April 2007
Rail ton-mile volume trails last year by 3%The Association of American Railroads announced that in the week ended April 21, rail carload traffic in the United States was down 2.8% from last year and intermodal volume was down 2.1%. Total, ton-mile volume declined 1.5%. Year to date, ton-miles are down 3% from last year as the national economy continues to experience a slowdown led by the housing slump.
In Canada, carload traffic in the week ended April 21 was down 3.1% and intermodal was up 3.3%. Mexico’s largest railroad, the Kansas City Southern de Mexico, reported carload traffic up 2% and intermodal up 40.3% in the latest week.
SEPTA increases Silverliner V order to 120SEPTA is exercising an option to purchase an additional 16 Silverliner V commuter cars from United Transit Systems (UTS) at a cost of $29.84 million. This brings the total Silverliner V order to 120 cars priced at $274 million. Four of the additional cars will be funded by the Delaware Transportation Corp., which contracts with SEPTA for regional rail service. UTS is a consortium of Sojitz Corp. of America and Rotem, a South Korean company.
Delivery of the new cars will permit SEPTA to retire 73 Silver II and III cars, in service since the 1960s.
SEPTA says the need for additional cars is underscored by the 3.5% growth the agency is experiencing. Daily ridership now exceeds 110,000.
L.B. Foster quarterly earnings soarL.B. Foster has reported 155% growth in per-share earnings from continuing operations--28 cents in this year’s first quarter vs. 11 cents in the same period last year. Net sales increased 31.5% to $110.7 million, and gross profit margin was 121.8%, up 120 basis points from last year’s quarter due mainly to increased billing margins offset, in part, by increased net plant expenses.
Summarizing first-quarter results, President and CEO Stan Hasselbusch commented: "Our Construction and Tubular segments delivered strong sales and profits, and even though the Rail segment posted a 37% increase in sales, growth profit margins were disappointing, primarily due to poor productivity at our new Tucson concrete tie and Pueblo Allegheny Rail products facilities.”
The company’s backlog on March 31 was $195.8 million, 38% higher than last year.
Wabtec expects 20% growth in 2007 earningsWabtec announced first quarter per-share earnings of 57 cents, 27% above year-ago levels, and said it’s “well positioned to take advantage of growth opportunities and deliver another year of double-digit revenue and earnings growth in 2007.”
The company’s new earnings guidance calls for growth of about 20% this year. As reasons for optimism, Wabtec cited renewed interest from freight railroads in electronic braking and increasing acceptance of its Electronic Train Management System®.
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First-quarter sales grew 20% to a record $314.3 million, and income from operations, as a percent of sales, was up 13.4% or 1.1 percentage points. On March 31, the company had an order backlog of $1.1 billion.
KCS trims operating ratio by 1.8 pointsKansas City Southern’s stated goal for 2007 is an operating ratio below 80%, and the first quarter saw a big step in that direction when the key performance indicator dropped 1.8 points to 82.4%. This reflected an 18% increase in operating income to $72.4 milloion.
KCS revenues grew 5.9% to $411.3 million in the first quarter, while expenses increased only 3.6% to $338.9 million. Net income available to shareholders was $17 million, or 21 cents per share, compared with $8 million or 11 cents in first-quarter 2006.
KCS chairman and CEO Michael E. Haverty attributed the improved operating ratio to “concerted efforts across the company to control costs and improve revenues in spite of difficult winter conditions.”
P&W celebrates one-year anniversary of RMI system successIn just one year of operation, the Providence & Worcester Railroad's RailConnect® system from RMI has paid for itself. Celebrating the first-year anniversary this week, P&W has seen significant improvements, including the automation of billing for secondary switching and storage charges. The 500-mile regional railroad was able to increase such charges by 40% while decreasing the manpower required to capture them by 50%. The revenue boost has already helped offset the RMI system's cost, according to RMI.
"We are extremely pleased with the results we have seen since implementing RailConnect," said P&W Vice President-Operations Dave Fitzgerald. "With the RailConnect TMS system, we have instant access to all of the information we need for each railcar on our lines, including the waybill, weights, charges, and movement history. RailConnect TMS also enabled us to develop a comprehensive inventory system for both yard and customer tracks."
P&W is now planning to install RMI's ShipperConnect system, which will allow it to interface with customers via the web.
ASLRRA presents marketing, safety awardsAt its 94th annual meeting in Baltimore this week, the American Short Line and Regional Railroad Association presented its 2007 Marketing Awards and Safety Person of the Year award. Arkansas Midland, Buckingham Branch Railroad Co., and New England Central took top honors for their marketing efforts. According to ASLRRA, these railroads "established new partnerships, found new and innovative uses for older facilities, engaged in creative thinking and problem-solving, and attracted new commodities to rail service." Montana Rail Link's Dale Virts, a Mechanical Department carman, has been named Safety Person of the Year.
In just two years, Arkansas Midland (a Pinsly Railroad company) leased a nine-mile line from Union Pacific and grew business in the decaying industrial area of North Little Rock, Ark., from six to 14 customers. Following this, in 2002, AKMD purchased the Southern Cotton Oil facility, located along the line, and sold it to the City of North Little Rock for a nominal sum. The railroad removed all manufacturing equipment, leaving only usable buildings; entered into a land management agreement with the city, including the performance of track maintenance; and agreed to market the facility with Pinsly transloading subsidiary, Railroad Distribution Services, and share specific revenues with the city. Traffic at the new facility has more than tripled original estimates. Due to AKMD's efforts, the Little Rock area has seen a 300%-plus increase in rail traffic since 2000 and 15 additional industries have located there since 2002, said AKMD.
The Buckingham Branch began business in late 2004, taking over a former CSX Transportation line in Virginia. Previously, the line's largest customer, Martin Marietta Aggregates, had experienced train problems due to crew delays, incorrect locomotive placement, and loaded ballast trains not leaving the quarry promptly. To overcome this, BB dedicated a train crew to the ballast trains so that trains would be delivered to the quarry for prompt loading and immediately moved to the interchange track. A passing siding was lengthened, as well. According to BB, reliable service, regular communication, creative thinking, and problem resolution boosted business 56.4%--from about 10,000 carloads in 2004 to 15,643 cars in 2006.
New England Central partnered with CN to create a rate and service package to make rail transportation service work for New England Wood Pellet, LLC, a new rail customer. Using its relationships with local real estate firms and the Town of Palmer, Mass., NECR found a vacant warehouse in an industrial park where the customer could receive wood pellets in covered hoppers, and unload, bag, and distribute them to the New England market. New England Wood Pellet invested about $1.5 million in renovating the building and rehabilitating its rail siding. It now processes 15 cars of wood pellets weekly--a success all around, said NEC.
MRL's Virts is a 30-year railroad veteran, who "leads by example," according to MRL President Thomas J. Walsh. Virts joined MRL in 1988, and has served as a member of the regional railroad's safety audit team for the last 12 years and a Safety Committee member and leader since 1991. He conducts daily and weekly safety briefings and is a "driving force" behind the railroad's quarterly SAFE (Safety Assessment of Fellow Employees) Days. He also is a new-hire mentor. Among his other roles at the railroad, Virts organizes yard clean-up efforts to boost facility appeal and eliminate tripping hazards, maintains yard ATV routes and crossings for carmen, and helps run periodic hazardous materials spill drills.
CSXT employee wins rail industry's top environmental awardCSX Transportation Director-Locomotive Engineering Donald L. Robey has been honored for developing and implementing a system that reduces emissions and fuel consumption. He received the railroad industry's prestigious Chafee Environmental Award during a ceremony yesterday in Washington, D.C.
The locomotive system he designed is expected to cut greenhouse gases by almost 100,000 tons over the next five years and reduce fuel consumption by 12.5 million gallons.
There were five other award nominees: Gary Stafford, Amtrak; Ken Perry, Canadian Pacific Railway; Terrance Gay, BNSF Railway; Wendell McCoy, Norfolk Southern; and Dennis Sullivan, Union Pacific.
The Chafee Environmental Award is named after the late Rhode Island Senator John Chafee, who was known as both a strong environmentalist and a supporter of the nation's railroads.
Class I employment tops 167,000Class I railroad employment reached 167,011 in mid-March, up nearly 1% over March 2006, according to the Surface Transportation Board. The number of train and engine employees grew 0.26% to 70,720. Maintenance of way and structures employment was up 1.82% to 34,587, and maintenance of equipment and stores was up 1.25% to 30,381. There were also increases in executive administrative, and professional employment, but a 22% decrease in the category of transportation employees other than train and engine.
CN creates new safety officeCN has named Paul C. Miller to the newly created position of vice president and chief safety officer. Miller, who has 28 years of operations and marketing experience with the railroad, will have responsibility for the current departments of Safety, Risk Management, and Environment, as well as the movement and handling of hazardous materials. “All of our leaders in operations have significant safety responsibilities embedded in their roles, but having an officer whose job is focused exclusively on safety will bring an added dimension of discipline and vision to our precision railroading model,” said CN President and CEO E. Hunter Harrison.
