December 2005
TWU and NYMTA swap concessionsConcessions by both sides that ended New York City’s three-day transit strike last week have now been written into a new, 37-month contract. Union leaders overwhelmingly approved the contract last night; the city’s 37,000 subway and bus workers are expected to approve it early next month. The agreement scraps NYMTA’s controversial demand that future union members pay more heavily into their pension plans. In return, the union agrees to increase worker contributions to health care plans. Union members also get wage increases of 3%, 4%, and 3.5% in the agreement’s first, second, and third years, respectively.
Railway Age’s small road of the year competition: Enter now!Railway Age is now accepting entries for its annual Short Line/Regional Railroad of the Year awards. The 2006 winners will be awarded specially designed plaques at the American Short Line and Regional Railroad Association Annual Convention in Orlando, Fla., this April. Articles describing their achievements will appear in Railway Age’s April issue, which will be distributed at the show.
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 500 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.
Entries should be submitted to: Marybeth Luczak, Executive Editor, Railway Age, 345 Hudson Street, 12th Floor, New York, N.Y., 100l4. E-mail: mluczak@sbpub.com. Fax: (212) 633-1863. Entries should contain the name, position, and contact information of the nominator and an approximately 500-word description of the achievement(s) of the nominated railroad.
Entry forms are not essential, but may be obtained from Luczak by fax or e-mail. The entry deadline is Friday, Feb. 24, 2006.
Railway Age works with the winners to publicize the awards in online and national media.
As STB’s Nober resigns, Buttrey takes over as chairThe Surface Transportation Board has elected Board Member W. Douglas Buttrey as chairman, following Roger Nober's resignation, effective Jan. 3, just days after his term expires on Dec. 31. Buttrey will hold the seat until President Bush designates a new chair. Board Member Francis Mulvey also was selected to serve as vice chairman.
Nober, who was sworn in as STB’s sixth member and became its second chair on Nov. 26, 2002, was the board’s only member for 54 weeks in ’03 and ’04.
Happy Holidays, New York—no subways, no buses!As of 3:00 a.m. this morning, New York City’s huddled masses had no subways or buses on which to huddle, as MTA New York City Transit employees represented by the TWU (Transport Workers Union) walked off the job after talks between the Metropolitan Transportation Authority and the union reached an impasse. This is the first strike since a walkout in 1980 crippled the city for 11 days. The strike is technically illegal (city and state workers are prohibited by law from walking off the job), and MTA Chairman Peter S. Kalikow said workers will bear the full brunt of the law—a fine of two days’ pay for every day the strike is in effect.
Contingency plans are going into effect. These include no cars with fewer than four people allowed below 96th Street, extra stops on Long Island Rail Road and Metro-North commuter trains (these won’t be in effect until tomorrow), PATH service that shuttles commuters between Midtown and Lower Manhattan by way of New Jersey, and cross-honoring of rail, bus, and light rail tickets on New Jersey Transit.
The TWU and the MTA had made some progress in the past few days, reaching agreement on salaries and health care benefits. Talks have stalled over pension benefits. The MTA wants to impose a two-tiered system, and the union isn’t buying.
WCBS Newsradio 880 issued the following report this morning explaining the pension issue:
“A two-tier pension system like the one being sought by the MTA in talks with the TWU is not unusual, says human resources expert Mitchell Langbert, an associate business professor at Brooklyn college. The pension proposal, perceived as the main sticking-point in the talks between the union and MTA is actually not legally negotiable, says Edmund McMahon, director of The Manhattan Institute think tank.
“Langbert says multiple-tiered pension plans have existed in New York state for many years, ‘As a professor at Brooklyn college, part of the City University of New York, I am part of a multi-tiered pension plan.’ Langbert says his benefits are not as generous as those of colleagues who have worked for the city longer.
“The reason there are multi-tiered systems, and the MTA is seeking the two-tiered plan, is New York State's constitutional prohibition on reducing accrued benefits for existing workers. For the government to save money, it can only offer different benefits for new hires.
“‘What's unusual about this is that, in fact, pension benefits are not dictated by labor contracts in New York City and New York State government. Penison benefits are actually set by state law,’ says McMahon.
“The state constitution absolutely guarantees that there can’t be any reduction in a pension benefit for an employee who is on the payroll, says McMahon. The union is actually correct in making its argument to the Public Employment Relations Board (PERB) that pensions actually are not a bargaining issue. PERB, he explains, acts as a mediating panel between the government and unions.
