By the 1980s, head-hardened rail was developed, cooling steel at a rate that provided additional strength. The new standard section became 80 feet, requiring 17 welds to create a quarter-mile length. Longer rail sections continued to be developed, but weren't as strong.That might have been a missed opportunity for U.S. steel producers, but that doesn't come as any surprise. I noted, fifteen years ago, the last time a Republican president was toying with steel tariffs, the reluctance of steel producers to compete. "[S]ome of the majors spent more resources figuring out that thin-slab casting would not work, rather than investigating ways to make it work, which it does." So too, might it have been, with U.S. rail mills. Nippon Steel, however, built the rolling and finishing stands, and commissioned a ship to transport the long rail.
During this time, Union Pacific, Nippon Steel of Japan and Sumitomo Metal Corp. began discussing a revolutionary idea – manufacturing and shipping high-strength, head-hardened continuous-cast rail in 480-foot-long sections. With access to long rail, only two welds are needed to create quarter-mile lengths, representing an 88 percent reduction in the number of welds.
Union Pacific evaluated many options for the 480-foot rail sections, including U.S. manufacturers. The company selected the only supplier who met all the necessary requirements for length, strength and weight, which are essential in providing safe, reliable rail.
Sumitomo designed "Pacific Spike," the first ship in the world serving as a long rail shuttle for Union Pacific. It’s outfitted with three cranes synchronized to simultaneously unload five rails weighing 10 tons. The rail is stacked three bundles high onto specially designed shuttle cars to be moved from the dock to storage.Pacific Spike began sailing, and the new quay and welding plant went into operation, in 2015.
Construction on the Port of Stockton's roughly 25 acres just finished. Typically, new facilities are built around old rail yards, but this one was designed nearly from scratch. The port has three tracks and two bridges, plus custom storage and welding facilities designed to accommodate the additional rail length.
The $18 million welding facility, equipped with a special overhead crane to lift the rail, began operations this week. Despite the unique nature of the process, standard weld techniques are used to create quarter-mile lengths, which are loaded onto a standard rail train and shipped out for use. UP's Engineering Department is still determining where the first long rails will be placed.
Then came Our President, and his steel tariffs. A rhetorical question from that post is germane. "[W]hat prevented U.S. Steel from running the works at capacity in 2015 the better to undersell the competition?" That's the Granite City Works, which is one of Our President's bragging points, and it doesn't produce rail, but there are rail mills in the States. And yet, somehow sending metal scrap or Australian ore to Japan to roll rails and load them onto Pacific Spike still doesn't offer domestic mills a business opportunity?
Meanwhile, Pacific Spike was recently held out of port.
Union Pacific is facing increased costs of around $4 million for each shipload of special “long rail” it imports from Japan unless it obtains a waiver from the federal government.That article suggests domestic steel producers didn't know how to do the engineering, or something. "When Union Pacific announced the beginning of the rail imports in 2015, it said Sumitomo had developed a means of manufacturing 480-foot rail with sufficient strength that domestic suppliers could not match, which is the basis for its tariff waiver filing."
One shipment that took two weeks to cross the Pacific Ocean was held up for nearly six more weeks in San Francisco Bay until the tariff was paid, although a Union Pacific representative says the delay did not slow down the railroad’s rail replacement work.
Perhaps the engineers have done their homework, or perhaps the tariff is functioning the way the advocates of import-substitution intended. The Association for Iron and Steel Technology reports that Evraz North America, operating the old Colorado Fuel & Iron rail mill in Pueblo, will build a plant to roll 100 meter rail sections. Here's the elevator pitch from Evraz. Interestingly, both Evraz and Steel Dynamics, a company started by Nucor veterans, both roll more rail than the Japanese. Nobody, domestically, yet, rolls a 480 foot (roughly 150 meter) rail.
There is not yet an announcement of a Trump campaign rally in Pueblo, the way there have been near Granite City during the current Congressional elections.