Late Breaking Rail Industry News
| July 24, 2008 |
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UP set second-quarter records in diluted earnings per share, which increased 24% to $1.02, compared to 82 cents in 2007, beating the Wall Street’s estimate of 92 cents. Net income increased 19% to $531 million, compared to $446 million in last year’s quarter. Operating income grew 18% to $931 million, compared to $787 million. Operating revenue totaled $4.57 billion, up 13% over 2007’s $4.05 billion, beating analyst projections of $4.49 billion. UP’s second-quarter operating ratio improved about 1 point, from 80.5% in 2007 to 79.6% in 2008.
Four of UP’s six business groups—Agricultural, up 29%; Chemicals, up 14%; Energy, up 21%; and Industrial Products, up 9%—posted all-time record revenues, more than offsetting Automotive, which fell 9%. A fifth, Intermodal, rose 7%, setting a second-quarter revenue record. All five groups set records for best-ever average revenue per car (ARC). Overall ARC increased 16%, reaching an all-time record of $1,835 per car in the quarter. Strong pricing helped offset overall business volumes that dropped 3%, to 2.4 million total revenue carloads, in the quarter.
UP’s second-quarter 2008 average quarterly fuel price rose a whopping 64% to $3.60 per gallon, compared to $2.20 in 2007. But the railroad’s second-quarter fuel consumption rate, as measured by gallons per thousand gross ton-miles, was a quarterly best 1.216 vs. 1.275 in 2007. Several fuel conservation initiatives that have enabled UP to save about 90 million gallons over the past four years, help drive consumption down.
“We achieved a record second quarter in the face of rising fuel costs and an estimated 5 cents earning reduction associated with Midwest flooding,” said UP Chairman, President, and Chief Executive Officer Jim Young. “We demonstrated the resiliency of our network by quickly restoring service to our customers, which provided us with a strong finish to the quarter, driving solid revenue growth and continued productivity improvements. We expect that our diverse business mix will continue to provide us with opportunities through the year. Although high fuel prices and a soft economy present challenges, we remain committed to ongoing productivity and customer service initiatives as we look forward to achieving a record year.”
In morning trading on the New York Stock Exchange, Union Pacific shares were up about 2.3%, to just over $79.
| July 24, 2008 |
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But Skoda's manager of U.S. operations says the manufacturer will bid only if TTC removes its requirement for 100% low-floor vehicle. TTC Chairman Adam Giambrone has said the agency will not relent on that matter.
Skoda-designed streetcars incorporating a 70% low-floor design operate in Portland, Ore., and Tacoma, Wash., but the company declined to bid for TTC's 204-car order due to the requirement for a 100% low-floor car.
However, last May Skoda signed a contract to provide 20 ForCity 100% low-floor streetcars, with an option for 32 additional vehicles, to Rigas Satiksme, the public transit operator serving Latvia's capital city, Riga. Skoda's ForCity low-floor design is in widespread use in Prague.
| July 23, 2008 |
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While ridership and usage is up on most MTA operations, the agency said new fare and toll increases were necessary because of soaring energy costs and plunging revenues from the real-estate transactions that help subsidize its trains and buses.
These increases will come on top of increases that went into effect just four months ago.
Reports of the planned 9% increase were circulating ahead of the meeting and drew sharp responses. Governor Paterson commented at a news conference: "This just cannot become the way the MTA solves problems: Every time there is an issue, pass along the increase." At his own news conference, Mayor Bloomberg delivered a businessman's verdict: "Anybody that tells me they've got a $10 billion budget and can't find ways to cut 5%, that's just poor management."
| July 23, 2008 |
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UTA, Salt Lake City, and South Salt Lake will fund the project, estimated to cost $9.8 million to construct. Included within the project is parallel right-of-way for a pedestrian and bicycle path. UTA projects daily ridership of 2,264, marginally higher than a light rail alternative and significantly higher than a bus rapid transit (BRT) option.
| July 23, 2008 |
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In a civil lawsuit, the government alleged that the fire was caused by the failure of UP employees to take proper precautions during a track repair operation. The government said workers failed to clear the area of flammable material and failed to use spark shields with high-speed rail saws and grinders. The fire burned more than three weeks and killed wild life habitat and destroyed trees on more than 21,000 acres. Firefighters suppressed the fire without loss of life or buildings at a cost of around $22 million.
“The court ruled that the people of the United States are entitled to compensation for the unique aspects of the damaged forests, above and beyond the fair market value of the timber destroyed,” said a Department of Justice announcement issued in Sacramento, Calif., on July 22. “The remaining $80 million of the settlement compensates the United States for damages to its natural resources. The settlement monies will go directly to the Plumas and Lassen National forests to help remedy the resources devastated from the fire.”
UP said it had taken a charge of $10 million at the time of the fire and insurance would cover the remainder of the settlement.
| July 23, 2008 |
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“We urge CSX to refrain from taking further steps to delay the inevitable outcome of this election,” said the two hedge funds, which have been critical of CSX’s management and want to help institute changes to improve the rail carrier’s earnings. “The votes have been counted and the outcome is clear: The shareholders want four of our nominees on the CSX board. We don’t want to litigate the issue, but we will take all necessary actions to protect shareholders’ interests if the duly elected board is not immediately seated.”
CSX responded that “in addition to the customary review and challenge period, the voting results are subject to the outcome of pending litigation between the company and the TCI Group before the U.S. Court of Appeals for the Second Circuit.” The company pledged to “proceed quickly and continue to keep open the lines of communication,” adding: “Whatever the ultimate outcome, the CSX board will work constructively to continue providing outstanding value for shareholders.”
After a June 25 shareholders’ meeting, CSX CEO Michael Ward said results of the proxy vote on new board members were “too close to call at this time.”
In their July 22 letter, the hedge funds pointed out: “After several weeks of work conducted by the independent inspector of elections (chosen and retained by CSX), the independent inspector came to the conclusion” that “shareholders had elected four of our nominees.” The hedge funds said they had now been told that “CSX is still seeking to find up to 122,229 ‘lost votes’ despite the fact that this number of votes would not change the outcome of the election.”
| July 22, 2008 |
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Railway operating expenses increased 16% to $2 billion for the second quarter compared with a year ago, primarily due to higher fuel expense, which rose by $212 million, or 76%. But the operating ratio for the quarter was 71.1%, about even compared with the second quarter of 2007.
"Norfolk Southern delivered record financial results during the quarter, reporting continuing strength in our coal, agriculture, and metals markets," said Norfolk Southern CEO Wick Moorman. "Looking ahead, our franchise should continue to benefit from a broad and balanced customer base as well as from rail's inherent advantages over other transportation modes - safety and reliability, fuel efficiency, and environmental sustainability."
Although continued weakness in the automotive- and housing-related industries contributed to a 2% reduction in traffic volume compared with the same quarter last year, higher average revenue per unit more than offset the effect of reduced volumes, the company said.
The company also announced it would increase its quarterly dividend by 3 cents to 32 cents per share, payable on Sept. 10 to shareholders of record as of Aug. 1.
| July 22, 2008 |
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| July 22, 2008 |
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| July 22, 2008 |
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"Nothing is more important than the safety of our employees and the communities through which we operate," Hamberger said. "It’s only reasonable that those who make extremely hazardous materials demonstrate that they also have the same public safety commitment."
Hamberger said the rail industry does not seek to eliminate its common carrier obligation at the present time. "Rail is the safest and most secure mode of transporting TIH, many of which play an important role in the national economy," he said. "However, if there is a public interest need for the railroads to be compelled to carry TIH materials, there is a corresponding public interest imperative for the industry to do what is necessary to best ensure the public's safety."
Hamberger said freight railroads are doing their part to ensure safe delivery, but asked the STB to recognize that given the unique risks involved in transporting these dangerous chemicals, shippers share the risk and also the effort to find ways to eliminate those risks entirely.
Reiterating AAR's observation that rail is a safe mode, Hamberger noted that the transport of TIH materials account for 100,000 carloads out of 32 million, or just three-tenths of one percent of total rail volume. "We train thousands of local emergency responders and have implemented special operating procedures on trains carrying TIH. It’s only right that those who make and ship these dangerous chemicals both share in the risks we face to transport their hazardous materials and have the same incentive to eliminate those risks,” Hamberger said.
Hamberger also restated AAR's position that the only way to completely eliminate the risks inherent in moving highly toxic chemicals by rail is to replace those hazardous materials with safer chemicals and technologies. He urged shippers to devote more resources toward developing safer substitutes to replace TIH materials.
| July 22, 2008 |
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"This was a tough quarter with the unprecedented rise [34%] in fuel prices, the North American economic downturn, and prolonged flooding on our U.S. main line," said President and CEO Fred Green. "We see the current economic and CP is taking aggressive steps which should position us well for 2009. I have conditions continuing, accelerated a rigorous process to improve our productivity, efficiency, and yield."
Chief Financial Officer Mike Lambert said CP now expects full-year earnings per share to be in the range of $4.00 to $4.20, down from previous guidance of $4.40 to $4.60. "We continue to focus on driving positive pricing gains and strengthening our fuel recovery and cost management programs," said Lambert. "However, these will not be enough to offset the challenges we are facing with the higher price of fuel and the slowing North American economy. We are updating our guidance to reflect our substantially higher fuel assumptions and the deteriorating economic conditions."
| July 22, 2008 |
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Based on these results and with full-year revenue expected to grow 12% to 14%, Wabtec increased its 2008 earnings guidance to about $2.65 per share from an earlier projection of $2.55.
"Our second-quarter performance was strong, with a variety of initiatives driving growth, including international and aftermarket expansion," commented Alfred J. Neupaver, Wabtec's president and CEO. "We generated strong cash from operations and finished the first half of the year with cash, net of debt, of $90 million, most of which was used to complete the acquisition of POLI, a European-based manufacturer of brake equipment, after the end of the quarter. Since 2005, we have made five acquisitions, all of which were financed with internally generated cash from operations. Although we remain cautious about the economic outlook in the U.S. and abroad, we are confident in our growth prospects for the rest of 2008 and beyond."
| July 22, 2008 |
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MTA raised fares on many services an average of 3.85% last March, but also anticipated a revenue surplus of $350 million for the year. That surplus has shrunk by at least 50% due to a decline in real estate tax revenue, coupled with rising fuel costs. Whatever surplus does remain is expected to be used to address the expected budget shortfall in 2009.
The proposed fare increase would take effect July 1, 2009; before then, MTA would hold hearings on the increases in December and likely vote on the measure in the spring of 2009.
No cutbacks in service or capacity are being considered publicly, in keeping with MTA's own comments at the APTA Rail Conference in San Francisco during June stating that such cutbacks were not an option for the authority. In fact, Metro-North has announced an additional weekend train is being added Aug. 3 on the Pascack Valley Line, serving Rockland County (N.Y.) points and making limited stops within New Jersey. MTA's rail ridership continues to grow on its Metro-North, Long Island Rail Road, and New York City Transit services.
| July 22, 2008 |
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"Would we ever walk? Absolutely. I mean, we're good business people," Mr. Harrison said Monday in a conference call.
Last September CN announced its intent to buy EJ&E for $300 million, hoping the tap the target's capability to circumvent rail bottlenecks in Chicago and speed transcontinental freight service. Since then, numerous suburban communities have voiced concern or outright opposition to the acquisition, citing fears of increased freight traffic, pollution, noise, and disruption of community activities, such as emergency service access. As just one example, representatives from three municipalities plan to meet July 23 in Naperville, Ill., to organize opposition to CN's proposed purchase.
Others have expressed concern that CN's acquisition would jeopardize plans for a 55-mile circumferential Suburban Transit Access Route (STAR) on the EJ&E, linking several Metra commuter rail lines.
"We could run this railroad without the EJ&E. We could run it a lot more efficiently with it," Harrison said. "But if it gets to the point where the mitigation costs or the timing of the issue is going to drag out for so long. ... We're very good at turning our backs and walking the other way and figuring out another way to skin the cat."
| July 21, 2008 |
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The company attributed part of its performance numbers to the "stronger Canadian dollar relative to the U.S. dollar, which affects the conversion of CN's U.S. dollar-denominated revenues and expenses."
"Despite the headwinds, we saw double-digit growth in intermodal revenues as a result of new container traffic over the Port of Prince Rupert and continued import strength at the Port of Vancouver, as well as higher volumes of commodities to support oil sands development in Alberta," said E. Hunter Harrison, CN president and CEO, in a statement. "CN continues to face economic uncertainties in the current environment, but we are still targeting diluted earnings per share growth in the mid-single-digit range for full-year 2008."
CN also announced a share repurchase program of up to 25 million shares, or 5.3% of its outstanding stock not held by its insiders on July 14. Approximately 473.4 million CN common shares were issued and outstanding on that date, the company said.
| July 21, 2008 |
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FRA's proposal would require railroads, contractors to railroads, and roadway workers to adopt and comply with additional on-track safety procedures. It would cover work groups using certain maintenance equipment, when at least one worker is on the ground and the centerline of the adjacent track is 19 feet or less from the centerline of the track being worked on.
The agency also proposes to expand requirements for job safety briefings, training, and record-keeping to ensure compliance with the new procedures. Under existing Roadway Worker Protection rules, work groups engaged in large-scale maintenance or construction must be provided with adjacent-track on-track safety by way of a train approach warning. The proposed regulation would expand upon this requirement to cover a wider range of operational conditions.
FRA says that since May 2004, four rail employee fatalities have occurred on a track adjacent to a track where a group of roadway workers had been operating on-track maintenance equipment.
A copy of the proposal can be viewed at http://www.fra.dot.gov/us/content/321 under the subheading Roadway Worker Protection. Comments on the proposed rule can be submitted until August 18.
| July 21, 2008 |
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A route through the park is one of three being evaluated by New Jersey Transit for rail service linking Middlesex, Ocean, and Monmouth counties, generating the moniker "MOM" rail service. The route traversing the battlefield, in western Monmouth County, offers that county the biggest expanded rail reach, but opponents in neighboring Middlesex County have sought to block the "western alignment" route for more than 12 years.
"The significant history of our county did not end with the Battle of Monmouth," Monmouth County Administrator Robert M. Czech wrote to DEP Commissioner Lisa P. Jackson. "In fact, there is a rich history in the area surrounding where the three-day Revolutionary War battle was fought and along the British retreat into Middletown."
The letter continues, "The railroad predates park development by more than 100 years and would not be expanded beyond the single track in this area ... When the park's Visitor Center was built on top of historically significant Combs Hill to overlook the historic houses and fields below, the railroad was already part of the landscape. Trains are not visible from the park's Visitor Center."
DEP Acting Director of Parks and Forestry Jeanne A. Mroczko has voiced concern that use of the rail line for passenger service would negatively impact the future development of the park as a National Historic Landmark. But Monmouth officials note the Monmouth Battlefield National Landmark Planning Guide prepared by the Friends of Monmouth Battlefield cites the compatibility of passenger rail service with park development and, in fact, recommends development of the western alignment, also known as the Monmouth Junction alternative.
Other supporters of the proposed line note that rail lines traverse other battlefields, including two Civil War sites at Gettysburg, Pa., and near Frederick, Md., with little if any negative impact.
| July 21, 2008 |
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| July 21, 2008 |
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“Dr. Calegari will be responsible to realign the functional organization to accelerate effectiveness in the deployment of new solutions to support the increasing demand of innovation in the field of railroad safety and security,” said Sergio De Luca, group president and CEO of Ansaldo STS in Genoa, Italy. “We appointed Dr. Calegari for his international experience to expand our market penetration of rail and transportation security, particularly in the arenas of large-scale applications for rail and mass transit in the North and Latin America, and China.”
Calegari brings more than 25 years of experience to US&S, including his most recent position as President and CEO Americas for Dedicated Micros Inc. Previously, he held executive positions with Siemens Building Technologies, Fiat, and Johnson Controls. Calegari holds a Ph.D. in Arts and Sciences from Loyola University and a Master of Arts from Harvard University. Emmanuel Viollet, who was Acting President until the appointment was made, remains at the company as Chairman of the Board of Directors of US&S.
| July 21, 2008 |
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The Canadian Class I competitors already share main line access through the Frasier Canyon, used by freight traffic traveling to and from Vancouver.
| July 18, 2008 |
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A quarter-cent sales tax to fund the $541 million project was approved July 16 by the Sonoma-Marin Area Rail Transit (SMART) District's board of directors; the project also would include include a parallel bike and pedestrian path. The tax would be enacted in 2009 and expire in 2029 unless renewed.
The board's decision follows a survey of 1,205 people, conducted in May by Godbe Research of San Mateo, that found 77% of respondents favoring SMART rail service.
An earlier vote in 2006 generated support for the project, but not a super-majority as required. Then, 65.3% of Marin and Sonoma voters supported SMART, but the total fell short of the 66.6% mandated for passage.
"The time has never been better for SMART," said train spokesman Chris Coursey. "People are) looking for not only higher gas-mileage cars, but ways to get out of their cars entirely."
| July 18, 2008 |
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DART averaged 69,861 trips per day, up 14.2% from June 2007, and notched 10.3 million trips during the month. TRE commuter rail service averaged 11,105 trips per day, up 19.8% over year-ago average ridership, and totaled 251,522 trips for June 2008.
Including bus and high-occupancy vehicle customers, DART recorded 10.3 million passenger trips for the month, its highest total ever, and up from the prior record of 10.28 million trips set in May, a DART spokesman said.
| July 18, 2008 |
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AVE S-130 trains, which travel up to 150 mph, are equipped with a dual-voltage propulsion system, a highly advanced onboard signaling system, and variable-gauge bogies, allowing RENFE to use equipment on Spain's standard-gauge high speed lines, tapping their 25kV power supply, and on the nation's broad-gauge conventional rail network, which uses a 3kV power supply.
RENFE previously awarded the Bombardier/Talgo tandem a maintenance contract in 2004, involving 16 AVE 102 trainsets.
| July 18, 2008 |
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TDOT's funding follows earlier disclosure of a $1.7 million funding shortfall by the Regional Transportation Authority, and comes with conditions attached. Primary among them: Nashville's Metropolitan Transit Authority, which oversees the city's bus operations, is to assume management oversight of the commuter rail service. TDOT anticipates administrative cost savings of $300,000 through this move. "The operation by the MTA would lead to a number of economic and operational efficiencies and will put the things into balance this fiscal year," an MTA spokesman said.
To close the remaining funding gap of $400,000, other participants, including Wilson County and the cities of Lebanon and Mt. Juliet, must each agree to contribute $100,000; Lebanon already has agreed to the deal. A $100,000 contribution from the Nashville & Eastern Railroad, which leases the right-of-way, is also anticipated.
"TDOT has invested a significant amount of money in the Music City Star, and we'll do all we can to ensure it succeeds," a department spokeswoman said.
| July 18, 2008 |
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TTC rejected a bid from U.K.-based Tram Power Ltd. on the basis its bid was not commercially compliant. A second bid, submitted by Montreal-based Bombardier Inc.'s transportation division, failed "a technical evaluation that required a pass/fail on key criteria related to negotiating the tight turning radii on the TTC's existing streetcar rail system," TTC said in a statement.
TTC added, "A Fairness Monitor was retained to oversee the procurement process and concurs that the TTC has followed the process as set out in the RFP and also concurs with the cancellation of the RFP."
The agency said it still hopes to proceed with an equipment order, valued at C$1.25 billion, and during the next month plans to "contact known and proven streetcar manufacturers to identify and discuss the issues that led the companies to a decision either not to bid, or to submit a bid that is not compliant." It expects to have new cars delivered on schedule, with test cars arriving in 2010 and revenue service begining in 2011 or 2012.
Among the potential carbuilders are Bombardier, Paris-based Alstom Transport, with manufacturing facilities in Hornell, N.Y., and Siemens Transportation, which has manufacturing facilities in Sacramento, Calif. Both companies had declined to pursue TTC's original RFP. Alstom cited deadline constraints, while Siemens suggested that the RFP was unfairly weighted to favor Bombardier.
Transit observers say other, smaller manufacturers are unlikely to compete successfully, given the size of the TTC order.
Bombardier spokesman David Slack said the company remained interested in winning TTC's business. "We were a bit surprised about the outcome—no question about that," he said. "We have great experience building light rail vehicles for Toronto and we're the No. 1 supplier of light rail vehicles in the world."
| July 17, 2008 |
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CSX has asked the U.S. Court of Appeals for the District of Columbia to vacate the decision, saying the STB's decision was "not supported by substantial evidence."
STB's decision was the first taken under new rules designed to expedite disputes over relatively small freight moves, particularly for small and medium-sized companies who had complained of the financial burden involved in challenging freight rates under the old procedures.
| July 17, 2008 |
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Intermodal volume continued to slide in the latest week, when 231,921 trailers and containers were loaded, down 2.8% from the same week in 2007. Total railroad volume for the week was 33.6 billion ton-miles, up 4.3% from the 28th week of 2007.
Year-to-date, carload traffic in the U.S. increased 0.4%, intermodal traffic was down 3.1%, and ton-miles were up 1.6%.
In Canada, carload traffic in the week ended July 12 totaled 73,467 cars, virtually flat with last year, and intermodal volume was 50,840 units, up 4.5%. Cumulative carloads for the first 28 weeks of 2008 were down 4.0% and intermodal loadings were up 1.9%.
Kansas City Southern de Mexico originated 9,293 carloads in the week ended July 12, down 13.4% from last year, and 3,962 trailers and containers, down 0.6%. Cumulative volume for 28 weeks was 294,147 carloads, down 3.3%, and 132,142 intermodal units, up 9.7%.
| July 17, 2008 |
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The NS demo, BMEX 259's first on a Class I, "confirmed that the locomotive's combination of three diesel engines and powerful regenerative brakes could perform with a higher fuel efficiency and lower emissions than a standard switcher locomotive," Brookville Sales and Marketing Specialist Michael White said. "It was rigorously tested. Fuel burn, tractive effort, and regenerative brake testing was performed by NS crews during the demonstration. According to NS, testing of the regenerative brakes showed that nearly 90% of the mechanical energy exerted on the locomotive by the trailing load was recouped into electrical energy."
Prior to the NS test, short line Buffalo & Pittsburgh utilized BMEX 259 for two days of switching at its DuBois Yard, where, according to White, its high tractive effort and individually controlled traction motors enabled it to outperform the railroad's GP40s.
BMEX 259 utilizes Cummins QSK19L engines to provide a combined 2,100 hp in a "Power-on-Demand" configuration. "Brookville's multi-engine building-blocks have proven to railroad crews that a single 700-hp engine will provide sufficient power to operate the locomotive," said White. "Working a single engine reduces fuel consumption and emissions by keeping the other engines idle during off-peak operation. This significantly lowers the railroad’s operating costs. Higher tractive effort, recycled braking energies, and better fuel economy all highlight the first 90 days of the CoGeneration™ locomotive tour."
BMEX 259 has been scheduled for short demonstrations on other railroads and transit properties in the next few months, and will begin making its way west after completing its test with CSXT.
| July 17, 2008 |
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2Q results: Railroad's EPS climbs 31%In an ironic coincidence, shares of CSX rose nearly 6% in late-day trading yesterday to $60.94 on the New York Stock Exchange following the railroad’s second-quarter 2008 earnings report, one day after it was reported that TCI (Children’s Investment Fund Management LLP), leader of the dissident hedge funds that gained four seats on CSX's board of directors, took a hit of over $1 billion in June—its largest-ever monthly loss. TCI lost 12.5% of its value and plunged into the red for the year’s first six months, according to a report in the Financial Times. Why? Probably because, unlike most other hedge funds, TCI has relatively few holdings. If one or two take a hit, the loss is that much greater.
In the second quarter, CSX set all-time records in revenues and operating income, which were up 15% and 17%, respectively. Earnings per share grew 31% to a record 93 cents, based on earnings of $385 million, compared to $324 million, or 71 cents per share, in the prior-year quarter. Revenue increased in eight of the CSX's 10 market segments, resulting in quarterly revenues of $2.9 billion and operating income of $717 million. A "continued focus on productivity and cost control" helped to offset a significant increase in fuel costs, driving the operating ratio down to 75.3% for the quarter. "CSX continues to deliver significant value for shareholders and demonstrate the secular strength of our business," said Chairman, President, and CEO Michael Ward. "The strong earnings performance delivered by this team was supported by all-time records in revenue and operating income, despite the effects of a softer economy. Sustained strong demand for export coal, grain, ethanol, metals and phosphates, and fertilizers, as well as solid yield management, continued to lead significant revenue growth across our markets."
Following the earnings report, CSX announced preliminary voting results from its 2008 annual shareholders meeting on June 25. According to a report prepared by independent inspector of election IVS Associates Inc., TCI Group (TCI and 3G Capital Partners) nominees Alexandre Behring, Christopher Hohn, Gilbert H. Lamphere, and Timothy O’Toole won seats on the board. Voters also approved the TCI Group’s special meeting and nullification proposals.
CSX stressed that the shareholder’s meeting “has been adjourned until July 25, 2008,” and that “voting results are subject to a customary review and challenge period as well as the outcome of pending litigation between [CSX] and the TCI Group before the U.S. Court of Appeals for the Second Circuit.” Last month, U.S. District Judge Lewis A. Kaplan ruled that TCI Group had sidestepped SEC Schedule 13D disclosure requirements and violated securities laws using so-called “swap investments” to obtain 6.4% of its 8.7% stake in CSX, but rejected CSX’s request to prevent the hedge funds from casting votes on those shares. CSX appealed the ruling. In a conference call with analysts during CSX’s second-quarter earnings announcement, Ward said that the outcome of CSX’s appeal would determine whether some of the votes cast for TCI Group nominees would be disqualified from the tally. Those nominees reportedly are Hohn and O’Toole, who may have won only by narrow margins. The Second Circuit appeals court could disqualify 6.4% of TCI’s stake if it agrees with the District Court ruling, because that was the percentage the hedge funds owned when they were out of compliance with SEC disclosure rules.
Oral arguments in the case are scheduled for Aug. 25, which now won’t be decided until September or perhaps even later. “Until we fully work through all of that, I don’t know if we will know the final results of that election,” Ward said. It’s possible that CSX will decide not to officially seat new directors or hold its first post-election board meeting until all is said and done. If CSX’s appeal is successful and the votes are disqualified (“sanitized,” in SEC parlance), TCI Group not only stands to loose two of its four board seats, but the ability to call special meetings of the CSX board—an eventuality, one Wall Street analyst told Railway Age, that holds far more significance than how many board seats are actually controlled.
As Yogi Berra famously once said, “It ain’t over ’till it’s over.”
| July 17, 2008 |
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The metropolitan planning organization, approving a six-year rolling transportation plan, indefinitely postponed plans for VRE to acquire seven additional railcars in 2010. It also postponed, by two years, the projected introduction of streetcar service along Columbia Pike in Arlington, Va.; the revised plan would introduce the service in 2016.
"The people who will suffer most are those in Prince William and Loudoun counties," said NCRTP Director of Transportation Ronald Kirby. "That’s where the congestion, the pain, is going to be felt more than in the other jurisdictions."
Numerous road construction and road widening projects were also postponed by the MPO.
| July 17, 2008 |
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URS previously had conducted the alternatives analysis, environmental impact analysis and preliminary engineering studies, station design, and ridership forecasting for the proposed rail line. The project is intended to open in conjunction with the extension of DART's Northwest Line to Carrollton in late 2010.
DCTA ceased pursuing federal New Starts funding for the project in 2007, citing the length of time and potential competition involved in the process. The authority is tapping regional funding sources for the project, which if opened on schedule would become the second DLRT operation in Texas, after Austin's expected DLRT debut late this year.
| July 16, 2008 |
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Sales generated by its transport division in the quarter, at about $3.3 billion, were up just 1%, "or 4% on an organic basis," the company said. Alstom attributed the modest gain to "the exceptional order of 2.2 billion euros recorded during the first quarter of 2007/08 for very high speed trains in France."
Sales increased by 22% in Alstom's Power Systems segment and by 8% in its Power Service over year-ago levels.
"Alstom continues to benefit from its good positioning on the growing markets of power generation and rail transportation: The level of orders recorded during the first quarter is strong and the prospects continue to be very positive with both the upcoming booking of the awarded projects and many new opportunities," said Patrick Kron, Alstom chairman and CEO, in a statement.
In Paris, shares of Alstom Wednesday closed up 8.49%, or 5.61 euros, at 71.71 euros.
| July 16, 2008 |
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"The addition of gating on the Metro Red and Purple lines and selected light rail stations will support Metro’s goals to prevent fare evasion, improve system security, and capture invaluable ridership data to enable Metro to enhance is service to the public," said the Cubic announcement. "Significantly, the addition of gating to the TAP™ system provides the key infrastructure required to enable additional threat detection and security features. Metro and Cubic are working together with appropriate government agencies on the subject."
| July 16, 2008 |
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The route would run along Woodward Avenue between the Michigan State Fairgrounds, near Eight Mile, to downtown, with 13-to-15 station stops, and carry a projected 22,200 daily riders, SEMCOG said. Federal matching funds would provide 50% of the estimated $371 million cost of the project. Construction could begin in 2011, the MPO said.