“‘Although the Taylor Law clearly outlaws negotiations, formally, around the issue of pension benefits, unions have been happy in the past to negotiate side benefits and side deals for changes in the laws to increase their pensions.’ But, McMahon explains, those side agreements must then be approved by the state legislature and signed by the governor.
“As for where he stands on the pension issue for new MTA hires, McMahon believes the best solution would be to pay the workers more now, and give them a ‘defined contribution pension,’ such as a 401-K. ‘Very few of the people who ride subways and buses and pay the taxes to subsidize them can dream of retiring at age 55 with a full pension,’ he notes.”
Mediation with Teamsters coalition has failed, say railroadsThe National Carriers Conference Committee has informed the National Mediation Board that “there is no reasonable expectation that further mediation will produce a voluntary agreement” with the seven member union coalition led by the Teamsters’ union. The NCCC asked the NMB to release the railroads from mediation so they can proceed to the next level–a Presidential Emergency Board–provided under the Railway Labor Act. The request came one day after the Teamsters' coalition announced that railroad management had walked away from the bargaining table. The teamsters’ coalition includes the Brotherhood of Locomotive Engineers and Trainmen, the Brotherhood of Maintenance of Way Employes, and five other unions.
The railroads are continuing negotiations with the United Transportation Union and four other rail unions.
“We need to reach agreements in a timely manner,” said NRCC Chairman Robert F. Allen. “Our goal is to modernize work rules to ensure long-term growth and stability for the industry.”
UP buys second multi-task track inspection vehicleUnion Pacific has paid $8.5 million for a second self-propelled track inspection vehicle, the EC-5, capable of performing several electronic track inspections at speeds up to 70 mph. Constructed by Plasser & Theurer in Linz, Austria, the EC-5 is 90 feet long and has 11 computer systems for gathering data from various types of lasers measuring track surface, rail wear, and tunnel dimensions. The on-board computers use GPS systems for accuracy in recording and reporting the location of variances. Track crews follow the vehicle and make repairs as needed. The data is also used for scheduling track improvement projects. For maximum utilization, the vehicle has a full-size kitchen for preparation of meals. “In a year, the two geometry vehicles will test miles of track equivalent to five times around the earth’s equator,” said UP. In addition to these vehicles, the railroad owns a fleet of 22 ultrasonic rail-flaw detection vehicles.
Spoornet awards second ECP brake/distributed power contractSouth Africa’s Spoornet, the first railroad in the world to convert an entire segment of its operation to electronically-controlled pneumatic (ECP) brakes, has awarded a contract to Knorr-Bremse for its EP-60® ECP and WireDP® wireline-based distributed locomotive power technologies, which will be retrofitted to 3,000 coal cars and 58 locomotives. Both systems were developed by Knorr-Bremse subsidiary New York Air Brake. Terms of the contract were not disclosed.
The Knorr-Bremse contract follows award of a $13 million contract for ECP braking and wireline-based distributed power to Wabtec Railway Electronics, for 3,300 freight cars and 50 locomotives.
Both systems will be used in high-density, heavy-haul coal operations between Ermelo and the port of Richards Bay, on Spoornet’s Coal Link. Work will be carried out over a three-year period.
Roger Nober quitting STBSurface Transportation Board Chairman Roger Nober informed President Bush on Dec. 15 that he will resign as chairman and member of the Surface Transportation Board effective Jan. 3—“just a few days after my term expires on Dec. 31, 2005.”
Nober said it was “a difficult decision not to seek a second term” but “I have decided it is best for me to leave government to pursue new challenges.”
Nober was sworn in as the board’s sixth member and designated its second chairman on Nov. 26, 2002. He was the board’s only member for 54 weeks in 2003 and 2004.
Patriot Act promotes rail safety, says FRA chiefThe Patriot Act extension now before Congress “will strengthen the safety and security of our freight and passenger railroads,” Federal Railroad Administrator Joseph Boardman said in a speech in Albany, N.Y., on Dec. 14.
Section 110 of the act “specifically adds railroad equipment and infrastructure to the list of mass transportation items protected by the federal and anti-terrorism laws,” said Boardman. “It includes modern terrorist weapons, such as the use of biological agents or toxins against railroads, as prohibited acts. And it makes it easier to bring those who target railroads to justice, with stronger penalties if there were passengers or hazardous materials aboard the train.”
