May 2007
Ex-BLE chief Sytsma dies at 85John F. Sytsma, 85, president of the Brotherhood of Locomotive Engineers from 1976 until he retired in 1986, died May 29. He lived in Salt Lake City.
Sytsma went to work at 19 for the New York, Susquehannah & Western and eventually operated a locomotive in every class of service on the railroad, according to the union, now known as the Brotherhood of Locomotive Engineers and Trainmen. As a member of an Army Railway Operating Battalion in World War II, he ran locomotives in the Philippines and Korea.
BLET says Sytsma will be remembered not only for working to improve wages and safe working conditions but also for helping to develop programs to combat drug and alcohol abuse among workers, at the same time opposing random breathalyzer tests and "sniffer dog" searches of employees.
RailAmerica deploys "green" locomotivesDallas, Garland & Northeastern, a RailAmerica subsidiary, has put into service two N-ViroMotive GenSet locomotives from National Railway Equipment Co. Powered by two 700 hp ultra-low emissions diesel engines, they are projected to reduce emissions of both nitrous oxides and particulate matter by 80%-plus, while using between 35-50% less fuel than conventional low-horsepower locomotives. The units were funded, in part, by a Texas Emissions Reduction Plan grant from the North-Central Texas Council of Governments.
"We are quite happy to be the first RailAmerica road to get these locomotives," DGNO Chief Mechanical Officer John Rogers said during today's announcement. "They are ultra-low emission-certified, which means we have locomotives with enough horsepower to do what we need while doing our part to protect the air quality and we are very satisfied with their performance." According to RailAmeria, the two-engine N-ViroMotives can be modified to include three engines, if necessary.
RailAmerica plans to deploy additional N-ViroMotives in the future. “We look forward to adding more of these environmentally friendly locomotives to our roads across North America,” said Director of Locomotive Operations Roger Robinson.
Bombardier lands another people-mover order from ChinaChina's Guangzhou Metro Corp. has awarded Bombardier Transportation a $71 million contract to build an underground people-mover in Guangzhou City. The 2.5-mile line is slated to serve the city's Zhujiang Xincheng Central District by June 2010. Four of the system's nine stations will provide connections to Lines 1, 3, and 5 of the Guangzhou City metro network.
Bombardier's Pittsburgh, Pa., plant will supply 14 CX-100 vehicles, Bombardier's CITYFLOW 650 automatic train control system, and 18 guideway switches (to be fabricated in China). The company will also team up with GMC to provide power and communications systems, as well as platform screen doors. GMC will design and construct tunnels and stations to meet Bombardier specs.
Bombardier is currently installing the same people-mover technology at China's Beijing Capital International Airport.
Trinity sells off Houston-based construction products assetsTrinity Industries' Transit Mix Concrete and Materials subsidiary has sold seven, Houston-based ready-mix concrete facilities and an aggregates distribution yard to an undisclosed buyer. While terms of the deal were not announced, the assets represent $40 million in annual revenues.
"The sale represents Trinity's exit from the metropolitan Houston concrete market," said Mark W. Stiles, senior vice president and group president of Trinity's Construction, Energy, Marine, and Components Group. Combined with the company's earlier acquisition of Armor Materials' East Texas asphalt, ready-mix concrete, and aggregates businesses (see Breaking News, April 9), the move "reflects a realignment of our focus to markets that are better suited to our business model," he added.
CSX named a finalist in DOT's "Corridors of the Future" programThe U.S. Department of Transportation plans to select up to five projects this summer as part of its "Corridors of the Future" program to help ease nationwide traffic congestion. DOT says that it will support the winners by "accelerating permitting schedules, identifying new financing options, and promoting innovative project delivery methods" in an effort to move the projects "from the drawing board to completion faster than ever before."
From a field of 38 applications, 14 have been chosen as finalists. Among them: CSX Transportation. The railroad submitted an application for the 1,200-mile I-95 rail corridor between Washington, D.C., and Miami, Fla., proposing a long-term plan to "address the increasing passenger rail and freight transportation needs of the U.S. at a time when a growing population and economy are straining existing transportation infrastructure." CSX is slated to invest about $1.5 billion to improve and add track, equipment, technology, and facilities along the corridor this year; $1.6 billion in both 2008 and 2009; and $1.7 billion in 2010.