SEMCOG also foresees the proposed line serving "as a distributor and feeder" to an Ann Arbor-to-Detroit commuter rail line the council is studying.
"This is an important step toward the establishment of a reliable rail transportation system that will assist Detroiters in getting to and from their destinations," Mayor Kwame Kilpatrick said in a statement. "This approval of DDOT's rail project will also multiply economical opportunities for business growth."
Lovevett Williams, interim director of DDOT, said in a statement, "I am pleased that DDOT is moving in the right direction on the Woodward Avenue Light Rail Transit (LRT) initiative by putting the customer first, as gas prices continue to soar."
| July 15, 2008 |
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Seidl, 37, brings more than 14 years of industry experience to Dahlman Rose. He has been ranked numerous times over his career as a top stock picker and earnings estimator in national surveys including the Financial Times 2008 World's Top Analyst Survey. Prior to joining the firm, Seidl was a Vice President and Senior Analyst at Credit Suisse Group, where he covered airfreight and surface transportation sectors. He previously held similar positions at Avondale Partners and Furman Selz LLC. Before beginning his Wall Street career, he served five years in the transportation public and private sectors.
"Our expansion into airfreight and surface transportation sectors enables Dahlman Rose to better understand and articulate the dynamic global transportation market and continue to provide a comprehensive research product for institutional investors," said Dahlman Rose CEO Simon Rose. "We are delighted to welcome an analyst of Jason's considerable expertise. His extensive experience in and passion for his coverage sector will be a great asset to our firm."
Seidl received his Masters in Business Administration from Rutgers University in 1998. He also received a Bachelor of Science in Transportation Distribution Management and a Bachelor of Science in Marketing from Syracuse University in 1993. He is a member of the North East Association of Railroad Shippers and serves on the Franklin Advisory Board at Syracuse University's School of Supply Chain Management.
| July 15, 2008 |
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The one-time presidential candidate noted Amtrak's current Acela service on the NEC is limited to only brief stretches of 150-mph running, making travel times between cities longer than between comparable points in Europe and elsewhere. "The point is, it could be significantly shorter," Kerry said.
Kerry's bill would give power to either a state or a compact of states to improve the rails, so decisions on possible land acquisition through eminent domain would be made at the state or local level.
The senator's approach would in large measure upgrade existing NEC infrastructure, with Amtrak a primary participant, as opposed to recent provisions in the Amtrak reauthorization bill, spearheaded by Rep. John Mica (R-Fla.), which call for exploring the creation of a brand-new right-of-way linking Boston and Washington, D.C., involving private-sector participation.
| July 15, 2008 |
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"Sharply higher" fuel surcharge revenue also helped, said Lowell, Ark.-based JBHT.
The trucking company reported that its Interemodal segment fleet increased by nearly 10% and its tractor fleet declined by about the same magnitude during the quarter: "Containers and trailers grew from 55,886 to 60,920. The growth in the fleet of trailers and containers was primarily to support additional intermodal business. The combined tractor fleet declined from 11,760 in the second quarter of 2007 to 10,545 in the second quarter of 2008, primarily due to our actions to reduce the size of the truck segmented fleet."
| July 15, 2008 |
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The six-member Joint Powers Authority expects to implement the real-time ticket sales and validation system in 2009. The system will be powered by Oracle software including Oracle SOA Suite, Oracle Database, and Oracle Real Application Clusters on Linux.
Using the system, conductors on the Capitol Corridor will use hand-held scanners to validate and sell tickets to customers on the train, improving security with the ability to track when passengers board and exit the train. The scanners will utilize Web and business process execution language (BPEL) based services to link CCJPA and Amtrak's IT systems.
| July 15, 2008 |
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"These recent contracts demonstrate the global appeal of our CX-100 technology," Raymond Betler, president of Bombardier's automatic people mover unit. "As a solid platform in our APM portfolio, the CX-100 system is recognized worldwide for its high performance and exceptional reliability."
Bombardier said Beijing Capital International Airport will acquire seven new CX-100 cars to its two-kilometer operation. George Bush International Airport in Houston will add four CX-100 cars to its existing fleet of 12, and Sacramento International Airport is installing a two-car system.
| July 14, 2008 |
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Commenting on the Amtrak reauthorization bill passed by both houses of Congress that must now be reconciled in House/Senate conference, the Times, in “Give Amtrak a Fighting Chance,” points out that “where passenger rail works best, as it does in Europe, it is treated like the critical service it is and is publicly financed, like the highways.”
As for the measure in the House version of the bill requiring the federal government to seek proposals from private companies to construct a dedicated high speed rail line between New York and Washington—a measure the WSJ heartily endorsed last week (Railway Age Breaking News Editorial Comment, July 8)—The Times editorial wisely recommends tossing it out: “Diverting money to a pointless experiment in privatization . . . is counterproductive. It would all but ensure that Amtrak remained inefficient and ill equipped to meet increasing demands for service. Its intercity routes this year may carry as many as 27 million passengers, 2 million more than last year. . . . Conferees from the two chambers should throw that privatization provision out as they reconcile the bills. Amtrak deserves this chance, without dilution, after years of being shamefully shortchanged. Its current funding is a woefully inadequate $1.2 billion. The bills would roughly double that, and sustain it for five years. That would allow long-term planning, instead of Amtrak's yearly fight for life. . . . Even with a relative windfall, Amtrak will not be able to deliver a French-style bullet train that can hit speeds of 200 mph. But the only sensible way to get there is by starting now, with the critical investment that Amtrak needs to keep the nation moving.”
