… with AAR President and CEO Edward Hamberger

Railway Age, March, 2005 by Marybeth Luczak

The recent public criticism of rail safety frustrates Ed Hamberger, president and CEO of the Association of American Railroads. The industry's goal is to continue to be safe and secure, he told me last month before heading off to a meeting at the Pentagon. "It's what we care about most," he maintains. "The focused effort that went into our security plan--that kind of response and feeling of obligation to employees and communities to get the job done--really sets us apart."

Hamberger's proudest moment during his seven-year AAR tenure came in spring 2002, when a top military official in the Bush Administration told him and a group of AAR members that the railroads' security plan, one of the first formulated after 9/11, was a model for other industries.

Part of that plan is AAR's Washington, D.C.-based command center--a clearinghouse for information relating to physical and/or cyber threats, which ties into federal agencies and individual railroad operations centers. This private-sector secure site has received a Department of Defense award, Hamberger says with pride.

In addition to AAR-member training programs and efforts to step up security personnel numbers and technology usage, the association works with the Federal Railroad Administration on emergency response. It also has teamed up with the National Guard for protection of some of the industry's 1,308 most critical assets--particularly when the country's threat-alert level is raised. "When we went into Iraq, the National Guard assigned personnel and equipment to help guard bridges," Hamberger notes.

Cargo moving across North American borders is currently inspected by VACIS scanning machines. "Nearly 100% of cars in Canada pass through them and we are approaching that in Mexico," Hamberger says. "We're also working with the Coast Guard on port security. So, for us, security is a very broad and ongoing effort." The question, "Are we safer today then we were yesterday," is acted on every day, he adds.

Hazmat security remains a priority. To Hamberger's dismay, however, the Washington, D.C., City Council passed a statute in February banning rail-shipped hazmat from within 2.2 miles of the U.S. Capitol. CSX Transportation has challenged the ban, claiming an unconstitutional restriction of interstate commerce.

"The ban is wrong on a number of different levels," Hamberger maintains. "It's not a local issue; it's a federal issue. If it were to stand, it would have a rippling effect across the country. Hazmat wouldn't move at all, and one has to look at what the impact of that is. Chlorine, for instance, is used to purify over half the nation's water supply, and unless you have a substitute product, you have to move it. The ban also doesn't eliminate risk; it merely transfers it from one location to another. Oftentimes, it would make hazmat move for longer periods, and move over Class 2 tracks instead of Class 4."

Hamberger, who started his career as an attorney, also points out that just three fatalities were caused by rail-related hazmat accidents between 1993 and 2003, vs. 106 for trucks. "That's not a shot at trucks," he says, "it's just the way it is." (The rail number rises to 17 with the recent Graniteville, S.C., and San Antonio, Tex., accidents.) And the industry has trained some 20,000 emergency responders in the past several years. "It's something we take very seriously," Hamberger says.

The Class I's partnership with short lines and regionals on the security front is "a work in progress," but the groups have come together to identify carriers that haul such vulnerable materials as hazmat, ammunitions, and liquefied natural gas, so additional precautions can be taken.

Currently, the AAR is in talks with the Department of Homeland Security on self: sealant technology for tank cars. "If there were to be a tank car penetration, something put on the inside or outside of the car would self-seal automatically," Hamberger explains.

Beyond security, another railroad concern now is capacity. Traffic levels on the 340,000 route-mile system reached record highs in 2004 and held out through January. Even though carriers aren't earning their cost of capital, they continue to invest in infrastructure. "17% of Class I revenues are reinvested in capex," Hamberger reports. "All announced in 2005 that they will invest more funds or at least hold them steady. So a lot of money is going into maintaining the capacity they have, with additional money to extend it." Union Pacific and BNSF Railway, for example, are triple-tracking in the Powder River Basin, he notes.

Despite the traffic boom, Hamberger is cautious about future growth. "It will be interesting to see if it's a blip," he says, "or a change in the whole dynamic."

Hamberger's passion for the industry began when he was a child, growing up by the Reading. "It's a great industry with a great story to tell, and it's still our challenge to get that story out," he sums up. "We move 41% of intercity freight, safely and efficiently. The ability to grow the business here and to turn intermodal into the number one revenue generator for the industry shows a tremendous ability to provide premium service."