Fare collection development cuts Cubic profitsCubic Corp. reported Dec. 14 that sales in the fiscal year ended Sept. 30 grew to $804 million from $722 million in the prior year, but net income dropped to $11.8 million from $36.9 million. Cubic said the revenue increase came from its defense business while the decline in profits was primarily the result of “major development efforts on several contracts to provide new fare collection systems.” The new systems “are more advanced in design and have been installed in four cities,” said Cubic. The company expects its transportation business to return to profitability in 2006.
RSI, ASME offer college scholarshipsThe Railway Supply Institute and the American Society of Mechanical Engineers' Rail Transportation Division are offering college scholarships for the 2006-2007 and 2005-2006 academic years, respectively.
RSI will award four $3,000 scholarships to the most qualified students whose parents, stepparents, grandparents, or guardians are employees of RSI member companies or individual members of one of the Coordinated Mechanical Associations sponsored by RSI. All applicants must be enrolled as full-time students in a four- or five-year Bachelor's degree program and expect to achieve at least sophomore status by the beginning of the 2006 fall term. Winners of 2005 scholarships are ineligible. Applications are due by March 17.
For details, contact the RSI at: 29W140 Butterfield Road, Suite 103-A, Warrenville, IL 60555; Phone: (630) 393-0106; Fax: (630) 393-0108; E-mail: rsupplya@aol.com; Website: www.rsiweb.org.
In honor of the Terrey Hawthorne, a respected engineer who passed away in 2004, ASME will provide one student with a $2,000 scholarship. Current employees of railroads, rail suppliers, transit authorities, and associated companies as well as their family members are eligible for the award. Applications are due by May 1, 2006.
For further details, contact ASME's Gary Wagner, Phone: (708) 596-5168, E-mail: wagnerg@hadadycorp.com or David Cackovic, Phone: (719) 585-1880, E-mail: david_cackovic@ttci.aar.com.
ARI plans IPOOne of the oldest suppliers in the railway industry, ACF Industries subsidiary American Railcar Industries Inc., plans an Initial Public Offering of its stock worth up to $150 million. ARI, which is based in St. Charles, Mo., is controlled by billionaire investor Carl Icahn, its chairman and principal shareholder. The company’s filing with the Securities and Exchange Commission says that proceeds from the IPO will be used to pay down debt and to redeem shares of outstanding preferred stock. No details about the number of shares to be offered and estimated price range for the IPO were disclosed. Icahn has served as ARI chairman and as a director since 1994.
ARI manufactures covered hopper cars and tank cars, two freight car market segments generally believed to have strong growth potential over the next few years. It also repairs and refurbishes railcars, provides fleet management services, and designs and manufactures railcar and industrial components used in the production of its own railcars as well as in railcars and non-railcar industrial products produced by other companies.
ARI’s SEC filing says that, for the year ended Dec. 31, 2004, the company generated total revenues of $355.1 million and net earnings of $1.9 million. For the nine months ended Sept. 30, 2005, it generated total revenues of $442.1 million and net earnings of $14.5 million. Net income for the period was $3.4 million, an improvement from a loss of $6.4 million in the 2004 period. As of Sept. 30, 2005, ARI’s railcar backlog was 15,567 units (including a 9,000-car order from CIT Rail Resources), compared to a backlog of 5,653 in the prior-year period.
In its filing, ARI also said that it intends to “selectively pursue strategic external growth opportunities. By significantly reducing our debt through this offering and with the establishment of a public market for our common stock, we believe we will have increased financial flexibility to supplement internal growth with select acquisitions, alliances, or joint ventures. We also believe our in-house fabrication of railcar components and our Ohio Castings joint venture provide us with competitive advantages and we intend to enhance these advantages by selectively acquiring or establishing strategic relationships with railcar component manufacturers and suppliers of critical raw materials. . . . We may also seek to expand our railcar components business into international markets on an opportunistic basis.”
ARI shares are expected to list on the Nasdaq Stock Market under the trading symbol “ARII.”
NS plans sharp increase in spendingNorfolk Southern has unveiled a capital spending program for 2006 that adds up to $1.146 billion, substantially higher than its announced $938 billion program for 2005. The 2006 figure does not include any of the $300 million that NS announced earlier it will invest in Kansas City Southern’s Meridian Speedway over the next three years in a joint venture with KCS.
