How Federal Rules Make It Harder to Build Trains in America

Former U.S. Secretary Ray LaHood at the Nippon Sharyo plant near Chicago, when the contract was awarded in 2012. Photo: U.S. DOT
Former U.S. Secretary Ray LaHood at the Nippon Sharyo plant near Chicago in 2012, when the company was awarded a contract to build 130 railcars. Photo: U.S. DOT

The Wall Street Journal‘s Bob Tita broke the news yesterday that the manufacturer of 130 new Amtrak railcars is years behind schedule, and probably won’t complete the order before the federal funding for it expires. How did this happen?

The 130 double decker railcars were approved for purchase in the 2008 stimulus package, destined for service in the Midwest and California. But the terms of the $352 million contract awarded to Nippon Sharyo, an American subsidiary of a Japanese rail company, made it impossible to complete on time. The company now says it won’t begin construction of the trains until 2018, when the order was supposed to be completed.

The problem can be traced to two regulations: a strict “Buy America” manufacturing requirement and the Federal Railroad Administration’s unusual safety rules.

The 2008 stimulus bill included a Buy America provision that compelled the winning bidder to build its trains “entirely in the U.S. with domestically sourced components and materials,” Tita reports.

Problem is, America doesn’t have much of a domestic passenger railcar industry, in part because the passenger train market is pretty small. To comply with the law, the Japanese company had to set up a subsidiary in the U.S. and build a brand new $100 million plant. That was the easy part.

What turned out to be more difficult was acquiring needed components that were made in the U.S. Nippon Sharyo appealed to Caltrans, which is overseeing the project, for an exemption to source these from Japan, according to Tita.

Compounding the difficulty of sourcing the parts is that Nippon Sharyo has to construct a railcar model that has never been built before. That brings us to the second problem.

Nippon Sharyo ran up against the FRA’s infamous crashworthiness standards, which “Nippon Sharyo’s car hasn’t been able to pass,” reports Tita. As a result, the company is going to have to spend the next few years reengineering the body.

America’s mandate for railcars that can withstand these crash tests is unusual, and it makes trains more expensive to build and operate without actually making them safer. In a classic post at Bike East Bay, Eric McCaughrin likened the FRA to “the soccer-Mom who thinks an SUV provides greater safety, the FRA figures collisions are inevitable and heavier is better.”

It’s not just Nippon Sharyo that’s having trouble filling orders for U.S. traincars. A Spanish company that won the bid to construct 130 railcars for Amtrak in 2005 is well behind schedule after 400 defects were discovered in the first 28 baggage cars it rolled out, Tita reports.

Responding to the Wall Street Journal, an FRA spokesperson indicated the agency isn’t willing to relax its rules: “The Federal Railroad Administration is committed to its investment in high-quality and safe passenger rail cars. And we are committed to the jobs the project has and will create.”

  • gb52

    The more we languish in improving our standards and fail it implement PTC and PREVENT collisions, the more we drive out competition. These companies are become more reluctant to do business with us, and US skills and innovation are faltering because of these outdated policies. We need to move into the modern era of rail transportation and stop shooting ourselves in the foot. We need to innovate or at least catch up with all the great things other nations have been able to achieve.

  • Joe R.

    We’re also paying for our much heavier than necessary trains in extra energy costs and slower schedules. I’m dumbfounded nobody is proposing changing US passenger rail standards to come in line with what the rest of the world is doing. If we could buy off-the-shelf equipment we could have a world-class rail system much more quickly and inexpensively.

    I don’t understand the silly Buy American provision, either. If it turns out a potential railcar manufacturer throws in the towel because they can’t meet the requirements how exactly does that create jobs? We might do better dropping the requirement altogether. If we can quickly and easily procure standard rail equipment, regardless of where its made, we’ll have a lot more jobs operating that equipment. We may lose out on the jobs building it, but the net number of jobs will be more if we actually grow our rail system. Long term as there’s more demand for rail equipment we can start growing a domestic railcar industry.

    The skeptic in me wonders if all these requirements exist solely to kill rail as a viable mode of transport in the US.

  • Jason

    Our super-heavy trains also greatly accelerate wear and tear on the tracks themselves, from what I recall. The extra maintenance/replacement eats up money that could be spent elsewhere and, I’d assume, decreases safety due to the risks that are inherent to worn-out tracks.

