Monday, January 5, 2009

CSX Implements Rail Security Rules

A reader has pointed me at a letter that CSX is sending to customers explaining how it plans to implement the new Rail Transportation Security Rule. Among other things, it notes that it will require all of its customers that ship Rail Security-Sensitive Materials (RSSM) or receive RSSM in High Threat Urban Areas (HTUA) to be fully in compliance with the new rules by February 15th. They note that this earlier compliance date is necessary to ensure CSX compliance with the TSA regulations by the federally mandated compliance date of April 1st, 2009. Continuous Attendance Rules In order to allow CSX the maximum flexibility in its scheduling of pick-ups and deliveries while still following the chain of custody rules in the new regulations (49 CFR § 1580.107) CSX is notifying its customers of its new requirements. Effective February 15th any customer that CSX directly serves that is:
An RSSM Receiver facility in an HTUA “must be attended 24 hours a day, every day” to effect the chain of custody requirements of the rule. An RSSM Shipper facility “must be attended 24 hours a day, every day from the time CSXT is informed that that railcar is ready for pickup until the pick-up has been appropriately documented by the consignor and CSXT”.
These CSX rules definitely go above and beyond the requirements of §1580.107. In the preamble to the final rule TSA notes that it only expects RSSM receivers in HTUAs to fulfill the ‘attendance rule’ by having someone present “only as long as necessary to transfer the car from the delivering railroad carrier, to document the transfer of custody, and to ensure that it is moved into a rail secure area” (73 FR 72150). The CSX requirement is clearly designed to allow it to continue its practice of making unannounced pick-ups and deliveries of rail shipments. Rail Secure Areas The CSX letter addresses the requirement in the regulations for RSSM Shipments to be picked up from and delivered (in HTUAs) to ‘Rail Secure Areas’. The letter notes that, as of February 15th “customers will be responsible for designating a "Rail Secure Area" at their shipping and/or receiving facilities”. While at some future point “CSXT may need to have written certifications of compliance from each consignor we serve directly and each consignee we serve directly”, they are currently accepting “informal oral notifications” of the designated areas. Chain of Custody Requirements The CSX letter describes the requirements outlined in the new regulations for documenting the chain of custody transfer of RSSM railcars at shipper and receiver locations. Surprisingly it does not describe how it plans to effect that hand-off documentation. I would have expected them to include a copy of a transfer form that they would expect a facility to have prepared (by RSSM shippers) and available at the transfer point. Effects on Routing of RSSM Shipments The CSX letter also brings up an entirely new issue that was not addressed in the rule making process, the effect of these rules on the hazmat rail routing issue. The letter states that:
“Finally, we note that there are a number of other requirements affecting railroads, including a prohibition on interchanging Rail Security-Sensitive Materials at most "unattended" interchanges. This requirement greatly complicates the routing of railcars containing Rail Security-Sensitive Materials. Many cars will have to be rerouted through attended interchanges, and our other operations may be impacted by these changes. It is very possible that the New Rules may result in significant increases in the transit times of some Rail Security-Sensitive Materials. We are still designing the required routing changes, and are not yet in a position to predict the new routes' effects on specific movements. If no attended interchange is available, CSXT may not be able to continue service in that lane, unless the consignor or consignee makes satisfactory contractual arrangements with the carriers to bring the interchange into compliance.”
This is going to have the largest impact on facilities that are only served by short line railroads. If a short line operator is not able to comply with the CSX requirement for 24 hour a day attendance at interchange points, it appears that CSX will refuse to deliver RSSM to that operator. This could effectively shut off access to RSSM shipments for any facility served by that operator. A more likely result is an increase in shipping costs as the short line operator adds staff to comply with the CSX attendance requirements. A more important impact is the use CSX will make to avoid having to use interchange agreements to avoid shipping around urban areas. Any routing that would go through an interchange that was not ‘manned 24 hour a day’ would not be useable under the new CSX rule. CSX is certainly not trying to specifically route through urban areas, but they will use this rule to avoid lowering their profits by re-routing around urban areas through use of some other carrier. Interestingly, nothing is said about CSX agreeing to provide 24 hour a day attendance at interchange points with other rail carriers. I expect that its interchange operations with other main line carriers will continue without interruption. I also expect that CSX will use its 800-lb gorilla status to require short line carriers to coordinate attended transfers of RSSM shipments at interchanges where CSX does not maintain 24 hour a day attendance. Customer Compliance The CSX rules outlined in this letter do not have the force of law and most of them are not specifically required by the new TSA regulations. They are simply rules made up by CSX to make it easier for them to comply with the new TSA regulations. For most RSSM shippers and receivers served by CSX this is a technical point; effectively they will have to comply with the CSX rules as CSX is the only game in town for shipping by rail for their facilities. I have not seen similar letters from other rail carriers. I would expect similar rules from most of the mainline railroads. They have made no secret of their dislike for carrying TIH/PIH chemicals. Anything that will discourage railroad shipments of these chemicals will make their day. Short Line carriers may be more willing to work with their customers to come up with ways to deal with the new TSA rules.

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