March 2005
Washington Metro’s ATC issues to be resolved soonWith a redesigned relay board and upgraded software, Washington Metropolitan Area Transit Authority is hopeful that many of its recent ATC (Automatic Train Control) problems will be resolved later this year. Among the problems delaying riders: door failures, station overruns, and loss of train speed and movement. Currently the mean distance between delays (MDBD) is 41,700 miles, and by year-end, it's slated to improve to 56,000 miles, WMATA said in today's announcement.
Alstom--the supplier of the ATC system for WMATA’s 740 new and rehabilitated railcars--is performing the upgrade work, which "could fix ATC malfunctions in 556 of the 740 cars that Alstom has contracted to repair," according to the transit agency. The remaining 184 are still in production, and will be tested next month.
Meanwhile, WMATA plans to form an expert advisory panel to "help speed up resolution of major engineering, safety, quality, reliability, and contractual issues."
NFL Jets awarded air rights over LIRR yardThe Metropolitan Transportation Authority of New York on March 31 accepted the $720 million bid of the NFL New York Jets for the right to build a stadium over the Long Island Rail Road’s 13-acre West Side Yard in Manhattan. The Jets originally offered $100 million but scurried to raise more money after the MTA received competing bids. A major bidding rival was Cablevision, owner of nearby Madison Square Garden.
Though many fear that it will trigger an unwanted explosion of development, the stadium has the support of Mayor Michael R. Bloomberg, who hopes to bring the 2012 Olympics to New York. Gov. George E. Pataki is also a supporter. The cost of the stadium is now estimated at $1.9 billion.
UP describes $1.3 billion track improvement programUnion Pacific provided details on March 30 of a $1.3 billion track improvement program that's being carried out this year. UP said its crews are replacing 1,055 miles of rail across its 33,000-mile system; surfacing 7,800 miles; spreading 6.8 million tons of ballast; and replacing 4.4 million crossties, of which 3.7 million are wood, 355,000 concrete, and 215,000 composite.
UP will spend an additional $295 million to increase capacity on its Sunset Route in Arizona and in the North Platte, Neb., area. This includes construction of eight new side tracks–two each in Texas and Utah and one each in Oklahoma, California, Iowa, and Arizona.
A further expenditure of $220 million is planned on commercial facilities, including support tracks for a new Toyota plant in San Antonio; intermodal yards in Wilner, Tex., and Salt Lake City; and support tracks at ethanol plants in Iowa and Minnesota.
These improvements are part of $2 billion in cash capital expenditures planned by UP this year to maintain or enhance its physical plant. In addition, the railroad will acquire through short- or long-term leases 315 new locomotives and more than 4,000 freight cars.
Toronto orders 10 more BiLevelsToronto’s GO Transit is adding 10 Bombardier BiLevels to its existing fleet of 285. They’ll be built at Thunder Bay, Ont., starting in August. In announcing the order, Bombardier Transportation President William Spurr said the BiLevel has become the most widely used multi-level commuter car in North America, with more than 750 in operation by 11 transit authorities.
Greenbrier car deliveries rise 35% in quarterThe Greenbrier Companies reported net income of $4.8 million on revenues of $255 million for the fiscal quarter ended Feb. 28. This amounted to 31 cents per diluted share, exceeding the Wall Street consensus estimate of 29 cents. Greenbrier said it delivered 3,100 railcars in the quarter, up 35% from the prior-year period.
As of Feb. 28, the company’s manufacturing backlog in North America and Europe amounted to 12,300 units valued at $720 million, up from 10,000 units worth $560 million on Feb. 29, 2004.
The Andersons rail fleet expands by 8%With the acquisition of 1,180 new cars, the Rail Group of The Andersons, Inc., now owns or manages a fleet of 15,980 cars, an 8% increase. The company said the purchase adds "a variety of car types and lease arrangements to the Rail Group’s portfolio," but gave no further details. The company also announced that it has invested $1 million in Iroquois Bio-Energy Co. in Rensselaer, Ind. The Andersons’ Grain Division is under contract to serve the IBEC ethanol facility.
Transit ridership up in 2004With 9.6 billion trips taken, U.S. public transportation ridership grew 2.11% in 2004, reports the American Public Transportation Association. The growth rate, according to APTA, was faster than highway vehicle travel, which increased by 1.14%.
Light rail, including streetcars and trolleys, saw the biggest ridership jump: 8.2% over 2003. This is due, in part, to last year’s addition of several new systems in Houston, Minneapolis, Little Rock, Charlotte, and Trenton, and expansions in Pittsburgh, San Jose, Memphis, New Orleans, Portland, Ore., and Jersey City, N.J.
Heavy rail experienced the second highest increase of 3%, with commuter rail trailing at 0.3%. Bus ridership grew 1.7%.
