February 2004
NJT set to "christen" nation’s first diesel LRTNew Jersey Transit has kicked off an advertising campaign to promote ridership on the 34-mile Camden-Trenton River Line and will hold a "champagne christening" of a train on March 13, according to George Warrington, executive director of NJT. Public service will commence on March 14, at a cost of just $1.10 per ride--"less than a gallon of gas."
The line--formerly known as the Southern New Jersey Light Rail diesel LRT--has suffered numerous setbacks. A year behind schedule, its been attacked by state government officials, and battled controversy over the $1 billion price tag as well as low ridership projections (nearly 6,000 weekday riders).
The Southern New Jersey Rail Group consortium won the design-build-operate-maintain contract for the River Line, which will be the first of its kind in the U.S. to use articulated diesel-powered vehicles. Bombardier has supplied 20 low-floor units. The line will offer connections to Amtrak, SEPTA, PATCO, and other NJT lines.
Cost cuts keep TFM's operating ratio downSharply reduced expenses helped Mexico's largest railway, Grupo TFM, post consolidated operating income of $132 million in 2003 and an operating ratio (OR) of 81.1%. Excluding the operations of Mexrail, TFM's OR was 78.4%. In the fourth quarter, operating income was $32.1 million and the OR 81.6% (79.1% without Mexrail). In September 2003, TFM repurchased from Kansas City Southern 51% of Mexrail's capital stock for $32.6 million, the same price TFM was paid for the sale transaction in April 2003. TFM said it invested $64.2 million in capital improvements last year.
69 new customers come on-line at NSNorfolk Southern says it expects to eventually reap 86,000 carloads of new traffic annually from 69 industries that located along its lines in 2003 and from 20 existing on-line customers that expanded their facilities. NS's largest industrial development (ID) project last year was a Honda auto assembly plant at Lincoln, Ala. Honda will complete a second assembly plant at the same location this year. "Warehouse and distribution projects led the way in 2003," said Larry Collingwood, assistant vice president-ID. "Nearly 40% of new and expanded industries were involved in distribution of products such as lumber, cement, steel, plastics, food, paper, chemicals, aggregates, and auto parts." NS said that in the last decade, its ID department has participated in the location or expansion of 1,144 industries.
Contractor picked for Utah commuter railAfter examining five proposals, the Utah Transit Authority (UTA) has selected Commuter Rail Constructors (CRC) as construction management/general contractor for a planned commuter railroad from Weber County to Salt Lake City. CRC is a joint venture of Stacy and Wilbeck, Inc., and Herzog Contracting Corp. The first phase of the contract, worth about $525,000, is for preconstruction services--"working with UTA, project designers, and project stakeholders to develop a cost-effective construction plan," said the agency. UTA expects to start the commuter rail service in 2007.
Giant nitrogen producer tests Green KidCalgary-based Agrium Inc., the world's second largest producer of nitrogen, has arranged to test a RailPower® Green Kid hybrid locomotive at its Soda Springs, Idaho, and Redwood, Alberta, sites. Agrium spokesman Richard Downey said the company operates four locomotives at the two sites "which could potentially be replaced with the Green Kids if the tests prove successful."
Trinity proposes $300 million senior note offeringTrinity Industries announced Feb. 27 that it is proposing to offer up to $300 million aggregate principal amount of senior notes due in 10 years. Trinity said it intends to use the net proceeds "to repay indebtedness outstanding under its existing credit facility and for general corporate purposes, including, among others, to make capital expenditures in strategic manufacturing facilities and fund working capital requirements of its railcar manufacturing operations." On Feb. 26, Trinity announced that it had received an order for 6,000 wheat cars from Burlington Northern and Santa Fe.
Traffic Club of New York names UPS Supply Chain Solutions "Company of the Year"The Traffic Club of New York presented UPS Supply Chain Solutions, a business unit of UPS, with its "Company of the Year" award at a ceremony on Feb 26. The annual award recognizes companies "at the forefront of the logistics and transportation industries."
"UPS Supply Chain Solutions has made a lasting impression on the logistics community, as it has been instrumental in moving our industry forward," said Kevin Murphy, president of the club.
"I’m honored to accept this award on behalf of our employees," said Bob Stoffel, president of UPS Supply Chain Solutions. "Our purpose at UPS is to enable global commerce for our customers by synchronizing the flow of goods, information, and funds. UPS Supply Chain Solutions represents the expanded capabilities we’ve developed to get that job done."
CN and UTU reach tentative agreement CN and the United Transportation Union announced today a tentative labor agreement covering 375 UTU members who work on CN’s former Grand Trunk Western (GTW) line in the U.S.
In contrast with traditional mileage- and rule-based wage systems, the new agreement would provide hourly wages, job guarantees, and more flexible work rules, according to the Class I.
If ratified, all of CN’s 2,300 U.S. train and engine employees would be covered by hourly-rated pay schemes.
The GTW’s main line between Port Huron, Mich., and Chicago is a key link in CN’s network between the U.S. Midwest, Ontario, Quebec and the Maritimes.
Meanwhile, the Canadian Auto Workers strike against CN continues. Union workers walked out on Feb. 20, when the two groups, aided by federal mediators, could not come to terms on new contracts replacing those that expired at the end of 2003. Talks are again under way. CAW represents approximately 5,000 CN shopcraft, clerical, and intermodal yard employees in Canada.
Suppliers partner to offer Indian Railway-manufactured rolling stockInternational consultancy RITES India and railway equipment supplier Kessler International Corp. have teamed up to distribute Indian Railway-manufactured rolling stock and components in the U.S., Mexico, and South America.
While RITES has been supplying such products on its own, the partners now will be able to sell ALCO 251-designed locomotives with six-, 12-, and 16-cylinder engines and 1,350-, 2,300-, and 3,100-hp, and related parts. (RITES can provide the technical support and manpower necessary to run railway systems on a turnkey basis, as well.)
