Austin Freight Operations and Maintenance Business Plan

Defining a new business model to optimize freight operations and maintenance

Capital Metropolitan Transportation Authority (CapMetro) | Austin, TX, USA | 2013-2015

Reviewed operations across a 160-mile freight network

Eliminated derailment claims through restructure of freight contractor business model

Freight rail is 3-4 times more fuel efficient than trucks and generates $80 billion per year as an industry

Challenges

  • CapMetro needed a new and effective business model to contract out freight operations and maintenance of one of the busiest freight corridors in the US.
  • A comprehensive review of its 160-mile freight network (a portion of which is shared with its passenger rail system) would assist CapMetro in addressing and eliminating significant derailment claims by the carrier.

Solutions

  • Conducted stakeholder interviews and a total system assessment to review benefits and constraints of the existing freight operations contract as well as related contracts for passenger service operation, infrastructure maintenance, and passenger rail vehicle maintenance.
  • Developed a business plan that recommended a restructuring of responsibilities and shifted the risk of performance from CapMetro to the freight contractor.
  • Prepared technical specifications to define contractor oversight of freight operations and maintenance. Assisted with contractor procurement process by evaluating proposals and responding to technical questions.
  • Defined additional specifications outlining fee structures, revenue sharing, marketing expectations, and coordination with third parties such as the Class 1 railroads and passenger rail contractors.

Highlights

  • Eliminated claims due to track conditions in freight-only territory and effectively increased long-term capital investment in the freight rail network.
  • Increased CapMetro revenue by implementing new specifications for contractors to manage daily operations.

Project numbers

  • 160 miles in CapMetro’s freight network
  • $33 million spent to complete the project
  • 400,000 freight carloads per year

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