Freight railroads take on Amtrak in court
It’s safe to say that Amtrak has been a thorn in the side of freight railroad operators in the United States. Now, the two sides could face a courtroom battle to settle their differences.
The Association of American Railroads, representing freight carriers, is suing the federal government for giving Amtrak the “authority to promulgate binding rules governing the conduct of its contractual partners, the freight railroads.”
The freight carriers made it known how they feel about Amtrak, saying that the passenger train service has a “historically poor record of on-time performance and (a) chronic inability to generate revenue sufficient to cover its operating costs.”
In lieu of those claims, the Association of American Railroads is challenging the constitutionality of PRIIA, the Passenger Rail Investment and Improvement Act, which allows Amtrak and the Federal Railroad Administration the ability to “jointly… develop new or improve existing metrics and minimum standards for measuring the performance and service quality of intercity passenger train operations.”
According to the freight carriers, the act establishes performance standards for Amtrak, but the standards don’t achieve their desired purpose because of “Conductor Delay Reports,” which can claim the railroad at fault for Amtrak missing its targets.
If an Amtrak train falls below 80 percent in its on-time standard for two consecutive calendar quarters, an investigation can be launched by the Surface Transportation Board, which can award damages to Amtrak.
SEE OTHER TOP FREIGHT RAIL STORIES IN THE SUPPLY CHAIN DIGITAL CONTENT NETWORK
The freight carriers are enraged because the federal government is working with Amtrak, a private company.
“Amtrak is not a department, agency, or instrumentality of the United State Government,” the association claims. “Rather, it is a private entity that is ‘operated and managed as a for-profit corporation.’ PRIIA purports to vest Amtrak with the power to issue binding regulations governing the business operations of the freight railroads.
“It is a bedrock principle of constitutional law that Congress cannot empower a private entity to regulate other participants in the same industry.”
Freight carriers claim that their own operations will suffer if they are forced to ensure that Amtrak meets its federal on-time performance standards.
A decision is likely months away, but freight railroad’s battle with Amtrak should be watched very closely, as it could impact freight rail growth throughout North America.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany