April 2004
"Significant" record for intermodalU.S. railroad intermodal traffic reached a new high of 213,104 trailers and containers in the week ended April 24. That was 13.5% over the same week last year and 0.9% above the previous record set last Nov. 22. "The fact that an intermodal volume record came this early in the year is significant," said Craig Rockey, vice president-policy and economics, at the Association of American Railroads. "Normally, intermodal doesn’t peak until late in the third quarter or early in the fourth quarter. That we’re reaching these levels now indicates that the economy is gathering strength and that railroads are providing their intermodal customers with attractive service and rate combinations." U.S. carload traffic totaled 341,961 cars in the week ended April 24, 3.7% higher than a year earlier.
FRA administrator to leave postAllan Rutter, administrator of the Federal Railroad Administration, announced today that he will be stepping down from his post in mid-June. He will return to his home state of Texas, where he served most recently as then-Governor George Bush's transportation policy director before Bush nominated him in 2001 for the FRA post. Rutter has accepted a position as deputy executive director of the North Texas Tollway Authority.
Following Rutter's departure, Deputy Administrator Betty Monro will serve as administrator "indefinitely," according to FRA spokesman Warren Flatau. Like Rutter, Monro was appointed by President Bush in 2001. With 30 years of transportation experience, her career includes such positions as chief of staff to former FRA Administrator Gilbert Carmichael from 1991 to 1993, special assistant for Aviation Policy to former DOT Secretary Sam Skinner from 1989 to 1991, and director of Federal Legislation for the Air Transport Association of America.
"Ultimately it is what is best for my family," Rutter said of his decision in a statement. "The opportunity to serve President Bush as FRA administrator has been truly an honor and a privilege and one of the great experiences of my life."
In response to the news, U.S. Secretary of Transportation Norman Y. Mineta said Rutter had made "significant" railroad safety improvements during his nearly three years of service. "Allan also helped shape the Administration's vision for reform of our nation's intercity passenger rail system, and helped lead the way in introducing the most comprehensive rail reform proposal ever delivered to Congress," Mineta observed.
Operational and financial problems erode UP earningsUnion Pacific posted a first quarter record $2.9 billion in revenues in the first three months of 2004, compared with $2.7 billion a year earlier. But operating income dropped to $314 million from $369 million in the 2003 period. The operating ratio rose to 89.1% from 86.5%.
"The first quarter of 2004 challenged us both operationally and financially," said Chairman and CEO Dick Davidson. "We saw exceptionally strong demand for our services, setting records for both first quarter revenues and carloads. Unfortunately, several factors, including our service challenges and the impact of truly adverse weather conditions, eroded the strong revenue gain.
"Looking ahead, I am confident we are taking the right steps to address our current service issues," he added. "We are continuing to hire and train new train crew personnel, acquiring additional locomotives, and refocusing our quality processes. The pace of our service improvement is uncertain and there is still a great deal of progress that must be made, particularly in terms of crews on the West Coast."
KCSR performance improves sharplyKansas City Southern Railway (KCSR) improved its operating ratio to 84% in this year’s first quarter compared with 93.3% in the first three months of 2003. "KCSR’s operating expenses, as well as its yield on its freight revenue, have benefited from sustained excellent operating metrics," said parent Kansas City Southern Co. (KCS) on April 29. "KCSR continues to rank among the best in the industry in terms of the publicly reported performance standards of average train velocity, average terminal dwell time, and cars-on-line." KCS operating income in the first quarter was $17.4 million vs. $6.8 million in the year-earlier period.
KCS said lower earnings from its stake in Mexico’s TFM railroad, debt retirement costs, and higher taxes helped drive consolidated net income for the first quarter down to $3.4 million. After preferred stock dividends, net income amounted to two cents per diluted common share, compared with 22 cents in the 2004 quarter.
Help wanted: 80,000 new workers in six yearsThe railroad industry needs to hire more than 13,000 workers annually over the next six years, according to the Association of American Railroads. The AAR said the 80,000 jobs expected to be available carry annual salaries that currently range from $48,853 for car and locomotive maintainers to $67,128 for conductors and $75,000 for locomotive engineers. The six-year projection comes from the Railroad Retirement Board, which expects a total of 140,000 new hires over the next ten years.
The surge in hiring is due to a combination of circumstances, said the AAR: sharply increased business for railroads in a growing economy and a shortage of workers due to a rising number of retirements following enactment of a law in 2000 that cut the full-benefits retirement age by two years. This means that nearly 40% of the industry’s current work force of 221,000 will be eligible to retire within the next decade.
Penn Station to go to the dogsThousands of police officers with bomb-sniffing dogs will ride and check every Amtrak, NJ Transit, Long Island Rail Road, and New York City Transit train entering Penn Station New York during the Republican National Convention this summer, according to a report in today’s New York Daily News. This is an alternative to shutting down Penn Station to thwart a terrorist attack, which the U.S. Secret Service had initially demanded following the March 11 bombings of commuter trains in Madrid, Spain, that killed 200 people.
"Our goal is to check every train with dogs and with police officers before they enter into Penn Station," New York City Police Commissioner Raymond Kelly told the Daily News. "We don't intend to close Penn Station."
