficiency. The technology utilizes a variety of operational metrics to provide the feedback. Locomotive engineers can then use this information to scope out ways to better manage fuel efficiency on future journeys.
The human component of fuel management is not lost on Kansas City Southern execs, either. The railroad regularly coaches employees on proper fuel handling techniques through a combination of classroom and computer-based training, coaching and related literature, KCS spokesperson Doniele Carlson said in an email.
BNSF also places a strong focus on individual locomotive engineers' fuel handling skills through the railroad's "Fuel MVP" incentive program.
Each month, BNSF locomotive engineers have a chance to win gas gift cards for use on their own personal vehicles. They receive the award based on locomotive fuel efficiency, which is determined by throttle position, trailing tonnage, distance traveled and a host of other outside factors, such as train type and travel direction. BNSF then analyzes the engineers' performances against fuel efficiency benchmarks and rewards the best-performing engineers.
The reward amounts vary by performance: those ranking among the top 10 percent in fuel efficiency receive a $100 gift card, while the top 20 percent earn a $50 fuel card.
In place since 2007, the MVP program has been positive for both the railroad and its employees, says Aaron Ratledge, BNSF's general director of operating practices.
"It's essentially a competition ... amongst a lot of our locomotive engineers that really identifies and rewards the best of the best out there," he says.
While CN doesn't have an individualized rewards program, coaching engineers "on their key role in achieving CN's fuel productivity goals and how it ties into [our] sustainability initiatives continues to be a focus," CN spokesperson Mark Hallman said in an email.
Quality training, education and rewards programs for employees certainly provide the groundwork for better fuel practices, but those alone can't help curb overall fuel consumption. Class Is also aim to utilize the latest advances in fleet technologies and software in an attempt to lower overall fuel expenditures.
Continually scoping out the most fuel-efficient locomotives has been key in trying to get a handle on fuel usage at CSX, which has invested $1.75 billion to upgrade its fleet in the past decade, according to the company's 2014 corporate social responsibility report.
Those investments, such as the railroad's use of GE Transportation's Evolution® Series locomotives, have led to tangible gains in fuel efficiency, Gerhardstein says.
The railroad has doubled its overall fuel efficiency over the past 30 years, Gerhardstein notes. CSX trains can now move a ton of freight 470 miles per gallon, a sizeable increase compared to 230 miles per gallon in the 1980s, he says, adding that there has been incremental efficiency growth each year.
CSX currently operates about 800 Evolution Series locomotives in its fleet, and plans to increase that number over the next two years, says Kaitlyn Barrett, a CSX spokesperson. Compared to older units, the new locomotives helped save about 12,600 gallons of fuel per year, according to the railroad's social responsibility report.
CSX also installed auxiliary power units (APUs) on some units to help mitigate fuel costs. The units are designed to provide additional power to locomotives, so that larger diesel engines get a chance to shut down. Doing so reduces idling time, which can theoretically lower overall fuel usage. The units are now a legal requirement for new and remanufactured locomotives utilized by Class Is, Barrett says.
Keeping the locomotive fleet up-to-date is an important component of fuel efficiency for Canadian Pacific, as well, says spokesman Andy Cummings. CP recently replaced its old fleet of GP9 locomotives with Electro-Motive Diesel GP20 units.
The new models feature turbocharged eight-cylinder engines with electronic fuel injection, as well as higher peak firing pressure, both of which are designed to aid in overall efficiency, he says.
The new units are 25 percent more fuel efficient than older models, and they've saved the railroad roughly $31,000 in fuel costs per locomotive per year, Cummings says.
"Running an efficient railway is the best way to drive fuel efficiency," he said in an email exchange. "Locomotive productivity is key: run heavy trains with as few units as possible and keep dwell to a minimum."
CP's new units also utilize automated engine start-stop (AESS) technology, which improves fuel efficiency by shutting down excess locomotives and running only those that are necessary. It's a device that's proven successful at BNSF and CSX, as well.
In 2013, BNSF had installed the devices on more than 90 percent of its locomotives, which led to an 8,000-gallon decrease in annual fuel usage per locomotive, according to a company sustainability report issued in December of that year. In the face of enormous fuel expenditures, incremental improvements like that have the potential to make dents in overall usage.
