How Does Technology Affect Railcar Maintenance

1. How Does Technology Affect Railcar Maintenance Advanced Technology Safety Initiative (ATSI)Ken Henman DTE Rail Services, Inc. Maintenance Management Seminar

2. Advanced Technology Safety Initiative – ATSIOverview • AAR initiative to make the overall freight interchange system safer and more efficient • Utilize new technology that facilitates more sophisticated assessment of the condition of in-service equipment • Provides immediate, reliable indicators of vehicle performance in a dynamic operating environment DTE Rail Services, Inc. Maintenance Management Seminar

3. Advanced Technology Safety Initiative – ATSIOverview • Creates opportunities for proactive predictive maintenance intervention • Reduces reliance on manual inspection that only identifies component failure or excessive worn conditions • Results are enhanced performance and safety with a net reduction in overall system costs DTE Rail Services, Inc. Maintenance Management Seminar

4. ATSI- Background • In the past Class I railroads have been able to optimize maintenance spending between rail infrastructure and railcars • The railroads concern for equity interests and financial liabilities had to be balanced against railroad operating efficiencies and/or capital improvements DTE Rail Services, Inc. Maintenance Management Seminar

5. ATSI- Background • Over time, the percentage of the U.S. freight car fleet owned by Class I railroads has declined 35.3% 55.7% 9% 2006 U.S. Freight Railroad Statistics Freight Car Ownership Canadian ownership is excluded, TTX included in PCO Source AAR Policy and Economics Department DTE Rail Services, Inc. Maintenance Management Seminar

6. ATSI - Background • Class I railroads now have less direct control over maintenance spending on railcars • Class I railroads are concerned about safety and damage to track structure • Poorly performing cars introduce unnecessary high cost • Reactive based maintenance is to risky and costly • Direct effect resulting in high car maintenance costs • Direct effect on track infrastructure maintenance costs • Indirect effect on system capacity and car availability DTE Rail Services, Inc. Maintenance Management Seminar

7. ATSI - Background • Class I railroads don’t want to maintain other people’s railcars • Costs to perform manual inspections for failed components is prohibitively expensive • *2005 Interchange repair and maintenance cost $332 Million • *Interchange inspection costs $270 Million *Source: Wheel Rail Interaction, TTCI Presentation May 2006 DTE Rail Services, Inc. Maintenance Management Seminar

8. ATSI - Background • Class I railroads/AAR saw need to reduce direct costs through: • Reduced physical inspection • Planned maintenance (predictive data driven scheduling, not time based) • Focused maintenance (efficient repair of only what is necessary) DTE Rail Services, Inc. Maintenance Management Seminar

9. ATSI – Common Terminology • TTCI- Transportation Technology Center, Inc • SRI- Strategic Research Initiative • TDTI-Technology Driven Train Inspection Initiative • FACTIS- Fully Automated Car and Train Inspection Systems • EHMS- Equipment Health Management System • InteRRIS- Integrated Railway Remote Information Service • WILD- Wheel Impact Load Detectors • TADS- Trackside Acoustic Detection System • ABD- Acoustic Bearing Detectors • THD- Truck Hunting Detectors • TPD- Truck Performance Detectors DTE Rail Services, Inc. Maintenance Management Seminar

10. ATSI - Strategic Research Initiative (SRI) • TTCI was assigned the task of developing mechanisms to reduce manual inspections while improving inspection quality • Technology Driven Train Inspection Initiative (TDTI) • Present focus is to evaluate and implement various combinations of automated equipment to meet a full complement of pre-departure train inspection requirements DTE Rail Services, Inc. Maintenance Management Seminar

11. ATSI- Fully Automated Car and Train Inspection System (FACTIS) • Designed to initiate and capture data providing analysis of equipment from moving trains • The goal is to improve interchange and pre-departure inspection efficiency and accuracy while building interpretive databases • Focus is on approximately 40 of the key inspections required by CFR 49 Parts 215, 231 and 232 DTE Rail Services, Inc. Maintenance Management Seminar

12. ATSI- Fully Automated Car and Train Inspection System (FACTIS) • Current modules of the ATSI system • Wheel tread surface condition • Bearing internal component acoustic signatures • Truck hunting and performance • Future? • Wheel profile • Wheel and bearing temperature • Wheel and axle crack detection • Brake shoe condition • Assess bearing adapter position • Spring nest height and condition • Draft gear position • Safety appliance condition DTE Rail Services, Inc. Maintenance Management Seminar

13. ATSI- Summary • Automatic wayside inspection equipment makes it easier to determine railcar condition • Car health can be monitored resulting in opportunities for planned maintenance • Reduced out of service time with predetermined maintenance planning • Data accumulation and sharing lends to root cause analysis DTE Rail Services, Inc. Maintenance Management Seminar