NS earnings drop, but exceed Street forecastsWith freight volume down 4% and revenue off 2%, Norfolk Southern posted first-quarter net income of $285 million, or 71 cents a share, exceeding Wall Street expectations of 70 cents a share. In the same period last year, NS earned $305 million, 72 cents a share. The NS operating ratio edged up to 76.5% from 76.1%. Expenses declined 2% despite severe weather, due mostly to lower compensation and benefit costs.
“We are encouraged with our performance in the first quarter, especially in light of the softness of the economy,” said NS Chairman, President, and CEO Wick Moorman. “We will be prepared as the demand for transportation services resumes its growth, and we are continuing to invest in safety, capacity, and new technology to drive further improvements in service. We are also continuing to manage our cost structure and drive further efficiencies in our operation.”
Harsco: Back to BrazilBrazil's Companhia Vale do Rio Doce (CVRD), the largest metals and mining company in the Americas and owner/operater of a broad-gauge, heavy-haul, 5,000-mile railroad, has contracted with Harsco Track Technologies for a 96-stone main line rail grinder. The contract includes two years of post-delivery operator and maintenance training, field service, and spare parts support. Delivery is scheduled for early 2008. Terms of the contract were not disclosed.
The grinder will operate on CVRD's 550-mile Carajas line, which transports iron ore and other cargo to Brazil’s main maritime port at Sao Luis in the country’s northern region. CVRD accounts for approximately 5% of Brazil's total exports.
The order is HTT's first in Brazil in more than a decade and could lead to additional orders as CVRD continues to evaluate system-wide railway track maintenance equipment needs. HTT says it “expects to benefit from the significant presence in Brazil of Harsco's MultiServ mill services operations, whose extensive on-site services to most of Brazil's major steelmaking operations typically involve heavy vehicle repair and maintenance capabilities at several locations.”
CPR increases earnings and shaves operating ratioIn the face of “extremely difficult, weather-related operating conditions,” Canadian Pacific Railway achieved diluted earnings per share of C$0.78 in the first quarter, up 8% from the 2006 quarter . CPR also held its operating ratio to 79.5% vs. 79.6% in the year-ago quarter.
Said CPR President and CEO Fred Green: “Our disciplined execution of the Integrated Operating Plan, in addition to the investments in network capacity we’ve made in our Western corridor, paid major dividends for us this quarter. We were able to recover from each event as it occurred and keep our customers’ shipments moving.”
Freight revenue increased 2.2% to $1.09 billion in the first quarter, while operating expenses rose just 0.3% to C$887 million. For the year as a whole, CPR expects to grow revenue in the range of 4% to 6%.
BNSF profits falter despite record revenuesRate increases helped drive BNSF revenues to a first-quarter record of $3.54 billion on flat volumes, but a special environmental and technology charge ate into profits. The $0.14 per-share charge reduced earnings to $0.96, compared with $1.09 in the prior-year quarter. Without the charge, BNSF would have earned $1.10 cents per share, exactly meeting Wall Street expectations.
BNSF Chairman, President, and CEO Matthew K. Rose said that in addition to “improved yields from our well-balanced portfolio,” the railroad continued “to drive operating expense efficiencies and improve velocity, delivering our best ontime performance since 2004.”
Operating expenses for the quarter were $2.95 billion, up from $2.67 billion in the same quarter last year, “primarily due to the $81 million environmental and technology charge as well as higher fuel expense reflecting both a declining hedge position as well as higher fuel prices.” The operating ratio increased to 80.4% from 76.5% in the 2006 period.
Storms and strike batter CN earningsSever winter weather and a conductors strike adversely affected CN’s performance in the first quarter, with net income declining 10% to C$234 million from the year-earlier quarter and the operating ratio rising 3.5 points to 70.6%. CN estimated that the United Transportation Union strike reduced operating income by C$50 million and net income by C$35 million.
CN said first quarter revenues were basically flat at around C$1.9 billion, reflecting rate increases, an improved commodity mix, and currency exchange gains. “This increase was partly offset by the effects of the UTU strike, unfavorable weather conditions, weakness in specific markets, and lower fuel surcharges resulting from a decrease in crude oil prices,” added the railroad.
USDOT’s Peters praises NYC “congestion pricing” proposalU. S. Secretary of Transportation Mary L. Peters has issued a statement characterizing New York City Mayor Michael Bloomberg’s proposal for traffic tolls on busy New York City streets as “the kind of bold thinking leaders across the country need to embrace if we hope to win the battle against traffic congestion.”
Mayor Bloomberg wants money raised through the tolls to be used to help support massive mass transportation projects totaling $61 billion, including the new, $6 billion Trans-Hudson Express tunnel into Manhattan that New Jersey Transit plans to complete by 2015.
Bloomberg fleshed out his plan for congestion pricing, which was leaked to the press last week, in an Earth Day speech yesterday. Bloomberg suggested that U.S. DOT might help pay for a three-year test of the plan, which would involve investing $225 million in traffic-recording equipment. This equipment would deduct tolls, ranging up to $8 for cars and $21 for trucks entering Manhattan below 86th St. between 6 a.m. and 6 p.m. on weekdays.
New York Gov. Eliot Spitzer said the plan had “admirable goals” and said he would review it. A leading Long Island politician, Nassau County Executive Thomas R. Suozzi, commented: “People’s reaction is they don’t want to pay. But getting them to switch to mass transit benefits us all.”
Kreusi quits as head of Chicago TransitFrank Kreusi has resigned as president of the Chicago Transit Authority, and Mayor Richard M. Daly has recommended a successor: Ron Huberman, the mayor's chief of staff and former head of the city's Office of Emergency Management and Communications. During Kreusi's 11-year tenure, major projects were initiated at CTA and ridership reached a 14-year high, as Mayor Daly noted in announcing his departure yesterday. That record did not, however, protect him from the public criticism that tends to descend on the manager of underfunded public transit authorities everywhere.
With quarterly profit up, Hub has high hopes for the yearThe Hub Group, which gets the bulk of its business from intermodal, today reported record income of $11.4 million from continuing operations in this year’s first quarter, up 35% from the prior-year quarter. Total revenue rose 10.2% to $393.3 million led by intermodal, which was up 10.4% to $287.8 million. Truck brokerage and logistics revenues were also up.
First quarter per share earnings amounted to 29 cents vs. 21 cents a year ago. “Given the current operating environment, we’re comfortable that the earnings for 2007 will be within the current analysts’ range of $1.31 to $1.40 per diluted share,” said Hub.
Plant expansions mean new business for CSXTCSX Transportation says it expects eventually to pick up 150,000 new carloads of traffic annually from 140 industrial development projects that were started on-line in 2006.
These projects include a new automobile assembly plant at West Point, Ga.; a dedicated intermodal terminal at Marion, Ohio; a unit train terminal for perishable goods at Rotterdam, N.Y.; a solid waste landfill in Coalton, Ky.; and a number of new coal traffic facilities.
CSXT said it attracted 88 new facilities to its lines last year and helped customers expand more than 50 plants, for a total investment of $2.7 billion.
NYC mayor to propose street tolls and massive outlays for mass transportationNew York City Mayor Michael R. Bloomberg is reportedly ready to propose massive new investments in public transportation as well as “congestion pricing”--a form of tolls--to discourage motor vehicles from entering Manhattan’s busiest sections. Proceeds from the tolls would help extend rail and bus transit options.
These are among the proposals for “greening” the nation’s largest city contained in an Earth Day speech Mayor Bloomberg is to deliver on April 22. Sources say it outlines a major policy initiative that could put the Bloomberg stamp on metropolitan development for years to come.
With his transportation plan, the mayor would be moving onto turf now occupied by the Metropolitan Transportation Authority, a state agency reporting to the governor’s office, and the Port Authority of New York and New Jersey, which operates a trans-Hudson rail system (PATH).
NS orders Railpower’s new multi-genset road switchersNorfolk Southern will add two Railpower RP-series multi-genset road switchers to its fleet later this year. The railroad will convert conventional locomotives using SW1500 platforms with Railpower-supplied kits. The RP14BD model kits are said to help improve yard operation efficiency, provide fuel savings of up to 70%, and reduce NOx and other particulate emissions by about 80%.
Thoroughbred Mechanical Services will perform the work at NS’s Juniata Locomotive Shop in Altoona, Pa.
The order, which includes an option for two additional units, supports Railpower's strategy to expand its multi-genset locomotive product line and will "position us well for future orders,” said Railpower President and CEO José Mathieu. The company’s backlog now stands at 65 units.
Steelhead Corp. acquires R-Mac Sales and LeasingSteelhead Corp. (Chicago, Ill.) has acquired R-Mac Sales and Leasing, LLC, (Broomfield, Colo.), a railway tie plugging and concrete tie-rail-seat abrasion prevention and repair firm. Terms of the deal were not disclosed.