Trains will not be stopped at checkpoints, but will instead be swept for explosives while they are heading to Penn Station. Dogs from various law enforcement agencies will be used. NYPD officers will be joined on commuter trains by New York, New Jersey, and Connecticut state police, as well as New York Metropolitan Transportation Authority officers. In addition, specially-trained officers will randomly board subway trains and check each car as the trains move through tunnels. Some 3,000 commuter and subway trains per day will be affected.
The plan, an MTA spokesman said, should cause minimal disruption to normal train operations.
CSX picture begins to brightenIn this year’s first quarter, CSX Surface Transportation posted an industry-high operating ratio of 89.3%. But that was a slight improvement compared with last year’s first quarter, and there were other signs that CSX’s rail and intermodal units were on the road to recovery. Surface Transportation revenue reached a record $1.92 billion, up 4% from the first three months of 2003. Operating income, before a pre-tax restructuring charge of $53 million, increased 21% to $204 million. The restructuring charge was related to the elimination of around 900 management positions, which began last year and is expected to save the company $90 million a year.
In announcing first quarter results on April 27, CSX Chairman and CEO Michael J. Ward said efforts to improve operations and cut costs must accelerate. "We plan to exceed historical-best operating levels through short-term efforts and, over the long term, the redesign of our network," said Ward. "The new operating initiatives and the leadership of our new chief operating officer, Tony Ingram, will drive significant improvement in our cost structure, service reliability, and our shareholder value."
Ending a dismal quarter, CPR regains momentumCanadian Pacific blames a disastrous avalanche and a loss on foreign exchange for driving its first quarter 2004 net income down 76% to C$24 million from the comparable period last year. Per-share earnings were 15 Canadian cents, compared with the Thomson First Call mean forecast of 29 Canadian cents. With operating income of $116 million compared with $118 million in the same period of 2003, the operating ratio edged up to 86.9% from 86.6% a year earlier.
"The worst avalanche in eight years and severe weather early in the quarter hit us hard in our western corridors over a two-week period," said CPR President and CEO Rob Ritchie. "With heavy freight volumes fully consuming available capacity, there was no opportunity to recover the lost volumes in the quarter. However, we staged a comeback that saw our railway running more efficiently than ever, and exited the quarter with very strong business fundamentals." Ritchie said that in March, revenue ton-miles were up 17% over February, average train weight rose 5%, and "this momentum has carried into the second quarter."
Like some of its neighbors to the south, CPR is now straining to meet demand and is assessing the sustainability of the new levels of business. "Our short-term response," said Ritchie, "is to hire crews for trains, increase the number and productivity of freight cars, and bring on 41 high-performance locomotives in the second quarter of 2004 and another 25 in the fourth quarter."
BNSF shaves point from operating ratioBurlington Northern Santa Fe Corp.’s railroad operating income rose 19% to $410 million in this year’s first quarter, and the operating ratio dropped to 83.3% from 84.3% in the year-earlier period. The company said per-share earnings of 52 cents in the first three months of 2004 were 30% higher than comparable per-share earnings in the 2003 quarter. (A consensus Wall Street forecast called for earnings of 42 cents a share in this year’s quarter.)
BNSF said freight revenues rose 11% to $2.45 billion this year on a traffic increase of 8%. Expenses increased 10% to $2.08 billion due to a 9% increase in gross ton-miles handled and higher depreciation expenses.
Quinn to leave CongressCongressman Jack Quinn (R-N.Y.), 53, chairman of the House Transportation and Infrastructure Committee, Subcommittee on Rail, has announced that he will not seek re-election for a seventh term this year. Quinn cited family reasons for his decision to leave Congress and did not indicate what he might pursue next, though The New York Times quoted sources as saying he is considering a run for governor of New York or a U.S. Senate seat.
Quinn, whose district is in the Buffalo area, is a staunch railroad industry and Amtrak supporter. He comes from a railroad family, his father and grandfather having worked for the New York Central System.
"Jack Quinn has been a good friend of the railroad industry, as well as the railway supply industry," Railway Supply Institute Executive Director-Washington Tom Simpson told Railway Age. "He will be missed."
CN sells CANAC, but retains BELTPACKCN has sold 100% of the stock of subsidiary CANAC, Inc., to Salt Lake City, Utah-based Savage Companies. The transaction, which is expected to close by April 30, 2004, will include CANAC’s industrial rail operations in Canada and the U.S., its planning and infrastructure engineering services, and its railway training and international services. Terms of the transaction were not disclosed.
Excluded from the transaction is CANAC’s Remote Control Division, which produces BELTPACK and other locomotive remote control products. This group will be renamed BELT-PACK Corp. and remain a CN subsidiary. It will continue to serve the North American and international markets with existing staff from its current locations.
Savage Companies operates businesses in oil refining, chemicals, coal production, electric power generation, and the rail industry in 26 U.S. states and two Canadian provinces. Its railway operations include bulk terminals for coal, petroleum coke, and sulphur, among others.
Rail-related deaths drop sharplyReports from 674 large and small railroads show that 862 people died from railroad accidents and incidents in 2003, a drop of 9.4% from the 951 fatalities recorded in the 2003. Highway-rail crossing accidents caused 324 deaths last year, down 9.2% from the prior year. Trespasser fatalities dropped by 6.1% to 507.
AAR reports double-digit growth for intermodalU.S. rail intermodal traffic in the week ended April 17 was 12.1% higher than in the comparable week last year, and carload traffic rose 6%, according to the Association of American Railroads. For this year’s first 15 weeks, intermodal traffic was up 7.6% over last year and carload traffic in-creased 3.2%. In Canada, intermodal loadings were up 13.1% for the latest reporting week and down 0.5% for the year. Carload traffic in Canada was up 13.3% for the week and up 6.7% for the year to date.