The 13 other proposals include various combinations of expanded highway capacity, truck-only lanes, increased freight and passenger rail development, and extensive use of "innovative" technologies to keep traffic moving, according to DOT.
The Corridors of the Future program is part of the federal agency's six-point National Strategy to Reduce Congestion on America's Transportation Network, which was launched in May 2006. The overall national initiative focuses on reducing traffic on highways, relieving freight bottlenecks, and reducing flight delays.
Bombardier Transportation completes restructuringBombardier Transportation has completed a restructuring plan announced two years ago, with some 7,700 positions eliminated and seven manufacturing sites closed. The division's first quarter of FY 2007 also was marked by "vigorous" order intake, reaching $1.7 billion during the period, and a "book-to-bill ratio that also remained strong at 1.1."
These developments were announced by Bombardier, Inc., in a quarterly statement that reported consolidated corporate revenues (including Bombardier Aerospace) of $3.5 billion, and earnings per share of $0.02 compared with $0.01 in the prior-year period. Bombardier shares rose on the news.
Bombardier Chairman and CEO Laurent Beaudoin commented: "Margins of the Transportation Group continue to improve and special charges related to the restructuring are complete as of this quarter. At Aerospace we ramped up construction at some of our business aircraft programs, illustrating the strength of the market."
China suspends planning for major maglev lineChina's Xinhua news agency reported that the government had suspended planning for a proposed 100-mile maglev line, estimated to cost more than $4.5 billion, linking Shanghai and Hangzhou. Contributing to the decision were rising cost estimates, safety considerations, and the opposition of residents along the route who expressed health concerns in a petition to the government. A shorter maglev line is already in operation between Shanghai and its international airport.
Florida transit agencies win security fundsThe Department of Homeland Security has awarded $3.5 million to South Florida Regional Transportation Authority/Tri-Rail and Miami-Dade Transit for security training purposes. The one-year grant will provide $2.6 million to MDT security officers and other staff for training in such areas as security awareness, behavior recognition, immediate emergency response, national incident management, and operations control readiness. SFRTA/Tri-Rail will receive $946,000.
CN, UTU reach new labor agreementUnited Transportation Union members working on former Wisconsin Central territory owned by CN have ratified a new collective labor agreement. Effective May 28, 2007, the pact applies to about 300 conductors, providing them with general wage increases through mid-2011 (with pay raises retroactive to Aug. 1, 2004) and moving them to UTU's national health and welfare plan. It is the first renewal of a hourly rate agreement in place for WC, which CN acquired in 2001. Compared with traditional mileage- and rule-based wage systems for engine crews, WC UTU members are paid hourly wages and "enjoy job security in exchange for greater work rule flexibility for the company." Most of CN's U.S.-based train and engine employees are covered by such agreements.
Liquefied coal: A boon for railroads?The railroads are part of a broad-based group seeking the investment of billions of dollars in federally guaranteed loans to promote liquefied coal as an alternative fuel to diesel and jet fuel. Industry sources say that any such development on the energy front could substantially increase the movement of coal by railroads, which already derive 40% of their traffic, measured in ton-miles, from coal.
As reported in the lead story in today's New York Times, legislators from coal producing states--pushed by a strong coal industry lobby led by such companies as Peabody Energy--are proposing taxpayer guarantees of billions of dollars in construction loans for six to 10 liquefied coal production plants, each of which could cost about $3 billion; minimum price guarantees for this new fuel; tax credits of 51 cents for every gallon sold through 2020; and guarantees of major government purchases over the next 25 years, such as the U.S. Air Force purchase of about a billion gallons a year for jet fuel. The proposed subsidies, which would be automatic if oil prices drop below $40 per barrel, could exceed those for other alternative fuels, including corn-based ethanol. Peabody’s lead lobbyist is former Democratic House Majority Richard Gephardt.
The coal-to-liquid conversion process, known as the Fischer-Tropsch Process, dates back to the 1920s. Opponents of liquefied coal say that it produces twice the amount of greenhouse gases as conventional diesel fuel when burned, and its production process produces about a ton of carbon dioxide per barrel. Coal industry executives counter that any gases produced during manufacture can be captured, stored underground, and used for such other purposes as oil-field injection to force oil to the surface.