ASLRRA names 2005 safety award winnersThe American Short Line and Regional Railroad Association will recognize 20 small roads for their safety achievements at its annual meeting in Anaheim on April 4. In cooperation with the National Academy of Railroad Sciences and MARSH USA, ASLRRA selected the winners based on employee injuries and man-hours. The awards program, established in 1999, categorizes ASLRRA member railroads by man-hours worked, and designates four winners by level: gold, silver, bronze, and copper. Switching and Terminal Railroads have a separate category.
And the winners are:
250,000 man-hours worked and above:
Gold: Wheeling & Lake Erie Railway Co.
Silver: Providence & Worcester Railroad Co.
Bronze: New York, Susquehanna & Western Railway
Copper: Iowa Interstate Railroad
50,001-250,000 hours:
Gold: Dallas, Garland & Northeastern Railroad
Silver: Columbus & Ohio River Railroad
Bronze: Utah Railway Company
Copper: Nebraska Central Railroad
10,001-50,000 hours:
Gold: Western New York & Pennsylvania Railroad
Silver: Chattahoochee Industrial Railroad
Bronze: Aberdeen, Carolina & Western Railroad
Copper: Livonia, Avon & Lakeville Railroad
1-10,000 hours:
Gold: Chesapeake & Albemarle Railroad
Silver: Newburgh & South Shore Railroad
Bronze: Gulf, Colorado & San Saba Railway
Copper: Florida Midland Railroad Co., Inc.
Switching and Terminal Railroads:
Gold: Terminal Railroad Association of St. Louis
Silver: Belt Railway Company of Chicago
Bronze: Indiana Harbor Belt Railroad Co.
Copper: Birmingham Southern Railroad Co.
KCS to take control of TFM on April 1Kansas City Southern announced March 29 that it expects to complete the purchase and take control of Mexico’s largest railroad, TFM, on April 1. The KCS announcement immediately followed a special meeting in Kansas City where, on an affirmative vote of 99% of shares voted, stockholders approved the issuance of 18 million or more shares of common stock to complete the transaction.
TFM will be operated as an independent Mexican corporation controlled by KCS, a holding company, which also owns Kansas City Southern Railway Co., Texas Mexican Railway Co., and Gateway Eastern Railway Co.
In a statement, KCS Chairman, President, and CEO Michael R. Haverty said: "with the railroads already physically linked in an end-to-end configuration, common control will enhance competition and give shippers in the NAFTA trade corridor a strong transportation alternative as they make their decision to move goods between the United States, Mexico, and Canada."
BNSF to implement mileage-based fuel surcharges Beginning Jan. 1, 2006, BNSF Railway customers will be assessed fuel surcharges based on mileage, not as a percentage of their freight transportation bills.
The move--a rail industry first--recognizes a customer "preference" for mileage-based fuel surcharges, which the trucking industry implemented in the 1990s. It is also "the most direct and accurate method of reflecting the impact of fuel price changes on BNSF and our valued customers," noted John Lanigan, BNSF’s executive vice president and chief marketing officer, in an announcement today.
The surcharge will apply to movements that originate and terminate on BNSF, to the BNSF portion of Rule 11 shipments, and to certain movements involving BNSF and one or more short lines. According to the railroad, these movements account for 75% of its volume. The remaining 25% represent joint-rate interline movements with other Class I’s, which "will continue to be covered by BNSF’s existing percentage fuel surcharge due to current interline billing systems and practices."
Mileage calculations will be based on the Household Goods Carriers' Mileage Guide (Rand McNally), and the surcharge tables will reflect the fuel use intensity of four types of rail movements: coal and taconite; carload and agricultural products; intermodal trailers; and intermodal doublestack containers.
The surcharge tables will be based on the On-Highway Retail Diesel Fuel prices published by the Energy Information Administration of the U.S. Department of Energy.
College scholarship program announcedThe Metropolitan Railway Club of New York (MRCNY) is offering Richard J. Collins Memorial Tuition scholarships to the dependents of club members, who have been in good standing for the last two years, as of April 1. High school seniors and college students must submit their applications no later than May 1. Successful applicants will be selected in June, and will receive a minimum award of $500 prior to the fall 2005 semester. Applicants are not eligible to receive this scholarship in consecutive years. For more information, contact MRCNY's Tom Pyle at 400 West 31st Street, New York, NY 10001.
CN, NS to streamline interchange trafficCN and Norfolk Southern have teamed up to improve network capacity, transit times, and asset utilization for through railcar movements. A new "structured routing protocol" will help streamline the railroads’ exchange of traffic at major interchange points: Rouses Point and Buffalo, N.Y.; Detroit, Mich.; Toledo, Ohio; Chicago, Ill.; Memphis, Tenn.; New Orleans, La.; and Mobile, Ala.
Implementation will take place over the next three months.
"With the demand for freight rail service increasing at historic levels throughout North America, this is a creative way of expanding network capacity and enhancing the service options available to our joint customers," said Donald Seale, executive vice president-sales and marketing for NS.