NYMTA orders 120 Metro-North carsAfter several weeks of political maneuvering, the New York MTA has placed a $206 million order with Bombardier for 120 additional M-7 EMU commuter cars for Metro-North. MTA announced in February that it planned to order the cars 18 months ahead of schedule. New York City Mayor Michael Bloomberg complained that this action by the state-controlled MTA would deprive New York City Transit of its share of MTA funding, and a panel in Albany that controls MTA capital spending vetoed the speeded-up purchase. After MTA agreed to certain requests by the mayor, the firm order was finally announced on April 22.
Wabtec sales rise, earnings dropWabtec reported on April 23 that its first quarter sales were 11% higher than in the same period last year, but net income dropped to $4.8 million from $5.7 million. Freight Group sales increased 9% and Transit Group sales rose 16%. Wabtec said higher steel prices impacted earnings as well as Canadian currency exchange rates and "inefficiencies related to the closing and relocation of an electronics plant from Canada to the U.S., and the ramp-up of low-margin rail door contracts in the Transit Group." The company said it will take actions including price increases and productivity initiatives to improve profit margins.
ASLRRA presents 2004 Marketing AwardsThe American Short Line and Regional Railroad Association presented its 2004 Marketing Awards to the North Shore Railroad Co., the Providence & Worcester Railroad Co., and the San Joaquin Valley Railroad Co. during its Annual Meeting in St. Louis on April 23.
"All three of this year's Marketing Award winners demonstrate the creativity, flexibility, and persistence of short line railroads in creating new business," said ASLRRA President Richard Timmons. "The willingness of short lines to seek out solutions to meet their customers' needs is one of our industry's greatest strengths. Each of these railroads has demonstrated the ability to use innovation and a focus on customer service to grow business."
The North Shore Railroad was selected for its "focus on growing business through short-haul movements" on one or more of its eight lines, according to the ASLRRA. The railroad's 10-plus short-haul moves range from five to 100 miles and produced more than 6,000 revenue loads in 2003.
Providence & Worcester received a Marketing Award for to its "successful efforts" to secure a movement of imported coal from the Port of Providence, R.I., to a Northeast Utilities Plant in Mt. Tom, Mass. In the past, while many rail carriers have been concerned about replacing domestic coal with imported coal, the railroad and its partners have turned the changing market into a positive and a source of new business, according to the ASLRRA.
The final award went to San Joaquin Valley for its Sunset Subdivision revitalization. "Through persistence and tireless marketing efforts, the line is now on the road to becoming one of the more profitable Subdivisions on the railroad," noted the association.
E. Hunter Harrison: Five more yearsE. Hunter Harrison, CN’s president and chief executive officer, has extended his employment contract through year-end 2008.
Harrison became president and CEO of CN on Jan. 1, 2003. He joined CN as executive vice president and chief oper-ating officer in March 1998, and served in that position until December 2002. He has been a director of CN since December 1999. Before coming to CN, Harrison was a di-rector and president and CEO of the Illinois Central Corp. (IC) and Illinois Central Railroad Co. from 1993 to 1998. CN entered an agreement to purchase IC in February 1998 and took control of the railroad in July 1999.
DART chooses to "risk" itInstead of awarding a contract to the lowest responsible bidder, Dallas Area Rapid Transit has changed its tactics and issued a Request for Proposal for a construction manager/general contractor (CM/CG) at risk contract for the first elements of its light rail extension projects. In the CM/CG risk process--used by many public agencies and the private sector already--the construction contractor guarantees a maximum fixed price and accepts risk should it exceed that price, according to DART. The process is said to "emphasize extensive pre-construction activities at the beginning of the project to eliminate questions, improve constructability, and reduce changes that can push a project over budget and off schedule."
RFP responses are due on June 23, and a contract will be awarded this August.
The contract will cover the entire 10-mile Southeast Corridor rail line connecting Dallas's Pleasant Grove area with the existing downtown Pearl Station, and a 2.3-mile section of the Northwest Corridor (including civil work for the section's build-out, and facility construction, track work, utility relocations, light rail systems installation, and traffic control). According to DART, when fully built out under subsequent contracts, the full 25-mile Northwest Corridor will offer two branches: an extension from the West End Station in downtown Dallas and an extension from the planned Bachman Station in Northwest Dallas to Las Colinas in Irving and Dallas Fort/Worth International Airport.
CN trims operating ratio in first quarterDespite a month-long strike by workers represented by the Canadian Auto Workers, CN was able to trim its first-quarter operating ratio to 72.5%, 2.5 points better than the same quarter last year. CN also reported net income of $C210 million, up 6% from the 2003 quarter; operating income of $C395 million, up 6% from last year; and free cash flow of $C272 million, compared with $C181 million in the 2003 period.
CN President and CEO E. Hunter Harrison commented: "We overcame a series of stiff challenges—an unfortunate strike, the year-over-year appreciation of the Canadian dollar, and persistently high energy prices—to grow freight volumes by 5% and deliver significant improvements in our operating income and operating ratio."
CSXT worker wins top environmental awardFor the fourth time, a CSX Transportation employee has won the John H. Chafee Environmental Award, said to be the railroad industry’s highest environmental honor. This year’s award went to Russell V. Glidden, a machinist, for his management of a wastewater treatment facility at the railroad’s Avon, Ind., yard.