Steelhead--a light manufacturing and services holding company that serves the rail and HVAC markets--has renamed R-Mac. Now called Encore Rail Systems, Inc., Doug Delmonico becomes president. He served previously as R-Mac's vice president-operations. Encore will now have production facilities in Broomfield and Chicago, which will "save valuable shipping and transit time to rail gangs" in both regions, he said.
"We are excited about the capabilities we've garnered through this acquisition, and are looking forward to rapidly expanding them through an aggressive program of products and services development," commented Steelhead Executive Vice President Jack Hollender.
CN targets trespassing in Rail Safety WeekCN says it will focus on “the deadly risks of trespassing on railroad property” during Rail Safety Week, April 20-29.
“Recent statistics reveal that trespassing incidents claimed 530 lives in the United States in 2006, remaining at a constant yearly average over the last decade,” said CN, “while fatalities due to crossing conditions were down to 362, reflecting a steady improvement during the same period. Statistics also show that in 2006 53% of trespassing incidents resulted in death, a 14.5% increase from 2005.”
DOJ settles with Amsted The U.S. Department of Justice has reached a settlement with Amsted Industries that requires Amsted to divest all “intangible and other manufacturing assets” it acquired from FM Industries for producing new and reconditioned end-of-car cushioning units (EOCCs). DOJ said its action resulted from an investigation after customers complained about price increases.
The settlement, DOJ said, will “remedy harm to competition” arising from Amsted’s December 2005 acquisition of FMI, formerly a wholly owned subsidiary of Progress Rail Services Holding Corp. “The acquisition removed Amsted's only competitor in new EOCCs, . . . resulted in higher prices, and substantially lessened competition in the market for [reconditioned] EOCCs,” DOJ said. “This divestiture will create an opportunity for a new entrant to enter the markets for EOCCs and restore competition to these markets.”
Amsted’s acquisition of FMI was not subject to the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, since the value of the transaction did not meet HSR reporting requirements, according to DOJ. “However, the department opened an investigation after customers complained that the consummated transaction removed a significant constraint on pricing, resulting in an immediate price increase for EOCCs,” DOJ said. “The merging companies were the only two manufacturers of new EOCC units and two of only three suppliers of reconditioned EOCC units used in the railway industry. The acquisition left Amsted as the sole competitor in the market for new EOCCs (its ASF-Keystone Inc. subsidiary), and the dominant supplier in the reconditioned EOCC market.”
DOJ’s Antitrust Division filed a civil lawsuit today in U.S. District Court in Washington, D.C., alleging that the FMI acquisition harmed competition. At the same time, DOJ filed a proposed consent decree that, if approved by the court following a 60-day comment period, “would resolve the department's competitive concerns.” At the conclusion of the 60-day comment period, the Court may enter a final judgment “upon a finding that it serves the public interest.”
The consent decree, in addition to the divestiture, requires Amsted “to grant a perpetual license to its own intellectual property to account for gaps in the FMI assets,” DOJ said. “The divestiture and license grant will be conveyed to an approved buyer, to facilitate that company’s entry into the markets for new and reconditioned EOCCs. . . . The divestitures will enable that company to become a viable EOCC supplier and compete with Amsted.”
In addition, under the proposed consent decree, Amsted, for a 10-year period, will be prohibited from acquiring any assets of, or any interest in, development, production, or sale of EOCCs in the U.S. if the value of such a transaction exceeds $1 million, without first notifying DOJ, unless the transaction is otherwise subject to HSR requirements.
CN's UTU members expected to resume workThe United Transportation Union announced today that it has instructed its members to return to work on Canadian National by 6:55 p.m.(Eastern Daylight Time). According to the union, CN will also end its lock-out of UTU-represented employees.
UTU said the move "follows enactment by the Canadian government of Bill C-46, the Railway Continuation Act, which prohibits strikes and lock-outs. The strike-ending law also forces final-offer selection arbitration on the parties. The Canadian labor minister will be appointing the arbitrator. In the meantime, the new law extends the agreement that was in force in December 2006 until such time as the arbitrator renders the decision, which, by law, must be no later than 90 days following the arbitrator’s appointment."
CN and UTU negotiations broke down on April 14, leading CN to conclude that a national collective agreement could not be reached. On April 16, the railroad invited the union back to the bargaining table to address and negotiate settlements on a regional basis in Canada.
One faction of the UTU has been reporting for work, awaiting the outcome of the raid application by the Teamsters Canada Rail Conference pending before the Canada Industrial Relations Board. Another UTU faction has been engaging in rotating withdrawals of service, in support of the UTU’s bargaining position. In response, CN locked out UTU members at various terminals in Canada, and CN managers have been performing their duties.
UTU launched the strike after announcing its members’ rejection of a tentative agreement with CN, which was signed on Feb. 24 (see breaking news, April 11).
FRA reports on CSX inspection programThe Federal Railroad Administration has released results of the first of two inspection programs on 1,085 miles of CSX trackage in New York State, announcing that it discovered 78 track defects and one “serious violation” using its T-16 track geometry car. Though most of the defects “did not pose an imminent safety hazard to the public,” according to Administrator Joe Boardman, FRA is recommending assessing a civil penalty against the railroad “for the single failure to comply with a safety regulation.”
FRA has now launched the second phase of the inspection program. This one will use the T-18 gage restraint measurement vehicle, which is capable of finding weaknesses in the track structure, such as poor connections between rail and crossties.
The inspection program will be expanded to include other railroads in New York, Boardman’s home state, where he served for several years as DOT commissioner before his appointment to FRA. They include, among others, Norfolk Southern, Canadian Pacific, and New York, Susquehanna & Western. FRA plans to deploy its newest inspection vehicle, the T-19, which can handle track geometry as well as rail surface defects.
FRA’s National Rail Safety Action Plan calls for the agency to triple the number of track-miles inspected each year to about 100,000.
UP profits soar 24% in first quarter"We're making good progress on improving profitability and increasing operating efficiency," Union Pacific Chairman and CEO Jim Young said during today's first-quarter earnings announcement. For the first three months of 2007, the railroad reported a 24% jump in net income: $386 million, or $1.41 per share, vs. $311 million, or $1.15 per share in the same period last year. The operating ratio also improved by 2.4 percentage points to 81.3%--a first-quarter record.
Operating revenue was up 4% to $3.85 billion. Gains in the chemical (9%), agricultural (8%), energy (4%), and intermodal (4%) business segments offset declines in automotive (-2%) and industrial products (-3%). Total average revenue per car grew 6%, but carloadings fell 2% to 2.3 million due to "winter storms, a softer housing market, and decreased domestic intermodal volume."
Thomson Financial-polled analysts had predicted profits of $1.28 per share and revenue of $3.89 billion.
Quarterly average train speed rose slightly (0.4 mph) to 21.7 mph and terminal dwell time improved 13% to 25.3 hours. Fuel prices, however, continued to rise. The railroad paid an average of $1.90 per gallon in this year's first three months vs. $1.87 in the year-ago period.
Despite economic uncertainty in the future, Young remains optimistic. "We will continue to enhance shareholder value through our productivity initiatives over the balance of the year," he maintained. "Our first-quarter results were a good start, giving us momentum for the rest of 2007."
For RailAmerica, a reorganizationRailAmerica is undergoing a reorganization to streamline its operations. The short line holding company's three business units will expand to five, smaller and "more manageable" units to improve communications and productivity.
Commenting on the move, RA CEO John Giles said: "I believe we will quickly see improved effectiveness and productivity, the introduction and execution of new programs, and significant assistance in problem solving."
The West Region will be led by Robert Jones, a four-year RA veteran with more than 30 years of railroading experience. He will be responsible for the Cascade & Columbia River; Puget Sound & Pacific; California Northern; Central Oregon & Pacific; San Joaquin Valley; Ventura County; Arizona & California; Lahaina, Kaanapali and Pacific; and San Diego & Imperial Valley.
Ray Stephens, RA's former West Region president, will now overesee the Central Region, which includes Otter Tail Valley; Kyle; Missouri & Northern Arkansas; Bauxite & Northern; Kiamichi; Texas Northern; Dallas, Garland & Northeastern; Rockdale, Sandow & Southern; and Point Comfort & Northern.
Heading up the Midwest Region will be John Ovitt, formerly vice president-operations for RA's Central Region. The railroads that comprise the Midwest Region include Grand Rapids Eastern; Mid-Michigan; Michigan Shore; Huron & Eastern; Indiana & Ohio; Central Railroad of Indiana; Toledo, Peoria & Western; Central Railroad of Indianapolis; and Chicago, Ft. Wayne & Eastern Railroad.
Peter Touesnard, the former Eastern Region vice president-operations, will now lead the Southeast Region, which includes Indiana Southern; Alabama & Gulf Coast; Eastern Alabama; Carolina Piedmont; South Carolina Central; Virginia Southern; North Carolina & Virginia; and Chesapeake & Albemarle.
The Northeast Region. led by former Eastern Region President Jan Polley, includes Cape Breton & Central Nova Scotia; Ottawa Valley; Southern Ontario; Goderich-Exeter; Massena Terminal; Connecticut Southern; and New England Central.