Citing “continuing strong demand for rail transportation,” NS President and CEO Wick Moorman said the 2006 program ”ensures that our network and assets continue to be well maintained and also provides for increased capacity in terms of infrastructure, locomotives and cars, and new technology.”
NS has budgeted $735 million for roadway improvements--$484 million for rail, crosstie, ballast, and bridge programs; $37 million for communications, signal, and electrical projects; $35 million for m/w equipment; $29 million for modification of a new data center in Tucker, Ga.; and $15 million for environmental and grade crossing safety projects.
NS’s 2006 equipment budget includes $305 million to buy 138 six-axle locomotives, upgrade existing power, certify and rebuild 225 multilevel automobile racks; and $35 million for projects related to computers, systems, and information technology.
The railroad will also invest $103 million in business development initiatives, including intermodal terminal and equipment, and projects to improve access and service to coal and motor vehicle customers.
Builders selected for World Trade Center TerminalDirectors of the Port Authority of New York and New Jersey have voted to award a $1.1 billion contract to the Phoenix Consortium for engineering and construction work on the new World Trade Center PATH terminal and transportation hub in downtown Manhattan. The consortium members are Fluor Enterprises, Slattery Skanska, Granite Halmar Construction Co., and Bovis Lend Lease, the company that cleared the site after the attacks of 9/11. A losing bid was entered by the joint venture of Bechtel Infrastructure Corp., Kiewit Constructors, Turner Construction Co., and Tully Construction Co.
Eight-car trains are Washington Metro priorityThe Washington Metropolitan Area Transportation Authority has adopted a $1.8 billion FY 2007 operating and capital budget. A highlight of the $662 million capital program is acquisition of 72 new railcars that will permit the Metro to introduce eight-car trains on 20% of its system by the end of 2006. Metro plans other major investments in rail yard expansions, new buses, and elevator and escalator overhauls. For the second year in a row, Metro is proposing no new fare increases. Helping to balance the budget will be anticipated 5% growth in rail ridership and 3% growth in bus ridership.
Canada tightens train-length restrictions on B.C. lineTransport Canada has ordered CN to impose an 80-car limit on the length of all northbound trains that it operates over the former B.C. Rail line from Squamish to Clinton. The new order, which follows a derailment on the line on Monday, covers distributed-power trains as well as conventional trains. Trains with distributed power were exempted from an 80-car restriction announced on Nov. 4. Transport Canada announced the new order on Dec. 7. There have been 11 derailments on the 125-mile line since the first of the year.
FEC raises earnings estimate, despite WilmaFlorida East Coast Industries today revised upward its estimates of Railway segment full-year 2005 revenues and earnings, despite the impact of a late-season hurricane, Wilma. FEC now expects calendar-year revenues to increase 15-17% to the range of $230-235 million, with operating income rising 25-29% to between $59 million and $61 million, $3 million higher than the previous outlook.
While these estimates include the costs of Wilma, they exclude any insurance recoveries or reimbursements, the company said. Service was suspended due to Wilma on Oct. 24 and was not fully restored until Nov. 7. FEC expects Wilma to reduce fourth-quarter revenues by $1.5 million to $2.5 million and increase expenses by $2.5 million to $3 million due to cleanup costs, property damage, and higher operating costs.
Fitch sees lower operating ratios in 2006In a report assessing surface transportation prospects for 2006, Fitch Ratings said it expects revenues to continue to grow faster than volume with the result that “operating ratios should continue falling.”
“This improvement in profitability is expected to translate into higher levels of operating cash flow in 2006,” said Fitch. “In turn, free cash flow is also expected to increase, although the rate of growth could be curtailed by higher levels of capital spending. In the railroad industry, several carriers, including CSX and Union Pacific, are in the midst of network improvement programs that are expected to drive capital spending needs higher next year. Railroads are also making investments in new, more reliable locomotives and infrastructure improvements, taking advantage of their strengthened financial position to make needed investments to increase their service performance.”
Fitch sees some signs of a weakening economy but points out that “many railroad and trucking companies are entering 2006 with a level of financial strength not seen for a number of years” and are in “a significantly better position to ride out a fall in the economic cycle should a slowdown begin next year.”
Wabtec wins order potentially worth $122 millionThe Metropolitan Transportation Authority of New York has awarded Wabtec’s MotivePower subsidiary a $93 million order for 28 new a.c.-propulsion work train locomotives for New York City Transit, with an option for 10 additional units bringing the total order to $122 million.