The award is presented by the Association of American Railroads. "On his own initiative and at his own expense, Russ secured his wastewater treatment licensing," said AAR President and CEO Edward R. Hamberger. "He then used his expertise to improve the facility’s operation during a system upgrade. In fact, the eight million gallon storm water pond he manages has become so successful under his supervision that it has developed into a wildlife haven."
UP appoints P3 managerScott D. Moore, a director of government affairs at Union Pacific since 2000 and a former Nebraska Secretary of State and state senator, has been named UP’s first general manager of public/private partnerships.
Moore, said UP, "is responsible for managing and expanding Union Pacific’s relationships with the many agencies, usually governmental, that partner with the railroad to solve communities’ transportation needs. He will work directly with agencies throughout the UP system to help identify these transportation needs and solutions. His responsibilities will include cultivating and maintaining relationships with the myriad of agencies involved in negotiating transportation projects, and organizing and managing internal UP teams to ensure proper resources within the railroad are deployed."
Additionally, Moore will coordinate UP’s relationships with many of the port authorities located within the railroad’s network, particularly on the West Coast.
Moore will report directly to UP’s recently created Office of the Chairman, comprised of Chairman and Chief Executive Officer Dick Davidson, Vice Chairman Ike Evans, and President Jim Young.
3,000 casualties feared in North Korean rail wreckUp to 3,000 people have reportedly been killed or injured in Ryongchon, North Korea, as the result of an explosion following the collision of two freight trains carrying oil and liquefied petroleum gas, according to the Associated Press. Ryongchon is about 30 miles from the Chinese border. The explosion reportedly occurred at 1:00 p.m. local time yesterday.
The South Korean news agency Yonhap quoted a witness as saying that "the area around Ryongchon station has turned into ruins, as if it were bombarded. Debris from the explosion soared high into the sky and drifted into Sinuju," a North Korean border town. Yonhap also said that a state of emergency had been declared in North Korea.
YTN, South Korea’s all-news cable television channel, reported that North Korean president Kim Jong Il had passed through the station several hours earlier while returning from a trip to China.
North Korea’s state-run news agency has not confirmed any of the reports.
Engineering contracts awarded for Chicago PlanThe Illinois Department of Transportation has awarded contracts to begin engineering work on certain parts of the Chicago Plan (otherwise known as CREATE—Chicago Region Environmental and Transportation Efficiency Program), the $1.5 billion modernization of the greater Chicago region’s freight and passenger rail infrastructure.
A total of $12.5 million has been contributed to the initial engineering effort and for a mapping project. Of that, the Illinois DOT is contributing $10 million. The six freight railroads involved in the Chicago Plan—CSX Transportation, Norfolk Southern, Burlington Northern and Santa Fe, Union Pacific, Canadian Pacific, CN—are contributing the remainder. The base mapping project has been awarded to HNTB. Other projects will be conducted by Parsons Transportation Group, Inc., Edwards and Kelcey Design Services, TranSystems Corp., Hanson Professional Services, Inc., and Alfred Benesch & Co.
The IDOT funds were appropriated as part of Illinois First, the state’s five-year, $10 billion transportation and education infrastructure investment program.
Greenbrier cites "favorable outcome" in patent suitGreenbrier Companies said in a statement on Aug. 20 that a "favorable" settlement had ended a patent-infringement lawsuit brought by National Steel Car against Greenbrier and Canadian Pacific Railway. NSC had alleged that Greenbrier’s drop-deck center-partition car built for lumber haulage infringed an NSC patent. CPR is a customer of both carbuilders.
"As part of the settlement," said Greenbrier, "CPR has ordered 750 new railcars of various types from Greenbrier valued at approximately $45 million. As well, CPR has agreed to cancel its option to sell to Greenbrier and lease back 600 previously built center partition railcars for which Greenbrier has been paid by CPR. The 600 railcars will be kept as substitutes for an earlier order for 500 railcars, which has been canceled by CPR. The removal of the contractual contingency for the 600 railcars will allow Greenbrier to realize approximately $32 million of revenue and related manufacturing margin in the company’s third fiscal quarter."
APTA seeks $2 billion for transit security in FY05The American Public Transit Association announced April 20 that it’s asking Congress to put $2 billion in the FY 2005 Homeland Security Appropriations bill to improve public transit security--$1.2 billion for capital needs and $800 million for related operating costs. APTA President William W. Millar said that since 9/11 transit agencies have spent $1.7 billion on transit security from farebox revenues and local tax sources. "The federal government must help the public transportation industry now by funding security measures as it does for the aviation industry."
Fleming retires as head of BMWECiting health reasons, Mac A. Fleming announced April 20 that he has retired as president of the Brotherhood of Maintenance of Way Employes. BMWE did not immediately announce its plans for filling Fleming’s unexpired term. Secretary-Treasurer Freddie N. Simpson has been acting president since Fleming took a health-related leave of absence in July 2003.
NS earnings top Wall Street estimatesNorfolk Southern’s operating ratio dipped to 79.6% in this year’s first quarter, the railroad’s best since it absorbed large parts of Conrail. A year earlier, the railroad’s operating ratio was 85.2%.