URS to acquire Washington Group InternationalURS Corp. has announced that it will acquire Washington Group International, Inc., under a $2.6 billion deal expected to close in second-half 2007. Combined, the two engineering and construction firms are expected to post 2007 revenues of about $8.6 billion. The new company, to be called URS Corp., will offer a full range of engineering, construction, operations, and maintenance services for the transportation, nuclear power plant, fossil fuel, wastewater treatment, and government markets. With projects under way in more than 50 countries, it will employ 54,000-plus people.
"Through this combination, both companies will be better positioned to capture growth from favorable trends across the engineering and construction sectors, including the increased investment in infrastructure projects, the focus on emissions reduction and energy independence in the power market, and the increased use of outsourcing by federal agencies, such as the U.S. Departments of Defense and Energy," said URS Chairman and CEO Martin M. Koffel. "Together, we will have the resources to meet increasing client demand for a single firm that can provide the full range of engineering and construction services required for large, complex projects in these high growth markets, both in the U.S. and abroad. In addition, our clients will benefit from the combined firm's expanded capabilities in the oil and gas, industrial process, facilities design and management, mining, and homeland security sectors."
Koffel is slated to become CEO of URS Corp. Upon close of the transaction, one current member of the Washington Group board of directors will join an expanded URS board.
Agreement terms were unanimously approved by both company boards. Washington Group International stockholders will receive $43.80 in cash and 0.772 shares of URS common stock for each Washington Group share. When the deal closes, Washington Group stockholders will own approximately 31% of the combined company; URS stockholders will retain their shares.
The transaction is subject to agreement approval by Washington Group stockholders, URS's issuance of shares in the deal by URS stockholders, regulatory approvals, and customary closing conditions.
CP looking to expand rail linesCanadian Pacific is seeking regulatory approval to construct a 16-mile rail line serving new and planned oil sands industry plants located near Edmonton, Alberta. It has filed a project description, the first step in the regulatory process, with the Canadian Transportation Agency.
The new line is slated to haul by-products from the bitumen upgrader plants, including sulphur, petroleum coke, asphaltene, and various liquids and gases. "While the market potential varies based on the timing of the upgraders and facilities, the total rail market will be significant and we will work closely with producers and governments at all levels to pace the right level of capital investment to new business opportunities," said Ray Foot, vice president-marketing and sales, merchandise for CP.
The railroad is investing $15 million for new infrastructure, and will first offer expanded transload capabilities for in-bound construction materials, including dimensional shipments required by the upgraders.
Bombardier moves to serve Russian propulsion marketA Russian market for up to 7,500 new locomotives by 2015 looms in the background of today's announcement of the creation of two joint ventures by Bombardier Transportation and Transmashholding, Russia's largest rolling stock manufacturer. An engineering joint venture will develop advanced train propulsion technology. A manufacturing joint venture will produce a series of traction converters based on Bombardier's MITRAC technology.
Located in Moscow, a new engineering center will serve customers in Russia and abroad. It is to be operational this fall.
The production joint venture will build the first traction converter family at Transmashholding's plant in Novocherkassk. "In its initial phase, the joint venture will manufacture advanced converters required for a new generation of locomotives with asynchronous propulsion," said the announcement. "The propulsion equipment will be used for locomotives of the Russian Railways and for other customers, also outside of Russia. Production of at least 600 converters is targeted by 2012."
Shippers fear course of "golden age" railroadingTwo rail shipper lobbying groups, Consumers United for Rail Equity (CURE) and the Alliance for Rail Competition (ARC) have lined up behind new rail safety legislation, H.R. 2095, that is strongly supported by elements of rail labor and generally opposed by rail management. The shippers said they feared railroads might sacrifice safety for profits.
"The major railroads of the nation have entered a 'golden age' of railroading," said the lobbies in a letter to the House Committee on Transportation and Infrastructure. "The value of their stock has soared and they are attracting hedge fund and other aggressive investors that are demanding a high return on their investments. . . . At a time when freight movement demands on the national rail system are at a modern high and the railroads are under increased pressure from aggressive investors to maximize their profits, the Congress must enact H.R. 2095 to ensure a safe and reliable national rail system."
Amtrak report gives a thumbs-down to Missouri rail servicePassenger rail service between St. Louis and Springfield, Mo., may not be in the cards. Amtrak recently released a report to the Missouri Department of Transportation finding that while there was "strategic merit to the proposed route," it would require a "significant" initial capital investment and ongoing state operating support, lack a competitive trip time vs. automobiles, and offer "lower than expected" ridership of 34,000 passengers annually, including 5,000 riders connecting from the current state-supported Amtrak service between St. Louis and Kansas City. The report estimates that it would cost $4.1 million a year to provide the service, which would generate $700,000 in ticket revenue. The initial state service contract pricetag: about $3.4 million.