RA also announced various staff changes:
* Vice President David Rohal assumes responsibility for RA's centralized train dispatching in St. Albans, Vt., which is currently headed up by Tom Murphy. Rohal also will be responsible for RA’s field operations support function, headed up by Carolyn Stefanic in San Antonio, Texas.
* Vice President Paul Lundberg assumes responsibility for RA’s labor relations activities.
* Vice President Charles Patterson assumes responsibility for RA marketing and sales. Reporting to Patterson are marketing and sales directors Larry Gomez, Mike Haeg, and John Winkler, and RA Distribution Services Director Kevin Goins.
* Vice President-Finance Jeffrey Bloom assumes responsibility for RA’s cost and economic analysis efforts. Reporting to Bloom are finance directors Dave Parkinson and Bob Frelich.
Economic development builds along UP linesUnion Pacific customers invested $2.6 billion in 210 industrial development projects in 2006. One of the biggest was Railex's new refrigerated produce distribution facility in Wallula, Wash., which now uses UP for distribution to the East Coast. Among the other facilities supported by UP last year are: new ethanol plants in Iowa, Nebraska, Kansas, Texas, and Colorado; lumber distribution centers in Colorado, Idaho, Oklahoma, Texas, and Washington; food and produce distribution centers in Washington, Arkansas, Idaho, Utah, and Oklahoma; glass manufacturing facilities in Washington and Colorado; and a railcar manufacturing plant in Louisiana.
UP General Director-Industrial Steven J. McLaws commented that the railroad "welcomes business opportunities that can be accommodated at locations on our railroad where we can provide efficient service for a new customer without unreasonably affecting service to existing shippers and receivers."
ARC project clears a hurdleThe Federal Transit Administration has accepted the DEIS (Draft Environmental Impact Statement) for the NJ Transit/Port Authority of New York & New Jersey multi-billion-dollar Access to the Region’s Core (ARC) project, which will punch two new rail tunnels under the Hudson River into midtown Manhattan and construct a new deep-tunnel station at 34th Street, adjacent to existing Penn Station New York. The project will about double rail service into New York City, from a current maximum of 25 trains per hour to 48.
Public hearings on the DEIS have concluded; the next step for prime consultant Transit Link Consultants—a joint venture of Parsons Brinckerhoff and SYSTRA Consulting—is preparing the FEIS (Final Environmental Impact Statement) for FTA review and an anticipated Record of Decision and Full Funding Grant Agreement. If all goes as planned, the FTA will issue an FFGA in early 2008, and construction will commence in 2009.
SYSTRA Consulting’s Ruby Siegel has been leading the TLC team preparing the DEIS and will continue in that capacity through the FEIS and Record of Decision process. Last month, she accepted an award on behalf of TLC from the Professional Women in Construction organization for her achievements on the ARC project.
CSX earnings fall slightly in first quarterCSX Transportation's first-quarter earnings dropped 2% over the same period last year--coming in at $240 million, or 52 cents a share, vs. $245 million, or 53 cents a share. The first three months of 2007 included $18 million from Hurricane Katrina-related insurance recoveries.
Revenues of $2.4 billion set a quarterly record for the railroad, increasing 4% over the year-earlier period. While the boost was driven by strong pricing, a "continued softness in the construction and automotive sectors" decreased overall volumes by 4% from first-quarter 2006. In addition, CSX's Surface Transportation operating ratio deteriorated slightly (0.8 percentage points) to 79.9%.
Thompson Financial-polled analysts had expected profits of 53 cents a share on revenues of $2.38 billion.
"We are pleased that our Surface Transportation businesses continued to show very strong earning power in the face of modest economic headwinds," commented CSX Chairman, President, and CEO Michael Ward. "We posted our 20th consecutive quarter of year-over-year revenue growth and sustained excellent levels of customer service."
First-quarter operating income was $487 million. Excluding insurance recoveries, comparable operating income was $469 million--down 4% from first-quarter 2006.
According to CSX, the first-quarter 2007 earnings were achieved "despite a $28 million expense related to a serious derailment and without the $35 million fuel hedge that benefited the first quarter of 2006." (The railroad did not identify the derailment.)
Looking ahead, Ward said: "Given the positive outlook for rail transportation and our momentum in executing our strategy, we expect strong financial results for the rest of the year and over the long term."
Freight cars orders, deliveries, backlog sag in 2007’s first quarterNorth American freight car manufacturers saw drops in orders, deliveries, and backlog during first-quarter 2007, according to figures released today by the Railway Supply Institute’s American Railway Car Institute Committee. The order books took the biggest hit--falling 70% to 11,152 cars vs. 35,991 in first-quarter 2006. Orders have decreased steadily since third-quarter 2006. Declines in deliveries and backlog have been less pronounced. In the first three months of the year, 17,148 cars were delivered, an 8% drop from the same period last year. The 79,038-car backlog was down 9% from the year-earlier quarter. Both deliveries and backlog sagged throughout 2006.
CN: National agreement with UTU “cannot be reached”Citing “continuing internal conflicts within the United Transportation Union,” CN says it is inviting the union back to the bargaining table to address and negotiate settlements on a regional basis in Canada.
“Following discussions held April 14, 2007, by CN and UTU negotiators, [we have] concluded that a national collective agreement with the UTU cannot be reached,” CN said in a statement released today. “One faction of the UTU is reporting for work, awaiting the outcome of the raid application by the Teamsters Canada Rail Conference pending before the Canada Industrial Relations Board. Another UTU faction is engaging in rotating withdrawals of service, in support of the UTU’s bargaining position. . . . CN believes it’s increasingly clear that the union today is unable to deliver a national negotiated settlement that its members across Canada would ratify.”
APTF gearing up for golfThe American Public Transportation Foundation, which administers APTA’s scholarship fund, will be sponsoring a fundraising golf tournament during the APTA Rail Conference in Toronto, Canada, on Tuesday, June 5, 2007, at the Royal Woodbine Golf Club. Fees are $180 (Individual) and $680 (Foursome), and they include a tax-deductible donation to APTF ($60 of the Individual fee and $180 of the Foursome fee). Four levels of sponsorship are available—Gold ($3,000), Silver ($2,000), Bronze ($1,000), and Individual Hole ($500). The event begins with a box lunch at 12:30 pm., followed by a shotgun-style tee-off at 1:00 p.m.
For information on golf registrations or separate sponsorships, call or e-mail Linda J. Bohlinger, Chair, 2006 APTF Golf Tournament, (714) 460-1612, E-mail lbohlinger@hntb.com; or Yvette Conley, APTF Director, at (202) 496-4868 (phone), (202) 496-4323 (fax), E-mail yconley@apta.com; or visit the APTF website, www.aptfd.org.
Bill Drusch retiring after 38 yearsAfter a 38-year career in railroading, William F. Drusch will retire effective May 1. Drusch has been chief executive officer of the 517-mile Red River Valley & Western Railroad, the 229-mile Twin Cities & Western Railroad, and 94-mile Minnesota Prairie Line, Inc. since 2001. Andrew J. Thompson, who was appointed president of the RRV&W in April 2006, will succeed Drusch as CEO of the three railroads, and Mark J. Wegner has been appointed president of TC&W and MPL.
Drusch started his career in 1969 with the Northern Pacific Railway, which, in 1970, merged with Burlington Northern (now BNSF Railway). From 1976 to 1980, he was manager-revenue accounting for the Minneapolis, Northfield & Southern (now part of Canadian Pacific Railway). He subsequently served as vice president-operations for the Escanaba & Lake Superior Railroad at Wells Mich., until 1993, when he joined the TC&W as president and chief operating officer. In 1999, he also became chief operating officer of the Red River Valley & Western Railroad Company, a TC&W affiliate, and was named president the following year. Drusch has also held leadership posts in the American Short Line and Regional Railroads Association and most recently was president of the Minnesota Regional Railroads Association.
KCSM teams up with Bombardier for subway car moveKansas City Southern de Mexico has partnered with Bombardier Transportation to move newly manufactured rapid transit cars from Lecheria to Monterrey, Mexico. For the next eight months, KCSM will transport one car every 15 days to Monterrey Metros's new line four. The job started on April 4, with the first car delivered on April 11. Bombardier is building the cars at its Sahagun, Mexico, plant.
MTA kicks off Second Avenue Subway contruction projectNew York MTA's long-awaited Second Avenue Subway construction project is finally under way. Marked by a groundbreaking ceremony yesterday, the new line will be the New York City's first major subway built since the Sixth Avenue Line opened in 1936.
First proposed in the 1920s, the new 8.5-mile, 16-station subway along Second Avenue will help ease congestion on the Lexington Avenue Line as well as the M15 bus route, which operates on First and Second Avenues. Transfer links will be provided for other subway lines and the Metro-North Railroad at Harlem-125th Street. It will be the first subway alternative to the Lexington Avenue Line since the Manhattan segment of the Third Avenue Elevated ceased operation in 1955.