14. ATSI- Summary • Data supplied by AAR so car owners can better manage maintenance on their cars • Identifies problem railcars across the Interchange system • Data serves as a means for root cause analysis • Allows opportunities for car owners to proactively manage maintenance on their cars • AAR revising rules improving maintenance standards for cars DTE Rail Services, Inc. Maintenance Management Seminar

15. ATSI- Phase I • Wheel Impact Load Detectors (WILD) implemented October 1, 2004 • Measures impact load of wheels upon track structure • KIPs is a unit of weight equal to 1000 lbs • Identifies out-of-round wheels • Four levels of alerts • Window Opening 65-80 KIPs • Window of Opportunity 80-90 KIPs, why made 61 • AAR condemning 90-140 KIPs, why made 65 • Final alert 140+ KIPs • Car owners receive notification prompting the opportunity to intervene and schedule the wheel for replacement DTE Rail Services, Inc. Maintenance Management Seminar

16. KIP Wheel DTE Rail Services, Inc. Maintenance Management Seminar

17. ATSI- Phase I Results to Date • AAR data, first 20 months of ATSI • Train accidents caused by rail or wheel failures, down 17% • TTCI data, 33 months prior to and after WILD • Broken wheels down 16.2% • Broken rails down 5.2% • Combined 7.3% improvement DTE Rail Services, Inc. Maintenance Management Seminar

18. ATSI- Phase I Results to Date • Monthly activity, InteRRIS hits in excess of 90 KIPs • High- February 2004 of 4824 • Low- July 2007 of 672 • Greater record keeping requirements • Management of Alerts/KIPs data • Auditing wheel repairs to check for open alerts, duplicate repairs • Repair shop access, open alerts and reporting closings • Repair history, documentation of remediation of alerts DTE Rail Services, Inc. Maintenance Management Seminar

19. ATSI- Phase II Truck Hunting Detectors (THD) • Implemented July 1, 2006 • Performance-based metrics to detect truck hunting • Measures lateral instability of trucks (Hunting Index) • AAR condemning criteria • Car to be home shopped for truck inspection and repaired per AAR Field Manual • Initial, any single read of .65 or any two reads at .50 • Reduced 7/1/07 any single read of .55 or any two reads at .4 • Window opened • Open-Opportunistic at any read in excess of.2 • When in shop car is to be inspected and repaired per AAR Field Manual DTE Rail Services, Inc. Maintenance Management Seminar

20. ATSI- Phase II Truck Hunting Detectors (THD) • Results to date • AAR condemning levels, InteRRIS events per 1000 trucks • June 2007- 184 • July 2007- 691 • September 2007- 889 • June- July net increase multiplied by 3.75 times • June- September net increase multiplied by 4.8 times • Proposed future reductions • July 2008, any single read of .45 or any two reads at .3 • July 2009, any single read of .35 or any two reads at .2 DTE Rail Services, Inc. Maintenance Management Seminar

21. ATSI- Phase III • Acoustic Bearing Detectors (ABD) • Bearing acoustic signature identifying bearing defects as cause for attention • AAR condemning only level • To be handled in accordance with AAR Rule 36 • EHMS implemented January 2008 • InteRRIS events per 1000 bearings for 2008 • January- 99 • February- 113 • Truck Performance Detectors • EHMS implemented March 2008 DTE Rail Services, Inc. Maintenance Management Seminar

22. ATSI- Next • Wheel Profile Detectors • Bearing temperature trending • Overload- load imbalance • Wheel Temperature Detectors • Axle/Wheel Crack Detectors • Vision Systems • More? DTE Rail Services, Inc. Maintenance Management Seminar

23. ATSI- Recommendations for Car Owners • Make sure the party responsible for maintenance on your cars is getting the ATSI information needed • Make sure that inspection and repairs are reported to EHMS • Keep accurate records of inspections, repairs and reporting to EHMS • Audit maintenance history for repeat and/or duplicate inspections and repairs DTE Rail Services, Inc. Maintenance Management Seminar

24. ATSI- Recommendations for Car Owners • Understand and embrace the technology • Acquire data and manage it for trending analysis • Utilize data within your overall maintenance plan and scope of work for shop repairs • Continuously measure effectiveness of the predictive/preventative maintenance program • Periodically review EHMS alerts for real time data of fleet condition and exposure DTE Rail Services, Inc. Maintenance Management Seminar

25. ATSI- Recommendations for Car Owners • Stay Current of Ongoing Issues • Stay informed about implementation of additional elements of ATSI • Monitor revisions to EHMS • Stay informed of AAR Rule changes • Be involved in root cause analysis DTE Rail Services, Inc. Maintenance Management Seminar

26. ATSI- Summary • Maintenance is changing with the rapid development of technology • Technology is influencing maintenance philosophies and positively affecting car reliability • Manage what’s being measured and provided to you DTE Rail Services, Inc. Maintenance Management Seminar