February 2005
Hulick resigns from TTXTTX Co. Senior Vice President Robert S. Hulick has resigned from TTX Co. after 27 years of service. His resignation is effective Feb. 28, 2005.
Hulick joined TTX in 1978. “We thank Bob for his years of service and the significant contributions he has made to our company and the industry,” said Andy Reardon, TTX’s President & CEO.
A release issued by TTX on Feb. 25 announcing Hulick's departure did not state why he had resigned.
Bombardier group to build cars for service to TibetBombardier’s Chinese joint venture will build 361 railcars for service from Beijing, Shanghai, and Guangzhou to the Tibetan capital of Lhasa. The route reaches an altitude of 16,000 feet, or three miles, which means the new trains will operate in conditions of extreme cold, thin air, and sandstorms. Bombardier’s portion of the $281 million contract, announced Feb. 25, is $78 million. Also participating are Power Corp. of Canada, China South Locomotive and Rolling Stock Industry, and Sifang Locomotive and Rolling Stock Co.
Traffic to date beats last year’s levelsU.S. railroad freight volume in the first seven weeks of 2005 ran well ahead of the same period last year, with carload traffic up 2.1% and intermodal loadings ahead by 10.4%. Total volume in ton-miles was up 3.2%. Canadian carload shipments were up 3.2% from last year and intermodal traffic rose 3.3%. Mexico’s TFM Railroad reported a 7.2% gain in originated carloads through Feb. 19 and an 18.6% increase in trailer/container traffic.
Short lines get flood damage aidPennsylvania Gov. Edward G. Rendell has announced grants totaling $3.5 million to five short lines to help pay for repairing infrastructure damaged by Hurricane Ivan’s floods last fall. Allegheny Valley Railroad gets $687,689; Delaware & Hudson, $392,000; Lackawanna County Rail Authority, $100,000; Pittsburgh & Ohio Central, $2.1 million; and Wheeling & Lake Erie, $267,770.
CN, Ontario Northland sign haulage agreement CN and Ontario Northland have entered into a two-year routing agreement that they say will speed the movement of freight in northeastern Ontario and northwestern Quebec, benefiting customers "whose traffic will reach key markets in Canada and the U.S. more quickly." A joint announcement on Feb. 25 said that CN will pay Ontario Northland a fee for hauling its traffic between North Bay and Noranda, Que., and between Noranda and Hearst, Ont., cutting almost 850 miles off previous all-CN and CN-O.N. routings and avoiding classification yards in Montreal and Toronto.
Chase agrees to buy Progress RailJ.P. Morgan Chase Co. has agreed to buy Progress Rail Services Corp. from Raleigh-based Progress Energy for $402 million. An announcement on Feb. 18 said the sale is expected to be completed within 90 days. Progress Energy Chairman and CEO Bob McGehee commented, "While selling Progress Rail has always been an objective for Progress energy, it was critical for our company and our shareholders to ensure that we received appropriate value for our investment in the business. We accomplished this with this sale."
The announcement noted that Progress Rail Corp. and its subsidiaries are among North America’s largest and most diversified suppliers of products and services to the railroad industry. With approximately 3,500 employees, Progress Rail offers railcar parts, m/w equipment, rail and other track material, car repair facilities, and railcar scrapping and metal recycling.
UP stock climbs on Wall Street upgradeIn a note to investors on Feb. 18, Morgan Stanley rail analyst James Valentine said discussions with shippers and other industry sources indicated that Union Pacific had "finally turned the corner after 18 months of congestion." Valentine upgraded UP shares from equal-weight to overweight based on the expectation of an improved earnings outlook for the first quarter. UP stock was up 4.95% at noon on Feb. 18.
One-person crews: How much of a savings?The Class I railroads served Section 6 notices in November and are in the midst of negotiations with the Brotherhood of Locomotive Engineers and Trainmen and United Transportation Union. Among the items on the table are one-person train crews for road operations, which, according to MorganStanley railroad analyst Jim Valentine, came into play just this week. Based upon information received from industry sources, Valentine released a report earlier today that suggests a move to one-man road crews “could save the industry over $1 billion annually, resulting in 11% to 32% higher earnings per share than 2004 levels.”