According to the report, the low ridership projections are due primarily to the "lengthy travel times on the nearly 235 miles of track, largely owned by BNSF Railway, with train speeds lower than that of the adjacent Interstate 44. The result is a trip time of almost six hours--nearly twice that of driving--even after building a $4 million track connection between the BNSF and Union Pacific to shorten the route and complement the current state-supported service at Kirkwood, Mo., by adding a stop there. The low speeds are mainly due to the BNSF track as it follows undulating terrain in the scenic Ozark Foothills, with much of it as curvature."
Also at issue was the lack of available station infrastructure at proposed train stops in Sullivan, Rolla, Lebanon, and Springfield. To provide it would cost "millions." Currently, no state funding is available for station construction along the existing St. Louis-Kansas City line. Communities there rely on local funds.
Not included in the Amtrak study was railway re-engineering to "achieve a higher differential for passenger train speeds vs. freight trains." However, MoDOT estimates that the initial service would require a $6 million upgrade to warning systems at 25 existing highway-rail grade crossings. Additionally, "substantial upfront costs" would be needed for railcars, locomotives, crew training, and other costs.
MoDOT remains undeterred, however. "While we were hoping for more positive news in Amtrak's analysis of this proposed passenger rail service expansion, MoDOT will continue to seek to increase transportation options for Missourians," said MoDOT Multimodal Director Brian Weiler.
BNSF takes delivery of 162 new ballast carsBNSF Railway's track maintenance work just got easier. FreightCar America, Inc., has completed delivery of 162 new, all-steel ballast cars--the first the railroad has acquired in more than 20 years. The high-capacity cars can haul 110 tons and feature a new electric, solar-powered activation system, allowing m/w workers to dump ballast via remote control. Georgetown Rail Equipment provided the first-of-its-kind electric operating system. W.H. Miner Enterprises supplied the cars' air-operated doors, which, like those of traditional cars, are capable of distributing ballast on the inside or outside of the rails.
Flooding impacts U.S. rail trafficFlooding in the Midwest continued to affect U.S. rail traffic in the week ended May 19, according to the Association of American Railroads. Carload freight was down 5.0% from the corresponding week last year and intermodal volume was off 3.1%. Cumulative figures for this year's first 20 weeks show carloadings down 4.5% from 2006, trailer/container loadings down 1.2%, and ton-mile volume down 3.2%.
Canadian carload volume was up 1.3% in the latest week and intermodal traffic declined 3.1%. For the first 20 weeks, carloads were off 1.6% and trailer/container traffic was up 1.6%.
Kansas City Southern de Mexico reported carloads up 5.8% in the week ended May 19, and intermodal volume up 5.0%. Cumulative carloadings year-to-date were down 4.9% and intermodal traffic was up 10.9%.
Are FRA safety inspections adequate?Railroad safety came under intense scrutiny this week at a Congressional hearing on proposed new safety legislation. A 16-page statement submitted by the United States Government Accountability Office (GAO) examined Federal Railroad Administration safety initiatives, and found them to be "promising." But it said that "FRA is able to inspect only about 0.2% of railroads' operations each year, and its inspections do not examine how railroads are managing safety risks throughout their systems that could lead to accidents."
"Such an approach, as a supplement to traditional compliance inspections, is used in the oversight of U.S. commuter railroads and pipelines and of Canadian roads," GAO noted. GAO stopped short of recommending that this approach be adopted by FRA--"because the agency's various initiatives to reduce the train accident rate have not yet had time to demonstrate their effects on safety." This was a reference to the FRA's National Rail Safety Action Plan launched two years ago this month, in which "inspectors focus their efforts on locations that data-driven models indicate are most likely to have safety problems."
GAO joined other witnesses in acknowledging the strides in safety that railroads have already made but said improvement has seemed to plateau in recent years.
"Although the overall safety record in the railroad industry, as measured by the number of train accidents per million miles traveled, has improved markedly since 1980, there has been little sustained improvement over the past decade," said GAO's witness, Katherine Siggerud, director-Physical Infrastructure Issues. "Serious accidents resulting in injuries, deaths, and property damage continue to occur."