MotivePower will begin work on a prototype at its Boise, Ida., facility in 2006. Deliveries are scheduled to extend from 2007 to 2009. Other Wabtec subsidiaries will provide such components as braking equipment, radiators, and microprocessor controls.
David Gunn joins conservative foundationPaul M. Weyrich, chairman of the conservative Free Congress Foundation, announced that former Amtrak President David Gunn has accepted the position of adjunct scholar with the foundation. Gunn will contribute to an “ongoing series of monographs on conservatives and public transportation.” “David Gunn was the best president Amtrak had in a long time,” said Weyrich, who is a former member of Amtrak's board and also served on the Amtrak Reform Council. “His firing, which was engineered by the White House, was a travesty. It suggests that the current administration is out not to reform Amtrak but to destroy passenger trains in this country.”
In a press release, the foundation noted that it is “one of the few conservative policy institutes that favors public transportation, especially rail.”
Said Weyrich: “Free Congress Foundation intends to make David Gunn's unique expertise on both urban and interurban rail passenger service available to Washington policy-makers, especially conservatives. Conservatives need to understand how passenger trains, subways, and streetcars can serve important conservative goals, such as increasing property values and reducing our country's dependence on vulnerable Middle East oil supplies. No one understands this subject better than David Gunn.”
Weyrich is no newcomer to the David Gunn fan club. In a commentary posted on the Free Congress Foundation website on Nov. 30, Weyrich recalled that in 1992 he was named to a committee to find a successor for Amtrak President W. Graham Claytor, who wanted to retire. Weyrich sought out Gunn at the latter's home in Nova Scotia and asked if he was interested in the job. Gunn wasn't. Claytor stayed on for another year, then retired due to illness, and Tom Downs became president of Amtrak. Downs was later replaced by George Warrington. When Warrington moved on to become head of New Jersey Transit, Gunn replaced him at Amtrak. Gunn later told Weyrich “jokingly” that Amtrak "wasn't in bad enough shape for me to take it over when you asked me.”
Goodbye, TFM; hello, “KCSM”Eight years ago, Kansas City Southern started the revitalization of Mexico’s railway system and its integration into the overall North American network when it was awarded the concession for the Northeast Railway, the crown jewel of the Mexican government’s national system. Transportación Ferroviaria Mexicana, S.A. de C.V. (TFM), as KSC and its partner TMM named the new railroad, soon became a model for successful rail privatizations. Last year, KCS consolidated its interest in TFM by acquiring TMM’s stake.
Privatization came full circle today when KCS renamed TFM “Kansas City Southern de Mexico, S.A. de C.V.” (KCSM) and announced consolidation of marketing and support services for its U.S. and Mexican railroads, as well as restructuring of certain management functions.
“The new name communicates to various audiences the common ownership and seamless marketing of services on both sides of, and across, the U.S.-Mexican border,” said KCS Chairman, President, and CEO Mike Haverty, who also chairs the KCSM board. “By combining the management of marketing and support services, KCS will promote close coordination between the U.S. and Mexican operations as the company moves forward on the significant international opportunities made possible by the recent full acquisition of KCSM.”
Integration of marketing and support services is under way. In November, KCS appointed of Richard M. Zuza senior vice president-international purchasing and materials, for the entire KCS enterprise. The intermodal and automotive sales and marketing functions of Kansas City Southern Railway Company (KCSR) and KCSM have been combined and will be led by Michael J. Smith, vice president-sales and marketing, intermodal and automotive business unit. The new combined group “will focus on longer-haul and cross-border traffic,” Haverty said. Scott E. Arvidson, vice president and chief information officer, will lead IT for both railroads. KCS plans to implement its Management Control System (MCS) at KCSM sometime next year, fully integrating the two operating platforms. Other marketing and support services will be combined over the next month. “Each of these steps will enable KCS to realize better efficiency and ensure a coordinated approach on cross-border opportunities,” Haverty said.
Current KCSM CEO Javier Rion is expected to depart KSM within the next three months, after which a search for a new president will take place. Manuel Zulaica Lopez, KCSM director-operations, will continue to lead the KCSM train operations department headquartered in Monterrey, Mexico.