“While we are enthusiastic about the prospects of one-man crews, we caution investors that there are many hurdles that will need to be overcome before this becomes reality, and thus it's unrealistic for investors to expect closure on this issue any time in 2005,” Valentine said. “Even 2006 may be optimistic. Historically, railroad labor negotiations have lasted well over a year and often times can drag on for multiple years.”
Presumably, one of the hurdles Valentine is referring to that will have to be overcome is the technology that will make one-person crews possible. This is Positive Train Control, which the industry is currently struggling with from a feasibility and cost-effectiveness basis. One of the biggest hurdles for PTC is interoperability, among railroads and among the different, largely-proprietary systems suppliers are currently offering. Several major railroads are either deploying pilot PTC systems or considering them, and it will most likely take far longer than the current labor negotiations to develop interoperable PTC architecture that the railroads can agree upon. Cost estimates for implementing PTC on a national basis have been as high as $10 billion.
UP’s Davidson is optimistic for growthUnion Pacific Chairman and CEO Dick Davidson says that despite the cost of severe winter storms, in both infrastructure damage and lost traffic, he remains optimistic for revenue growth this year of 5% to 7%. Coal revenues are expected to grow 10% to 12%, and intermodal, 6% to 8%. Addressing the Deutsche Bank conference in Naples, Fla., on Feb. 17, Davidson reiterated an earlier forecast of first-quarter growth in the 4% to 6% range.
Justice Department probes rail coal ratesThe U.S. Justice Department confirmed Feb. 16 that it’s investigating "the possibility of anticompetitive practices involving the transport of coal." What’s at issue is the growing practice of publishing rates for the movement of Powder River Basin coal vs. negotiating confidential, long-term rates. BNSF Railway and Union Pacific said independently that they are cooperating with the investigation. Speaking at a Deutsche Bank conference in Naples, Fla., BNSF Chairman and CEO Matt Rose said, "It’s a question of whether or not we have the right to display these prices or to change out a long-term contract. We have not been instructed to do anything differently. We don’t believe that we will."
Amtrak reform plan resurfacesThe Bush Administration’s "Passenger Rail Investment Reform Act," which Congress refused to consider when it was introduced in 2003, will soon be reintroduced to Congress, DOT Secretary Norman Mineta said at a press conference this morning at Chicago’s Union Station, Amtrak’s second-largest hub after New York Penn Station.
Mineta, speaking one week after the Administration released its plan to zero-budget Amtrak (which he said was "a call to action"), said "true reform is the only real solution" for a passenger rail system that "is dying and everyone knows it." The reform plan calls for breaking up Amtrak and reconfiguring it as an operating company. Multi-state "compacts" would oversee passenger train operations, which would be open to competitive bidding from other operators. The federal government would provide a 50-50 match to state investments in passenger rail infrastructure. The existing method of funding Amtrak, he said, "is fundamentally irrational."
Mineta said the Administration is not trying to kill Amtrak. If that were the case, he "wouldn’t have to lift a finger."
Bush budget skimps on waterwaysThe Bush Administration is proposing FY06 expenditures totaling $4.5 billion for civil engineering projects mainly related to inland waterways. This is $200 million less than Congress appropriated for FY05 and $900 million below the $5.6 billion deemed essential by the National Waterways Association, which represents barge lines, inland waterways shippers, shipyards, and other interests.
FHWA looks at highway tolls and intermodal fundingHighway user fees can no longer meet highway costs, and tolls in selected areas are one way to help close the gap, Federal Highway Administrator Mary Peters told the executive committee of the American Trucking Associations. Peters said there’s "a growing mismatch" between highway needs and highway funds. "We believe we need to diversify our highway-funding portfolio, and that road pricing should be part of that discussion," she said.
Peters also mentioned the intermodal aspects of the recently announced $284 billion TEA Reauthorization plan. "Among the important issues of reauthorization," she said, "the Bush Administration has proposed that freight considerations be an integral part of our national transportation strategy through a comprehensive national Freight Action Plan. Our proposal specifically targets resources to the often-neglected National Highway system connector roads to ports and other intermodal freight facilities, the so-called ‘last mile.’"
Shipper group opposes D.C. hazmat banThe National Industrial Transportation League is supporting CSX Transportation in its request for a Surface Transportation Board order effectively nullifying a ban on hazmat shipments on CSXT’s mainline through Washington. The District of Columbia local governing council voted to prohibit hazmat shipments within 2.2 miles of the Capitol building. CSXT claims that the ban violates the Interstate Commerce Commission Termination Act. The STB gave interested parties until Feb. 16 to file comments.