Siggured said FRA has concurred with a recent GAO finding that the agency lacks measures to determine the effectiveness of its programs, and "has agreed to develop such measures and will consider requesting the additional resources necessary to evaluate its enforcement program."
BNSF optimizes fuel management processesBNSF Railway has deployed systems from Houston, Texas-based FuelQuest to automate and streamline its fuel management processes. With diesel fuel prices at a premium, the railroad is using the Fuel Management System™ and ZyTax™ to better manage inventory, fuel procurement and delivery, and financial reconciliation of the approximately 1.5 billion gallons purchased annually. The new technology also will electronically determine fuel excise taxes and simplify fuel invoice reconciliation.
"BNSF is looking for every possibility to reduce our overall fuel spend and a key objective is ensuring that fuel contract pricing is strictly adhered to," BNSF Director-Fuel Management Casey Gourley said during today's announcement. "We selected FuelQuest because its solutions streamline payables, standardize internal processes, and reduce workload. It is very important to us to implement an electronic solution that easily facilitates the integration of all our suppliers from small jobber operations to large oil company invoicing."
Harsco lands another order from ChinaHarsco Track Technologies has received its third rail-grinder order in less than a week from the Chinese Ministry of Railways. The first two orders, for 40-plus grinders, are expected to generate more than $350 million in revenue over the next four years (see Breaking News, May 21). The newest contract, announced today, is for a "smaller, more lightweight configuration grinder." It will be used to help build a new 17-mile express rail line linking Beijing's International Airport to Dongzhimen, where there are connections to the city's subway system, long-distance buses, and the Olympic village, which is under construction for the 2008 Games. The line is expected to open in August 2008, in time for the Olympics. Terms of the deal were not disclosed.
NS prepares for fall peakNorfolk Southern announced this week that preparations are under way for the fall peak season. In an update report on its website, the railroad outlined traffic predictions as well as improvement projects to handle demand.
NS said that intermodal volumes, which were weaker in the first part of 2006 than in 2007, may increase from present levels with new international business, stronger truckload premium volumes, and the railroad's new train service to Atlanta, via the Meridian Speedway. Excess trucking capacity is expected to diminish later in the year. According to the railroad, the automotive sector will remain weak through 2007 and into 2008. Coal volumes are not expected to vary from traditional fall peak levels, but the railroad reported that "coal demand can change as a result of extreme weather conditions." As for industrial product shipments, NS said that its share of the corn crop will grow due to an increase in acres of corn planted this year; chemical volumes will rise over first-quarter 2007 levels as lower inventories of plastics are rebuilt and new business comes from plant expansions; ethanol shipments will continue to expand; and housing-sector weakness will persist and negatively impact shipments of related commodities. The railroad noted, however, that market conditions could change. "Like that of anyone else, our crystal ball is not crystal clear."
As a result of these estimations, NS is tailoring its operating plans and making capital expenditures to maintain and expand its infrastructure. It has budgeted $1.34 billion in 2007 for such efforts. They include: $610 million for rail, crosstie, ballast, and bridge improvement programs, including $73 million in infrastructure investments for increased capacity; $47 million for communications, signal, and electrical projects; $41 million for maintenance-of-way equipment; $16 million for environmental, grade crossing separation, and signal upgrade projects; $97 million to increase access and capacity for coal traffic, bulk transfer facilities, and vehicle production and distribution facilities; $600 million for capital projects related to computers, systems, and information technology; $321 million to purchase 53 six-axle locomotives (and upgrade existing locomotives), 1,300 new higher-capacity coal cars, and 739 freight cars, as well as certify and rebuild 388 multilevel autoracks and add supplemental restraints to those autoracks; $56 million for freight car repair; renew expiring equipment operating leases covering 2,800-plus cars; and lease an additional 200 construction debris cars. NS spent more than $6.1 billion for such initiatives between 2000 and 2006.
In addition to infrastructure expenditures, the railroad said it expected to begin work on its Heartland Corridor project later this year to boost system capacity. The public-private project will permit 30 tunnels in four states to accommodate doublestacks, and includes developing a new NS-owned intermodal facility in Columbus, Ohio, which is slated to handle 400,000 lifts annually. When the project wraps up in about three years, NS will be able to shorten port-to-plains travel time by 20% and travel distance by more than 20%. NS will work to minimize the impact of construction and plans to enhance communications with affected customers, but does expect delays through its primary Central Appalachian coal-hauling territory.