Another way that BNSF strives to manage fuel efficiency is by keeping close tabs on horsepower per train (HPT). By locating trains using excess HPT and restricting their power usage, engineers are able to increase fuel efficiency. It's a move that — if handled improperly — could adversely affect the speed of trains.
"There's a trade-off between ... velocity and fuel efficiency," says Matt Feldman, BNSF's general director of fuel efficiency. "In our efforts to maximize fuel efficiency by minimizing HPT, we've done it in a targeted way to not negatively affect velocity."
In addition to limiting HPT on individual trains, BNSF engineers also shut down any unnecessary locomotives, which not only saves maintenance costs, but also fits into the railroad's overall idle reduction goals.
"If we have excess locomotives in the fleet, that means more idle time," Feldman says.
Targeting moving trains is another big step in fuel conservation for Class Is. KCS relies on methods to conserve fuel for idling trains, but in February announced plans to take a different approach to fuel management: focusing on moving locomotives.
"In the year ahead, the Network Services, Transportation and Mechanical teams are working toward acquiring an energy management technology solution that addresses fuel efficiency when the train is moving," the Class I's officials said in an online "KCS News" item posted Feb. 13. "Onboard energy management technology helps to automatically optimize for these conditions, controlling throttle and dynamic brakes to reduce fuel burn, while still ensuring safe train handling."
KCS plans to begin a pilot of GE's Trip Optimizer technology in May and June, Carlson says. The technology has already proven successful with other Class Is, including CSX and CN.
Trip Optimizer works much like an autopilot or cruise control function for locomotives. It's designed to calculate a locomotive's ideal speed to minimize braking and increase fuel efficiency.
CSX has been gradually introducing Trip Optimizer to its fleet since 2010.
"We're getting to the last stages of [Trip Optimizer] now, and starting to realize the highest levels of fuel efficiency with the third phase now being implemented," says CSX's Atkinson.
The railroad originally estimated it would see a 5 percent to 6 percent increase in fuel efficiency, but on some runs, fuel efficiency has increased by around 10 percent due to the device, Gerhardstein says.
CSX now has Trip Optimizer installed on about 1,500 locomotives, which has led to a total fuel savings of about 11.8 million gallons.
"I think it really has surprised us on what we thought we were going to get as far as fuel efficiency," Gerhardstein adds.
CP outfitted 391 locomotives with Trip Optimizer as part of its fuel management strategy, says Cummings.
In addition, the railroad aims to install Wi-Tronix LLC's telemetry systems on 125 units by mid-2015. Wi-Tronix systems are designed to remotely gather locomotive data to ensure that correct train-handling rules are being applied, which results in less unnecessary braking and more fuel savings.
Beyond Trip Optimizer, KCS will begin experimenting with distributed power to achieve fuel efficiency goals.
"Distributed power allows locomotives to operate in the middle and/or end of trains, rather than only having all locomotives at the end," KCS's Carlson said.
Using New York Air Brake Corp.'s Locomotive Engineer Assist Display and Event Recorder (LEADER) system also may be on the radar for KCS, Carlson said. The railroad is considering implementing a trial run with the system — which is used extensively by NS — in fall.
LEADER is designed to create a statistical profile of an optimal run, determined by continually tracking a train's operating conditions. This allows locomotive engineers to obtain a more accurate reading of fuel usage to decrease unneeded braking.
Reducing friction is yet another way of increasing fuel efficiency for moving trains. At BNSF, a device is installed next to its track to apply a friction modifier to the top of the rail as a train passes by.
"As that reduces the rolling friction, the train requires less energy to maintain track speed, so we can save fuel that way," says BNSF's Feldman.
CN's technology-related fuel efficiency initiatives cover many of the same areas as some of the other Class Is, but the railroad also aims to incorporate past operational statistics to make informed decisions about fuel usage.
"[We] place a strong focus on historical data analysis to identify trends and future opportunities," said CN's Hallman.
Whether by culling past or real-time data, each Class I remains on the lookout for ways to further cut fuel costs and consumption. They're perennial issues that, as CSX's Gerhardstein sees it, continue to consume a sizeable degree of Class I execs' concentration.
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