Site Visit: Short Line Railroad warns of “death by a thousand cuts” caused by federal regulations tailored only to bigger rail companies

By Dillon Taylor, Assistant Chief Counsel

Since the 19^th Century, Kansas City, Mo., has developed as a transportation and railway hub in the United States. As part of its regulatory outreach effort, on Sept. 14, staff from Advocacy visited one of Kansas City’s railroads, Kaw River Railroad (KAW), a short line railroad company.

A short line railroad is generally a small railroad company that operates over a relatively short distance relative to larger, national railroad networks.

The original KAW was a Kansas City Southern Railway Company property before becoming the first short line Watco Companies would operate. The 12-mile line began operations in June of 2004, serving customers in the Kansas City area as well as, the historic Union Station. The KAW expanded in April 2005, adding 16 miles that included the Birmingham, Missouri, to Kearney, Missouri line. In March of 2006, the line expanded again serving more than 30 customers. In May of 2007, nearly 15 miles of industrial track was added. KAW currently employs approximately 30 people.

Travis Herod, Vice President of Transportation Safety and Compliance for Watco, took Advocacy staff on a tour of KAW. Advocacy staff had the opportunity to visit KAW buildings, view train equipment, board a train engine car and talk to KAW employees.

During Advocacy’s tour, KAW employees expressed concern over the impact that federal regulations and paperwork requirements have had and continue to have on the day-to-day operations of the railroad. Specifically, KAW staff observed that federal rules for larger, national railroads often didn’t always make sense for smaller short line railroads. As an example, KAW staff discussed the Department of Transportation’s Federal Railroad Administration (FRA) rules related to the training and certifications for rail employees. The FRA has begun mandating different education and certification requirements for different jobs held by railroad staff. Complying with these new certification requirements is particularly problematic for short line railroads because these small businesses usually have a limited number of staff that wear many hats and perform several different jobs. Therefore, under the new FRA rules, short line staff could spend more of their time obtaining certifications for their various jobs and duties than performing their actual tasks at the railroad.

KAW staff also discussed the FRA’s changes to railroad signal rules. KAW employees observed that such changes were easily implemented by larger railroads but did not understand why smaller short line companies would be required to change signal practices that have worked for decades at smaller railroads.

One KAW employee warned that more and more new rules tailored primarily to larger rail companies could eventually cause a “death by a thousand cuts” at smaller short line railroads. KAW employees recommended that federal requirements, such as certifications, should be scalable to the size and complexity of the line rather than the current one-size-fits-all standards.

Advocacy thanks KAW staff for taking the time to allow Advocacy a tour of its facilities.

For additional information, contact Dillon Taylor at dillon.taylor@sba.gov or 202-401-9787.

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