GE unveiling Evolution® Hybrid road locomotive Today, GE is set to hold a formal unveiling of its Evolution® Hybrid road locomotive. The one-of-a-kind demonstration unit will be displayed at Union Station in Los Angeles during an event that GE has dubbed Ecoimagination, following a journey over Union Pacific lines this past week. UP says the locomotive is one of many emission-reducing technologies to be featured at the event. Wearing road number 2000, the 4,400-hp prototype diesel-electric features a series of innovative batteries that capture and store energy dissipated during dynamic braking. GE says the stored energy will reduce fuel consumption and emissions by up to 10%. The hybrid will also operate more efficiently at higher altitudes and up steep inclines.
The new locomotive is not yet in production. Following further testing, GE will offer pre-production units for customer validation in the field.
FRA devising safety rule to reduce human errorsU.S. Secretary of Transportation Mary E. Peters announced that the Federal Railroad Administration expects to publish a final rule by the end of 2007 "to prevent common human errors that lead to train accidents such as improperly lined track switches, moving railcars without a person up front to monitor conditions ahead, and leaving railcars in a position that obstructs an adjacent track."
Peters also said she expects the agency this year to issue a report on safety at private grade crossings, publish a proposed rule to ease implementation of electronically-controlled pneumatic brake systems, and increase the amount of civil penalties assessed against railroads for safety violations.
These announcements were made as FRA came under fire at a congressional safety hearing, where Senator Charles Schumer (D-N.Y.) characterized the agency as "an old and tired watchdog." Senator Gordon H. Smith (R-Ore.) responded that railroad accidents have actually been in a long decline, a point that FRA has repeatedly underscored.
CPR receives two Toyota Logistics awardsToyota Logistics Services has selected Canadian Pacific to receive the automaker's Presidents' Award for Rail Carriers and an Excellence Award for Customer Service. Noting that the railroad's relationship with Toyota goes back 40 years, CPR Senior Vice President of Marketing and Sales Marcella Szel called the awards "a testament to the collaborative focus and ingenuity that the entire Canadian Pacific team has provided to Toyota's service delivery."
SAE honors UP for Genset technologyFor its pioneering work in developing the Generator-Set--or Genset--locomotive, Union Pacific has won the Society of Automotive Engineers' (SAE) Excellence in Transportation Award, mobility and general emissions category.
"It is truly an honor to be recognized by such a prestigious organization that shares our deep-rooted concern about the environment," said Bob Grimaila, UP's vice president-Environment and Safety.
UP's Gensets have also received recognition from the California Air Resources Board as Ultra-Low Emitting Locomotives, in addition to exceeding EPA's Locomotive Tier 2 standards. UP expects to have 159 Genset switchers in operation by the end of this year, 61 in the Los Angeles area and 98 across the state of Texas.
In a separate announcement, UP reported that over the last seven years it has reduced overall emissions at three Los Angeles area yards--Commerce, LATC, and Mira Loma--by 28% while moving record volumes of freight through the yards.
According to UP, it has reduced emissions through four broad efforts-- fleet replacement, technology that reduces idling, improved fuel efficiency, and better fuel quality.
US&S to acquire RM StarUnion Switch & Signal, Inc., has signed a definitive agreement to acquire yard control system supplier RM Star, Inc. The deal, whose terms were not disclosed, is expected to close at the end of the month.
"The combination of US&S and RM Star represents a significant step in our strategy to deliver integrated solutions that help our customers manage their entire rail network," said US&S President and CEO Ken Burk, during today's announcement.
While RM Star will be integrated into US&S operations, it will continue to be run out of its Norristown, Pa., facilities.
Northstar clears major hurdleConstruction could begin as early as this summer on Minnesota's first commuter rail system, Northstar. The Federal Transit Administration has formally invited Northstar officials to submit a Full Funding Grant Agreement application for the $307.3 million, 80-mile project, whose first phase will operate along 40 miles of BNSF Railway trackage between Big Lake and downtown Minneapolis. This is the final hurdle in FTA's New Starts process.
"This is the signal we needed to move forward on the BNSF easements and to begin early construction so we can keep Northstar on track for its planned opening of operations in late 2009," said Dan Erhart, chair of the Northstar Corridor Development Authority. Earlier this year, the state of Minnesota acquired the right to use BNSF tracks, and planned to spend $107.5 million to purchase permanent land easements, which allow Northstar to continue operating even if BNSF sells its assets to another entity.