Routing changes include:
* Traffic between the Louisiana gulf and the Northeast U.S. will be interchanged directly at New Orleans or Memphis, "benefiting from a more direct route and fewer intermediate handlings."
* Western Canada traffic to and from the south-central U.S. will be interchanged at Memphis, "avoiding the congestion and additional handling in Chicago."
* CN and NS will expand the use of the November 2004 Rouses Point gateway agreement to further handle traffic between Eastern Canada and the southeastern U.S.
BNSF offers new interline pricing toolShippers may now obtain prices for most general-merchandise carload commodities from all BNSF Railway origins to any destination served by CSX Transportation and some of its affiliated short lines, and Canadian National. An "easy-to-use" pricing tool is now available on BNSF’s Website (www.bnsf.com).
Previously, carload customers had to call the originating railroad, which would in turn call the destination railroad to determine an interline price, according to Denis Smith, vice president-industrial products marketing for BNSF. "With this new enhancement, customers can now visit bnsf.com and get a price from point A to point B on any participating destination railroad—instantly."
PATCO takes the "smart" approachThe Port Authority Transit Corp. has awarded an $11.3 million contract to Cubic Transportation Systems, Inc., for a new smart card-based automated fare collection system, linking rail and parking services. Delivery is scheduled for year-end 2006.
Cubic will supply operational software; communications; agent sales terminals; multi-language ticket vending machines that issue smart cards for commuters and magnetically encoded tickets for occasional/tourist riders; fare gates; and parking equipment for PATCO’s 13 rail stations and seven parking facilities. In addition, it will provide such automated customer service features as credit-debit payment, Internet-based ticketing, autoload (the ability to automatically load value onto the card), and electronic transit benefits delivery. These and other advanced capabilities will be integrated and managed by Cubic’s Nextfare™ Central System.
According to Cubic, the new system is one of the first to be compliant with the Regional Interoperability Standard for Electronic Transit Fare Payments, which was developed by the Port Authority of New York and New Jersey and serves as the basis for a national standard currently under review by the American Public Transportation Association.
Greenbrier acquires two GE railcar repair facilitiesGreenbrier’s Gunderson Rail Services subsidiary has acquired two railcar repair facilities from GE Rail Services located in Dothan, Ala., and Hodge, La. GE will provide Gunderson with a minimum baseload of work for railcar repairs and services at the two facilities over a 10-year period. Financial terms were not disclosed. Greenbrier, which anticipates revenue from both shops to grow to about $10 million per year, said the acquisition “strengthens our ties with GE in serving their railcar repair and maintenance needs, and extends our geographic reach into new markets in the Southeast.”
Why national labor negotiations broke downRailroad management’s Section 6 notice demanding the right "to consolidate all train and engine service positions" appears to be based on unreliable and unready advanced train control systems, said United Transportation Union International President Paul C. Thompson on March 17. He had previously said that the Section 6 notice would effectively eliminate the position of conductor, a craft with heavy UTU representation.
In a letter sent to railroad general chairpersons and to state legislative directors explaining why "national negotiations have completely broken down," Thompson went on to say:
"The preamble to this notice clearly articulates that the proposed consolidation of operating positions contemplates the use of new, technologically advanced train control systems that enhance productivity and provide additional safety benefits. In other words, we were told that with the introduction of these emerging technologies in the workplace, certain through-freight trains could be safely and efficiently operated by one onboard employee."
Thompson said that a National Safety Board symposium early this month on PTC (Positive Train Control) produced "solid information confirming that the technologies on which the carriers based their Section 6 notice are not perfected to the point that they can accomplish what we were originally informed was possible. . . . Furthermore, the Association of American Railroads testified that the underlying technologies ‘were not proven to be reliable’ and ‘are not ready for revenue service.’"
Bush picks N.Y. DOT chief to head FRAThe White House announced March 17 that the transportation commissioner for the State of New York, Joseph H. Boardman, will be nominated by President Bush to be the next permanent head of the Federal Railroad Administration. The FRA, which regulates railroad safety and other programs, including Amtrak, has not had a permanent administrator for about a year. The current acting administrator is Robert Jamison, who replaced Acting Administrator Betty Monro when she resigned Dec. 31.
Boardman, who has headed the New York State DOT since 1997, is probably best known in railroad passenger transportation for his legal fight with Amtrak over custody of rebuilt but unsatisfactory Turboliners designed for New York Gov. George E. Pataki’s $185 million incremental high speed rail plan.
The New York Times quoted U.S. Senator Charles E. Schumer (D-N.Y.) as saying Boardman told him that his top priorities would include "saving Amtrak and strengthening our weak rail safety and security system."
United Transportation Union International President Paul Thompson noted that Bush’s nominee is a "personal friend" of UTU’s state legislative assistant and added: "We know Joseph Boardman will cut through the industry’s self-serving claptrap on how safe it is and will confront with impartiality and promptness the industry’s growing, frightful, and lethal safety problems."