  • Zack Rules

    Apparently, these railcars failed the buff strength test at 798,000lbs when FRA’s requirement is 800,000lbs. Europe has a 337,000lbs requirement. The 800,000lbs rule has only been around since 1999 although the concept dates back to the days of railroad post cars (1910’s) which haven’t been used since the 60’s. see page 10 https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjdn6Lm64vMAhVISCYKHauICD8QFggkMAE&url=https%3A%2F%2Fwww.fra.dot.gov%2FElib%2FDocument%2F90&usg=AFQjCNGjEepIPVSHzmW0Mh3t3gnawMAayw&sig2=MCqbCFKKnIDdAAm8vhbkww&bvm=bv.119408272,d.eWE

  • bolwerk

    If we actually had sane regulations, U.S. manufacturers could reenter the market. Right now there is really no market for new American equipment overseas. Not passenger equipment anyway. Not only can we not source equipment for ourselves, but we can’t sell it to Germany, Japan, China, etc.. This is the type of manufacturing Americans should be good at. It’s complicated and we actually have good engineers.

    The crashworthiness thing is stupid too. If you crash in a 300k lbs train car at speed (or even at any speed greater than 25 mph or so?), I’d guess the laws of inertia will pretty much dictate you’ll be either squished or snapped no matter what. 800k lbs just makes that squishing/snapping more dramatic. Either way, you’re just as dead, even if the EMU/DMU you’re in is lucky enough to survive.

  • bolwerk

    Hell, it’d be the perfect thing for NYS to try to get into, even if the rest of the country isn’t that into rail. To say the least, we could sell to ourselves, to California, and probably to Ontario and Quebec and have a competitive advantage.

  • thielges

    You guys are missing the point on the heavy coach requirement. The idea is to eliminate one of the competitive advantages against driving. USA train cars weigh about 1000 pounds per passenger which is on par with a fully occupied passenger car.

    Any lighter and rail travel would have an unfair advantage over driving and we can’t undermine the core of the country’s transportation system.

  • SD70MACMAN

    “The Federal Railroad Administration is committed to its investment in high-quality and safe passenger rail cars. And we are committed to the jobs the project has and will create.”

    No, no you’re not. We all know it. The only domestic train manuf with sustainable jobs is Siemens while other companies ebb and flow with our weak demand. Talgo and Bombardier, as examples, closed shop here once their orders were done for pendular trains and bi-level cars. Others like United Streetcar and Colorado Railcar received huge sums of taxpayer money to create a new industry that ultimately didn’t work.

    Working in the rail transit industry, “Buy America” doesn’t help us either. We can’t use proven, off-the-shelf rail and signal technology available to everyone else in the world. Compared to the enormously expensive civil work done on these projects, these are small potatoes items like specialized rail, switches, switch machines, and wayside equipment; representing maybe 1% of total costs. Building 10 switch machines or 2 miles of girder rail a year here doesn’t create jobs and we’re forced to use lower-quality, more expensive “Buy America” equipment as a result.

    On the bright side, if whatever project uses zero federal dollars, “Buy America” doesn’t apply. In Seattle, our streetcar network is locally funded so we use proven European rail equipment and vehicles.

  • theqin

    It seems unlikely any US manufacturer would re-enter the market unless it was through an acquisition. Pullman is long gone. The expertise has left America, and there is not really the demand here compared to the EU and Asia. It is also difficult for us to compete on cost.

    Is the crashworthiness standard just your opinion or based in fact? At least anecdotally it seems less people die when the US has a rail related derailment, compared to in Europe where the cars buckle and rip apart. You can argue that maybe the cost is not worth it, but it does seem like it makes rail cars safer. Especially when in collisions with cars and the objects.

  • crazyvag

    The way to mitigate lower buff strength is to have a collision prevention system. Hope that once PTC is more widely deployed, the buff strength rules can be scaled back for passenger systems.

  • Megaskull

    Alstom and CAF are located in NYS.

  • bolwerk

    I have an irrational tendency to base my opinions on fact. But I did cue that I was conjecturing at least a little with the phrase “I’d guess…”!