"Indian Railways’ manufacturing and operating capability with this equipment allows us to provide our customers with locomotives, parts, and services at almost half the cost," said Vinod Kakar, general manager of Kessler India.
According to Kessler, IR has manufactured more than 4,000 locomotives that are operating "reliably" in India and abroad.
RailPower moving up in the trading worldRailPower Technologies Corp. announced on Feb. 26 that it expects its shares to begin trading on the Toronto Stock Exchange (TSX) during the week of March 8. The Vancouver-based company, which builds the hybrid Green Goat and Green Kid yard locomotives, said it had received conditional approval for the listing. The company is currently listed on the TSX Venture Exchange (P).
Ex-VRE officer takes Texas postTrinity Railway Express, a commuter service linking the downtowns of Dallas and Fort Worth, has a new chief operating officer--Peter Sklannik, who formerly held a similar position with Virginia Railway Express. In addition to supervising day-to-day operations at TRE, Sklannik will develop marketing and customer-service initiatives. Ridership on the Virginia network doubled in the years after his arrival there in 2000, said the TRE announcement.
BNSF acquiring 6,000 grain cars from TrinityTrinity Industries has agreed to supply 6,000 high-capacity covered hopper cars to Burlington Northern and Santa Fe over the next four years. Production will begin in this year’s third quarter. The cars will be used in grain service, where BNSF has recently experienced severe equipment shortages. Details of the transaction were not immediately available.
In. announcing the order on Feb. 26, Trinity Rail Group CEO Mike Flannery commented, "Our railcar backlog had already grown to more than 12,000 at the end of 2003, and this order provides further evidence that the market for our products continues to improve."
Trinity car production will nearly double in ‘04Trinity Industries announced Feb. 25 that its North American freight car shipments increased 33% in the fourth quarter compared to the third quarter of 2003 and 101% compared to the fourth quarter of 2002. "Our North American backlog is at the highest level since March 2000 and we are planning to almost double our rail shipments in 2004," said Trinity Chairman, President, and CEO Timothy R. Wallace as he announced results for last year. "We expect 2004 to be another transitional year for Trinity as our North American railcar and barge businesses rebound from the trough of their markets despite the fact that the majority of our manufacturing businesses are confronted with increasing steel prices and potential steel supply shortages. We are working day to day with suppliers of steel to mitigate the effect this will have on our product deliveries and profits."
For the quarter ended Dec. 31, Trinity posted a loss of $0.8 million on revenues of $415 million compared with a loss of $11.5 million on revenues of $349 million in the same period a year earlier. The 2003 fourth quarter included an after-tax loss provisions of $4.5 million "for certain North American rail and barge contracts that will be completed in 2004"—losses due primarily to "the effect of increases in steel prices related to scrap surcharges that Trinity was notified of in the first quarter of 2004. For the year 2003, Trinity reported a loss of $10.0 million on revenues of $1.4 billion, compared with a net loss of $19.6 million on revenues of $1.5 billion in 2002.
Siemens gets nod for Charlotte light rail carsThe Metropolitan Transit Commission of Charlotte has recommended acceptance of a Siemens Transportation Systems bid to supply 16 light rail trains for $53 million. The Charlotte city Council is expected to give final approval to the contract on March 22. MTC believes its chances are good for getting a federal commitment to pay half of the estimated $371 million cost of the Charlotte Area Transit System light rail line; CATS wants to order the rolling stock next month in order to maintain its October 2006 scheduled opening of the line.
Kawasaki wins delay of SEPTA orderA Common Pleas Court judge in Philadelphia has set March 15 for a hearing on Kawasaki’s complaint that SEPTA was out of order in finding a South Korean-led consortium to be the preferred bidder for supplying 104 new commuter cars to the agency. The apparent winner in the bidding was United Transit Systems, led by South Korea’s Rotem Inc. The UTS bid was $237 million, $14 million below that of Kawasaki. The Japanese builder, which has a plant in Yonkers, N.Y., argued that SEPTA’S initial emphasis on technical expertise was weakened to favor the Rotem group. SEPTA said it did not view the revised specifications as a material change. Judge Matthew Carrafiello found that Kawasaki’s argument was of sufficient merit to put a hold on a final contract at least until the March 15 hearing.
Bombardier, Talgo share AVE maintenance contractBombardier and Patentes Talgo, which are building 16 AVE 102 high speed trains for Spanish National Railways (RENFE), have been awarded an additional contract worth 124 million euros ($C433 million) to maintain the new fleet for 14 years. Bombardier’s share of the contract is around $C208 million. The trains will be operated on a new high speed line linking Madrid, Barcelona, and the French frontier town of Le Perthus. Bombardier announced the contract on Feb. 25, noting that it had no connection with orders announced one day earlier for a new fleet of conventional intercity trains to be supplied by consortia including Bombardier, Talgo, Alstom, and CAF.
Spain awards $1.76 billion in train contractsSpanish National Railways, RENFE, announced Feb. 25 that it has awarded contracts valued at 1.4 billion Euros ($1.76 billion) for 101 new, 155-mph trains. Under a contract worth 937 million Euros, a consortium of Alstom (France) and CAF (Spain) will supply 30 wide-gauge trains and 45 variable-gauge trains. A 370 million Euro order placed with Bombardier (Canada) and Talgo (Spain) is for 26 variable-gauge trains. Most track in Spain is wide gauge; variable gauge means they can be used on standard-gauge high-speed lines and wide-gauge conventional lines. Both contracts include maintenance for 14 years. RENFE also awarded a contract worth 143 million Euros to Talgo for 10 sleeper-car trains.
In addition to conventional trains like these, Spain continues to expand its high speed network, which is being built to standard gauge. A Madrid-Seville high speed line (186 mph) has been hugely successful, and a Madrid-Barcelona (217 mph) line is close to completion.