The Second Avenue Line will be constructed in four phases. Combining an existing six-block-long tunnel excavated in the 1970s between 99th Street and 105th Street with new construction, the initial phase will be built from 105th Street to 62nd Street, with stations at 96th, 86th, 72nd, and 63rd Streets. The route will join the 63rd Street Crosstown Line and head west beneath Central Park before connecting to the Broadway Line at 57th Street and Seventh Avenue. From there, it will run to lower Manhattan and Brooklyn along existing tracks. Skanska USA Civil, Schiavone Construction, and J.F. Shea Construction have been awarded a $333 million contract for the work. More than 200,000 weekday riders are expected to use the initial segment when it opens for revenue service in 2013.
Construction methods will include a combination of tunnel boring, mining, and cut-and-cover techniques. A 60-70-foot-deep pit will be dug between 96th and 92nd Streets to provide access for the 700-ton tunnel boring machine. The machine is slated for delivery early next year.
The $3.8 billion first phase will be funded through MTA's 2000-2004 Capital Program ($1.05 billion), MTA's 2005-2009 Capital Program ($650 million), Federal Transit Administration grants ($1.3 billion is expected), and MTA's 2010 Capital Program (approximately $875 million will be needed).
The second phase will extend the line north from 105th Street to 125th Street and Park Avenue, while the third will bring the line south to Houston Street (under Second Avenue) and the fourth will continue from Houston Street to Hanover Square.
Groundbreaking for the Second Avenue Line was first held in 1972, but in 1975, construction was halted due to the City's financial condition. Only three non-contiguous sections of tunnel had been completed: between Chatham Square and Canal Street, 99th and 105th Streets, and 110th and 120th Streets. The project was taken up again in 1995 when MTA New York City Transit began the Manhattan East Side Alternatives Study. In August 1999, a subway was proposed under Second Avenue from 96th Street to the 63rd Street/Lexington Avenue Subway station and support expressed for a full-length line. Environmental requirements were then met for the full-length line, and in 2004, preliminary engineering for all four project phases was completed. In April 2006, extended and final preliminary engineering was wrapped up and the FTA authorized MTA to begin final design of phase one.
New England short line receives C-TPAT certificationThe U.S. Customs and Border Protection (CBP) has certified St. Lawrence & Atlantic and its Canadian sister company Chemin de fer St. Laurent & Atlantique as members of the voluntary Customs-Trade Partnership Against Terrorism (C-TPAT) program. Under C-TPAT, the Genesee & Wyoming-owned railroads will not only take appropriate supply chain security meaures, based upon risk analysis and consistent with C-TPAT security criteria, they will document them in a verifiable format.
"We see certification as a necessity in being a cross-border carrier, and the C-TPAT objectives are consistent with our own," SLQ and SLR President Mario Brault said during today's announcement.
The move makes "smart" business sense, because "over the last 18 months, a lot of pressure has been put on our U.S. and Canadian shippers to maintain a seamless, C-TPAT-certified supply chain," added SLR General Manager Ray Goss.
C-TPAT was launched in November 2001, and partners include more than 7,400 U.S. importers, customs brokers, terminal operators, carriers, and foreign manufacturers. Once certified, CBP "provides reduced inspections at the port of arrival and expedited processing at the border."
How can railroads solve capacity constraints? Experts offered answers at STB hearingToo much freight crowded on too little rail infrastructure. Such is the challenge facing railroads, shippers, and policy makers, who exchanged possible solutions April 11 at a Surface Transportation Board hearing.
The American Association of State Highway and Transportation Officials (AASHTO) previously warned that railroads are operating at capacity and not investing at the rate that rail freight-traffic demand is growing. The annual rail infrastructure investment shortfall, AASHTO says, may be $4 billion.
Rail executives see a congressionally enacted investment tax credit as essential to solving the funding shortfall, but also acknowledge a role for improved equipment utilization and further technology advancements. Reregulation would be a serious setback, they say.
Even captive shippers, many of whom seek an elevated government role in setting rail rates, acknowledged an urgency to make railroads more fluid through increased spending on infrastructure.
Many witnesses suggested public-private partnerships, accelerated asset depreciation, and third-party private investment, as well as the investment tax credit, to maintain the fluidity of the rail network as traffic grows.
BNSF Chairman Matt Rose said that while the railroads’ infrastructure is in “better shape than ever before,” necessary levels of future investment depend on “adequate revenues” and congressional passage of the investment tax credit. Double- and even triple-tracking of high-volume rail corridors is an expensive, but essential, component of the railroads’ growth strategy, Rose said.
Union Pacific Chairman James Young said, “It’s not all about iron in the ground.” In making “bets on the future,” railroads daily must ask themselves, “What can we do to get more (utilization) out of the asset?” Reregulation, and/or failure by Congress to provide the investment tax credit could stall UP’s ability to accelerate from eight years to four years the double tracking of its southern-tier Sunset Route, he said.
Responding to those who advocate restoration of rail-rate ceilings, Rose said railroad debt instruments are but “one notch above junk-bond status.” Many shippers were not around in the pre-Staggers Act era when railroads were in “bankruptcy chaos.” Young added, “My commitment is that if I get my returns up, they (shippers) will see more capital investment and more good service.”
National Industrial Transportation League President John Ficker, who declined to support the investment tax credit, asked the STB to define more accurate measurements of capacity and velocity in key lanes, by commodity.
UPS witness Thomas Jensen said that the railroads' single-biggest shipper is “constructively captive” to the railroads--the only mode not moving freight faster than 15 years ago. He encouraged railroads to speed up introduction of positive train control and to support the concept of a railroad trust fund, as an investment tax credit is “not enough” to solve existing capacity and bottleneck problems.
CN initiates lock-out of UTU membersCN is locking out United Transportation Union members at various terminals in Canada, in response to a renewed strike. To keep the railroad running, CN managers are now performing the duties of the locked out employees.
“CN is a scheduled railroad, and we cannot run scheduled/precision freight operations without predictable manpower resources,” said CN President and CEO E. Hunter Harrison. “Rotating withdrawals of employee services are very disruptive to the company. We must ensure the continuity of our operations.”
The UTU launched the strike after announcing its members’ rejection of a tentative agreement with CN, which was signed on Feb. 24 (see breaking news, April 11). The railroad says it's prepared to resume negotiations with the union, but no date has been set for new talks.
GE Transportation delivering rehabbed power to JordanJordan-based Aqaba Railway Corp. will take delivery later this month of four refurbished C24 MMI locomotives from GE.
The 12-cylinder, 2,400 h.p. units, which will be used in Aqaba's phosphate mining service, feature GE's Brightstar advanced digital microprocessor system. According to GE, Brightstar helps users "maximize fleet capacity" by controlling and monitoring such critical locomotive systems as temperature, fuel, water, and horsepower. Self-diagnostics "improve troubleshooting, reduce maintenance, and minimize road failures, allowing customers to achieve up to 25% more productivity from their locomotive fleet and generate further savings on maintenance and fuel."
In 2006, Aqaba hauled 2.7 million tons of phosphate. The new locomotives are expected to help increase production by 700,000 tons per year, according to Eng. Hussain Krishan, the railroad's director general.
The locomotives were remanufactured at GE's Contagem, Brazil facility.
New York City Transit names new presidentToday, Howard H. Roberts, Jr., takes over as president of MTA New York City Transit, succeeding Lawrence Reuter, who resigned from the post in February to join Parsons Brinckerhoff. Roberts, former COO of Southeastern Pennsylvania Transportation Authority, is returning to NYCT for a second tour of duty. He was hired on at the transit agency in 1981 as finance and administration vice president, following a 20-year stint in the U.S. Army. In 1983, he became vice president for surface transit.
"We interviewed many exceptional candidates from around the world and within the MTA family, but Howard's experience, leadership, and management style made him the clear choice," said MTA Executive Director Elliot G. Sander, whom MTA appointed three months ago. Sander also praised Millard "Butch" Seay, who oversaw NYCT as acting president since Reuter's departure, for his work during the transition. Seay now resumes his position as senior vice president of the Department of Buses.
Roberts joined SEPTA in 1989 as deputy general manager, before being promoted to COO. Most recently, he was a transportation consultant.
UTU Canada renews strike at CNCN management again stands ready to perform the work of striking United Transportation Union employees in Canada. The union members have rejected the tentative one-year settlement agreement, which was signed on Feb. 24. In an announcement last week, union leaders said if the agreement was not ratified, strike action would be renewed against the railroad, including rotating strikes. The UTU represents 2,800 CN conductors and yard service employees in Canada.
UTU members in Canada have been on strike at CN since Feb. 10, 2007, but suspended strike action and returned to work during the ratification process for the tentative settlement.
Disappointed with the contract rejection, CN President and CEO E. Hunter Harrison said, “We believe the settlement was fair, equitable, and consistent with collective agreements the company recently signed with another Canadian union.” He told customers that “CN will work hard to maintain service,” but that they should “appreciate the fact that CN service levels may be affected by the frequency, location, and severity of the UTU’s rotating work actions.”
According to CN, the UTU has given the railroad verbal assurances that it will continue to protect commuter rail services in Toronto and Montreal during the strike.