CN/UTU reach tentative agreementCN and the United Transportation Union have signed a tentative labor contract covering approximately 2,600 conductors, assistant conductors, yard service employees, and traffic coordinators in Canada. The three-year contract is retroactive to Jan. 1, 2004 and requires ratification by the UTU membership. In general, it provides for wage, benefit, and quality of life improvements.
Safety Board schedules PTC symposiumThe National Transportation Safety Board, a strong advocate of positive train control, announced Feb. 10 that it has scheduled a symposium on PTC for March 2-3 at the NTSB Academy in Ashburn, Va. The board’s chairman, Ellen Engleman Connor, said the goal is "to reinvigorate the dialogue between industry and both state and federal agencies on the issues relevant to the implementation of positive train control systems." PTC has been on the board’s "Most Wanted" list since its inception in 1990. Information on the symposium is available at wsww.ntsb.gov/academy.
Hurricane rebuilding boosts FEC profitsFlorida East Coast Railway posted a 27% increase in intermodal revenues in the fourth quarter of 2004 compared with the prior-year quarter, partly because of demand for building supplies in the wake of four hurricanes that struck the state last fall. Total fourth-quarter revenues were $55.8 million, 19% above the 2003 period. Operating income rose 29% to $15.7 million; the operating ratio improved to 71.8% from 74.0%.
Lott appointed subcommittee chairSen. Trent Lott (R-Miss.) has been appointed chairman of the Senate Committee on Commerce, Science and Transportation-Surface Transportation and Merchant Marine Subcommittee. The subcommittee has responsibility for automobiles, trucks, railroads, Amtrak, maritime and ports, driver safety, transportation of hazardous materials, pipelines, and transportation research.
Lott said he "welcomed the responsibility of overseeing improvements in the administration of highway, rail and maritime transportation and safety. One of our first priorities will be the reauthorization of the trucking and automobile safety titles in the overdue highway bill. It's vital that these programs have the stability of being renewed in a multi-year reauthorization so that the states can
get to work on their implementation."
Lott also said the subcommittee will be looking at freight rail and railroad safety issues "early in this Congress."
FRA told to steer a more focused course on safetyThe U.S. Department of Transportation has determined that the Federal Railroad Administration needs to refocus its safety program because "significant safety problems persist despite a significant increase in FRA enforcement." The recommendations for a new approach came from the Office of the Inspector General at the Department of Transportation in a two-month old report made available Feb. 9 under the Freedom of Information Act. The report suggests that greater reliance on penalizing the railroads, and less on "partnering" with them, may sometimes be called for.
The 16-page report by Inspector General Kenneth Mead, dated Dec. 10, came out of his office’s investigation of allegations that the FRA had been lenient in matters involving the Union Pacific, partly because Acting Administrator Betty Monro was close friends with Union Pacific Washington representative Mary McAuliffe. Mead absolved Monro of this charge but said she had been ill-advised to give the appearance of a "closer than arm’s length" relationship with the biggest company her agency regulates. (Monro resigned effective Dec. 31.)
"With fewer than 450 safety inspectors responsible for overseeing the nation’s vast network of 230,000 miles of rail, it is critical that FRA’s inspection and enforcement efforts be carefully targeted to address those safety problems that are most likely to result in accidents and injuries," said Inspector General Mead. He went on to recommend a safety program that will "(a) focus field inspection activities; (b) assess when a partnership approach is no longer effective and more traditional enforcement (i.e., fines) is warranted; and (c) determine appropriate numbers and fines, factoring-in prior safety/enforcement history and trends. FRA’s plans should include specific milestones for measuring progress."
The new program should be in place by this fall
FY06 budget has no funds for RRIF loansThe proposed federal budget for FY2006 would cut off funding for the Federal Railroad Administration’s five-year-old Railroad Rehabilitation and Improvement Financing program. This is "consistent with the Administration’s intent to eliminate corporate subsidies," said the budget document.
The latest of eight loans made so far under the program was announced a few weeks ago. It was for $7.5 million and went to the 53-mile Great Smoky Mountains Railroad, primarily a tourist road.