The Spanish Transport Ministry recently announced that it would increase rail spending by 25% this year to 6.36 billion Euros (around $8 billion). International Railway Journal, Railway Age’s sister magazine based in the U.K., reports in its February issue that rail spending in Spain now accounts for almost half of spending for all transportation modes. Highways, for example, are to get 2.27 billion euros; airports, 2.3 billion; and ports, 927 million. IRJ Editor David Briginshaw writes that this "will put Spain into first place in Europe for railway investment [and] second place in world terms behind China (at about $8.5 billion) and just ahead of the United States (at about $7.5 billion)."
Deadline extension for Railway Age's Short Line and Regional Railroad of the Year contestRailway Age has extended its deadline for 2004 Short Line and Regional Railroad of the Year award nominations. The new deadline for entries is Monday, March 1, 2004.
Winners of the 2004 Short Line/Regional Railroad of the Year Awards will be honored with articles describing their achievements in the April 2004 issue of Railway Age. The awards also carry specially-designed plaques.
Short line and regional carriers are invited to submit entries describing what they deem to be outstanding achievement in one or a combination of areas. These include, but are not limited to, turnaround situations; consistent excellence; innovation in operations or maintenance; marketing; customer service; enhanced productivity; community relations; safety improvement; and ingenuity in dealing with the unexpected. Each of the more than 600 smaller roads in Mexico, the U.S., and Canada is eligible for an award and may nominate itself. Size is not important. In the past, awards have gone to carriers ranging from 20 miles to nearly 2,000 miles. In some years, separate awards are given for regional and short line carriers.
To obtain an entry form, visit this site:
http://www.railwayage.com/rr_entryform.html
Entries should be submitted to: Marybeth Luczak, Executive Editor, Railway Age, 345 Hudson Street, 12th Floor, New York, N. Y., 10014. E-mail: mluczak@sbpub.com. Fax: (212) 633-1863.
Railway Age will work with the winners to publicize the awards in online and national print media.
UP continues search for train service traineesUnion Pacific is recruiting entry-level train service employees in eight states, promising starting annual earnings of around $40,000 rising "within a few years" to as much as $70,000 based on job performance, seniority, location, and work schedules. An announcement on Feb. 19 said there are immediate openings in California, Iowa, Minnesota, Nebraska, Nevada, Texas, Utah, and Wyoming. Information is available at www.up.com by clicking on "Jobs at UP" and then on "View Positions." "As the economy recovers and manufacturing increases, so does shipping, and that is creating a need for train service workers," said Bill Behrendt, UP’s assistant vice president of human resources.
With 5,000 workers out, CN keeps rollingIn the fourth day of a strike by approximately 5,000 shopcraft, clerical, and intermodal yard employees, CN reported that business was at near normal levels under a contingency operating plan. That plan went into effect as employees represented by the Canadian Auto Workers Union walked out on Feb. 20 after failing to ratify new contracts negotiated by the company and the union. Court orders prevented picket lines from closing access to intermodal yards. The strike was not unexpected, and CN announced Feb. 19 that it would maintain normal freight schedules, with management employees performing CAW functions, though it warned that shippers might experience some delays.
Network Rail suspends control center projectNetwork Rail, Britain’s infrastructure management company (formerly known as Railtrack), has suspended plans to build its Network Management Center due to financial and budgetary constraints. The NMC, which Network Rail contracted with Union Switch & Signal to develop, would have been used to optimize traffic planning and reduce train delays.
US&S said it has reduced its workforce in response to the project’s suspension. Approximately 40 people at the company's Pittsburgh Technology Center have been affected by the workforce reduction. "There could be additional workforce reductions based on project closeout activities and the level of follow-on opportunities with Network Rail," US&S said.
Korean carbuilder preferred bidder for SEPTA contractUnited Transit Systems (UTS), a consortium of South Korea’s Rotem and Japan’s Nissho-Iwa Ltd., is the preferred bidder on a contract for 104 new electric multiple-unit commuter railcars for Southeastern Pennsylvania Transportation Authority, Philadelphia. SEPTA staff members today recommended UTS be awarded the contract to a board committee; the full SEPTA board is expected to vote on the contract next Thursday. The cars will replace aging Budd Company Silverliners.
UTS’s bid of $237 million was $14 million below the next-lowest bidder, Kawasaki, which bid $251 million, and nearly $100 million lower than the remaining two bidders, Sumitomo ($323 million) and Bombardier ($340 million). UTS plans to assemble the cars in a facility it will establish in an abandoned warehouse at the former Philadelphia Naval Yard, and hire about 140 local workers. Since federal funding is involved, there is a 60% U.S. content required under Buy America provisions. Rotem has a 90% interest in UTS.
The four bidders were each assigned scores based on, among other factors, engineering and manufacturing capability, technical and labor expertise, final assembly, North American experience, and price. Interestingly, UTS had the lowest score—125 out of a possible 175 points. Bombardier scored 132; Sumitomo, 157; Kawasaki, 163.
Rotem was launched in July 1999 through the merger of the rolling stock divisions of Hyundai, Daewoo, and Hanjin Heavy Industries. The SEPTA contract would be its first in North America. It recently won a contract for 80 subway cars valued at $100 million for Rio de Janeiro, Brazil, beating out Bombardier, Siemens, and Alstom.
According to a report published in the Feb. 17 Korea Times, Rotem "expects its advance into Latin America to gather momentum. Last November, Rotem signed a contract to supply 24 electric multiple units to Salvador city in Brazil. It said it has an advantage over competitors for orders of subway projects for Sao Paulo and Fortaleza. Rotem said it will be able to challenge Alstom's monopoly in Latin America. It will consider establishing either a subsidiary or joint venture in Brazil."
