IRRB

Rail Research Cooperative Effort

By: Robert C. VanderClute

Senior VP Safety and Operations

December 5, 2006

Who is the AAR? Serves its members including operations, maintenance, safety, security,

research, economics, finance, data systems and public affairs

Has 2 for-profit subsidiaries and 1 affiliated organization

Transportation Technology Center, Inc.

Research and Development

Railinc Corporation

Data Systems

Railroad Research Foundation

Secures grants from Federal Agencies (FRA and DHA) for the betterment of the rail industry and its employees

Our Full Members

Safety & Operations

ManagementCommittee

Network

EfficiencyManagementCommittee

Policy & Advocacy

Management Committee

AAR Board

Chief Operations Officers Chief Marketing Officers Chief Policy & Legal Officers

Chief Executive Officers

Research Studies

Level 1-

Action

Simple exchange of information regarding rail research projects being performed.

Results

Minimal benefit except to alert other interested parties of what your colleagues are doing in the way of railway research, opens the door to interested colleagues to obtain more in depth knowledge of the issues.

Benefits

Minimal costs to the IRRB participants, can be presented at regular IRRB meetings.

Research Studies

Level 2 –

Action

An in depth discussion of specific research projects; white papers exchanged and presented on a common issue. Detailed discussions regarding the specific research issue are discussed, issues examined.

Results

More information on specific research issues exchanged between interested parties. Possible downside, duplicates other research forums such as the Heavy Haul and World Congress on Railway Research.

Research Studies

Level 3 –

Action

Specific research performed at the request of a client could entail several research organizations working together on a common issue. Results, benefits and costs are shared among the participants.

Results

Costs as well as benefits to the contributors are received. Need for research money, program administration and mechanisms to monitor and direct the program are required.

Railway Research Spending (annual estimate in US dollars)

Korea

(Korean Railway Research Institute) $ 63 million

Japan

(Railway Technical Research Institute) $135 million

USA

(TTCI) $ 13 million

EU

EU $ 50 million

Germany (DBAG) $ 35 million

UK (all sources) $ 66 million

What is needed for a successful research program ?

Common Objective

Objective must be clearly defined by sponsors prior to project commitment

Each sponsor should have quantified costs & associated benefits for their organization

Participants nominated by sponsors must be managed by the sponsors to remain focused

(No alternative agendas)

What is needed for a successful research program ?

Managed Competitive Environment

Objective definition & deliverables must account for conflicts arising from the competitive environment of:

Product Development / Marketing

Consultancy

What is needed for a successful research program ?

Commitment

All participants should show commitment through either providing:

Funding

Expertise on a quantifiable basis

(Contractible Deliverables)

What is needed for a successful research program ?

Funding

Transparent

Defined

Contractually committed to the project

Managed by Committee Chairman and project manager

What is needed for a successful research program ?

Defined Deliverables and Migration Path Project plans prior to start of project

Multi year timelines

Realistic milestones, tasks and deliverables

Commitments for facilities & resources

Effective conduct of research is not enough

Results of research need to be implemented to generate benefits for the members

Implementation requires involvement of other parties in the process as soon as possible – industry (suppliers)

Identify potential barriers to implementation through the innovation process

What is needed for a successful research program ?

Project Structure

Steering Committee (SC) with membership at appropriate level to:

Ensure commitment from participating organizations and:

Ensure attention to project progress

Project leader reporting to SC with:

Defined Budget

Authority to commit funds to secure adequate resources

Stable & capable project membership

A successful research initiativeAAR- Strategic Research Initiatives (SRI)

Recommendations are based on the following:

The SRI program is developed by a series of AAR committees addressing high priority industry risks, needs and opportunities

Committee involvement has ensured that the program is tightly focused on:

Vehicles, track and their interaction, and, on issues that are not adequately addresses by other railroads R&D

SRI priorities and committee recommendations are supported by extensive cost-benefit analyses.

Analyses suggest very high returns from SRI projects

Returns are supported by post-audits of completed projects

Strategic Research Initiatives

SOMC/RTWC governance ensures full accountability and responsibility with TTCI, RTWC and SOMC.

The issues addressed by the program are crucial to the industry’s future.

Safety, efficiency and reliability, and promise of significant returns.

AAR Strategic Research - SafetyAAR Strategic Research - Safety

CauseDamage Costs

(Numbers)SRI Project

RTWC

Rating

Rail, joint bar and anchors

$70 Million

(318)

Improved Rail Performance

Improved Rail Flaw Inspection

Effects of HAL on Rail Joints

Improved Rail Welding

Advanced Rail Steels

Improved Performance Special Trackwork Designs and Maintenance

Rail Stress Management

Improved wheel/rail design and maintenance

Friction control

A-

A

A

A

B+

A

A

A-

B+

AAR Strategic Research Program - EfficiencyAAR Strategic Research Program - Efficiency

Spending CategoryExpensesPercent

SRI ProjectRTWC

Rating

Wheels

and

Brakes

44% ($1.5 Billion)

27%($0.94 Billion)

Strategies to prevent wheel Failures

Cracked Wheel Detection

Wayside detection – Brake condition monitoring

Technology Driven Train Inspection

Improved Brake Performance

ECP Brake

A

A

A-

A

A-

A-

AAR Strategic Research Program - ReliabilityAAR Strategic Research Program - Reliability

Spending CategoryCosts

($ Billion)SRI Project

RTWC

Rating

Equipment-Caused

Train DelaysTBD

Technology Driven Train Inspection

Strategies to prevent wheel Failures

Cracked Wheel and Axle Detection

Brake condition monitoring

Improved Brake Performance

ECP Brakes

Roller Bearings

Improved Detector Reliability

Improved Car Inspection and Performance

A

A

A-

A

A-

A-

A-

A-

A-

Cumulative ROI for Proposed 2007 Strategic Research Initiative Program

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000$0

.0$0

.7$1

.5$6

.4$7

.2$8

.2$9

.2$9

.9$1

0.6

$11.

1$1

1.6

$12.

1$1

2.4

$12.

8$1

3.6

$14.

0$1

4.4

$14.

8$1

5.1

$15.

5$1

5.8

$16.

3$1

6.6

Cumulative Funding $000,000

5 Year NPV

15 Year NPV

$12.8M

Cu

mu

lati

ve N

PV

$00

0,00

0

Lessons Learned UIC/WEC Joint Research Projects

UIC/WEC developed a number of high value projects of common interest

Intended to leverage worldwide pool of experience and expertise

International committee established and guided by UIC

UIC/WEC selected three projects

Rail Defect Management (Began in 1997 and completed in 2001)

Wheel/Rail Interaction (completed in 2005)

Wayside detection – never materialized

Lessons Learned UIC/WEC Joint Research Projects

Committee chaired by TTCI and project work managed by consultants

Program experienced difficulties and delays

Project deliverables were delayed

Lack of commitment from members to attend meetings or contribute towards timely completion of deliverables

Members/attendees lacked quantifiable expertise

Lessons Learned UIC/WEC Joint Research Projects

Steering group/committee never formed nor met to guide technical work nor reviewed status

Lack of accountability

Funding and budgets were unavailable to Committee Chairman/Project Leader

Work completed by extra efforts by a few members

End products and benefits intangible

Mostly reports and best practices guidelines

Implementation of results unknown

Where does the IRRB go from here ?