Miami-Dade hires interim directorHarpal Kapoor has been named interim director of Florida's Miami-Dade Transit, following Roosevelt Bradley's reportedly forced resignation last month by Miami-Dade County Mayor Carlos Alvarez. MDT, the 14th largest transit property in the U.S., operates the 23.5-mile Metrorail system, 8.5-mile downtown Metromover, and a fleet of more than 1,000 buses.
Kapoor is a 28-year transportation industry veteran, and served most recently as MDT's deputy director-operations. He first joined agency in 1985 as a rail vehicle electronics technician and rose through the ranks to assistant general superintendent of bus maintenance. In 1999, Kapoor accepted a new position as assistant manager of bus engineering at Washington Metropolitan Area Transit Authority. He returned to MDT in 2006.
Kappor has been charged with "achieving departmental budget savings by improving administrative and operations efficiencies" as well as "optimizing resources through adjustments in bus routes, completing an overhaul of Metromover vehicles, improving on-time bus and rail reliability, and agressively implementing the People's Transportation Plan--the multi-billion dollar transportation improvement plan funded by the voter-approved half-penny sales surtax."
BART general manager to retireBay Area Rapid Transit General Manager Thomas E. Margro has announced that he will retire on June 29. The longest-serving general manager of BART accepted the post on Sept. 30, 1996.
During his tenure, Margro completed BART’s 10-year, $1.2 billion renovation program, which included replacing ticket vending machines, elevators, escalators, and faregates, and rehabilitating BART’s 669-car fleet (2005); wrapped up a five-station, $1.5 billion San Francisco International Airport/Millbrae extension (2003); and received the No. 1 Transit System in America award from the American Public Transportation Association (2004).
Before Margro was promoted to BART's top spot, he served as assistant general manager of transit system development. Prior to that, he worked for 18 years on engineering, operations, and capital projects at Southeastern Pennsylvania Transportation Authority. He also was employed by the New Jersey Turnpike Authority.
BART Board President Lynette Sweet said in an announcement that a search has already begun for Margro’s replacement.
UP reports on first-quarter coal operationsUnion Pacific updated its customers late yesterday on the state of its coal operations, asserting that despite first-quarter challenges—winter weather conditions and a mine roof failure in Colorado—it was able to satisfy more than 96% of National Coal Transportation Association demand by mid-March, boost total system coal tonnage by 0.4%, and reduce total system coal trainloads by 0.5%.
“If there was a bright spot in the first quarter, it was the progress we made increasing train size,” said Doug Glass, vice president and general manager-energy. The railroad was able to add three more cars per train “due to the cooperation of our customers and more effectively replacing bad-ordered cars and wheels at North Platte,” he reported. “With these initiatives firmly in place, we were able to limit the decline in tons of Southern Powder River Basin coal delivered year-over-year to 2.1% and increase Colorado/Utah coal tonnage 5%.”
Glass also described investments in support of the Joint Line (UP-BNSF) coal business: “Based upon progress made renewing track and roadbed on the Joint Line, we were able to lift our embargo on new business effective March 27. The CANAC recommendations for adding new capacity on the Joint Line are being implemented, with grading work under way to add a third main line on the north end of the Joint Line and a fourth main line near Logan Hill, toward the south end. Based upon the Joint Line work schedule, the third main line on the north end will be completed by June, with crossovers installed by the fall. Logan Hill’s fourth main line will be completed by year-end, with crossovers in the first half of 2008. Both projects will significantly increase coal hauling capacity on the Joint Line.” In addition, 11 of the 20 new train landing spots at mines along the Joint Line are either completed or planned for completion by year-end 2008, he said. Seven more landing spots are in the planning stages.
BNSF incentivizes hazmat shippers to use "most improved and strongest" tank carsBNSF Railway is publishing tariffs effective Jan. 1, 2008, to restructure rates for toxic and poison inhalation hazmat transport based on "car risk factors."
"We hope this change will incent our TIH/PIH shippers to use the most improved and strongest tank cars available as soon as possible, thus further improving the safety of transporting these materials," said John Lanigan, executive vice president and chief marketing officer.
The Association of American Railroads has identified the cars as DOT-specification tank car 112J500W for anhydrous ammonia and 105J600W for chlorine. Both can be used for most other TIH/PIH commodities, according to BNSF.
The AAR is already requiring that any tank car built after Jan. 1, 2008, meet such specs and that all shippers convert their fleets by Dec. 31, 2018.
TIH/PIH shipments are said to represent "significantly less" than 1% of BNSF's total annual volume.
APTF scholarship deadline: June 15The American Public Transportation Foundation (APTF) will award scholarships of at least $2,500 to the most qualified candidates for the academic year beginning Fall 2007. Any American Public Transportation Association member in good standing may nominate an undergraduate sophomore (who has completed 30 or more hours of course work), junior, or senior, or graduate student enrolled in an approved industry-related degree program of a fully accredited university or college.
Each nominating organization must offer some type of internship or supplemental education program in order for the nominee to be considered. Nominations are due June 15, and winners will be selected (and informed) in July. Depending on funding availability, the awards may be renewable for each year of the winners’ academic program.
For more information on the scholarships and other awards (including the new Richard J. Bouchard AECOM Scholarship, Jack R. Gilstrap Scholarship, and Parsons Brinckerhoff-Jim Lammie Scholarship), contact APTF Director Yvette E. Conley at 1666 K Street, NW, Suite 1100, Washington, D.C. 20006; tel. (202) 496-4868; fax (202) 496-4323; E-mail: yconley@apta.com; or click here.
CN introduces CN WorldWide North AmericaCN is expanding its transportation services portfolio with CN WorldWide North America. The new business unit’s purpose is to grow warehousing and distribution, customs services, truck brokerage, and supply chain visibility. It will focus on increasing CN’s material handling ability (with a number of new and existing facilities strategically located across the rail network) and provide new retail intermodal trucking services in the U.S. and freight forwarding within North America.
According to CN, the expansion of these non-rail offerings combined with rail service will help the company “strengthen” its position and provide more “seamless” transportation to customers.
Keith Reardon will serve as managing director of CN WorldWide North America.
AAR, NARS to hold joint customer forumAre Class I railroads optimistic about handling frieght traffic in 2007? Shipper customers are invited to find out at the 2007 North American Railroad Customer Forum, co-sponsored by the Association of American Railroads and the North American Rail Shippers Association. As part of the NARS annual meeting, the customer forum will take place on May 24 at the Mayflower Hotel in Washington, D.C. CSX Transportation Executive Vice President and Chief Commercial Officer Clarence Gooden will be among the Class I railroad executives participating on a panel, moderated by AAR President and CEO Edward R. Hamberger. Following the panel, individual customers and railroad officers will have an opportunity to meet for informal discussions. Registration deadline: May 2, 2007. For more details, click here.
Steel castings firms mergeRail, heavy construction, and mining steel castings manufacturer AmeriCast Technologies (Atchison, Kans.) has acquired Atlas Castings and Technology (Tacoma, Wash.), a specialty steel castings firm for the energy and defense industries. AmeriCast customers include Electro-Motive Diesel, General Electric, and Caterpillar.
Castle Harlan, a New York-based private equity investment firm, and Bradken Operations Pty. Ltd., an Australian steel products supplier, purchased AmeriCast last November in a transaction valued at $110 million. Castle, Bradke, and members of the AmeriCast and Atlas senior management teams invested in the recent acquisition. Terms of the deal were not disclosed. The combined company is expected to generate annual revenues in excess of $300 million.
Lower demand, poor weather slow rail traffic Both carload and intermodal traffic fell in March 2007, according to the Association of American Railroads. U.S. railroads originated 1,310,037 carloads of freight during the month, a 3.4% drop from March 2006. Intermodal traffic totaled 908,109 units, a decrease of 1.4% compared to the year-earlier period. For the first three months of 2007, carloadings were down 4.9%, but intermodal was up 0.2%--its 20th straight quarterly increase.
“The low demand for building products (in part because of housing weakness), difficult times for the auto industry, and severe spring snows and flooding in the West, which halted coal mining, have left their mark on rail volumes,” commented AAR Vice President Craig F. Rockey, during the recent announcement.
Trinity acquires construction products firmThrough subsidiary Transit Mix Concrete & Materials Co., Trinity Industries, Inc., has acquired the asphalt, ready-mix concrete, and aggregates businesses of Armor Materials. Annual revenues for the East Texas businesses are estimated at $55 million.
The deal, whose terms were undisclosed, will “complement” and “strengthen” Trinity’s Construction Products Group, said Trinity Chairman, President, and CEO Timothy R. Wallace. “This acquisition provides an entry into the Texas asphalt market, which we believe holds growth potential in select markets,” he noted.
According to Trinity, some of the new businesses’ leaders will be added to Transit Mix’s management team.
A. Stucki wraps up management buyoutA. Stucki Co. has concluded a management-led buyout of its railroad products subsidiaries. The deal includes the operations of Hansen, Inc. (with additional financing provided by Gladstone Investment Corp.); A. Stucki Co. and its two divisions, Independent Draft Gear and American Industries; and international subsidiaries Stucki do Brazil, Stucki de Mexico, and A. Stucki Rail in the Ukraine. Terms of the deal were not disclosed.