NYC tunnel proposals vie for center stageYou won’t find it among the passenger rail programs administered by the U.S. DOT, but the Bush Administration’s new budget offers $2 billion to help build a direct rail connection between Lower Manhattan and JFK International Airport. This delivers on a pledge President Bush made last summer in response to a personal appeal from New York Gov. George E. Pataki. The costliest component of the $6 billion project would be a new tunnel under the East River. Pataki asked for $2 billion in the form of unused tax credits granted to the city as part of a $20 billion federal program to help revitalize the district hit by the 9/11 terrorist attacks.
New Jersey also wants a new tunnel into New York, but under a different river—the Hudson. This would be a $5 billion project. Two days after the offer of aid for the East River tunnel surfaced, NJ Transit released a study demonstrating the benefits that it claimed would accrue to the region by building a new commuter rail tunnel between New Jersey and a new station in Midtown Manhattan at 34th St. Economic Research Associates conducted the study for NJ Transit.
Broadened safety program proposed for FRAThe White House Office of Management and Budget says the railroad safety program at the FRA has been performing well but could use a little more money. OMB’s new budget offers a 5% increase in funding, to $146 million, for FRA Safety & Operations. This is in support of the goal "of reducing railroad accidents and incidents, while contributing to the avoidance of serious hazardous materials incidents in rail transportation." The extra money will also pay for "two new safety positions to conduct inspections of facilities where tank cars are built or repaired."
The budget requests $46 million for R&D at FRA, an increase of $10 million over the FY05 enacted amount. The new money will be used to help implement a revised plan to install the Nationwide Differential Global Positioning System in furtherance of the FRA’s safety goals.
THE NEW BUSH BUDGET: Winners and losersThe wave of media excitement generated by President Bush’s effort to end federal subsidies to Amtrak all but obscured some positive news for the passenger rail business in the administration’s proposed budget for FY 2006, which was released Feb. 7.
Not that the Amtrak surprise wasn’t important. Amtrak President David L. Gunn called it "stunning." If approved by Congress, the separation of Amtrak from its federal support system would drive it into bankruptcy—a result foreseen by the White House, which offered $360 million to the Surface Transportation Board to maintain commuter services in the Northeast Corridor if Amtrak goes out of business. The zero-funding threat is apparently intended to breathe some life into the dead-on-arrival Amtrak privatization plan that went to Capitol Hill last year.
Because it no longer includes Amtrak funding, the proposed Federal Railroad Administration budget requested by the White House drops to $552 million from $1.4 billion requested in each of the two prior years. In addition to the $360 million in provisional commuter rail subsidies, the FRA budget offers $146 million for Safety & Operations and $46 million for Research & Development. Missing from the new budget are funding for Next Generation High Speed Rail, which got $19 million and $37 million in the two prior years, and the Alaska Railroad, which received $25 million in each of the last two years.
The new Bush budget does offer substantial funding for major rail transit projects, with total transit funding grow by $132 million to $7.65 billion, a 2% increase.
Four new full-funding grants are in the Federal Transit Administration budget: $390 million for New York’s Long Island Rail Road East Side Access plan; $90 million for the Central Phoenix/East Valley Light Rail Corridor; $55 million for the Charlotte, N.C., South Corridor LRT; and $66 million for the Pittsburgh Light Rail Connector. These projects are part of a total of $1.53 billion proposed for New Starts, which also include 16 existing full-funding agreements covering rail projects in Los Angeles, San Diego (2), San Francisco, Denver, Chicago (5), Baltimore, Northern New Jersey, Cleveland, Portland, Ore., San Juan, and Seattle. In addition, there’s funding for continuing engineering work on San Diego, Denver, New York (Second Ave. Subway), Beaverton-Williston, Ore., Dallas, and Salt Lake City.
The Department of Homeland Security Budget contains a Targeted Infrastructure Protection program providing $600 million for protection of public transportation, seaports, railway, and energy facilities. Transit agencies would get $36.6 million. And there’s $700,000 for the FRA to coordinate "all FRA-related security projects in addition to responding to notifications of bomb threats and criminal acts against railroads as they are reported to the National Response Center."
RAILWAY AGE ANNOUNCES 2005 SHORT LINE AND REGIONAL RAILROADS OF THE YEARRailway Age magazine has named Cedar Rapids and Iowa City Railway Co. (Cedar Rapids, Iowa) as 2005 Short Line Railroad of the Year, and Red River Valley & Western Railroad Co. (Wahpeton, N.Dak.) as 2005 Regional Railroad of the Year. The awards will be presented at the American Short Line and Regional Railroad Association’s annual meeting in Anaheim, Calif., on April 4.