Diverted Amtrak funds could help state, says BrunoA powerful New York State Republican politician, Senate Majority Leader Joseph Bruno, is advancing a plan for high speed rail that he says will be helped if aid now going to Amtrak is channeled to state-controlled passenger rail systems. "Discussions now under way on the future of Amtrak may also make available hundreds of millions of dollars that could be used to offset initial planning and construction costs," said Bruno in a statement on March 17. Bruno said he would try to put $5 million in the new state budget for a high speed rail feasibility and cost-benefit study.
Accepting Railway Age award, Goode looks back on "the year our transportation world changed"Norfolk Southern Chairman and CEO David R. Goode accepted Railway Age’s Railroader of the Year Award at the Union League Club of Chicago on March 15. Railway Age Publisher Robert P. DeMarco and Editor William C. Vantuono presented the award in the presence of nearly 400 industry leaders at a dinner meeting of the Western Railway Club. Goode is a two-time winner, having also earned the honor in 1998.
In his acceptance speech, Goode looked back on 2004 as "the year that changed our transportation world." "We saw a basic demand shift to rail," said Goode. "Why? The tipping point may have been a combination of factors—resurgent basic industry, continuing consumer demand, highway congestion, driver shortages, stubbornly high fuel prices. Also, domestic circumstances worked together with global economic influences. High gas prices caused utilities to burn more coal, and a weak dollar helped us sell coal in Europe. Pacific trade was up, which means traffic at ports was high. When intermodal grows 20% with pricing very strong, something big is happening. Don’t overlook the decision by the Association of American Railroads and the American Trucking Associations to work together instead of fighting. The partnerships in transportation are real and growing."
Goode added: "Suddenly, rail is on everyone’s lips, and public policy is even recognizing that investing in rail is good policy and good politics. What a change--what progress that is for the rail industry. We are at the threshold of a new growth-oriented, growth-driven business model for the railroad industry. It has taken a long time to get here. We have been in a long overall decline for most of my 40 years in the business, although there certainly were some good years. The best news is that decline in markets has stopped and reversed. . . . I see a new growth era for rail—if we can seize the day."
With all of the good news, the industry faces challenges on three fronts, Goode cautioned: "First, we are facing intense scrutiny on safety and security issues. Second, we again have to ward off talks about de facto reregulation of the industry. Third is the huge challenge of financing a growth industry."
"Financing additional capacity to handle continuing growth will require megabucks in investment capital," Goode continued. "Nothing will frighten investors faster than legislation or regulation calling into question the industry’s ability to improve its margins and cash flow. Even with the best backing from Wall Street, we are going to require the most innovative public/private partnerships and help from federal, state, and local governments to make any progress toward improving capacity."
Goode’s concluding words: "The freight system in the United States is a treasure. Without strong railroads, where would we be, given highway conditions? Railroads have been enormous forces for improving the transportation business—and we can do even more now, because our time really has come."
UTU sues carriers over crew-size and FELA bargainingThe United Transportation Union has asked a federal court in Illinois to bar railroads from demanding that the union "collectively bargain" on two carrier demands. One would change current agreements to include a provision that "crew size shall be based on operational needs as determined by the railroads." UTU says these words could be construed to "eliminate every conductor aboard through-freight trains." UTU also asked the court to bar from the bargaining table "a carrier notice to seek jointly from Congress legislation eliminating the Federal Employers Liability Act (FELA), a federal statute allowing injured railroad workers to sue carriers for damages arising from unsafe working conditions."
National Carriers' Conference Committee Chairman Robert F. Allen responded to the UTU by saying the union "has decided to misuse the legal process to raise issues that properly should be addressed at the bargaining table and not in the courtroom. We are dismayed by the union’s irresponsible and false characterization of the nation’s rail system, which remains the safest in the world and the safest way to move goods and products on the ground. . . . We hope that during the course of these negotiations the UTU will commit to helping the railroads meet the transportation challenges of the future rather than defending the outmoded work rules of the past."
Talks stall between Teamsters, NCCCAt the same time as the United Transportation Union sued the National Carriers' Conference Committee over crew-size and FELA issues, talks have stalled between the NCCC and the Teamsters-led Rail Labor Bargaining Coalition (RLBC), which represents seven rail unions comprised of 85,000 rail workers (Brotherhood of Maintenance of Way Employes Division, Brotherhood of Locomotive Engineers and Trainmen, National Conference of Firemen and Oilers, Brotherhood of Railroad Signalmen, Sheet Metal Workers International Association, International Brotherhood of Boilermakers, and American Train Dispatchers Association).
The RLBC proposed—and the NCCC dismissed as "needless" and "inappropriate"—eight process-oriented ground rules for negotiations: "Who each side represented; who would participate in negotiations; advance notification of presentations by experts; scheduling of negotiations; alignment of common and craft-specific issues so the suitable representatives would be available; mutually agreeing upon negotiation locations and provisions for bargaining and caucus rooms and the sharing of expenses; provisions for information sharing and confidentiality agreements; and finalization of contract language and the process for the ratification of the contract by the members of the coalition."