    I’m not aware of very any recent U.S. crashes actually happening at speed. But I have heard of that happening in Europe, and it’s, well, ugly. In any case, Europe has about 14x the passenger-mileage as the USA and a similar number of serious accidents/fatalities, so their avoidance/prevention-based safety record looks a lot better to me than the U.S.’s mitigation-based safety strategy.

    This image compares mainline US railroads (passenger-miles that I converted to kilometers, passenger accidents) with EU-28 statistics from here. Maybe some of this can be explained away by differences in how statistics are collected, but I find it unlikely all of it could be.

  • bolwerk

    Mostly providing maintenance services. Certainly they aren’t exporters?

  • Arlington Traveler

    Hey, everyone is missing the point. PTC can prevent train to train collisions. It cannot, however, prevent grade crossing collisions. So to achieve European levels of safety, one would not just have to implement PTC (already happening), but also eliminate most if not all the grade crossing. The latter would be very expensive.

    I get it from a life cycle perspective that lighter railcars will probably cost less than eliminating grade crossings. However, the fact is that the money to do eliminate all or most at grade crossings isn’t going to materialize overnight, and even if it did it would take at least a decade to close crossings and design/build grade separations.

  • Joe R.

    Here in the US we mistakenly count grade crossing incidents as railroad accidents when they’re 100% the fault of the motor vehicle operator. That might account for quite a bit of the difference. That said, the US standards don’t make railcars any safer. Rigid car bodies means the first car gets the brunt of the impact. Often in a serious collision there’s override. That’s a disaster for anyone in that car.

  • Joe R.

    Trains built to European standards do fine in grade crossing incidents. Remember European standards are designed to protect in collisions with other trains. Motor vehicles are much lighter than trains. Also, typically only the motor vehicle occupants die in grade crossing incidents. Money to eliminate grade crossings should come out of the general highway fund given that motor vehicles will be the primary beneficiaries. Also, we can have full length locking gates like they do in Europe if we can’t get rid of grade crossings.

  • bolwerk

    I wasn’t really paying attention to the kind of accident, or regarding fault. I looked only at danger to passengers on trains and compared based on that. Passengers mostly don’t actually have any control over the kind of accident that kills/hurts them. It’s always someone else’s fault or some act of our vengeful, dickish God. I figured comparing accidents for people outside the train was kind of silly because it would turn on a lot of things that aren’t necessarily the railroad’s fault (e.g., suicides and stupid drivers), and one railroad may even cope better than others at mitigating the effects of those issues to the benefit of passengers’ safety.

    The biggest problem with my comparison is the EU-28 numbers looked at fatalities and “major” accidents and the U.S. numbers didn’t seem to be break that out. Still, seems to me it’s hard to explain away a difference of a factor of 10!

  • Robert Jarman

    The reinforced stopgates I saw in Madison can stop a pickup truck doing 70 (I don’t know whether it was km/h or mph). within 4 metres. That should stop vehicles intruding.

  • We ought to lower the crash test standard from 800,000 lbs to something more reasonable. That seems like the regulation that drives the most problems and fails the benefit-cost ratio.

  • Peter L

    “Wahhhhhaaaaahhhh. We haven’t been able to build cars like other makers have for decades!”

    Sorry, but literally *thousands* of cars have been made to FRA’s safety specifications over the last several decades. What’s worrisome is that **Nippon Sharyo** made some of them. If their new stuff can’t meet FRA’s safety spec, maybe all the cars they’ve built in the past don’t meet FRA’s safety specs, either.

    All this whining about the mean ol’ FRA is just covering for a company that apparently bit off more than they can chew. Cancel the contract and give it to another company that knows what they are doing.

  • Claude

    The way to mitigate lower buffer strength is to have crumple zones like modern cars do.
    The FRA tested crumple zone technology years ago and it protected the passengers far more effectively than the rigid buffers. They’re only recently allowing the knowledge to be applied to the real world, but only if their excessive buffer requirements are also met.
    Our new rail cars are effectively the ends of a new Mercedes grafted onto a 1940 Nash.

  • bolwerk

    Old stuff doesn’t have to meet current specs. I think once it’s on the rails, it’s grandfathered in.

