Central Maine and Quebec Railway Wants to Earn Your Trust

Central Maine and Quebec Railway Wants to Earn Your Trust

You've bought a railroad that just killed 47 people. How do you earn the trust of the community?

  • Posted on: 18 October 2014
  • By: stannenb

John Giles is a railroad man. Starting out as a locomotive engineer and fireman in his early twenties, he worked his way up through the industry while earning business degrees in college. After retiring from CSX Transportation in 1999, where he was its Vice President of Strategic Planning, Giles became a rail financier, working with private equity companies to invest in struggling railroads and return them to profitability. Railroads that have track where people want to move goods should make money, he believes, and if they don't, they're doing it wrong.

John Giles
John Giles

Safety, says Giles, is just good business. While there will always be bumps and bruises, it's possible to run a railroad without injuries. He points to the numerous American Short Line and Regional Railroad Association safety awards won by railroads he's run. You need to embed safety in the culture, he says, make sure people don't take short cuts, and create incentives for safe operation. Make it in everyone's financial interest to follow the rules and you have a self monitoring and correcting system. The real world, however, makes this hard. In an earlier railroad venture, Giles planned what he thought were common sense methods for dealing with hazardous cargo. Meet the cargo at the exchange point - the place where one railroad's tracks end and the next one begins - with a locomotive and crew. Take the rail cars carrying hazardous cargo out of the train, couple them to the new locomotive, and deliver them directly to their destination. Opposition came from the chemical industry who seemed to object to hazardous cargo being treated as dangerous. It would just draw attention to these shipments, they said, and worry people unnecessarily.

Giles' philosophy will be put to the test in his latest railroad venture, the Central Maine and Quebec Railway. Under its previous owner and name, the Montreal, Maine and Atlantic Railway (MMA) was responsible for the 2013 Lac-Mégantic derailment, an accident in which 4 railway cars carrying petroleum exploded, killing 47 people and destroying half of the town's downtown center. Giles' approach to winning the confidence of those who border the rail line is straightforward. The railroad won't carry oil again until 2016, he says, because it won't be ready to do it safely. No more trains crewed by a single engineer, not just because of public pressure, but because he doesn't believe in them. Spend $6-$7 million on track safety improvements this year, fixing "the worst of the worst", and just keep doing this until there's nothing that can be labeled "the worst". This isn't just the responsible thing to do, he says, it's good business. Unsafe stretches of rail have speed limits that slow delivery of non-hazardous freight. Get rid of those speed limits by fixing the track and you deliver your freight to customers more quickly.


But there are limits to what Giles will do for safety. The Mayor of Lac-Mégantic would like a bypass constructed around the town. As a railroad person, Giles looks at the terrain and sees how the geography would make this impractically expensive, but that's not going to stop him from spending company money to help with a feasibility study. It's a reasonable thing for Lac-Mégantic to ask, he believes, and they deserve as good an answer as is possible. And, if the $100 million he estimates it will take can be found, a prospect he doubts, he'll build it. He just won't pay for it,

In watching Giles speak to a Harvard Kennedy School audience this week, one can see why he was entrusted with rebuilding the reputation of this railroad. He speaks with quiet confidence and competence born of 40 years of railroad experience. He doesn't so much need to convince people that he cares about safety as he does simply talk about safety as smart railroad business. His disdain for running a railroad stupidly is apparent.

When asked by an audience member how a community can have discussion about the proposal to bring ethanol trains through dense areas of metro-Boston, Giles' suggestion was to have conversations like the ones he's having, But there's been no equivalent to John Giles, no one from the rail carrier to earn the trust of the communities through which the trains will move. No one from Global Partners, the owner of the ethanol, came to talk to the cities who will have to fund emergency preparedness. Citizens were left fighting a rearguard action, using a slender lever of an environmental permit for track renovation to force safety studies. Rail companies, exempt by federal law from local regulation, may feel they have the right to move whatever freight they wish over whatever tracks are most convenient to them. But John Giles shows that there's another way to run a railroad.

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