“This year’s winners were selected from a pool of 34 strong finalists—a Railway Age record,” said Robert P. DeMarco, senior vice president and group publisher of the magazine’s parent company, Simmons-Boardman Publishing Corp. “Their dedication and tenacity—never accepting ‘no’ for an answer—helped make them standouts. They maximized growth
opportunities wherever possible to increase customer business volumes.”
Both railroads have been recognized previously in the Railway Age competition. Cedar Rapids and Iowa City (CRANDIC) received an Award of Merit in 1995 for consistent excellence. Red River Valley & Western (RRVW) secured the Regional Railroad of the Year Award in 1997 for solid business growth in the years following its establishment in 1987.
“These outstanding performers wowed us again, and deserve top honors,” DeMarco said.
CRANDIC is being honored for its exceptional achievements in productivity, safety, and customer service. The winning entry was submitted by CRANDIC President Paul Treangen.
Celebrating 100 years of service in 2004, the former high speed electric interurban is now one of the nation’s premier short lines, maintaining more than 100 miles of track and providing more than $18 million in annual revenue to its parent company, Alliant Energy. Last year, CRANDIC handled nearly 90,000 revenue carloads, an increase of some 20,000 since 1992. Its 90-plus employees worked more than 150,000 hours with no lost-work
accidents for the second consecutive year, and only one recordable injury.
“Our employees are extremely proud of their railroad, commitment to safety, and successful heritage,” said Treangen.
Recent strategic haulage agreements with BNSF Railway Co., Canadian National, and IAIS allow CRANDIC to offer a variety of competitive pricing options. CRANDIC customers can connect with all Class I carriers via major interchange gateways, or take advantage of single-line pricing to Mexico and Canada.
CRANDIC customers are benefiting from more than $20 million in local rail infrastructure enhancements completed in 2004, setting the pace for economic growth in eastern Iowa. A new 1.9-mile, double-track interchange with Union Pacific was completed to facilitate the movement of unit corn and coal trains in 135-car consists, versus four-to-five multi-car cuts. Not only are efficiencies created for the carriers, the interchange is free of grade crossings, enhancing public safety. CRANDIC's largest customer, Archer Daniels Midland (ADM), also completed a 65-car rail expansion around its processing plant. The 3,700-foot expansion allows the short line to serve ADM’s load-out without halting operations and save at least one crew a week, and lets ADM stage empties on its property and increase load-out capability. The project includes the latest safety precautions such as electronic signals at the only private crossing.
The 517-mile Red River Valley & Western (RRVW) is being recognized by Railway Age for outstanding business achievements through Class I partnership, marketing, and customer service efforts. William F. Drusch, RRVW’s President and CEO, submitted the winning entry.
In the late 1990s, the grain industry began a trend toward 110-car unit trains loaded solely at shuttle facilities, and RRVW’s primary connection, BNSF, maintained a policy of locating such facilities only along its main lines. Facing an uncertain future, RRVW undertook a bold program in 1999 that reversed the potential loss of its largest commodity and the likely demise of many small online elevators in North Dakota. It took more than a year, but the regional and its local shippers convinced BNSF to establish a joint shuttle network, locating or expanding five large shuttle elevators along RRVW lines together with a collector program to transport grain from small elevators to RRVW-served shuttle facilities.
RRVW and its customers spent more than $20 million on facilities and track upgrades to accommodate 286,000-pound gross rail load cars. The regional also invested in a fleet of 105 covered hopper cars to handle grain locally. In 2004, 12,237 carloads—or 45% of RRVW’s total grain shipments--were handled in BNSF shuttle trains. Of this, 3,156 came from small elevators. Without RRVW’s determination to keep pace with grain transportation changes and ability to earn BNSF’s confidence, much of this traffic would have been lost to trucks or other rail competitors. The project has kept more than 10,000 trucks off rural highways to the benefit of the North Dakota Department of Transportation.
“RRVW has demonstrated exemplary handling of our shuttle trains,” said R. Mark Schmidt, assistant vice president-short line development for BNSF. “As a result of hard work and aggressive marketing, RRVW’s grain volume tendered to BNSF has risen significantly.”