NS revenues for this year’s first three months were $1.7 billion, 8% higher than in the same period last year. Income from railway operations rose by 50% to $346 million. Income from continuing operations before accounting changes was $158 million, or 40 cents a share, compared with 22 cents in the 2003 quarter. Reuters Research said analysts had forecast earnings of 31 cents a share.
In announcing the railroad’s first-quarter performance, Chairman, President, and CEO David Goode that said NS achieved a number of financial and operational records in the quarter. "Our network velocity reached an all-time high as our average train speed exceeded our goal and was among the best in the industry," said Goode. "We improved our terminal dwell time performance over year earlier levels. And finally, our network fluidity continued to improve as we handled 109,000 more carloads in the quarter but our cars on line remained constant."
Genesee & Wyoming joins AARGenesee & Wyoming Inc., an operator of short line and regional freight railroads in the U.S., Canada, Mexico, Australia, and Bolivia, has become the newest full member of the Association of American Railroads. GWI Chairman and CEO Mortimer B. Fuller III has been elected to the AAR's board of directors. GWI operates over 8,100 miles of owned and leased track and more than 3,000 miles under track access arrangements.
Fuller, who characterises GWI as "a significant partner" to North America's Class I railroads, said AAR membership "is an important opportunity for us to participate in the discussion of issues affecting the railroad industry. We also expect to benefit from the research and development and technical discussions that the AAR brings together on behalf of the entire industry."
AAR President and CEO Edward R. Hamberger said GWI's decision to join AAR "broadens our membership and strengthens our ability to represent our industry effectively before various public agencies and with the media."
The addition of GWI brings to six the number of non-Class I’s who are full AAR members. The others are Rail America, Wheeling & Lake Erie, Texas Mexican Railway, Vermont Railway, and Manufacturer’s Railway. In addition, AAR also has three associate member categories whose members include railway supply companies, logistics providers, engineering firms, and numerous other short lines and regionals.
Senate Commerce Committee passes Rail Security Act of 2004Last Thursday, the U.S. Senate Committee on Commerce, Science, and Transportation approved the Rail Security Act of 2004, which will authorize spending more than $1.1 billion to secure the rail network against terrorism. The bill was introduced by Senators McCain (R-AZ) and Hollings (D-SC) shortly after the Madrid train bombings in March.
"We're not waiting for a train to blow up here before we take action," Sen. Hollings said. "Rail security is a matter of national security. It is no longer a function that we can leave to the private sector. Amtrak and public transit operators can barely cover their operating costs." Hollings added that he hopes the full Congress will pass the bill soon.
The bill will:
* "Require the Secretary of the Department of Homeland Security to conduct an assessment of railroad security risks, and submit the assessment along with prioritized recommendations to Congress within 180 days.
* Provide $185 million in grants to railroads, state and local governments, and others to upgrade security across the entire railroad system, including hardening infrastructure, hiring additional police and canine units, and improving explosive detection capabilities
* Provide $670 million to bring old railroad tunnels used by Amtrak and commuter railroads in New York, Washington, and Baltimore up to modern standards for ventilation, fire safety, and life safety to ensure adequate access by first responders in case of an emergency.
* Provide up to $128.5 million in funding for Amtrak to implement measures contained in Amtrak's security plan.
* Provide up to $100 million to improve the security of hazardous materials transportation, including structural modification or replacement of railcars transporting high hazard commodities.
* Provide $100 million for research and development initiatives, including explosive detection, tamper resistant sealing of freight cars, enhanced communication, and improved emergency response techniques and technologies.
* Authorize a pilot program for passenger, baggage, and cargo screening."
Global Railway Industries brings YSD into the foldGlobal Railway Industries has expanded its presence in the railcar door market with the $2 million acquisition of YSD Industries' manufacturing assets. Youngstown, Ohio-based YSD joins Global's Canadian railcar door subsidiary Prime Railway Services, and its two other wholly owned rail subsidiaries, Rafna Industries Ltd. and Bach-Simpson Corp.
"We believe Global will realize significant value from the timing of its purchase of YSD's assets," observed Mike Kohut, president and CEO of Global, which is based in Alberta. "Since bottoming out in 2002, there is ongoing strength in the new railcar market in the U.S. Orders for new railcars have begun to surge, which should have a positive impact for suppliers in this industry."
Global is currently implementing a "continuous improvement plan" for YSD, which will "further strengthen operations and financial results over time," Kohut noted. The plan is expected to save nearly $3.2 million a year, and make YSD profitable at the current level of sales and accretive to Global within three to six months.
The assets purchased from YSD include machinery and equipment, land, buildings, patents, licenses, computer hardware and software, engineering designs, and the existing sales order backlog.
YSD was founded in 1924 as the Youngstown Steel Door Co. and has grown to supply such components as outlet gates for hopper cars, boxcar roofs, autorack side screening and roofs, and a line of stamped grating products. The company generated nearly $15 million in annual sales in its most recent fiscal year.
Amtrak derailment investigation continuesThe engineer of Amtrak's City of New Orleans train that derailed last Tuesday has told the National Transportation Safety Board that the right rail "appeared to roll away" before he put the train into emergency braking. The first phase of braking had started just seconds before, when the engineer noticed a "track misalignment." The NTSB's preliminary review of event recorder data confirms the engineer's actions.
The nine-car Amtrak train had been traveling at 78 mph, before it derailed near Flora, Miss., injuring 58 and killing one of the 73 people onboard. The NTSB's investigation of the accident is now underway.