Norfolk Southern marks 175th anniversaryThe new Norfolk Southern Museum opened its doors in Norfolk, Va. today, marking the 175th anniversary of a railway system that traces its beginnings to 1830. The museum occupies 1,600 square feet at Norfolk Southern’s corporate headquarters. It displays such artifacts as early rail, clothing, tools, locomotive parts, signage, photographs, and advertisements.
A replica of the Best Friend of Charleston locomotive will visit the Norfolk Southern museum Dec. 15-16 on loan from the city of Charleston, S.C. The Best Friend pulled the first regularly scheduled steam passenger train in America on South Carolina Canal and Railroad Co. tracks on Christmas Day 1830. The replica will be on display on Wall Street Dec. 12, when NS representatives will ring the opening bell of the New York Stock Exchange.
Wabtec sells ECP brakes to South AfricaWabtec has signed a $13 million contract with Spoornet, the South African railway system, to retrofit about 50 locomotives and 3,300 freight cars with electronically controlled pneumatic (ECP) braking and wireline-based distributed power control. The Wabtec Railway Electronics system will be used in high-density, heavy-haul coal operations between Ermelo and Richards Bay. The work will be carried out over a three-year period.
The contract, announced Dec. 5, follows a 200-car pilot program that began in 2001. Wabtec said Spoornet can achieve “significant improvements in train handling and cycle times” by combining ECP braking with distributed power control.
”Railroads around the world are seeking ways to increase capacity and become more efficient, and Wabtec’s ECP braking package is at the forefront of the technological solution,” said Timothy J. Logan, vice president and group executive in charge of international sales for Wabtec.
CN spending in 2006 will top C$1.5 billionCN released details today of a planned C$1.525 billion capital program for 2006. The total exceeds 2005 capital expenditures by 9%.
The biggest outlay, C$800 million, will be for replacing rail, ties, ballast, and other track material, and upgrading bridges and signaling systems. CN has earmarked an additional C$250 million for “network productivity initiatives and strategic projects,” including siding extensions in Western Canada, line improvements in the Prince Rupert, B.C., corridor, and the reconfiguration of Johnstown Yard in Memphis, Tenn.
Equipment spending will include C$150 million for new and rehabilitated locomotives and C$175 million for new and refurbished freight cars.
The railroad said it will also spend nearly $C150 million “on facilities, information technology, and other projects to allow the company to tap new growth opportunities and drive overall efficiency gains.”
CN President and CEO E. Hunter Harrison said the planned capital program represents close to 20% of anticipated revenues.
KCS, NS partner on “innovative” rail capacity project Kansas City Southern and Norfolk Southern have formed a joint venture to increase capacity along KCS's Meridian Speedway. KCS will contribute its 320-mile line for a 70% interest in the partnership. For a 30% interest, NS will invest $300 million in cash over a four-year period--“substantially all of which will be used for capital improvements to increase capacity” along the line, which runs between Meridian, Miss., and Shreveport, La. Improvements include upgrades to signal systems and track speeds as well as extensions to sidings and stretches of double track.
The increased capacity will “offer shippers fast, competitive rail service along the shortest rail route into the southeast from both Mexico and the southwest,” said KCS Chairman, President, and CEO Michael R. Haverty, during today's announcement. “In addition to connecting these rapidly growing regions, it will allow us to extend the reach of the Port of Lazaro Cardenas (Mexico) not only into Texas and the Midwest, but directly into the southeast as well.”
Because rail capacity at major ports is a particular challenge, KCS has been promoting use of the Port of Lazaro Cardenas as a back-up to West Coast ports for some time. It is a “beneficial and underutilized alternative,” KCS Vice President-Marketing, Automotive, and Intermodal Michael Smith told Railway Age earlier this year.
NS President and CEO Wick Moorman said that the new partnership “represents an innovative way for carriers to work together to add critical rail capacity.”
The railroads will now seek the Surface Transportation Board's approval for the transaction.
Grade crossing safety improvements required, says DOT Inspector General“Greater attention is needed in the areas of reporting and investigating grade crossing collisions, and strengthening enforcement when a Federal Railroad Administration inspector cites a railroad for a safety defect.” This conclusion stems from a just-released audit report from the U.S. DOT Inspector General's office (OIG). The audit, conducted at the request of top Congressional leaders and triggered by a July 2004 New York Times series criticizing railroad safety, made four key recommendations slated to bolster FRA's highway-rail grade crossing safety oversight.