“RRVW rose to the challenge,” added Sonia Meehl, owner/manager of country grain elevator Crete Grain, which opened a new elevator along the regional’s lines last year. “We could not and would not have done it without the help we received from the RRVW.”
The awards will be announced in the March issue of Railway Age.
Bush budget yields on TEA 21 reauthorizationIn his new budget, unveiled Feb. 7, President Bush proposed a six-year funding level of $283.9 billion for TEA-21 reauthorization. This is substantially above the $256 billion that he offered one year ago and the $247 billion he proposed in 2003. Reauthorization of the highway/transit legislation—the Transportation Equity Act—has been delayed for one and a half years by the failure of the White House and Congress to agree on the size of funding. Originally the House wanted $375 billion and the Senate $318 billion.
While the new budget may be good news for highway and transit interests, it holds nothing for Amtrak. As previously leaked to the press, the Bush Administration is asking zero operating subsidies for Amtrak in the new fiscal year.
Railroad accident rates declineIn every safety category but one—switching yards—the railroad accident rate in the first 11 months of 2004 was lower than in the same period of 2003. The yard accident rate increased 2.58% to 20.4. But the following percentage declines were reported by the Federal Railroad Administration in its seven other broad categories: total accidents/incidents, 7.47%; train accidents, 0.95%; other [than yard] track, 2.49%; highway-rail incidents, 1.88%; employee on duty, 9.16%; trespassers, 8.90%; passengers on train, 26.1%.
Accident rates take into consideration total train-miles and total hours worked as well as the actual number of accidents in order to reflect exposure to risk.
The two main causes of railroad fatalities continue to be grade crossing and trespasser deaths. There were 339 crossing fatalities in the January-November period of 2004, a 12.6% increase over the 301 fatalities reported in the prior-year period. There were 444 trespasser fatalities, down 5.5% from the previous year. (The "rates" of these fatalities are not broken out by the FRA.)
CSX fined $298,000 for crossing violationsThe Federal Railroad Administration announced Feb. 3 that it had assessed fines totaling $298,000 against CSX Transportation for "multiple violations of highway-rail grade crossing safety regulations related to a Feb. 3, 2004 accident in Henrietta, N.Y., where a train struck a vehicle and killed an elderly couple."
The announcement was accompanied by this statement from FRA’s recently appointed Acting Administrator, Robert D. Jamison: "With rail traffic reaching record levels, it is more important than ever for railroads to remain focused on rail safety. Grade crossing warning systems are vital tools for protecting motorists which is why we will take every step necessary to make sure railroads keep them in proper working order."
FRA said it had cited CSXT "for failure to make repairs without undue delay at three highway-rail grade crossings where the flashing lights and gates were known to be malfunctioning." The railroad was also cited "for failing to have the train crew involved in the accident ‘stop and flag’ highway traffic as the requires alternate means of providing warning and protection to motorists." Another citation was for inadequate drainage caused by fouled ballast at one of the crossings.
Amtrak funding: "A tired reminder"An "out of touch with the public" Bush Administration, in the words of the National Association of Railroad Passengers, will propose zero operating support for Amtrak for Fiscal Year 2006, and $360 million for Northeast Corridor maintenance, according to reports published by several news agencies. The reports are based on information leaked by Administration aides.
The zero-funding proposal is "a tired reminder of similar, failed efforts by past Administrations, which proposed Amtrak zeroes for FY 1986 through FY 1991," NARP said in a statement released late yesterday. NARP was specifically referring to the administrations of Ronald Reagan and George H. W. Bush.
Amtrak has wide support in Congress, which one rail industry observer characterized as "voting its constituents, not its conscience." Several lawmakers responded to the news reports by saying that it would be highly unlikely that Congress would support the Administration’s proposal. For FY 2005, the Administration requested $900 million, an amount Amtrak President and CEO David L. Gunn said would force the railroad to shut down. Congress eventually approved $1.2 billion.
"President Bush is willing to spend billions to send a couple of people to Mars, but not one dime for Amtrak's 25 million annual travelers who want better rail service to destinations on this planet,'" Sen. Frank Lautenberg (D-N.J.) was quoted as saying to the Associated Press.
