Technical Bulletin to Railway Companies: Captive Service Operations

Date: June 2019

The purpose of this bulletin is to describe the federal requirements pertaining to freight cars operating in captive service under the Railway Freight Car Inspection and Safety Rules (Freight Car Rules) and clarify the filing requirements for captive service operations under the Rules.

On this page

• Introduction
• Overview of Regulatory Requirements
• Requirements for Captive Service Operations
• Conclusion

Introduction

The Freight Car Rules allow railway companies to file for an exception to the provisions pertaining to safety inspections for freight cars operating exclusively in captive service.

As an exception, captive service operations are assessed on a case by case basis, based on the specifics of the railway operation and the appropriateness of the safety inspection criteria and restrictions established by the railway company for the proposed operation.

This bulletin clarifies the regulatory requirements pertaining to captive service and provides guidance to railway companies on the information required to file for captive service operations under the Freight Car Rules.

Overview of Regulatory Requirements

The term “captive service” is present in the Freight Car Rules as an exception provision under which a railway company can be excluded from having to comply with the requirements outlined in subsection 4.2 of the Freight Car Rules.

Captive service is defined in the Freight Car Rules as "an operation where freight cars are assigned exclusively to transportation between specified points".

Subsection 4.1 of the Freight Car Rules states that, subject to the exclusion and exceptions outlined in sections 20 and 21 of the Rules, a railway company shall ensure that the freight cars it places or continues in service are free from all safety defects described in Part II of the Freight Car Rules, and that such cars comply with General Order No. 0-10, “Regulations Respecting Railway Safety Appliance Standards”, or the latest edition of Association of American Railroads (AAR) Safety Standard S-2044 “Safety Appliance Requirements for Freight Cars” of the Manual of Standards and Recommended Practices.

The exception provision applicable for captive service is restricted to subsection 4.2 of the Rules and does not extend to subsection 4.1.

Subsection 4.2 of the Freight Car Rules requires that safety inspections be performed, by certified car inspectors, at safety inspection locations where trains are made up, on cars added to trains and where cars are interchanged. Such inspections may occur before or after a car is placed in a train at that location.

The Freight Car Rules, define "safety inspection" as an examination of:

1. a stationary freight car by a certified car inspector; or
2. a stationary or moving freight car, by other technology, as adopted under subsection 18.2; or
3. a combination of both

to verify that the freight car may be moved safely in a train and to identify those safety defects.

Under subsection 18.2 of the Freight Car Rules, a railway company may use alternate methods or technology to perform all or part of a safety inspection provided the railway company engages in early consultation with Transport Canada to review the alternate methods proposed and file, at least 60 days prior to implementation, an alternative practice with the department. Such filing must demonstrate that the alternative method meets or exceeds the equivalent level of safety to the rule and must include a risk assessment as well as evidence of consultation with relevant associations or organizations.

As per paragraph 19.1(e) of the Freight Car Rules, a railway company shall file with the Department the captive service operations as outlined in subsection 21.2 of these Rules.

Subsection 21.2 of the Freight Car Rules establishes that “Subsection 4.2 of these Rules does not apply to freight cars used exclusively in captive service if a railway company:

1. establishes appropriate safety inspection criteria and restrictions for freight cars used exclusively in captive service; and
2. files railway schedules with the Department that specify the locations of captive service, the round trip mileage, the type of equipment operated, along with the applicable inspection criteria and any restrictions imposed on operation of such equipment, 60 days prior to operation.”

The Freight Car Rules, define “railway schedule” as an electronic or paper record that indicates the type of inspection, brake test and operational activity performed by a railway and the location where the activity is performed.

The Railway Safety Management System Regulations (RSMS Regulations), which complement other requirements of the railway safety regulatory regime, require railway companies to be proactive in identifying safety risks and managing them. More specifically, as per paragraph 15(1)(c) of the RSMS Regulations, a railway company must conduct a risk assessment when a proposed change to a railway company's operations may affect the safety of the public or personnel or the protection of property or the environment. Excluding certain freight car equipment from the requirements to perform safety inspections under the Freight Car Rules may affect the safety of the public or personnel or the protection of property or the environment if the safety inspection criteria and restrictions established by the railway company are not appropriate for the operation. Conducting a comprehensive risk assessment to establish appropriate safety inspection criteria and restrictions for freight cars is required to support a captive service filing and is an important element of an effective safety management system.

It should be noted that all other regulations and rules, including the Railway Freight and Passenger Train Brake Inspection and Safety Rules (Train Brake Rules) apply in their entirety to freight cars operating in captive service under the Freight Car Rules.