"We're hopeful that Northstar will receive the final FTA approval later this year for 50% federal matching funds," Erhart said.
BNSF appoints new vice president-transportationBNSF Railway's Greg Fox has been named vice president-transportation, succeeding Dave Dealy, resigned. Fox served previously as vice president-engineering, responsible for leading the construction and maintenance of the railroad's track, structures, and signal systems. He began his railroading career in 1984 as a corporate management trainee for BNSF predecessor Burlington Northern. Fox held a variety of operations positions before joining the finance department in 1988 and the ISS department in 1992. He was appointed to his most recent position in 2002.
Dealy, who left BNSF on May 22, had served for nearly eight years as vice president-transportation. Prior to that, he held a number of operating positions, including vice president-operations North. Before joining BNSF predecessor Santa Fe Railway as assistant vice president-operations, Dealy spent 20 years as a senior manager in operations, marketing, and information systems for Union Pacific.
Railroads question PTC timetableIn testimony prepared for a congressional subcommittee studying new safety legislation, the Association of American Railroads quotes Department of Labor data showing that "railroads today have lower employee injury rates than other modes of transportation and most other major industry groups, including agriculture, construction, manufacturing, and private industry as a whole."
Federal Railroad Administration figures show that in the 1980-2006 period, railroads cut their train accident rate by 60%, the employee casualty rate by 81%, and the grade crossing incident rate by 76%.
It is against this background that railroads raise questions about the desirability or urgency of some portions of the new, union-supported safety legislation, which today reached the mark-up stage as H.R. 2095.
One contentious issue is H.R. 2095's requirement (Section 601) that the carriers submit to the U.S. DOT plans for implementing positive train control by 2014.
"Railroads favor a commitment to provide the FRA with an implementation plan regarding train control within 12 months, with the FRA reporting to Congress," said AAR President Edward R. Hamberger in testimony submitted when the bill was introduced earlier this month. "Perhaps at that point a firmer implementation timetable could be established." He said "the tremendous costs and complexities involved in train control systems argue for flexibility, not rigidity, both in time and operational functionality."
The railroads aren't dragging their feet, said Hamberger: "For example, BNSF has done extensive and successful pilot testing of its version of train control (Electronic Train Management System--ETMS) in Illinois and elsewhere. BNSF recently received final approval from the FRA to implement the technology on lines elsewhere on its system. Train control projects in progress on other railroads promise to provide similar or enhanced functionality and safety benefits. These include CSX's Communications-Based Train Management (CBTM) system, Norfolk Southern's Optimized Train Control(OTC) system, and Union Pacific's Communications-Based Train Control (CBTC) system."
Pacer, Trailer Bridge partner on new intermodal servicePacer Stacktrain and vessel operator Trailer Bridge have teamed up to offer door-to-door intermodal service between the U.S. and Puerto Rico. Loaded in Pacer's 53-foot containers, freight will move via rail from the U.S. West Coast to Jacksonville, Fla., where Trailer Bridge will pack the containers into Triplestack Box Carriers®. The carriers will be shipped to San Juan on triple-deck, roll-on, roll-off vessels.
According to the partners, the new service will provide customers with "a single point of contact to manage all intermodal and vessel details, an all-inclusive rate quote, and one invoice consolidating all land and ocean activities." It's aimed at such freight intermediaries as intermodal marketing companies, freight brokers, and trucking lines.
"With this arrangement, Pacer will be able to offer integrated moves to Puerto Rico not only for shipments of U.S. origin, but also for imported ocean freight that Pacer has transloaded into domestic containers at its own West Coast cross-docking operations," Pacer Chairman and CEO Mike Uremovich said during today's announcement.
Added Trailer Bridge Chairman and CEO John D. McCown: The agreement "will enhance our innovative liner service by giving Trailer Bridge regular access to shipments to and from the Western region, particularly inbound shipments from the Far East that can now go all the way to Puerto Rico in the same 53-foot container."
Until now, Trailer Bridge's market has been the U.S. Eastern region.