  • SuperChief49

    Although the government has embraced Boeing to prevent patient infringement by foreign firms, where was the same government to protect the patents of Budd? As a result of Sumitomo/Nippon Sharyo “re-engineering” Budd’s bi-level commuter cars, Budd was forced out of business. Our rail passenger business is the victim of lowball bids and promises of factories to entice governmental funding, which has been counter-productive to how a competent private railroad operator would make decisions.

    Note how the cab forward “push/pull” commuter train concept successful since the late 1950s was challenged after Hyundai-Rotem’s failure to “re-engineer” designs that caused the 2015 LA Metrolink accident last year. Remember the recent HSR wreck in China after they unsuccessfully “re-engineered” Siemens signal system? New CTA ‘L’ cars required their Chinese fabricated truck assemblies to be replaced as they soon cracked. What will happen when China builds the next gen of CTA ‘L’ cars, based upon a lowball bid against a proven provider, Bombardier, and the politically expedient promise of a local factory (just as for Boston’s MBTA)? To what extent will those cars be simply fabricated in China; with no oversight to ensure U.S. components are used?

    As Pogo once said, “we have met the enemy and it is us!” This country allowed the design patents to be hijacked, destroying our heavy industrial base for rail cars from Budd, Pullman, ACF, and St. Louis Car. Good American union jobs were lost, and the quality of building with American steel and components discarded. What was this sacrifice for?

    Forget for now the penalties to assess against Nippon Sharyo’s obvious inability to meet the well known, detailed specs. Time is critical-to meet funding requirements, as well It is urgent to replace the 1960s commuter-design Amtrak Horizon coaches just to maintain current schedules, let alone to expand these corridors of opportunity. Certainly, this does not mean we go from the fire to the furnace by seduction to accept the used car approach by any firms lacking requisite credentials in rail experience–operations, financing, and a track record of performance.

    DOT Secretary Foxx should decisively intervene now, by pulling the contract from Nippon Sharyo, and awarding it to either Bombardier, Alstom, or Siemens, with experienced American work forces and commitment to fulfill the “made in U.S.” component percentage. As well, these firms, with American factories, already offer current product knowledge of bi-level design. We should have learned from Boeing’s miserable experience when it outsourced to foreign firms components for its 787 model, only to have to basically re-build the planes here in the U.S.

  • neroden

    FRA needs to be liquidated. Shut down. Every person working there is incompetent.

  • neroden

    Bolwerk is correct. The old cars don’t meet the FRA’s new standards.

  • neroden

    Both have factories in NYS. NYS is very good at offering bribes to locate factories here.

  • neroden

    FRA needs to be shut down with extreme predjudice. I’m sick of them issuing rules with no rational basis. Just transfer authority to the FTA, who are sane.

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  • Raphael Chapman

    ACF is still around, however, they have their focus on freight cars.Budd has moved away from railcors since the 80s, Pullmans assets were sold and St LC went out in 74. of all the foreign carmakers in the states, it seems like Bombardier is the most successful. having proven results with the Horizon cars, the Bi-Level commuter car’s, the Acela, and the multilevel coach. Nippon Sharyo has made good on the Bi Level commuter cars (especially with Metra). Don’t forget that Kawasaki has an entourage of cars running on the Long Island railroad. Talgo, while hiding in the shadows of the other makers, has has great success on the Cascades line. and Siemens has equipment running all across the NEC. so don’t count them out just yet.

  • SuperChief49

    Thank you; however, the salient point here was strictly to focus on how our four post-WWII “builders of passenger rail cars-intercity, commuter, and subway” were forced out of our own domestic market. Foreign firms from Japan, South Korea, and now China excelled at re-engineering the design patents and using low costs to gain market entry-and dominance-to be designated as the lowest cost bidder.

    Just as with Nippon Sharyo, we just witnessed serious structural issues with commuter cars for Boston and Philadelphia manufactored by Hyundai Rotem (LA last year). Ironically, China’s principal government supported builder for subway cars, which seriously underbid Bombardier for Chicago’s CTA RFP just had their subway cars in Singapore identified as having serious structural integrity issues.

    If our former heavy manufacturing base for passenger rail car firms had their design patents protected by the Feds as Boeing has enjoyed, we would still be building this equipment in the USA, using American steel, American labor, US-made components. For those who could care less, so how do you like now the Oakland Bay Bridge re-built with Chinese steel..?

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