Requirements for Captive Service Operations

Based on the above, the following requirements shall be met for each and every captive service operation:

1. The freight cars must be assigned exclusively to transportation between specified points. Exclusively means that the fleet must be dedicated solely to transportation between the specified origin and destination points of the captive service operation, with no interchanging of cars between railway companies. Trains operating in captive service are not to handle cars other than those assigned to the captive service fleet.
2. The captive service operations must be restricted to a round trip route. The round trip mileage (i.e. the total cycle route mileage to and from the specified origin and destination points of the captive service operation) must be provided as part of the company's filing.
3. The railway company must establish appropriate safety inspection criteria for the freight cars used exclusively in captive service. The safety inspection criteria are understood to include the measures, principles and standards by which the railway company will ensure that the freight cars operating in captive service can be placed or continued in service, free from all safety defects under the Freight Car Rules. Alternate methods or technology proposed to perform all or part of a safety inspection must comply with the requirements of subsection 18.2 of the Freight Car Rules. The safety inspection criteria must be appropriate for the proposed captive service operations, as supported by a risk assessment conducted by the railway company.
4. Appropriate restrictions for the freight cars used exclusively in captive service must be established by the railway company. These restrictions, (operational, mechanical, or otherwise), must be appropriate for the proposed captive service operations, as supported by a risk assessment conducted by the railway company.
5. The captive service operations must be filed with Transport Canada, at least 60 days prior to start of operations. As per subsection 21.2 b) of the Freight Car Rules, this filing must include, for each captive service operation:
   1. The railway schedules for each of the affected trains, indicating the locations of the captive service operation (i.e. the specified origin and destination points where the freight cars are to operate, exclusively) as well as the type of inspection, brake test and operational activity performed by the company and the location where the activity is performed;
   2. The round trip mileage (i.e. the total cycle route mileage to and from the origin and destination points of the captive service operation);
   3. The type of equipment assigned exclusively to transportation between the specified origin and destination points of the captive service operation;
   4. The safety inspection criteria that the railway company will apply on the captive service operation and demonstration that the safety inspection criteria are appropriate for the proposed captive service operation.
   5. The restrictions (operational, mechanical or otherwise) imposed by the railway company on the freight equipment used exclusively in captive service and demonstration, that these restrictions are appropriate for the proposed operations.

Conclusion

Railway companies are responsible for the safety of their operations and for ensuring that the safety risks associated with their operations have been fully assessed and that the mitigation and control strategies for the conditions of operation are sufficient and effective in eliminating the risks where possible or reducing the risks to the lowest acceptable level possible while maintaining the highest level of safety.

This responsibility also includes ensuring that the freight cars that companies place or continue in service, including the freight cars operating exclusively in captive service, are free from all safety defects as defined in the Freight Car Rules.

Consequently, Transport Canada expects a railway company that files for captive service operations to provide the following for each and every train in its captive service filing application:

1. The railway schedules that clearly specify the locations of the captive service operation (i.e. the specified origin and destination points where the freight cars are to operate, exclusively) as well as the type of inspection, brake test and operational activity performed by the railway and the location where the activity is performed, in compliance with regulatory requirements.
2. The round trip mileage (i.e. the total cycle route mileage to and from the specified points of the captive service operation).
3. The type of equipment operated exclusively on the captive service operation. This must include confirmation that the freight cars will be assigned exclusively to transportation between the specified points of the proposed captive service operation, with no interchange with other railways or handling of cars that are not part of the captive service fleet.
4. The safety inspection criteria that the company has established for the captive service operation. This is understood to include the measures, principles and standards by which the railway company will ensure that the freight cars operating in captive service can be placed or continued in service, free from all safety defects as defined in the Freight Car Rules. It is Transport Canada's expectation that the company's filing proposal clearly demonstrate that the safety inspection criteria are appropriate for each proposed captive service operation, based on an assessment of the risks involved.
5. The proposed restrictions for the freight cars used exclusively in captive service (mechanical, operational, or otherwise), including the measures taken to ensure that the cars remain in captive service and are not interchanged. Once again, the appropriateness of the restrictions established by the railway company need to be based on the risk assessment conducted by the railway company.

Railway companies must clearly demonstrate that their captive service operations meet the definition and requirements of captive service under the Freight Car Rules and must clearly substantiate the appropriateness of the safety inspection criteria and restrictions established for the proposed operations, based on an assessment of the risks.

Railway companies must be proactive in evaluating the safety performance of their captive service operations. Any changes, and in particular any change that may alter the terms under which a captive service operation was established, must prompt the company to re-file its captive service operation with Transport Canada. Likewise, any change that may impact the effectiveness or appropriateness of the safety inspection criteria and restrictions established for a captive service operation, shall prompt the cancellation and a re-filing of the captive service operation with Transport Canada.

Transport Canada recommends that railway companies that operate freight cars in captive service under the Freight Car Rules, review on a continual basis their captive service operations to ensure the safety inspection criteria and restrictions established for that operation remain appropriate in ensuring that the freight cars placed or continued in service are free from all safety defects.

For additional information on this Bulletin, please communicate with Transport Canada's Rail Safety Head Office

Ottawa head office

Rail Safety
Transport Canada
330 Sparks St
Ottawa ON K1A 0N8

Email: railsafety@tc.gc.ca
Telephone: 613-998-2985
Facsimile: 613-990-7767