Bombardier Transportation gets new CEOAndre Navarri, a former president of Alstom’s transportation division, will become president of Bombardier Transportation on Feb. 22. The appointment was announced Feb. 18 by Bombardier Inc. President and CEO Paul M. Tellier.
After leaving the Alstom Group, where he worked for 20 years, Navarri served as chairman and CEO of automotive component supplier Valeo SA and later as president, operations, at Alcatel.
Bombardier Inc. recently announced a reorganization in its rail transportation group, with the position of president and chief operating officer split into two separate positions. Wolfgang Toelsner was named chief operating officer.
Wabtec earnings—and new orders—riseFeb. 18 was a banner news day for Wabtec Corp. The company reported its sixth consecutive quarter of year-over-year earnings increases. It also reported a new order worth up to $100 million, with options, for New York City subway car components—door operating systems, door panels, and event recorders. This followed an earlier order valued at $150 million, with options, for brakes, couplers and current collectors. These orders are part of New York’s R-160 subway car program. Alstom Transportation and Kawasaki are to deliver 1,700 new cars starting in 2006.
Wabtec’s net income for the fourth quarter of 2003 was $5.9 million, compared with $5.3 million in the same period in 2002. Wabtec said the improvement resulted from "higher sales and a more favorable product mix, offset partially by the negative impact of foreign currency exchange rates." Wabtec Chairman William E. Kassling said the company generated $45 million in cash flow last year, exceeding its target of $40 million.
REMSA offers college scholarship programThe Railway Engineering-Maintenance Suppliers Association will award five $2,000 scholarships to the full-time employees and family members (spouses, children, or grandchildren) of REMSA member companies for the 2004-2005 academic year. Eligible students must have an interest in railway-related careers and be enrolled, full time, in an accredited two-year or four-year college program. REMSA scholarships may be considered for renewal each year. Applications and all supporting materials must be submitted by May 1. All applicants will be notified of their award status in July.
For details, contact REMSA Executive Director Judy Meyerhoeffer at: 210 Little Falls Street, Suite 100, Falls Church, VA 22046; Phone: (703) 241-8514; Fax: (703) 241-8589; Email: meyerhoeffer@remsa.org; Website: www.remsa.org.
BNSF leases another 30 miles of Texas track to TIBRThe Timber Rock Railroad Co. (TIBR), a Watco Companies subsidiary, has expanded its rail service by 30 miles between Sisbee and Kirbyville, Tex., under a lease agreement with Burlington Northern and Santa Fe. The 170-mile short line was established in 1998 from BNSF trackage purchased between Kirbyville and DeRidder, La. In 2002, TIBR signed a 10-year lease with the Class I for an additional 100 miles of track between Kirbyville and Tenaha, Tex., including all connecting sidings, spurs, and sidetracks; and yard, industrial, team, and switching tracks. TIBR interchanges with BNSF at Tenaha and Kirbyville, and Kansas City Southern at DeRidder.
"This is really an exciting addition, which will expand our already strong presence in Texas and the Gulf Coast," said Rick Webb, president and CEO of Pittsburg, Kan.-based Watco, which owns seven short lines operating in 23 states. "Our entire team will be focusing on this line to ensure that we are taking care of our customers, and that this transition is as seamless as possible."
"We have found the Watco organization to be nimble and competent service providers when dealing both with us and with our mutual customers," added Pete Rickershauser, BNSF’s vice president-Network Development, "and we look forward to its successful operations of this BNSF property."
Jervis Langdon, CEO of ailing railroads, dies at 99Jervis Langdon, Jr., who served successively as CEO of three troubled Class I’s during a tumultuous period of 20th Century railroading, died Feb. 15 in Elmira, N.Y., where he was born 99 years ago. A champion of consolidation, Langdon once said, "The greatest potential for an efficient national railroad system lies in fewer railroads—far fewer." (Railroad Mergers, Frank Wilner, 1997.) Langdon was president of the Baltimore & Ohio when it was taken over by the Chesapeake & Ohio in 1963, a transition in which he played an important role. He went on to become head of the Rock Island, whose efforts to save itself through merger were thwarted by the ponderous, slow-moving bureaucracy at the Interstate Commerce Commission. After the Penn Central went into bankruptcy, a federal judge appointed Langdon trustee of that railroad; he subsequently became its president (he was named Railroader of the Year in 1971). Langdon was a grandnephew of Mark Twain, who married Olivia Langdon. In 1982, Jervis Langdon donated the ancestral family retreat, Quarry Farm, to Elmira College, which turned it into a center for Mark Twain studies.
Senate bill disappoints rail groupsThe Railway Supply Institute mustered impressive bipartisan support for financing rail infrastructure needs in TEA-21 reauthorization legislation, but the $318 billion bill passed by the Senate on Feb. 12 failed to include the desired "rail title." While the bill included Amtrak funding, it was not immediately clear how other provisions of the complex legislation might affect railroads.
WTC station is again PATH’s busiestThe Port Authority of New York and New Jersey announced on Feb. 12 that PATH’s temporary World Trade Center station has again become the busiest station on the system, two years ahead of projections. Built at a cost of $566 million, the station opened on Nov. 23, 2003, replacing one destroyed in the 9/11 terrorist attacks. PANY said the station averaged more than 30,000 weekday riders between Jan. 15, and Jan. 31. The bistate agency had expected weekday ridership to initially average 18,000, rising to between 20,000 and 30,000 the first year, and reclaiming its position as the system’s busiest weekday station by 20006. As it turned out, those goals were achieved in the first two months. PANY/NJ called this "the clearest sign yet of Lower Manhattan’s continuing recovery."
Kim Hotstart extends ISO recordSince receiving ISO 9001:2000 certification in July 2001, Kim Hotstart Manufacturing has undergone five audits by Quality Management Institute, none of which has resulted in a non-conformance. Its most recent January audit extended the company’s "perfect" ISO record, according to Don Etten, Kim Hotstart’s quality assurance manager.