The NCCC said the RLBC is refusing "to bargain on issues of substance" and has filed for mediation with the National Mediation Board. "We regret the necessity of filing for mediation at this time but . . . we are forced to do so to forestall potential service disruptions," NCCC Chairman Robert F. Allen told the NMB. He said the railroads had suggested that process issues be set aside, "without prejudice to either side’s position, in order to continue work on the substantive issues of pay, benefits and working conditions as mutually agreed in their January introductory meeting."
The filings blocked any possible strikes or job actions. No further negotiations have been scheduled.
NS lands new business opportunitiesLast year, Norfolk Southern’s industrial development department helped locate 67 new industries and supported expansion of 34 additional industries in 19 states along NS rail lines, representing an investment of approximately $1.5 billion by NS customers and, over time, creation of around 4,300 jobs and generation of more than 100,000 carloads annually of new rail traffic.
The largest projects were the expansion of a Toyota Motor Manufacturing automobile assembly plant in Princeton, Ind., and development of a new SunCoke Company coke production facility at Haverhill, Ohio. Other expansion projects involved warehousing and distribution, paper manufacturing, building and agricultural products, automotive parts, steel, plastic, and power plants.
During the past 10 years, NS has participated in location or expansion of 1,109 industries that invested $25 billion and created more than 60,000 jobs in NS-served territory.
CPR will acquire Green Goat fleetFollowing a successful first round of testing, Canadian Pacific announced that it plans to acquire up to 35 Green Goat® hybrid switchers from RailPower Technologies Corp. over the next four years. Seven of CPR’s yard locomotives will be converted in 2005 to RailPower’s low-emission hybrid technology for "more rigorous long-term testing" in the railroad’s Calgary operations. If they perform as expected, an additional 28 conversions will be made in the following three years. CPR said that an initial demonstration trial of the technology conducted last year showed "fuel, emissions, and operational benefits."
Leasing company orders 36 Bombardier freight electricsAngel Trains, a leasing company, has placed a $202 million order with Bombardier Transportation for 36 TRAXX freight locomotives for use in continental Europe. Terms of the agreement allow the order to expand to 100 units as needed. Ten of the new locomotives will be F140 d.c. units to be delivered in 2006 for operation in Italy. This will be followed in 2007 by 26 FM140 MS (multi-system) locomotives, of which 10 will operate between Belgium, the Netherlands, and Germany; 10 between Germany and Poland; and six in cross-border service between Germany, Austria, Switzerland, and Italy. Angel Trains already owns 10 TRAXX units.
STB dismisses rate complaint against BNSF and UPThe Surface Transportation Board issued a decision March 15 dismissing a coal rate challenge brought against BNSF Railway and Union Pacific by the Arizona Electric Power Cooperative. The Board said it was unable to complete "a rate reasonableness analysis because AEPCO, which chose to contest the reasonableness of the challenged rates using the Board’s stand-alone cost (SAC) test, presented an incomplete SAC case and, even when afforded the opportunity to provide a more complete case, failed to do so."
The SAC test is designed to show whether a new, purpose-built railroad could provide transportation for the complainant’s product at a cost lower than the challenged rates.
In a complaint filed Dec. 29, 2000, AEPCO claimed that rates charged by BNSF and UP for moving unit trains of coal from New Mexico mines to the Apache power plant in Cochise, Ariz. were unreasonably high.
The STB acknowledges that the SAC test is "a contestable market theory," and it has called a public hearing to hear comments on the methodology. The Board announced March 16 that it had moved the hearing from March 26 to April 26 at the request of interested parties.
Wabtec revises 2005 railcar delivery forecastNew freight car deliveries will top 55,000 in 2005, according to Wabtec Corp.--a nearly 15% increase from its previous forecast of 48,000.
"With the economy growing, North American railroads are still seeing meaningful volume gains for carloadings and intermodal shipments," said Wabtec Chairman, President, and CEO William E. Kassling, during an announcement of the company’s improved earnings outlook. "These factors are having a favorable impact on orders for new rolling stock and on aftermarket demand for our parts and services."
Based on continued strength in the freight rail aftermarket, Wabtec today increased its 2005 guidance for earnings per diluted share to about $1.10. The company’s previous guidance was for EPS of about $1.
Greenbrier backlog soars to $720 millionThe Greenbrier Companies announced that with "recent orders" for nearly 5,000 railcars valued at $260 million, its undelivered backlog has reached 12,300 units worth $720 million. This compares with a backlog of 10,300 units valued at $620 million on Nov. 30, 2004, and 10,000 units valued at $560 million on Feb. 29, 2004. The latest orders included 4,500 doublestack intermodal wells.