The audit found that railroads failed to bring 21% of reportable grade crossing collisions to the attention of the National Response Center (NRC) ; FRA investigated “very few” crossing collisions--less than 1% of the 3,045 in 2004; and the federal agency recommended “few” violations for the “many” critical safety defects it identified.
The report also included positive feedback. It stated that “significant progress” has been made over the last decade to reduce crossing collisions and fatalities: Grade crossing collisions fell 39%--from 4,979 in 1994 to 3,045 in 2004--and fatalities declined 40% from 615 to 368. (Railroad safety statistics posted on FRA's website late yesterday show a continuing trend. From January-September 2005, highway-rail incidents dropped 6% to 2,115 from 2,115 in the first nine months of 2004. Fatalities and injuries fell 7.4% to 263 and 13.3% to 709, respectively, during the same period.)
The report also credited FRA on implementing a Highway-Rail Grade Crossing Safety Action Plan in 1994 and revising it in 2004; a process to enforce reporting of fatal grade crossing collisions to NRC in July 2004; a National Inspection Plan to strengthen its compliance program in April 2005; a safety advisory promoting grade crossing safety in May 2005; and three new grade crossing safety rules in 2005 on locomotive-horn use at crossings, reflectorization of railcars, and locomotive event recorders.
FRA Administrator Joseph H. Boardman praised the OIG's report for recognizing the “aggressive actions” already taken by FRA. Its recommendations, he added in his written statement, will help “determine the accuracy of grade-crossing accident information reported by the railroads and may contribute to our understanding of the causes of grade crossing collisions.”
In written comments to a draft report issued on Sept. 26, FRA “generally concurred” with the results and recommendations and agreed to “take reasonable corrective actions,” according to OIG.
The recommendations to FRA are:
* “To clarify accident reporting to NRC by requiring railroads to report any grade crossing collision resulting in a fatality at the scene or death within 24 hours of the accident.” The OIG has requested a timetable for implementation. The Association of American Railroads said in a statement that it “strongly support[s]” this recommendation. (The OIG report “noted that 'railroad employees were confused about which collisions to report to NRC' and that railroads had reported them to the FRA consistent with FRA requirements,” AAR maintained.)
* “To maintain its new monthly oversight practice of reconciling grade crossing accident reports submitted to its database with those reported to NRC and rigorously recommend violations and assess and collect civil penalties, when railroads have failed to report to NRC.” According to OIG, FRA plans to continue the reconciling process and has begun “citing civil penalties for railroads that have clearly violated the NRC telephonic reporting requirement.”
* “To collect and analyze independent information on crossing collisions from railroads and local or state law enforcement agencies, using a pilot program.” The FRA intends to implement a one-year pilot of a sampling of states for which police reports are readily available--specifically one state from each of FRA's eight regions, the OIG report said. While OIG recommended that the study also be conducted in the states that “have the most grade crossing accidents year after year,” FRA said that it would “endeavor to select states with relatively high accident/incident counts.” In addition, the report noted, FRA plans to compare police report data with the accident reports that railroads submit to its national database. It was suggested that FRA routinely obtain event recorder data for the collisions reviewed under the pilot, but FRA plans to review available event recorder data when “there appears to be a conflict between the police report and the railroad's report of a grade crossing collision.” FRA may extend the pilot to other states at its conclusion. The OIG has requested a methodology and timetable for the pilot.
* “To increase enforcement of existing federal grade crossing safety regulations when railroads fail to comply, especially with those involving critical defects, by recommending more violations and assessing and collecting civil penalties.” According to OIG, FRA has stated that it has “already placed great emphasis on focused enforcement of its safety regulations” and that it is “putting control systems in place to ensure good use of existing data, whether reported by the railroads or gathered through the inspection process." The OIG said that it finds such actions “responsive to this recommendation.”
“Overall, we are pleased with FRA's response to our four recommendations and expect that the necessary actions will be taken to implement each of them,” the OIG report concluded. “During the next year or so, time will tell whether FRA's proposed actions have addressed the findings and recommendations presented in this report.”
The railroads are ready to help, according AAR. “We will work closely with FRA to make highway-rail grade crossings even safer,” the association said in a statement. “As the report noted, 'FRA believes that the public should be reassured that, overall, railroads are taking prompt action when they become aware of conditions affecting the safe operations of highway-rail grade crossing warning systems.' We agree.”