NS expanding remote control operationsNorfolk Southern plans to install remote control locomotive technology at an additional 12 locations in 2004 and 2005, the railroad reported in a presentation at the Deutsche Bank Global Transportation Conference in Naples, Fla., on Feb. 11. NS, which began installing remote control in January 2002, now uses the technology in 34 locations across the system, and has so far trained 595 employees in the use of remote control. NS said it's evaluating new products on the market before making additional purchases.
NS Vice Chairman and CFO Henry C. Wolf also told the conference that NS will spend an estimated $810 million on capital improvements this year, compared with $720 million in 2003. During the last 10 years, capital investment at the railroad peaked at $1 billion in 1998. The lowest investment was $695 million in 2002.
NS also had good news on the employee safety front. Wolf said preliminary statistics show that NS last year experienced only 1.35 injuries per 200,000 employee-hours. That compares with preliminary figures of 1.75 for Burlington Northern and Santa Fe, 1.92 for Union Pacific, 2.18 for CSX Transportation, and 4.00 for Amtrak.
Pennsylvania governor assails Bush transit budgetAt a transportation conference in Harrisburg on Feb. 10, Pennsylvania Gov. Ed Rendell was strongly critical of the Bush Administration’s six-year surface transportation funding package. He said the White House version of TEA-21 reauthorization failed to meet the capital needs of systems like Philadelphia’s SEPTA and Pittsburgh’s Port Authority of Allegheny County. Rendell spoke at a conference whose theme was "Public Transit: A Funding Crisis." Several days earlier, Rendell proposed a 3.5% increase in state transit funding in FY 2005, but one analyst said that would meet no more than 10% of the need.
The White House wants to hold the six-year federal reauthorization to $256 billion. The Senate is now considering legislation providing $318 billion; the House of Representatives has been eyeing $375 billion.
Amtrak evaluating "higher-speed" corridorsThe $1.798 billion capital/operating budget that Amtrak submitted to Congress on Feb. 10 contains no specific funding for new state-corridor development studies, but it’s not an issue the national passenger railroad is ignoring.
Amtrak told Congress: "Unfortunately, many worthwhile passenger rail projects are stalled due to the lack of a national rail policy and the absence of any established federal matching fund program for state rail corridor development. Amtrak is currently evaluating state proposals to develop higher-speed rail corridors using multiple criteria, including state-local commitment, host railroad support, and market viability. The administration and several members of Congress have advocated a new federal/state capital funding partnership and Amtrak hopes that the study will facilitate and encourage such relationships."
The need for increased state funding is one area where Amtrak and the Bush administration are in agreement, though they remain far apart on the question of federal funding. The President’s proposed budget for FY 2005 contains only $900 million for Amtrak – "a shutdown number," said Amtrak President David L. Gunn as he announced his request for twice that amount. The U. S. Department of Transportation reiterated the President’s pledge to support funding of $1.4 billion for FY 2005 provided Amtrak moved to implement the controversial "Amtrak reform plan." That plan includes the outsourcing of some Amtrak operations to the private sector. It has won little support.
Sales and earnings rise at PortecPortec Rail Products, Inc. announced on Feb. 11 that net sales hit an annual record of $57.6 million in 2003, up from $50.1 million in 2002. Fourth-quarter 2003 sales were $12.8 million compared to $10.3 million in the same period a year earlier. In unaudited results, the company reported net income of $522,000 for the fourth quarter last year, up from $320,000 a year ago, and net income of $3.4 million for the full year 2003, compared with $2.2 million in 2002. (In an IPO last month, the company netted $17.3 million on the sale of two million shares of its common stock.)
Alstom, Siemens share big diesel orderA consortium of Alstom and Siemens has won a diesel-electric locomotive order from French National Railways (SNCF) valued at up to $1.3 billion. The contract is for an initial 400 locomotives with an option for an additional 100. The Alstom share is 60%. SNCF Chairman Louis Gallois said the order is "the first for diesel rail stock in 30 years and will profoundly modernize" the railroad’s equipment fleet.
Pennsylvania to receive $13.3 million for transit projectsFour grants totaling $13.3 million have been approved for Pennsylvania transit projects, announced U.S. Secretary of Transportation Norman Y. Mineta on Feb. 10.
The following projects will be supported:
* The Port Authority of Allegheny County will receive $6.9 million for the North Shore Connector Light Rail Transit Project. The Pittsburgh LRT will include a new 1.2-mile Gateway Line extension from the existing Gateway Center Station, across the Allegheny River, to the new Heinz Field Football Stadium and Carnegie Science Center on the North Shore, and a 0.3-mile Convention Center Line extension from the existing Steel Plaza LRT Station to the David L. Lawrence Convention Center.
* Another $3.9 million will finance the Port Authority’s Job Access and Reverse Commute expansion projects in the Southwestern Pennsylvania Region, including various shared-ride services. The projects will be implemented and operated by transit agencies, transportation management associations, human service agencies, and faith-based community service.
* The Westmoreland County Transit Authority will receive $1.2 million to purchase three replacement buses and four commuter buses for service expansion.
* The city of Williamsport will use its $1.2 million grant to purchase two replacement buses, renovate and expand an administrative and maintenance facility, purchase and install a bus washer, and erect three bus stop shelters and signage.
Amtrak seeks higher capital budgetAmtrak President David L. Gunn submitted a request to Congress on Feb. 10 for a grant of $791 million for capital improvements in FY 2005. That compares with capital spending of $532 million in Amtrak’s revised budget for FY 2004.
The capital grant is part of a total of $1.798 billion that Gunn is asking for FY 2005, compared to $1.375 million from various sources in FY 2004. He’s also seeking $570 million for operations, $262 million for debt service, $75 million in working capital, and $100 million for a DOT RRIF loan repayment that was deferred last year.