Rail traffic continues to climbRailroads stocks are currently enjoying the warm favor of Wall Street, and one reason is the continuing increase in both carload and intermodal traffic. In the week ended March 5, U.S. intermodal traffic was up 7.6% from year-ago levels and carload traffic was up 4.1%. On a revenue ton-mile basis, total volume was up 5.6%. In the same period, Canadian trailer/container loadings were up 14.3% and carload traffic rose 4.2%. Mexico’s largest railroad, TFM, reported a 5% increase in originated carload traffic and a 7% gain in originated intermodal traffic.
New York looks for new transit fundsFacing a possible loss of $1 billion in federal transit aid over the next few years, New York State may ask its voters to approve a $2.79 billion transportation bond issue, of which $1.6 billion would be delivered to the capital-hungry New York Metropolitan Transportation Authority. The MTA operates two commuter railroads, the Long Island and Metro-North, and New York City’s subways and buses.
A similar bond proposal failed at the polls two years ago. The new one has not yet been introduced in the State Assembly but is said to be gaining support among both Democratic and Republican legislative leaders.
The feared loss of $1 billion in federal aid would result from a proposed revision in the formula under which states recover portions of the taxes they contribute to the Highway Trust Fund.
The funding crisis is exacerbated by Governor George E. Patois’ effort to substantially reduce the new five-year capital plan proposed by the MTA, a state agency. MTA originally asked for a little over $27 billion, including $10 billion for such costly new projects as the Second Avenue Subway and East Side Access, the Long Island Rail Road connection to Grand Central Terminal. The remaining $17 billion was for essential core system expenditures. Governor Pataki countered with an offer of $14.7 billion for the core system and $2 billion for expansion projects.
Ohio’s rail commission helps small railroadsThe Ohio Rail Development Commission has awarded $748,000 in grants and loans to assist local Class II and Class III railroads with infrastructure improvement programs. They include:
o A $150,000 grant to assist in the replacement of a 298-foot, steel girder bridge built in 1910 over the Mahoning River. The bridge is used by the Youngstown Belt Railroad, a subsidiary of the Ohio Central Railroad System.
o A $148,000 grant to assist the RJ Corman Railroad to rehabilitate 10 miles of track between St.Mary’s and Minster in Auglaize County.
o A $132,000 grant and a loan of up to $108,000 to cover the costs of building and/or rebuilding approximately 6,000 feet of track on the Republic N & T Railroad to serve a new steel casting plant at Republic Engineered Products in Canton. The project will allow the railroad to handle an additional 6,000 railcars per year.
o A grant of $50,000 to US Rail Corp. to help improve drainage ditches along eight miles of track distributed throughout the 60 miles of track owned by the City of Jackson in Ross, Vinton, and Jackson Counties. The rail lines currently serve 13 active customers.
o A $120,000 matching grant for the Maumee & Western Railroad to repair portions of its lines between Cecil and the Indiana state line and between Napoleon and Defiance. The MAWRR will provide a 40% match of $80,000.
o A $40,000 grant to the Cleveland Commercial Railroad Co. to repair several turnouts at the northern end of its line in Cleveland. CCRC is a startup short line that replaces a prior operator.
Spotlight shining sharper on rail safetyMore derailments and hazmat leaks, rancorous debate over hazmat routing, and now a mediocre grade for rail in a "report card" on transportation infrastructure are sharpening an already-glaring spotlight on railroad safety and are heading the industry toward stepped-up government scrutiny and possibly new or increased regulation.
"The news yesterday that the nation's civil engineers gave rail infrastructure a poor grade only further inflames the whole rail safety debate and gives more reason for Congressional hearings," says one industry observer. "The railroads repeatedly have said their physical plant suffers from no deferred maintenance, but they are having an increasingly difficult time supporting their position."
The "poor grade"—a C minus—came from the American Society of Civil Engineers, which for the first time included rail in its report on the condition of the nation’s infrastructure. ASCE based its grade partially on reports that have been released previously by other organizations, referring to growing rail freight traffic, chokepoint conditions, and long-range infrastructure capital needs in the $200 billion range cited by the Association of American Railroads and American Association of State Highway and Transportation Officials, among others. (Access the full report at http://www.asce.org/reportcard/2005/index.cfm>.
The ASCE released its report card shortly after two incidents on Union Pacific—a hazmat derailment near Los Angeles that temporarily shut down Metrolink commuter operations and a hazmat spill in Salt Lake City in which several thousand people were evacuated—were widely reported in the media. No deaths or injuries resulted from either incident.
In California on March 8, a 21-car pileup in the City of Industry punctured one of three tank cars containing combustible propylene glycol, forcing evacuation of 200. UP says the derailment was caused by a broken rail.
The day after, on the same line, another UP train carrying chemicals and other commodities split a switch while moving, separated in two, and derailed, with several tank cars coming to rest against a warehouse in Santa Fe Springs. There were no leaks, no injuries, and Metrolink service was not affected. Whittier police arrested a 14-year-old boy and charged him with purposely throwing a manual switch lever, which caused the train to split in two. The lever was equipped with a lock, but it not known whether the lock was engaged. The boy was charged with felony train wrecking and was released to his parents.