The derailment occurred on tracks owned, operated, and maintained by Canadian National/Illinois Central. According to an Associated Press report, "Four freight trains have crashed on the five-mile stretch near Flora since 1994. One, in 1997, was carrying hazardous chemicals, and 4,000 residents had to be evacuated."
Canadian National spokesman Mark Hallman told Railway Age that "the track where the accident occurred is inspected twice weekly and was recently subject to rail flaw detection inspection. No exceptions were found. Also, CN's track geometry car traveled over the line in February and, again, no exceptions were discovered."
STB approves CN acquisitionsThe Surface Transportation Board has conditionally approved CN’s purchase of three railroads controlled by Great Lakes Transportation LLC: Duluth, Missabe & Iron Range, Bessemer & Lake Erie, and Pittsburgh & Conneaut Dock Co. A fourth carrier involved in the $380 million transaction, Great Lakes Fleet Inc., is regulated by other federal agencies. STB said its conditions include requirements that CN keep all existing gateways open and "waive its defenses regarding rate regulation on bottleneck line segments created by the transaction."
BART cutting train sizes to help balance its budgetBay Area Rapid Transit says it has worked out a "preliminary balanced budget" of $476.9 million for FY 2005 despite a stagnant economy that has reduced both farebox revenues and sales tax income. Earlier this year, BART projected a $41.5 million shortfall. "Tailoring train size to demand" was one of the economies that helped close the gap. Efficiencies resulting from a renovation program now nearing completion were also a factor, said BART General Manager Thomas Margo. The budget includes $414.2 million for operating expenses and $62.7 million for debt service and capital expenses.
Amtrak train derails in MississippiOn April 6, Amtrak's Chicago-bound City of New Orleans train derailed near Flora, Miss., injuring 58 and killing one of the 73 people onboard. Two passengers and two of the 12 crewmembers remain in the hospital; all others have been released, Amtrak spokesperson Marcie Golgoski told Railway Age today.
Each of the nine cars--including eight passenger cars and a baggage car--jumped the tracks, toppling nearly six feet off a trestle. The locomotive remained upright.
The derailment occurred on tracks owned, operated, and maintained by Canadian National/Illinois Central. According to an Associated Press report, "Four freight trains have crashed on the five-mile stretch near Flora since 1994. One, in 1997, was carrying hazardous chemicals, and 4,000 residents had to be evacuated."
The National Transportation Safety Board is now investigating the cause of the accident. "We're assisting them in any way we can," Golgoski said. Investigator-in-Charge Ted Turpin is leading a 12-member team, which includes experts in the track, equipment, and human performance areas. Other investigators are retrieving information from the train's event recorder.
According to Golgoski, the track at the site is now open. Amtrak's southbound City of New Orleans train will operate, for the first time since the accident, tonight, passing through the area at "walking speed." The first northbound train will depart New Orleans tomorrow afternoon.
April 18, 2002 marked the last Amtrak accident involving passenger deaths. An Auto Train derailed at Crescent City, Fla., killing four and injuring more than 150.
RailAmerica's Marino steps downAfter leading RailAmerica's growth from a $1 million, one-railroad operation to a $360 million, 47-railroad holding company, Gary O. Marino, 59, has retired. He served as chairman of the Board of Directors since the company's formation in 1992, taking on the roles of CEO in 1994 and president in 1996. The chairmanship position was split from his responsibilities in mid-March, when William Pagonis took over, after holding the positions of vice chairman of the Board and chairman of the Corporate Governance and Nominating Committee at RailAmerica.
"With the recent announcement of the execution of an agreement to sell Freight Australia, my work at RailAmerica is now complete," said Marino of the announcement on April 7. "The company is well positioned for future, sustained growth and the proceeds from the pending Australia railroad sale will further strengthen the balance sheet and provide the capital for the company to bolster its strong footprint in the North American railroad industry."
Marino attributed his success to the "dedicated service from a very talented, motivated management team and staff, and a supportive Board of Directors." Now, his plans are to focus on other "projects that interest me" and "personal priorities."
Pagonis praised Marino's service to the company, noting that he has achieved "a long list of enviable accomplishments." "The company is highly appreciative of Gary's leadership and vision in helping transform the company," Pagonis said.
The Board is currently searching for a new president and CEO. Ronald D. Redfearn will serve as active president in the interim.
RailAmerica will record a charge of about $0.18-$0.20 per share in the second quarter for Marino's retirement benefits. Approximately 50% of the charge relates to non-cash items for the extension of his stock options and the vesting of certain equity award, according to the company.
EMD's Tier 2 locomotive development program on trackThe SD70ACe locomotive from General Motors's Electro-Motive Division is on schedule to meet the U.S. Environmental Protection Agency's Tier 2 engine emissions requirement for all new locomotives starting January 2005. EMD announced on April 6 that two SD70ACe units with GM's existing 710 diesel engines had entered revenue service on Kansas City Southern following extensive testing at the Transportation Technology Center. Demonstrations on other North American railroads will follow soon.
The units have performed "flawlessly" during their first week at KCS, according to EMD Director-Market Development and Communications Curt Swenson. "Initially, the SD70ACe units GM72 and GM73 are being used in helper service," he said, "where they are repeatedly exercised at very high tractive effort levels as they push heavy coal trains up the 1.5% grade from Heavener, Okla., to the top of Rich Mountain."