President Bush asked Congress on Feb. 2 to fund Amtrak at a total of $900 million in FY 2005. At that time, Gunn noted that the Administration had also tried to cut Amtrak to $900 million in FY 2004, but "we received an appropriation level from Congress higher than requested by the Administration." That appropriation was $1.2 billion. It was augmented, in Amtrak’s final FY 2004 budget, by carry-over of $150 million in funds from FY 2003 and deferral of the loan repayment.
In announcing his proposed FY 2005 budget on Feb. 10, Gunn pointed out that it was in line with Amtrak’s five-year strategic plan: "When we announced our plan last February, we said we’d need about $1.7 billion in FY 2005, and that is what we have proposed."
FEC selects Solidstick™ lube system for loco fleetFlorida East Coast is equipping its entire fleet of road locomotives with MPL Technology’s Solidstick™ wheel flange and rail lubricating system.
"We are installing Solidstick applicators and sticks to help us get reliable fuel and wheel wear savings," said Gary Griffiths, FEC's vice president and chief mechanical officer. The system's simplicity, he added, is an another advantage.
The Solidstick applicator is bolted onto existing locomotive truck-assembly brackets and its polymer stick is properly aligned so that a spring can apply enough pressure to coat the flange’s throat with lubricant. Savings include reduction in wheel wear and truing requirements, increased rail life, decreased reliance on trackside lubricators, and reduced fuel usage.
"MPL Solidstick is a simple, very cost-effective improvement over traditional lubrication methods," pointed out Michael Mitrovich, MPL president. "The cost of installation is very low, while maintenance and operating costs are significantly less than other wheel lubrication systems."
2,800 Canadian trainmen switching to TeamstersTeamsters International President James P. Hoffa announced on Feb. 6 that the Teamsters Canada Rail Conference had won a representation election on the Canadian Pacific Railway, picking up 2,800 trainmen from the United Transportation Union as well as keeping 1,700 engineers targeted by the UTU.
The Teamsters Canada Rail Conference was created in the merger of the Brotherhood of Locomotive Engineers and the International Brotherhood of Teamsters on Jan. 1. With that merger, the Engineers union became the Brotherhood of Locomotive Engineers and Trainmen.
UTU petitioned the Canadian Labour Board for the election in a bid, said the Teamsters, for the entire group of 4,500 operating workers.
"We didn’t want this vote to occur in the first place, but the results show that the workers want to belong to the Teamsters," Hoffa said.
BNSF’s economic development efforts pay off in 2003Burlington Northern and Santa Fe’s economic development efforts in 2003 have led to a $1.1 billion investment in the location of 149 new or expanded facilities along its lines and the creation of 3,845 new jobs.
Vann Cunningham, assistant vice president-BNSF Economic Development, observed that the Class I’s partnerships with state and local, public and private economic development agencies have helped "businesses accelerate improvements to their supply chain process--from site selection to optimizing distribution networks."
Among the newly located facilities are ethanol plants in California, Iowa, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, and South Dakota; lumber yards and transload facilities in California, Kansas, and Minnesota; and consumer and perishable products warehouses in Arkansas, California, Illinois, Missouri, and Nebraska. Among the others are plastics and aggregates facilities, a copper firm, and a paper mill.
Huntington Beach, Calif.-based Reliable Wholesale Lumber (RWL) was just one of the lumber companies to locate two new distribution centers along BNSF lines due to the spike in housing starts in 2003. Working with BNSF helped RWL increase its capacity and enable broader access and deeper penetration into key markets, according to Jerry Higman, president of the company.
STB issues decisions in Duke rate casesLast week, the Surface Transportation Board found for CSX Transportation and against Norfolk Southern in separate rate cases filed by Duke Energy Corp.
CSXT’s rates for hauling coal from origins in Virginia, West Virginia, and Kentucky to Duke’s Cliffside and Riverbend, N.C., electricity generating facilities, and to Duke’s Lee, S.C., electric generating facility were not unreasonable under the "stand-alone cost" test, according to the STB. The Class I successfully demonstrated that the move’s capital and operating costs justified its rates. There was concern, however, about the size of the rate increases, and the STB noted that it would consider requiring CSXT to phase in rate increases over time, if Duke decided to pursue the matter further.
"The Board’s decision supports our position that CSXT established fair rates for Duke," said Christopher Jenkins, vice president-coal and auto service group, noting that CSXT "regret[s]" that Duke canceled its transportation contract with the railroad to bring the case to the Board.
"While we are pleased with the result of this case, at the same time, we have always been willing to negotiate private contracts that provide discounts in exchange for considerations such as volume commitments," Jenkins added.
In the Duke vs. NS rate case, the STB overturned its original Nov. 6, 2003, decision, which found the railroad’s rates to be reasonable, and issued corrections to "computational and technical errors" in the earlier decision. NS estimates that any required reduction to the challenged tariff rates would be less than 2%.
Because the Class I and Duke have indicated that they will file petitions for reconsideration, the STB has continued to stay its November decision and has not quantified or ordered any rate relief.
NS said that it will continue to "monitor future developments and report on any financial impact when a definitive resolution is reached."
Union Pacific expands "Passport" programUnion Pacific Carrier Services (UPCS) and third-party logistics provider TransMex Logistics have teamed up to expand Union Pacific Railroad’s Passport program. UPR-managed Passport is a border-clearing service that combines U.S. rail and Mexican trucking in a bundled offering. UPCS arranges Mexican highway transportation. The new Passport Plus will "expedite trans-border shipping to and from Mexico by providing intense scrutiny and screening of shipments," according to the Class I.
TransMex, a subsidiary of Tucson, Ariz.-based OrderPro Logistics, will review customers’ bills-of-lading and shipping documents for accuracy, monitor transportation and customs events, and resolve issues as needed to eliminate transit delays.