In Salt Lake City, a tank car that UP says may have been mistakenly identified on a manifest as an empty after being loaded by workers at Philip Services Corp. in Fernley, Nev., with 13,000 gallons of a mixture of highly corrosive acids, was routed to the railroad’s Roper Yard, where it leaked 6,000 gallons after its contents ate into the tank car’s lining during a suspected adverse chemical reaction. It was supposed to have gone to a disposal facility in Ohio. Questions have been raised as to whether the tank car’s contents were accurately identified and why the car, which was designed to carry one type of chemical (sulphuric acid), was loaded with the corrosive mixture at all. The Federal Railroad Administration is investigating.
Meanwhile, CSX is seeking to block a 90-day local ban on certain hazmat shipments through Washington, D.C. by the district’s City Council. The U.S. Department of Justice has filed a "statement of interest" with the federal district court in Washington urging the court to invalidate the ban, which is due to take effect April 11. DOJ’s statement, which supports CSX’s position, also includes opinions from the Departments of Homeland Security and Transportation. It states that rerouting shipments around Washington would compromise safety and security by lengthening travel time, increasing the vulnerability of a hazmat shipment to a terrorist attack; unfairly shift risks to other communities; and cause congestion on other lines and in other yards, harming the economy.
CSX is also dealing with grade crossing safety issues in New York State, where it has entered into a voluntary settlement with the State Attorney General’s office. The railroad has agreed to implement several safety measures for grade crossings statewide under a $1.5 million settlement. It will implement safety monitoring and reporting changes and pay for a $500,000 pilot program to reimburse local police for their costs in protecting railroad crossings identified as having malfunctioning warning devices. The Attorney General said CSX failed to make quick repairs to malfunctioning safety equipment at crossings as required by law, failed to alert local police about malfunctions, and failed to maintain appropriate records tracking the status of malfunctioning warning systems at crossings.
According to the agreement, CSX will repair warning systems within 24 hours, notify police, improve testing and record keeping, and update and improve maintenance instructions to employees. CSX describes the agreement as a "partnership" and says it "acknowledges and appreciates that the Attorney General was a partner in many of the actions that we have taken." Those actions include "completing signal and/or track maintenance work at 143 crossings, including the complete rebuilding of some of those crossings; deploying an electronic means of recording crossing warning device inspections and tests; relocated the railroad’s 24-hour Police Communications Center to the Network Operations Center in Jacksonville, Fla., to facilitate and coordinate company response to reports of crossing malfunctions; providing additional and revised instructions concerning appropriate response to reports of crossing malfunctions; providing enhanced review of train crew performance; and enhancing communication with local public officials regarding crossing safety and other issues."
The Attorney General’s investigation began after two people died at a CSX crossing in Henrietta, N.Y. (near Rochester) on Feb. 4, 2004, in which the warning lights were found to have been disabled. Last month, CSX agreed not to contest a $298,000 FRA civil penalty, the largest fine a U.S. railroad has paid in such a case in several years.
The media attention generated by these recent events plus others (such as the Norfolk Southern hazmat derailment in South Carolina last month that killed nine) has coincided with a series of high-profile investigative reports on grade crossing safety and hazmat transportation in The New York Times. These reports, Railway Age notes in its March issue, have used "highly selective anecdotal evidence" and have "been helped by an unusual cluster of high-profile railroad accidents. They leave the impression that the railroads, through incompetence or indifference, are endangering the lives of people who venture near their property, especially highway motorists."
"Cumulatively, the perception all this creates—in the minds of the public and legislators—does not bode well for the industry," says one observer.
RailAmerica bristles at STB requirementsRailAmerica will appeal the Surface Transportation Board’s recent decision, ordering the sale of Toledo, Peoria & Western’s La Harpe-Hollis, Ill., line, pursuant to Keokuk Junction Railway’s feeder line application.
The 76-mile line’s $4.2 million pricetag would result in a book loss of $800,000 for RailAmerica in first-quarter 2005. It would not, however, "materially affect revenue or operating income," according to the short line holding company.
RailAmerica CEO Charles Swinburn expressed disappointment in the ruling. "The sale price does not properly reflect the line's value and provides inadequate compensation to RailAmerica," he said.
Filibustering change: Implications for Amtrak?A Republican effort that is reportedly gaining ground in the Senate to kill the threat of Democratic filibustering—the ability to cut off debate by majority vote—may have implications for Amtrak.
Sixty votes are now required for a filibuster. Senate Republicans are attempting to change that requirement to a simple majority of 51 votes. The motive behind their effort is keep Democrats from filibustering Republican judicial nominees, "but it could have a transportation hook," says one rail industry observer. "If the Republican plan succeeds, one of the Democrats’ and moderate Republicans' most potent defenses against conservative Republican initiatives could be lost. It could mean that Democrats would not be able to stop ultra-conservatives in the Senate from pushing legislation to dismantle Amtrak, whether through some privatization initiative or financial starving mechanism as outlined by DOT Secretary Mineta."