The SD70ACe units use an a.c. traction system to develop a continuous tractive effort of 157,000 pounds--necessary for pulling heavy coal trains and higher speed intermodal trains, according to EMD. (A d.c. traction system also is available.)
The SD70ACe was tested for the last nine months at TTCI, logging "millions of kilowatt-hours," according to EMD.
"Many of our customers who have participated in the tests have commented on the reliability benefits of meeting Tier 2 emissions standards without adding any new technologies or complicated equipment to the 710 engine, and the outstanding improvements in ergonomics and maintainability in the cab and throughout the locomotive," reported Bill Happel, vice president of GM and general manager of EMD.
KCS and TMM reach an agreement in rail transactionKansas City Southern and Grupo TMM, S.A., (TMM) will "discharge in good faith all of the obligations of the [April 2003] acquisition agreement" in which TMM would sell its interest in Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. to KCS, according to a KCS announcement today. This is a stipulation to an agreement by the two companies not to "move immediately" into the next phase of arbitration.
Last month, a AAA International Centre for Dispute Resolution Arbitration panel granted an interim award to KCS, finding that the acquisition agreement was binding unless "otherwise terminated according to its terms or by law."
A dispute arose between the companies when TMM attempted to terminate the acquisition agreement last August, after TMM shareholders voted against it. The arbitration panel concluded that their rejection did not authorize TMM's purported termination of the agreement.
According to KCS's announcement today, both companies "have reserved the right to proceed with the next phase of arbitration at any time."
Their recent agreement comes shortly after the Mexican Federal Competition Commission provided a 180-day extension of its May 18, 2003 ruling, which granted authority for the transaction.
New York MTA ridership decline continuesJanuary 2004 saw a continuation of ridership declines posted in 2003 by New York MTA’s transit and commuter rail agencies.
NYC Transit subways carried 109.1 million riders in January this year, down from 115.0 million in January 2003. Subway ridership in calendar 2003 dropped to 1.384 billion from 1.413 billion in 2002.
On the Long Island Rail Road, January 2004 ridership dropped to 6.3 million from 6.8 million in January 2003. Annual ridership declined to 80.9 million in 2003 from 83.9 million in 2002.
Metro-North carried 5.59 million riders this January, compared with 5.80 million in January 2003. Ridership totaled 71.1 million in 2003, down from 73.2 million in 2002.
Will court rulings discourage rail investment?Surface Transportation Board Chairman Roger Nober says he’s concerned that court rulings delaying two STB-approved rail construction projects could discourage investment in railroad expansion.
Nober described the cases and their implications in a speech prepared for the spring forum of the National Industrial Transportation League:
"The United States Court of Appeals for the Eighth Circuit partially vacated and remanded--which means it sent it back to the Board for further proceedings--a small portion of the Board’s decision approving Dakota, Minnesota & Eastern Railroad Corp.’s new rail line to coal mines of Wyoming’s Powder River Basin. Primarily, the court was concerned that the Board’s environmental analysis had not taken into account the effects that might occur as a result of what it concluded was a reasonably foreseeable increase in coal consumption."
Nober said that this ruling "for the first time asked the agency to look not only at the entity and project it regulates but raised the possibility that the agency would need to examine the effects of transporting a certain commodity carried by the regulated business." The court denied an appeal for a rehearing, and the board is following its instructions, said Nober.
He also described "a delay in a rail construction project approved by the Board which gave San Jacinto Rail Limited, a subsidiary of the Burlington Northern and Santa Fe Railway Company, and four chemical shippers approval to construct a 12.8-mile railroad line near Houston, Texas, and for BNSF to provide service over the line. While the Board approved the rail line construction, in order for the rail line to be built, some of the property must be obtained through the state’s eminent domain statutes. A state court in Texas has prevented the construction from going forward because it has ruled that Texas’s eminent domain statutes preclude the taking of the land required for the project." The court’s ruling is under appeal.
"Stepping back," concluded Nober, "I am concerned about the larger implications that these rulings may have on the decisions of railroads and shippers to try to improve their competitive positions by building-in. Since these types of projects are privately-funded, I worry that companies may decide that it is too risky tie up capital on a build-in project and no longer look to these as private-sector solutions to railroad competition."
KCS granted extension in proposed NAFTA rail transactionKansas City Southern announced yesterday that the Mexican Federal Competition Commission provided a 180-day extension of its May 18, 2003 ruling, which granted authority for the sale of Grupo TMM, S.A.'s (TMM) interest in Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (Grupo TFM) to KCS. The extension started from the day of notice, April 2.
Last month, a AAA International Centre for Dispute Resolution panel issued an interim award in the KCS-TMM dispute. The panel found that the Grupo TFM acquisition agreement "remains in force and is binding on KCS and TMM in accordance with its terms." Under the April 2003 agreement, KCS would acquire all of the shares of Grupo TFM.
The dispute arose when TMM attempted to terminate the agreement last August, after TMM shareholders voted against it. The arbitration panel concluded that their rejection did not authorize TMM's purported termination of the agreement.
CP publishes 2004 Corporate Profile and Fact BookCanadian Pacific has published and posted the 2004 Corporate Profile and Fact Book on its Website (www.cpr.ca). Designed as a "quick reference" for detailed information about CP, the 66-page fact book includes sections on the company's mission, executives, assets, history and governance, operations, markets, human resources, and labor relations, as well as a glossary. The reference has been published online as a downloadable Adobe PDF file since 2000.