"The Administration talks a lot about ‘Amtrak reform,’" said NARP. "However, Amtrak under President and CEO David L. Gunn has experienced more reform in the past two-and-a-half years than probably in the previous 30. Headcount has dropped by 3,900 (not counting the transfer of Boston area commuter rail to another operator). Meanwhile, the number of daily trains has risen from 265 in 2002 to 300 today. Amtrak has taken on no new debt since June 2002, although costs of servicing previously incurred debt continue to be significant."
NARP also cited Amtrak's 4.3% ridership growth in FY 2004, which established a record of 25.1 million. The previous record was 24.0 million in FY 2003.
An Amtrak spokesman said the railroad will not comment until the Administration’s FY 2006 budget request has been officially released.
How secure are America’s railroads?At Railway Age’s first "Railway Security Forum & Expo," presented in cooperation with the Association of American Railroads, American Short Line & Regional Railroad Association, American Public Transportation Association, and Railway Supply Institute, 150 people gathered to address security issues the industry has been dealing with in the aftermath of the terrorist attacks on the U.S. in September 2001.
Close to 40 presenters addressed such topics as funding, training and awareness, hazmat transportation, and technology, for both freight and passenger rail systems. More than 20 exhibitors presented some of the latest available security technologies.
Among the featured speakers was Rep. Don Young (R-Alaska), Chair of the House Committee on Transportation and Infrastructure. Young underscored the need to "keep commerce moving" while dealing with security issues. He also emphasized that transportation, infrastructure in particular, needs to have a much higher priority in both the Bush Administration and the Congress.
A full report on the conference proceedings will appear in the March 2005 issue of Railway Age.
DOT names new safety chief at FRAU.S. DOT Secretary Norman Y. Mineta announced the appointment of Daniel C. Smith as the new Associate Administrator for Safety at the Federal Railroad Administration. Smith has been with the FRA 27 years and for the last 12 years was the agency’s Chief Counsel for Safety. He will report to Robert D. Jamison, recently named Acting Administrator of the FRA to replace Acting Administrator Betty Monro, who resigned.
Smith succeeds Grady Cothen, FRA’s Deputy Associate Administrator for Safety Standards and Program Development, who was serving as Acting Associate Administrator for Safety.
Greenbrier co-founder Alan James diesAlan James, co-founder with William A. Furman of The Greenbrier Companies, died Jan. 28 at the age of 74. James had been associated with the company since 1974 and held the position of chairman until his term expired last year. "Alan was my long-time partner and a force in building Greenbrier into the company it is today," said Furman, who is Greenbrier’s president and CEO.
Valencia, Spain, orders Bombardier tramsFerrocarrils de la Generalitat Valencia in Spain has placed a $106 million order with Bombardier for 30 FLEXITY Outlook trams. Delivery is scheduled for 2006 and 2007. The contract includes an option for 10 additional trams. They will be similar to Bombardier equipment already operating in Austria, Poland, Switzerland, and Turkey, and on order by Brussels and Marseilles. Bombardier Transportation President Andre Navarri said the order "represents a breakthrough in the Spanish tramway market."
KCSR posts record revenues, cuts operating ratioKansas City Southern Railway (KCSR) had record revenues of $173.7 million in the fourth quarter of 2005, up 17.6%. KCSR also posted record operating income of $31.7 million in the quarter along with an operating ratio of 81.8% vs. 86.9% in the prior year’s quarter. For all of 2004, KCSR revenues added up to a record $639.5 million, an increase of 120% over 2003. The operating for the year was 84.1% vs. 88.6% in 2003
EPA sees sustained strength in car marketEconomic Planning Associates is projecting annual freight car deliveries in the 55,000-to—60,000 range through the year 2010.
"The only dampener in our near term outlook is the recent escalation in new equipment prices due to the rising costs of raw materials and components," EPA says in its latest (January 2005) "Outlook for Rail Cars." "These price hikes may keep some potential customers on the sidelines in the near term, especially as production runs for some car types extend to the end of 2005 or even further."
EPA estimates that 58,850 new cars will be built in 2005, compared with 46,871 in 2004 and 32,180 in 2003. Deliveries are projected at 59,100 in 2006, 57,350 in 2007, 54,850 in 2008, 57,850 in 2009, and 59,600 in 2010.
"The relatively steady levels of projected deliveries during the next five years," EPA says, "reflects our hope that backlogs will be managed in such a manner as to ameliorate, if not avoid, the ’boom-bust’ production cycles of the past."