How true. The French, many do not realize, didn’t build the TGV without a foundation. Following World War II, SNCF (French National Railways) spent years improving its existing service, increasing speeds, upgrading rolling stock, and building ridership. The Mistral, for example, was a fast passenger train that linked Paris with Nice from 1950 until the commissioning of the TGV Southeast in 1982. The Mistral was upgraded in 1956 with new equipment (France’s first air-conditioned cars), was integrated into the Trans-Europe-Express network in 1965, and in 1969 received new, luxurious cars and a top-speed upgrade to 100 mph.
In contrast, Amtrak is still running Amfleet cars designed in the 1960s. They’ve served us well, but their replacements are years overdue. That’s nothing a substantial, well-managed long-term capital program can’t address.
“Lawmakers can no longer get away with shortchanging passenger rail,” The Times stated. “Rising gas prices and dependency on foreign oil are front and center in Americans’ minds, as are pollutants that contribute to climate change and respiratory illnesses. Airlines are responding to rising fuel prices by paring schedules, raising fares, and charging for checked baggage. It’s no wonder that May was a record month for Amtrak.”
We’ve seen many editorials like this appear in newspapers across the country. When a publication as highly respected and broadly read as The New York Times takes a position supporting Amtrak, it’s good news for passenger rail. Whether the Wall Street Journal continues to miss the train remains to be seen—but don’t hold your breath waiting.
William C. Vantuono
Editor, Railway Age
Comments are welcome. Email wvantuono@sbpub.com.
| July 14, 2008 |
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Opponents of that route, Citizens for Responsible Transportation, sought a referendum on the alignment, but the court said a decision on the route was administrative, not legislative, and thus not subject to the ballot box.
The citizens group sought to move the train route to an alternate route serving Draper's commercial centers near Interstate 15; The group cited concerns of increased noise, increased crime, obstruction of scenic views, and declining property values as reasons to oppose the preferred route, which UTA acquired from UP in 1993.
Draper officials also favor the ex-UP route for LRT service, which would extend the existing north-south Salt Lake City/Sandy TRAX LRT line south from its current southern terminus in Sandy.
| July 14, 2008 |
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"There has been no pressure whatsoever on fare increases or cuts in service," said GO Transit Chairman Peter Smith. "We all recognize that we're in an environment now where gas and diesel fuel prices have gone up."
| July 14, 2008 |
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USSI's portion of the contract is approximately $36 million, or 30%, and involves the signaling system and operational control center. Among the USSI technologies to be used are the MicroLok II Wayside Control System, which consolidates vital and non-vital control logic, data transmission, and coded track circuits into a single package; and switch machines. The operational objective is to reduce train headways from eight minutes on Line 7 and nine minutes on Line 12 to three minutes on each, resulting in more than a 50% increase in daily passengers, from 430,000 to 660,000.
The project is estimated to take 32 months to complete: 24 months for installation with an additional six months for commissioning.
| July 11, 2008 |
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Half of all available grant funds are reserved for projects costing no more than $20 million. A state or other eligible entity will be required to pay at least 10% of the shared costs of the project.
Congress appropriated $20 million for this program for FY2008 with $5.24 million directed to nine non-competing projects. FRA intends to issue a Notice of Funding Availability later this year, following which applications will be accepted for a competitive selection process for the remaining program funds. To obtain a copy of the Final Rule, go to http://www.fra.dot.gov/us/content/2008.
| July 11, 2008 |
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As a first step, DRPA has prepared a 60% specification for industry review and comment; interested rebuilders have been asked to respond by July 31, 2008. An introductory meeting for the program was held yesterday at DRPA’s Camden, N.J., headquarters. The companies invited to participate were Alstom Transportation, Bombardier Transportation, Brookville Equipment Corp., CAF USA, Kawasaki Rail Car, Railplan International, Siemens Transportation Systems, Sumitomo Corp. of America, United Transit Systems-A Consortium of Sojitz Corp. of America and Rotem, Wabtec Passenger Transportation, Colorado Railcar Manufacturing, Delaware Car Corp., KinkiSharyo International LLC, Mitsui & Co. (USA) Inc., Nippon-Sharyo USA Inc., and Tokyu Car Corp.
PATCO acquired its railcar fleet in two separate orders. The original 75 PATCO I cars were designed and manufactured by The Budd Company in 1968 and entered service at PATCO’s startup in 1969. Forty-six PATCO II cars manufactured by Vickers Canada under license from Budd were delivered in 1980.
| July 10, 2008 |
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| July 10, 2008 |
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In a background paper prepared for the House hearing, the safety issue was prominent. “In 2006, nearly 5,000 people were killed in crashes involving large trucks, and an additional 106,000 were injured,” said the paper, which was prepared by the Subcommittee on Highways and Transit staff. “Truck size and weight laws impact safety on roads. . . . [M]ultiple factors contribute to truck crashes [but] truck weights and lengths affect stopping distances, braking, and vehicle stability and control.”
In an opening statement, Rep. Peter A. DeFazio (D-Ore.) appeared open to the idea of increasing allowable truck sizes on all national highways. “I don’t think anybody could say the current system makes sense,” he said. “We have a total failure and we have to look toward the near future.”
The American Trucking Associations, represented by President and CEO Michael Sid of YRC North American Transportation, said changes that will increase trucking productivity will reduce congestion, save fuel, and improve safety and air quality.
The Association of American Railroads disagreed. “According to the U.S. DOT, trucks weighing over 80,000 pounds pay only about half of their highway cost responsibility,” said AAR President Edward R. Hamberger. “Longer and heavier trucks—unless accompanied by sharp increases in taxes—would exacerbate this inequity and based on a DOT study divert between 100 million and 225 million tons of freight annually from rail to highways.”
| July 10, 2008 |
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Cumulative traffic for the first 27 weeks of 2008 was 8,377,978 carloads, up 0.3% from 2007; 5,955,153 intermodal units, up 1.9%; and 903.8 billion ton-miles, an increase of 1.5%.