CP is a transcontinental carrier operating in Canada and the U.S. over a 14,000-mile rail network. Its CP Logistics Solutions unit provides logistics and supply chain expertise worldwide.
UP receives GM's 2003 Supplier of the Year AwardFor the third consecutive year, Union Pacific has been named a General Motors Supplier of the Year for overall business performance. The Class I was one of 77 suppliers honored, and the only railroad selected. A team of GM executives from purchasing, engineering, manufacturing, and logistics based their decisions on supplier performance in quality, service, technology, and price.
"Union Pacific has a balanced focus on performance and behavior that supports GM's priorities," commented Bo Andersson, vice president-GM Worldwide Purchasing Control and Logistics.
The award was presented to UP Chairman and CEO Dick Davidson on April 3 during ceremonies in Prague, Czech Republic.
"The real honorees for this award are the employees in the field who work every day to deliver General Motors parts and vehicles," said Julie Krehbiel, UP assistant vice president-GM.
UP serves six on-line GM plants and handles 2.4 million-plus GM vehicles in more than 1,500 origin/destination pairs across its network.
Alaska Railroad honored with architectural awardThe new $28 million Alaska Railroad Bill Sheffield Depot in Anchorage has won an American Institute of Architects Award. San Francisco-based architectural firm KMD designed the station, which opened last May. With a backdrop of the Chugach Mountains, the station has skylights that span the 25-foot-high vaulted ceilings, and smooth aluminum panels frame the towering glass window walls.
The station is linked to the Ted Stevens Anchorage International Airport by a tunnel with a 154-foot, two-way moving walkway. Fiber optic technology, accompanied by synchronized hues and sounds, covers the arched ceiling to represent the Northern Lights.
Possible high speed rail sabotage attempt in Germany A German InterCity Express high speed passenger train narrowly avoided derailment after hitting six metal slabs bolted to the tracks early Saturday, according to a report today from the Associated Press. None of the 200 riders were injured, and an investigation by police is now under way.
Thirty-eight-pound metal slabs were screwed onto the track between the West German towns of Kamen and Nordboegge on a line linking Cologne and Berlin, according to the AP. The police reportedly believe that the slabs were attached just prior to the high speed train's arrival. A local train had passed over the site approximately 18 minutes earlier.
House approves TEA-21 reauthorization billOn April 2, the House of Representatives passed a $275 billion bill for the reauthorization TEA-21. The Transportation Equity Act: A Legacy for Users would provide transit with $51.5 billion in guaranteed funding through FY 2009--$17.7 billion less than the $69.2 billion earmarked in the House's original six-year, $375 billion proposal. House members rejected an effort earlier in the day to step up funding to $318 billion--the amount already approved for reauthorization by the Senate, which would include $56.5 billion for transit over six years.
Funding for the newly approved House bill is still higher than the Administration will accept. The President has threatened more than once to veto any highway-spending bill with funding levels above $256 billion.
A conference committee will now consider the House and Senate bills to resolve differences.
"Given identified needs for public transportation at $44 billion a year, conferees should fund the program at no less than the $318 billion mark approved by the Senate," said William W. Millar, president of American Public Transportation Association.
The current TEA-21 extension expires on April 30. According to APTA, "to keep the pressure on getting the six-year bill through the conference as quickly as possible, there is some discussion that the Senate may not support any further short-term extension of TEA-21."
RENFE orders 44 power heads from Bombardier/Talgo consortiumSpanish National Railways (RENFE) has awarded a C$303 million contract to Bombardier Transportation and Patentes Talgo for 44 high speed power heads. Bombardier will supply the electrical equipment, and the propulsion, train control and communications, and signaling systems, and will participate in final assembly and testing. Talgo is responsible for mechanical component production, including variable-gauge trucks. Delivery of the units--which can reach a maximum speed of 250 kph--is slated between June 2006 and August 2008. They will be coupled with variable-gauge cars to form 22 nine-car trainsets for use on Spain's new high speed lines.
CP to change out a century-old swing bridgeCanadian Pacific plans to give a century-old swing bridge a $16 million lift at the end of this month. Replacing a 307-foot truss swing span with a more modern rolling bascule plan, the 1902 bridge over the Black River between La Crosse and French Island, Wis., will be converted into a lift bridge. (The Milwaukee Road, a CP predecessor, built the current steel swing bridge.)
"The new structure will substantially reduce maintenance costs in our current high-axle loading environment and provide more reliability in operations, benefiting both the railroad and users of the river," said Ray Strelesky, CP's manager-project services, based in Minneapolis.
Designed by HNTB Corp. (Kansas City, Mo.), under the direction of CP's Structures Planning and Design Group, the new 147-foot bascule span will lift on the east end to create a 60-degree angle open to the west, allowing boats to pass through the river channel below. The 987,000-pound span will open by rolling back on a half-moon-shaped girder powered by an electric motor, which will be housed in a machinery room at the top of the bridge. A 865,000-pound concrete weight on one end of the span will assist in opening and closing the structure. The bridge tender, who used to operate the swing span from a control house in the middle of the bridge, will operate the new span from a control house on the east end of the bridge.
Crews from CP's contractor, Plain, Wis.-based Edward Kraemer & Sons, have been building the bascule span on falsework since November 2002.
Changing out the spans will involve rerouting trains and closing the Black River to navigation through coordination with railroad crews, contractors, the U.S. Army Corps of Engineers, and the Coast Guard.