Initially, Passport Plus will be offered as a local UPR rail-trailer service, but in the near future, it will include other rail-controlled equipment and be offered as a joint service with connecting North American carriers.
Approximately 3,000 loads per day move back and forth across the Mexican border bound for national and international destinations.
Key Congressman asks Bush to "reconsider"U. S. Rep. Don Young, chairman of the House Transportation and Infrastructure Committee, has let the White House know of his displeasure with the $256 billion TEA-21 reauthorization proposed by the President. Young’s committee has been working on a $375 billion reauthorization, and a bill authorizing $311 billion has been making headway in the Senate. Young not only believes the Administration’s figure is far too low to meet the needs of highways and transit--he also told the President he is "extremely disappointed with the ‘take it or leave it’ approach taken by your advisors." This was a reference to a letter sent to Congress by Treasury Secretary John Snow and Transportation Secretary Norman Y. Mineta suggesting the President would veto any legislation that violated certain taxing and spending "principles." Young said "no option should be placed off limits" for discussion. He also said, "It is my view and I believe the view of most of my colleagues in Congress that you are not receiving the best advice on how to reauthorize our nation’s surface transportation programs in the coming six years."
14 rail transit projects recommended for fundingThe Federal Transportation Administration has awarded "recommended" ratings for FY 2005 funding to 14 rail transit projects. Only one is at the "pending full-funding grant" stage--the Los Angeles Metro Gold Line Extension, estimated to cost $898.8 million, of which total federal funding of 55% is sought.
Four are in final design: Charlotte South Corridor LRT; New York LIRR East Side Access; Central Phoenix/East Valley LRT; Raleigh/Durham Regional Rail System.
Nine are at the preliminary engineering stage: Columbus North Corridor LRT; Dallas Northwest/Southeast Light Rail; Las Vegas Resort Corridor Fixed Guideway (monorail); New York Second Avenue Subway; Orange County Centerline LRT Project; Weber County to Salt Lake Commuter Rail; San Diego, Midcoast Extension; San Francisco, New Central Subway; Washington county Wilsonville to Beaverton Commuter Rail Project.
New York plans AirTrain expansion to lower ManhattanNew York State and City officials have unveiled four alternatives to link Lower Manhattan to J.F.K. International Airport and Long Island Rail Road’s Jamaica, Queens, station, by building off the newly opened AirTrain system.
Determined as part of a feasibility study being conducted by Lower Manhattan Development Corp., New York MTA, Port Authority of New York and New Jersey, and New York City Economic Development Corp., all four options will carry riders from either JFK or the Jamaica station to downtown Brooklyn via the LIRR’s Atlantic Avenue Branch. They also provide station or pedestrian connections to PANY/NJ’s World Trade Center transportation hub or MTA’s Fulton Street Transit Center. The options differ only in the tunnels they employ to cross the East River between Brooklyn and Manhattan.
The first option proposes new tunneling in Brooklyn, a new East River tunnel, and tunneling in Manhattan; the second, new tunneling in Brooklyn and use of the Montague Street Tunnel (currently serving the M, N, and R subway lines) and MTA New York City Transit’s Broadway and/or Nassau Line; the third, new tunneling in Brooklyn and use of the Cranberry Street Tunnel (currently serving the A and C subway lines) and the NYCT Fulton Line (A and C); and the fourth, using both the Cranberry and Montague Street Tunnels.
"Transportation improvements including a direct rail link to JFK Airport are vital investments in the future of Lower Manhattan," said Governor George E. Pataki during a press conference on Feb.4, announcing the proposals.
The final plan, including a financing framework, will be announced in late April. This spring, a formal environmental review process will commence and a timeline for implementation, including construction start date and the beginning dates of potential interim/early phases of new services, will be released.
Interfleet expands consultancy with acquisition of RSE ManagementInterfleet Technology, a U.K-based international rail technology consultancy, has acquired the business and assets of Risk, Safety, and Environmental Management Ltd. (RSEM) from GB Railways Group plc. Following First Group’s take-over of GB Railways last year, it was decided that consultant firm RSEM, established in April 2003, was not central to the train operating company’s core business. RSEM is an "excellent strategic fit" with Interfleet, however, noted David Rollin, managing director of Interfleet.
RSEM will move to Interfleet’s London office. RSEM Managing Director Mike North will report to Interfleet’s London Director Peter Howarth.
UP plans new intermodal facility in TexasUnion Pacific says construction could begin in May on a new, 342-acre intermodal facility in Dallas County, Tex., with 23 miles of track and 3,200 trailer stalls. The facility will be located in a business park developed by Prime Rail Interest, Inc., which developed Railhead Phase IV in Fort Worth and is developing additional rail-served industrial parks in the area.
China plans rail link with RussiaChina is reported to be planning a new, 840-mile railroad linking the port of Dalian in its northeastern region with a point near the port of Vladivostok in Russia. The Beijing-based China Daily, as quoted by Reuters on Feb. 4, said the line would run through areas with "rich and varied resources, but with lagging economies." Construction of the railroad would be a 15-year undertaking.
Green Kid heads for another testA 1,000-hp-equivalent Green Kid hybrid yard locomotive will be tested for 90 days at the North Vancouver, B.C., facilities of James Richardson International Limited (JRI). Nick Fox, JRI’s vice president-Terminals, observed that "there is no better way to evaluate performance, reliability, and economics than under actual operating conditions." In announcing the new lease trial on Feb. 4, Jim Maier, president of RailPower Technologies Corp., said the company sees "a bright future for [the Green Kid] industrial applications." RailPower is the builder of the Green Kid and the twice-as-powerful Green Goat.