The current management team will remain in place, and the company will continue to design, manufacture, and market dynamic control and brake products for freight cars through A. Stucki Co., and offer reconditioning and repair services for railcar components through Independent Draft Gear and American Industries in Pennsylvania and the Midwest.
The move was “critical” to the company’s ongoing effort to grow its railcar product offerings and service levels, commented President and CEO Bill Kiefer. Most important, he added, the buyout “underscores our employees dedication to our customers, the industry, and the continued success of our company.”
Special charges will impact BNSF earnings; blizzard slows coal trafficBurlington Northern Santa Fe Corp. says it anticipates first-quarter 2007 earnings per share to be approximately 96 cents, 13 cents lower than the prior-year quarter’s $1.09 per diluted share, due to a special charge of approximately $80 million, or 14 cents per share. “This charge reflects an approximate $65 million increase in environmental costs primarily relating to a recent final resolution with the State of Washington and its Department of Ecology on cleanup of an existing environmental site at Skykomish and an adverse reversal of a trial court decision on appeal regarding a site at Arvin, Calif.,” BNSF said in a statement released late yesterday. “In addition, the company will record a non-cash charge of approximately $15 million to write off a technology system that has been replaced.”
Following the earnings-related announcement, BNSF said blizzard conditions in the Powder River Basin in Wyoming and Montana resulted in a reduction of about 170 coal train loadings between March 27 and April 4. Daily BNSF trains originating in the PRB bottomed out on March 30 at three—approximately 5% of the usual daily total. Throughout that period, BNSF said it had empty trains available, but mines were unable to load due to the blizzard’s effect on mine employee availability and mine pit conditions. Since then, train loadings have been increasing as mines continue to work toward normal operations, although moisture in the mine pits continues to reduce loadings at some Wyoming mines. Normal mine operations are expected to resume by the beginning of next week.
“Thanks to the cooperation of utilities and connecting railroads, BNSF has been able to balance loaded and empty trains while maintaining a steady flow of empty trains back toward the PRB,” the railroad reported. “BNSF will have empty trains available for loading as mines resume normal loading levels.”
Mitsui consortium lands $765 million Saudi Arabian contractSaudi Arabia’s Ministry of Finance has awarded a $765 million contract to a consortium of Mitsui & Co., Ltd., Barclay Mowlem Ltd. (Australia), and Al Rashid (Saudi Arabia) for the construction of an approximately 508-mile section of the new North South Railway (New Line). The new railroad will haul phosphate in Jalamid and bauxite in Zabirah to the seaport in Ras Azoor on the coast of the Arabian Gulf.
The North South Railway will reportedly span more than 1,242 miles when it opens for revenue service in 2010.
NS predicts lower first-quarter resultsReduced carloadings and lower property sales will reduce Norfolk Southern’s first-quarter earnings per share by 3%, the Class I reported late yesterday. Slumps in the automotive and housing markets reduced volumes 4.4% in the first three months of the year compared with record volumes set during the same period last year. The railroad also said that “extreme” winter weather conditions this year resulted “in a slowing of operations and increased costs.”
In first-quarter 2006, NS earned 72 cents per share, up from 47 cents in first-quarter 2005.
NS will report full earnings and other results at its analyst meeting on April 25.
Reflecting what appears to be a downward trend in rail traffic volume and a slowing U.S. economy, NS is the second Class I railroad to issue an advisory that its first-quarter earnings will be below the prior-year period’s. CN issued a similar advisory on March 29.
Bombardier designing signal system for UzbekistanA new signal system will be supplied to the Uzbekistan Railways by a consortium led by Bombardier Transportation. Bombardier, which has a $19 million share of the $39 million order, said it will be the first modern signaling system in the Commonwealth of Independent States, a group of former Soviet Socialist Republics. The system will be installed on a line of approximately 125 miles. Bombardier will provide its advanced EBI Lock 950 computer-based interlocking systems, object controllers, and wayside equipment, and will also supervise design and installation.
Pacer lowers earnings forecastWith revenues growing at a slower rate than expected, Pacer International, a major third-party player in the intermodal marketplace, said today that it now expects to earn $1.50 to $1.60 a share in 2007 vs. an earlier projection of $1.95 to $2.05.
”Although our consolidated revenues and volumes remain strong and are up compared to last year’s quarter, the rate of growth is less than previously forecasted,” said Michael Uremovich, chairman and CEO. He said Pacer’s focus on four strategic objectives for future growth could have a short-term effect on 2007 performance. These include “(1) delivering a competitive, consistent intermodal product; (2) transforming to new vendor arrangements with Pacer’s rail carriers; (3) improving the profitability of the company’s business units; and (4) reducing costs.”
“We plan to consolidate some of our operations, reduce headcount, invest in IT systems, and undertake other initiatives that could result in restructuring charges and increased expenses in 2007,” said Uremovich.
Greenbrier reports loss, will close Canadian plantThe Greenbrier Companies today reported a net loss of $6.1 million or 38 cents per share for its fiscal second quarter ended Feb. 26. Greenbrier also announced that it will closed its unprofitable Canadian railcar manufacturing plant in the third quarter with completion of a current order for approximately 300 cars.
“The net loss for the current period includes a special charge of $16.5 million associated with the impairment of assets of the company’s Canadian manufacturing operation [Trentonworks in Nova Scotia] and an $8.5 million tax benefit associated with the write-off of the Canadian investment for tax purposes, for a combined loss of $7.9 million or 49 cents per diluted share,” said Greenbrier. ”In addition, the net loss for the period includes operating losses of the Canadian facility of $2.2 million, or 14 cents a share.”
Exclusive of the Canadian facility’s impact, Greenbrier’s earnings for the quarter were $4.0 million, or 25 cents per diluted share. The consensus forecast of analysts polled by Thomson Financial was for earnings of 54 cents a share, excluding special items.
Greenbrier said total revenues were flat at $240 million in the quarter and the manufacturing backlog on Feb. 28 was virtually unchanged from the prior quarter at 14,300 units.
The company withdrew its previous earnings guidance and said it was suspending guidance for the rest of the year.
President and CEO William Furman said that while demand has slowed for the intermodal cars that are a Greenbrier specialty, he views the slowdown as “a temporary adjustment to the car supply side, given the large builds in recent years and the recent improvements in rail velocity.”
New people-mover debuts at Paris-Charles de Gaulle AirportThe new CDGVAL automated people-mover system opened today at the Paris-Charles de Gaulle airport. The free service, whose five stations link three terminals, RER-TGV stations, and long-term parking lots, runs 24/7 along 2.17 miles. Total trip time is eight minutes.
Siemens Transportation Systems and France-based Keolis have been selected to serve as operators by Aéroports de Paris (the manager of the Paris-Orly, Paris-Charles de Gaulle, and Paris-Le Bourget airports).
German rail firm buys Cleveland Track MaterialIn a move to accelerate “consolidation” of the U.S. switch manufacturing market, Germany-based Vossloh AG announced today that it is acquiring Cleveland Track Material, Inc. (Cleveland, Ohio), just weeks after buying Pohl Corp. (Reading, Pa.).
The $42.5 million deal for Cleveland Track, which includes financial debt, is still subject to approval by Vossloh’s supervisory board. The U.S. company is slated to operate under the same name at its two locations in Cleveland and Memphis, Tenn.
In September 2006, Vossloh announced that it would begin an international expansion of its Rail Infrastructure division, which includes a switch systems business unit. In March 2007, it spent $21 million for Pohl, which has been renamed Vossloh Track Material, Inc.
“These two subsidiaries have now made us a formidable number three in the USA and given us a solid base for further developing our other business units in this growth market,” said Vossloh AG CEO Gerhard Eschenröder.
Vossloh serves the rail transport industry through its Rail Infrastructure and Motive Power & Components divisions. Rail Infrastructure's main products are rail fasteners and switches; Motive Power & Components', diesel freight locomotives and electrical systems for trams, streetcars, and trolleybuses.
Railroad clubs to award college scholarshipsThe New England Railroad Club (NERC) and the Metropolitan Railway Club of New York (MRCNY) are offering college scholarships to the dependents of club members in good standing.
Scholarships from NERC will for distributed for the fall 2007 semester. High school seniors and college students enrolled in an Associate’s or Bachelor’s degree program must submit their applications by April 20. Previous applicants are encouraged to apply. For more details, contact NERC at P.O. Box 82, Lowell, MA 01853; or click here.
Applications for MRCNY scholarships are due by May 1. Successful applicants will be selected in June, and a minimum award of $500 will be made prior to the fall 2007 semester. Students are not eligible to receive this scholarship in consecutive years. For more information, contact MRCNY’s John Hyland at 400 West 31st Street, New York, NY 10001; or click here.