Canadian railroads during the week ended July 5 originated 67,848 carloads, down 4.1% from last year, and 44,624 trailers and containers, up 4.2%. For the first 27 weeks of the year, originations totaled 2,006,063 carloads, down 4.1% from last year, and 1,271,131 intermodal units, up 4.2%.
Traffic on Kansas City Southern de Mexico for the week ended July 5 totaled 11,198 cars, up 7.3%; and 4,443 trailers and containers, up 10.6%. Cumulative volume for 27 weeks was 284,854 carloads, down 1.9%; and 128,180 intermodal units, up 10.0%.
| July 10, 2008 |
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| July 10, 2008 |
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The contract is Wabtec Rail’s third with HSBC Rail. In 2006, HSBC awarded Wabtec Rail a 10-year, $140 million contract to overhaul transit vehicle bogies. This was followed by in 2007 by a $40 million contract to maintain high speed locomotives. “This contract represents a significant breakthrough for Wabtec Rail into the refurbishment of transit cars fitted with electric traction, and it demonstrates our continuing successful relationship with HSBC Rail,” said Wabtec President and CEO Albert J. Neupaver.
HSBC Rail (UK) Ltd. owns approximately one-third of the U.K.’s rolling stock and provides a rolling stock and management services for the rail passenger and freight markets. It is a wholly owned subsidiary of HSBC Bank plc, which is a wholly owned subsidiary of HSBC Holdings plc, headquartered in the U.K. and a member of the HSBC Group.
| July 9, 2008 |
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| July 9, 2008 |
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“As the first transit agency in Florida to adopt contactless technology, Miami-Dade County will lead the way toward future interoperability with other agencies in the South Florida region, including the South Florida Regional Transportation Authority Tri-Rail,” said Cubic in an announcement Wednesday. “To achieve this objective, the system will be compliant with the Contactless Fare Media Standard ratified and published by the American Public Transportation Association in 2007. Cubic’s recent smartcard system launches for the Port Authority Trans-Hudson Corporation (PATH) in New York-New Jersey and the Port Authority Transit Corporation (PATCO) in Philadelphia are the nation’s first, and only, CFMS-compliant fare collection systems since the standard was adopted.”
| July 9, 2008 |
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NJT Executive Director Richard Sarles said the budget “relies on more state support and continued cuts in back-office expenses to keep our core rail and bus system running efficiently and meet record demand for service.” New Jersey Governor Jon Corzine’s FY 2009 state budget provides a $60 million increase in operating support for NJT. The agency’s fiscal year runs from July 1 through June 30.
The operating budget provides for large increases in the cost of fuel, power, parts, and materials. NJT said that, since FY 2005, the cost to maintain stations has risen 48%, the cost of vehicle parts has increased 63% and fuel costs have more than doubled. The state’s increase in operating support will be used to partially offset these increases.
The capital budget supports NJT’s ongoing fleet modernization program, which includes 1,365 new buses, 326 new Bombardier Multilevel railcars, 110 electric multiple-unit railcars currently in design, 27 new Bombardier ALP46A electric locomotives, and 26 Bombardier dual-powered (diesel-electric/a.c. catenary) locomotives, a contract awarded today. State-of-good-repair projects include infrastructure renewal, preventative maintenance of equipment, and rail station improvements. Among the capacity expansion projects are the Access to the Region’s Core Trans-Hudson Express Tunnel project to double rail capacity under the Hudson River, and the extension of Hudson-Bergen Light Rail to 8th Street in Bayonne.
| July 9, 2008 |
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Alberta is rich in oil and has been under pressure to use some of these riches to reduce oil’s impact on the environment. In announcing the two new initiatives of its Climate Change Strategy program, Alberta Premier Ed Stelmach commented, “We’re tackling both sides of the emissions challenge on behalf of Albertans and all Canadians. We’re reducing the impact of industrial emissions with carbon capture and storage and investing in public transit to reduce the impact from our tailpipes.”
Initial funding will come from this year’s government budget surplus, which was initially projected at $1.6 billion but is now expected to be “significantly higher than predicted due to higher-than-forecast oil and gas prices.”
Alberta expects its Climate Change program to cut greenhouse emissions in half by 2056.
As examples of projects eligible for funding from the Green Transit initiative, the government listed the following: light rail transit and intercity commuter rail systems; purchase of transit vehicles (hybrid, diesel, natural, gas, fuel cells); regional transit to reduce commuter traffic; acquisition of new transit or commuter rail corridors; and park and ride facilities.
| July 9, 2008 |
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Iowa’s Burlington Junction Railway resumed Burlington operations yesterday and expected to resume Quincy operations today or tomorrow. The Cedar Rapids & Iowa City has resumed operations with the exception of Iowa City Yard, but the yard is expected to be clear of water later this week. CRANDIC cannot presently interchange with CN or Iowa Northern due to the bridge across the Cedar River at Waterloo having washed away, but is serving “all rail customers who are operating.” A timeline is being developed to rebuild the bridge, which the Iowa Northern leases from owner Union Pacific. IANR’s main line is “near normal operation,” and repairs to washouts on other lines should be complete within the next few days. IANR continues to use temporary office quarters, but hopes to return to its Cedar Rapids offices within the next few days as the city’s utilities are repaired.
Iowa, Chicago & Eastern’s Beloit to Janesville main line remains out of service, but “operations are proceeding according to plan and significant improvements have been made in moving the backlog of traffic. The Mason City terminal area remains heavy and extra focus is being placed on that area.” Iowa Interstate reports that all lines are back in operation and it’s working to clear the backlog of traffic, though some final repair work remains. Iowa River Railroad’s line just north of Gifford to Marshalltown, 28 miles, remains out of service, with repairs continuing. Wisconsin & Southern’s Reedburg Subdivision shold resume operation by this weekend; the railroad hopes to have its Prairie Subdivision back in service by mid-month.
Finally, all operations on the Indiana Rail Road resumed as of June 15.
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