Freight car backlog nudges 40,000Freight car builders entered 2004 with a backlog of 33,967 cars, up from 18,402 a year earlier. Orders were placed in 2003 for 47,249 new cars, compared with 28,459 in 2002. Car deliveries totaled 32,183 last year, up from 17,736 in 2002. The Railway Supply Institute’s latest American Railway Car Institute Committee statistics are posted on the RSI website.
Bush budget disappoints, but doesn’t surpriseAdvocates of increased federal support for surface transportation found little to cheer about in President Bush’s FY 2005 budget. But then they really hadn’t expected to strike gold, with the federal deficit soaring and all domestic programs clamoring for clemency.
For the longer term, the President proposed a TEA-21 reauthorization that would provide $256 billion in highway and transit funding over the next six years—a little more than the $247 billion the Administration offered in its 2003 version of the new program, but far less than the $311 billion under consideration in the Senate and the $375 billion backed by influential House members. There’s other legislation pending that would aid transportation infrastructure through various incentives.
On Feb. 2, Treasury Secretary John Snow and DOT Secretary Norman Y. Mineta sent a letter to Senate Majority Leader Bill Frist suggesting that legislation violating any one of three presidential principles would invite a veto. These were: 1. "Transportation infrastructure spending should not rely on an increase in the gas tax or other federal taxes. 2. Transportation infrastructure spending should not be funded through bonding or other mechanisms that conceal the true cost to federal taxpayers. 3. Highway spending should be financed through the Highway Trust Fund, not the General Fund of the Treasury."
Short term, the news from the White House was no better. The proposed FY 2005 budget cuts Amtrak funding to $900 million from the $1.2 billion appropriated by Congress for FY 2004. DOT Secretary Mineta said the White House would consider raising FY 2005 funding to $1.4 billion to help pay for the transfer of certain Amtrak operations to the private sector—one of the recommendations of an Administration-backed Amtrak reform plan that has won little support.
Public transportation funding came off better in the FY 2005 budget, with nearly $7.3 billion. But the American Public Transportation Association said this figure was a disappointment. "In fact, the proposal runs counter to the U.S. Department of Transportation’s most recent annual Conditions and Performance Report that concludes that $20.6 billion needs to be invested annually in public transportation," said an APTA statement. "In addition, this FY 2005 figure of $7.266 billion is lower than what was proposed in the Administration’s TEA-21 reauthorization plan submitted to Congress less than a year ago."
Suppliers team up to test remote tracking systemsGE Rail and transportation logistics and packaging provider MHF Logistical Solutions, Inc., have partnered to test remote monitoring and diagnostics systems for use in rail shipping. The suppliers are equipping MHF-LS’s private fleet of gondolas with wireless communications devices to improve the security of sensitive shipments and customer operational efficiencies in North America. Using GPS technology, the devices will transmit real-time geographical position and sensor data via satellites, with processed data incorporated into MHF-LS tracking systems. If the devices determine that cargo has been tampered with, or cars haven’t moved, may be off-course, or are entering areas of concern, diagnostic data and alerts are immediately sent to customers. The MHF-LS/GE Rail pilot program is slated to run until this spring.
"GE has been working on remote monitoring and diagnostic systems for more than a decade," says Glenn Shaffer, engineering department manager for GE Rail. "Working with MHF-LS, we have now moved into the next stage of testing technology for individual railcars. Creating a virtual custodian for railcars will enhance the service railroads can provide to shippers--we’re helping our customers."
U.S. DOT to offer Transportation Services IndexThe first Transportation Services Index (TSI) will be released in March, measuring the economy’s performance as reflected in the movements of freight and passengers by land, water, and air.
The U.S. Department of Transportation’s new index will use monthly, for-hire transportation data on freight movement--including rail, trucking and parcel, inland waterway, pipeline, and air freight services--and passenger travel--including local transit, intercity passenger rail, and air passenger transportation. Analysts from the DOT’s Bureau of Statistics will weigh and seasonally adjust the data to allow monthly and year-to-year comparisons.
"Wall Street understands how important numbers are for gauging financial health," U.S. Transportation Secretary Norman Y. Mineta said of the announcement on Jan. 29 after he rang the opening bell on the New York Stock Exchange. "The new TSI will fill a crucial void by finally giving us a single number to measure how much transportation means to the American economy."
According to the U.S. DOT, the transportation sector accounts for 11% of the U.S. Gross Domestic Product and employs more than 11 million Americans. At the NYSE, there are 39 transportation companies listed that together represent a current market value of more than $181 billion.
Key study finds high speed trains cheaper, friendlierAdvocates of a high speed rail system linking California’s population centers face major financing hurdles, but a draft environmental impact report says they’re on the right track. A study running to around 2,000 pages found that trains traveling at up to 200 mph would cost half as much as the highway and airport improvements that would be required to carry the same passenger load and would be friendlier to their surroundings. A 700-mile high speed rail system (including a 31-mile tunnel) would cost between $33 billion and $37 billion vs. the $82 billion estimated cost of constructing 2,970 miles of new highway lanes and adding five new airport runways and nearly 60 gates. The next step is for the California High-speed Rail Authority to schedule five public hearings on the draft environmental impact report.
MTA speeds up Metro-North car orderOver the strong objections of New York City Mayor Michael Bloomberg, the Metropolitan Transportation Authority of New York has voted to advance by 18 months the purchase of 120 additional Bombardier M7 electric m-u cars for Metro-North. The MTA board approved a $208 million bond sale to finance the purchase. Mayor Bloomberg complained that this would divert capital from New York City Transit’s subway and bus system. MTA Chairman Peter Kalikow’s response was that the agency’s next capital budget could correct any imbalance. To its riders, Metro-North’s need for reliable rolling stock has recently been all too evident. A severe winter marked by powdery, intrusive snow has crippled up to one-fourth of the Metro-North fleet. MTA’s other commuter railroad, the Long Island, has a new Bombardier M7 fleet that has performed well under the same wintry conditions.