BNSF to cut rates for ethanol shippers using DOT-117s

Starting April 1, 2017, the Berkshire Hathaway-owned Class I railway will offer discounts of $300 per carload for ethanol shippers that opt to use the newer, safer DOT-117 model tank cars.    Berkshire Hathaway-owned BNSF Railway Co. is cutting freight rates for ethanol shippers that opt to use DOT-117 model tank cars starting in April, according to a customer advisory notice from the company.
   As of April 1, the Fort Worth Texas-based Class I railroad will offer discounts of $300 per carload for shippers using the newer tank cars, which are considered much safer than older DOT-111 models.
   Regulators and industry advocates in the United States have pushed to retrofit or replace older DOT-111 and CPC-1232 tank cars as they are thinner and more likely to puncture than the newer DOT-117 models. Trains carrying flammable liquid in those older tank cars are, as a result, at a higher risk of leaking and/or catching fire in the event of a derailment.
   The DOT-111s have been blamed for a growing number of destructive derailments involving crude oil trains in recent years, the largest of which claimed the lives of 47 people in Lac-Mégantic, Quebec in July 2013.
   The U.S. Department of Transportation’s (USDOT) Pipeline and Hazardous Materials Safety Administration (PHMSA), in coordination with the Federal Railroad Administration, in August 2016 released final rules amending the federal hazardous materials regulations related to the transport of crude oil and ethanol by rail. The rule changes, first introduced by USDOT in May 2015, include an enhanced tank car standard and an “aggressive, risk-based” retrofitting schedule for older tank cars carrying crude oil and ethanol, DOT said.
   Canadian Transport Minister Marc Garneau last July moved up the the country’s deadline for phasing out the older, less reliable tank cars for crude-by-rail transport to Nov. 1, 2016. The deadline for DOT-111s to be removed from service entirely for all flammable liquids remains April 30, 2025.
   According to figures from the National Transportation Safety Board (NTSB), at least 16 significant ethanol or crude oil derailments have taken place since 2006, nearly all of which involved DOT-111 tank cars.
   Reached for comment, a company spokesperson told American Shipper, “BNSF continually works to reduce risk in the transportation of all of our commodities; and nothing is more important than operating safely.
   “We are committed to ensuring that all commodities, including ethanol, move as safely as possible. Consistent with federal regulatory tank car standards, we are working with our customers to enable the prompt transition of next generation or appropriately retrofitted tank cars (DOT117/117R) into ethanol service as soon as practicable.”