Currently, there is no filibuster mechanism in the House, owing to its different rules.
NYAB's electronically controlled pneumatic brake system gets nod from AARNew York Air Brake has received conditional approval from the Association of American Railroads for its EP-60 electronically controlled pneumatic (ECP) brake system. EP-60, which is in revenue service at Quebec Cartier Mining, already meets the latest AAR S-4200 specification in all areas. Trains equipped with such a system "demonstrate faster brake response and better handling as a result of graduated brake application/release and simultaneous, load-compensated braking features on each car," according to NYAB. Additional benefits include fuel savings and reduced lading damage and wheel, shoe, and draft gear wear.
Trespasser deaths down in 2004 but still lead the listU.S. railroads reported 13,504 accidents and incidents in calendar 2004, a 4.5% drop from the prior year despite increased train traffic. Fatalities, however, rose 3.6% to 896. These included 480 trespasser deaths, down 4.4% from 2003, and 369 fatalities in grade crossing collisions, an increase of 11.5%. Train accidents were up 3.7% to 3,104 though the train accident rate—taking into account exposure to risk—dropped 1.4%. Collisions increased 27.5%, to 255, and derailments rose 5.7%, to 2,236. Yard accidents were up 4.2% last year, to 1,712.
NYCT, MNR gain riders; LIRR loses someTwo of the New York MTA’s three passenger carriers reported increased ridership in 2004: New York City Transit’s trains and buses carried 1.426 billion riders last year, compared with 1.384 billion in the prior year, and Metro-North railroad commuter trains carried 70.76 million, up from 70.72 million in 2003. Long Island Rail Road ridership dropped slightly to 79.9 million from the previous year’s 80.9 million.
Among the three agencies, NYCT passengers continued to pay the biggest share of the cost of their rides. NYCT’s farebox operating ratio last year was 58.9%, Metro-North’s was 57.6%, and LIRR’s was 47.0%. The operating ratio states the percentage of operating costs covered by fares.
Another measurement, the farebox recovery ratio, takes into consideration such long-term costs as debt service. NYCT came in last year with a recovery ratio of 48.0%; Metro-North, 44.3%; and LIRR, 34.7%.
Solid railcar backlog brightens Trinity prospectsBusiness levels at Trinity Industries rose in 2004, but "rapid and unexpected increases" in the prices of steel and other materials resulted in a loss of $9.3 million on revenues of $2.2 billion, the company announced on March 3. This compared with a 2003 loss of $10 million on revenues of $1.4 billion.
"Our revenues increased more than 50% in fourth-quarter 2004 when compared to the same period the previous year," said Trinity Chairman, President, and CEO Timothy R. Wallace. "We are expecting our revenues to remain at least at this level in 2005. This should provide a nice platform for a return to profitability. Revenue grew in every segment of Trinity’s business in 2004, and the company ended the year with the highest year end backlog of railcar orders since 1998."
Fellow travelers make strange politicsSen. Frank Lautenberg (D-N.J.) last month introduced a bill, S.95, the Safe Highways and Infrastructure Preservation Act (SHIPA), to expand the current freeze on truck sizes and weights to the National Highway System, which includes the Interstate highway system and many secondary roads. The legislation would freeze truck lengths and weights and would prevent the use of long-combination vehicles (LCVs) as currently permitted in several states. Proponents of the legislation are believed to be moving to attach the measure as an amendment to the reauthorization of the surface transportation bill, known as TEA-LU (Transportation Equity Act-Legacy for Users).
The National Industrial Transportation League has come out against S.95, stating that it would impede a growing economy. The Association of American Railroads and the American Trucking Associations are also opposing the bill. CABT (Coalition Against Bigger Trucks), which lists the AAR as a member, is supporting S.95.
That the ATA opposes the bill is not so surprising. But why the AAR, after years of fighting big trucks? That, industry observers point out, has much to do with the so-called “truce” the ARR and ATA signed in 2003 (http://www.aar.org/GetFile.asp?File_ID=281) in which the two groups agreed to oppose changes to existing federal law regarding truck sizes and weights.
“It kind of puts the AAR between a rock and a hard place,” says one observer. “It’s a quid pro quo. The AAR promised not to push for the freeze if the ATA promised not to oppose the freeze. So the ATA has the NITL doing its work, and quietly is working Capitol Hill to oppose the freeze. Is this a month of Sundays, three blue moons, and a week that Hell has frozen over? What an interesting situation.”
The United Transportation Union says it is “currently the only railroad union fighting bigger trucks.” UTU is telling its members that “highway behemoths that would suck freight from the rails, cost railroad jobs, and endanger Railroad Retirement. It's a jobs and retirement issue and you can make a difference.”