Portec Rail sells shuttered U.K. facilityPortec Rail Products announced that it has sold its facility in Wrexham, Wales, to GHA Coaches. Net proceeds of approximately $2 million were used to reduce debt in the U.K. Portec closed the rail and material handling operation in December 2006 as part of a business reorganization. Portec now maintains rail and material handling operations in the English cities of Sheffield and Leicester.
Bombardier will assemble 100 EMD units in MexicoBombardier Transportation has won a $67 million contract to assemble an initial order of 100 SD70Ace EMD locomotives at the Bombardier facility in Sahagun, Mexico. In the last nine years, Bombardier has produced more than 1,100 locomotives for EMD at Sahagun. Delivery of the new order will begin in June and continue through 2007.
TGV train tops 357 mph, a new world recordEarlier today, TGV set the world rail speed record during a test on the new TGV East high speed line in eastern France. Reaching a speed of 357.2 mph, TGV broke the previous record of 320.2 mph, which it set in 1990, and exceeded its target of 335.5 mph.
The record run was a result of a program designed to "test, measure, and validate the aerodynamic behavior and stability of the trainset, its trucks, current collection capabilites, the quality of wheel-rail contact, the behavior of new AGV™ track equipment, and of the track, tunnels, bridges, and overhead line," according to organizers Reseau Ferre de France (French Rail Network), French National Railways (SNCF), and Alstom Transport.
In the V150 test train consist were two POS power cars (built by Alstom and adapted by SNCF) and three TGV™ Duplex bilevel, articulated cars. Three AGV™ motorized, traction trucks were also included. The V150’s output was 19.6 megawatts (more than 25,000 h.p.)--a 10.3 megawatt increase over the conventional TGV. To ensure the test’s success, infrastructure improvements--track grinding, adjustments to catenary, and measures to reduce rolling resistance--were made.
“This speed record represents a major technological and human achievement," said SNCF CEO Anne-Marie Idrac. "The results of tests conducted on board the V150 trainset enable us to envisage a highly promising future in the domain of very high speed rail transport, based around four priority areas: life on board, safety & performance, journey and environment."
Since Jan. 15, more than 300 engineers and technicians conducted 40-plus trial runs at speeds exceeding 279.6 mph covering 1,988.4 miles.
To see a video of the record run, click here.
Virginia advances Dulles Corridor Metrorail projectThe Virginia Department of Rail and Public Transportation (DRPT) has negotiated a $1.6 billion agreement with Dulles Transit Partners LLC for final design and construction of Phase 1 of the Dulles Corridor Metrorail Project. DRPT will incorporate this price into its Request to Enter Final Design that goes to the Federal Transit Administration in May, with the goal of reached a Full Funding Grant Agreement in spring 2008.
DRPT Director Matthew Tucker said the agreement “marks the culmination of more than a decade of planning, environmental review, and engineering work to advance the Dulles Corridor Metrorail Project. We now have a defined project for Phase 1, and we look forward to working with Dulles Transit Partners as we move into final design and construction.” Roger Picard, project director for Dulles Transit Partners, said the agreement “offers the most complete opportunity in over 40 years to build Metro to Tysons Corner, Dulles Airport, and beyond.”
UP maps $300 million modernization for Los Angeles terminalUnion Pacific announced that it will invest up to $300 million over several years to turn its 20-year-old Intermodal Container Transfer Facility (ICTF) at Los Angeles into “the most environmentally modern and efficient rail port in North America.” The UP facility is located five mile north of the San Pedro Bay Port Complex.
“This plan will more than double the capacity of ICTF, but more important, the plan modernizes the way in which cargo is handled,” said UP Chairman and CEO Jim Young.
A switch from diesel-powered to electric-powered equipment is expected to produce environmental and efficiency improvements. Ten diesel-powered gantry cranes will be replaced with up to 39 electric-powered, rail-mounted cantilevered gantry cranes. This will permit the removal of 71 of the 73 existing diesel-powered truck tractors. The remaining truck tractors will be replaced by two units using an alternative fuel. UP said the plan calls for a unique process of stacking containers under the newly designed cantilever cranes in order to reduce the area required for container storage. The breakthrough stacking method will be made possible by wide-span gantry cranes.
UP will also replace current switching locomotives with GenSet switchers.
Train accidents drop; crossing, trespassing fatalities rise Safety statistics for January 2007, posted today by the Federal Railroad Administration, fall into a familiar and—for railroad safety officers—frustrating pattern. Total incidents and accidents were down 12.4% from January 2006, and train accidents were down 20.2%. But highway/rail grade crossing fatalities increased 27.3% to 28 from January 2006 and trespasser fatalities were up 27.6% to 37. Both are areas over which the railroads have relatively little control. There were only two fatalities in train accidents during the month and a total of three employee fatalities.
Safety trends in January generally showed a continuation of improvements recorded in 2006: collisions were down 40.9% from January 2006, derailments were 15.5% lower, and yard accidents dropped 32.1%.
Richard Sarles named to head NJ TransitNew Jersey Transit has found within its own ranks a successor to George D. Warrington as the agency’s executive director. Named today to the position of executive director was Richard Sarles, 62, who has worked at NJ Transit for five years overseeing capital programs. Warrington left last month after five years on the job and has formed a consultancy.
State Transportation Commissioner Kris Kolluri, who serves as chairman of the NJ Transit board, said Sarles has been the “silent architect” behind the Access to the Region’s Core (ARC) program, the centerpiece of which is the $7.5 billion Trans Hudson Express Tunnel project. Like Warrington, Sarles worked at Amtrak before joining NJ Transit. He also served with the Port Authority of New York and New Jersey for 28 years.
Alstom, Bombardier share French double-deck order French National Railways has awarded orders totaling $180.4 million to Alstom and Bombardier for the supply of 16 new-generation double-deck trainsets. Alstom’s share of the order is $143.8 million and Bombardier’s is $36.6 million. Deliveries are to be completed by 2010.
South Florida maintenance contract goes to BombardierBombardier Transportation has won a seven-year, $84 million contract to provide maintenance services for the South Florida Regional Transportation Authority’s commuter rail fleet. Exercise of an option for a three-year extension would bring the total value of the business to $121 million. Bombardier is to design and carry out a life-cycle maintenance program for a fleet of locomotives, self-propelled vehicles, and Bombardier Bi-Level cars. A new Maintenance Management Information System will be implemented.
Norfolk Southern reveals senior management changesNorfolk Southern announced the promotion of three senior managers, effective April 11. James A. Squires, now senior vice president-financial planning, becomes executive vice president-finance. Joseph C. Dimino is advanced to vice president-compliance from vice president and corporate counsel. Timothy J. Drake, assistant vice president-maintenance of way and structures, becomes vice president-engineering. Drake succeeds Gary W. Woods, who is retiring.
CN plans new intermodal yard at Prince GeorgeCN announced that it will build a $C20 million transload operation and intermodal terminal at Prince George, B.C., for handling containerized traffic to and from Asian markets through a new rail/maritime facility at the Port of Prince Rupert, B.C.
Situated 500 miles from Prince Rupert, Prince George is CN’s main operations hub in northern B.C. “The Prince George facility is ideally located to tap backhaul export opportunities, filling empty containers moving to Asia via Prince Rupert with lumber, panels, wood pulp, and paper, as well as ores, plastics, and some metal products,” said Peter Marshall, CN’s senior vice president, Western Region.
Railpower pursues aggressive turnaround strategyRailpower Technologies Corp. came out of 2006 with a net loss for the year of $41.5 million and continued high hopes for tapping “a tremendous market opportunity.” The company posted a loss of $59.9 million in 2005.
“During 2006, our management commenced the implementation of a turnaround strategy,” said José Mathieu, Railpower president and CEO. “We recruited senior engineering and finance talent to address our core internal functions, costing and reporting processes were put into place in all our departments, and new procurement and manufacturing processes were developed. We completed a new and improved third generation yard switcher, we launched the production of our RP-series multi-genset road switcher, and we recently completed a battery-dominant hybrid power plant for installation on RTG cranes.
“Looking ahead,” he added, “we will continue to improve our procurement and manufacturing processes, focus on increasing the market penetration of our RP-series road switchers, and build up a family of road switchers on the initial model. We will also further develop our hybrid technology for derivative applications, such as RTG cranes. We have a tremendous market opportunity to address and by continuing to execute on our focused business plan, we believe we are well positioned to succeed.”
WMATA may divert capital to maintenanceTo help control costs and protect fare and service levels, the Washington Metropolitan Area Transit Authority is considering using capital funds to do preventive maintenance over one year. Reducing the Metro workforce, cutting consultant expenditures, and crediting back a portion of unused fare cards that were sold but never used are among other proposals expected turn up in the budge that Metro General Manager John Catoe will present to the agency’s board of directors in April.
After two months at Metro’s helm, Catoe “is putting the brakes on a proposal to raise fares this July, while planning to improve service,” according to a statement released Mach 30. “I believe we will able to present the board with a budget proposal that won't require service reductions or a fare increase in July,” said Catoe. “The proposal will not in raise the subsidy levels required of our jurisdictional partners either.”