Saudi company buying GE Plastics for $11.6 billionGE Plastics, whose customers include the rail and rail transit industries, will be sold to Saudi Basic Industries Corp. under a definitive agreement announced today by GE. The deal is valued at $11.6 billion in cash plus assumption of liabilities. GE said it would use after-tax proceeds of approximately $9 million for stock buyback and corporate restructuring.
Harsco wins $350 million Chinese contractHarsco's Track Technologies division has landed the biggest contract in its history, a combination of two orders from the Chinese Ministry of Railways worth an estimated $350 million over the next four years. The contract calls for delivery of more than 40 new rail grinding machines through early 2011; they will join a growing fleet of HTT equipment in China. Division President Robert Newman said the company is prepared "to expedite these increased volumes without impacting the commitment, service, and attention given to our North American and other international customers."
It's a landmark contract, and its importance was underscored when South Carolina Gov. Mark Sanford and Secretary of Commerce Joe Taylor were present at the signing along with Wang Chao, assistant secretary of the Ministry of Commerce of the People's Republic of China, and Harsco Chairman and CEO Derek C. Hathaway.
Recommended SEPTA fare hike pared to 11%It could have been as high as 24%, but the fare hike faced by SEPTA riders on July 1 is likely to be 11%. That's the increase SEPTA management has asked its board to approve at a meeting May 24. The 11% increase--the agency’s first in six years--would generate an estimated $35 million to help reduce a budget shortfall of $129 million. A hoped-for extra state subsidy of $94 million would close the gap. Absent that, SEPTA would move to budget Plan B, which calls for a 24% fare increase that would generate $69 million in additional revenues plus a 20% across-the-board reduction in service that could save $60 million in expenses. This "last resort" plan would also eliminate around 1,000 jobs.
Global Rail acquiring Signal InnovationsGlobal Rail Systems, Inc., of Marlin, Tex., announced that it has completed an agreement to acquire Signal Innovations of Vacavile, Calif., which specializes in train detection systems used in Global Rail's main line and yard automation products. Signal Innovations will now operate Vacavile as Global Rail Systems’ West Coast Operations Division.
Metro-North to serve new Major League Baseball stadium in 2009When the new Yankee baseball stadium opens in Bronx, N.Y., during second-quarter 2009, it will be served by Metro-North Railroad. The New York MTA commuter rail agency announced today that it has reached an agreement with the City of New York to construct a $91 million station. The station will include two 10-car-length island platforms connected by a 10,000-square-foot covered mezzanine. A 450-foot-long, 25-foot-wide overpass will lead to the stadium.
MTA will contribute $52 million to the project, covering the station, ticketing facilities, and customer information system costs. The City’s $39 million contribution will cover the overpass. MTA and the City will split equally the cost of the mezzanine. CCA Civil, Inc./Halmer International, LLC, is slated to win the design-build contract; DMJM Harris, Inc., the construction management contract. Final approval is expected from the MTA board this Wednesday.
"This new station will be a dream come true for Yankee fans throughout our territory in New York and Connecticut," MNR President Pete Cannito said during the announcement. "Moreover, once this station is built, it will also make Metro-North service available to people who live and work in this area of the Bronx. Ultimately, the new Yankee Stadium will be one of the most transit-accessible stadiums in the country."
The new station will be built along MNR’s Hudson Line, south of the existing Morris Heights station. MNR estimates that 6,000-10,000 riders will use it for Yankee home games.
In addition to scheduled service on the Hudson, Harlem, and New Haven (Ct.) lines, MNR will provide special shuttles to the stadium from Grand Central Terminal and Harlem/125th Street in Manhattan. Regular weekday and weekend train service from the new station to GCT and points north also will be added. While the station will not connect directly with MTA New York City Transit subways, MNR service will complement subway service on the B, D, and #4 lines.
The Yankees broke ground on the new $800 million stadium in 2006. The original stadium opened in 1923 and was rehabbed for the 1976 baseball season.
As shares soar, NS schedules investor conferenceNorfolk Southern announced yesterday that it will host an "investor day" for its largest shareholders and sell-side analysts in New York on June 6. The announcement came on the day that NS shares reached a 52-week high of $58.81 on the New York Stock Exchange amid rumors of a leveraged buyout. The company’s 52-week low was $39.10 about 10 months ago.
NS stock has recently been performing well on a steady basis; it rose toward the new high after the announcement earlier this week that billionaire investor Warren Buffet's Berkshire Hathaway had acquired 6.2 million shares of NS for $322 million. Buffet acquired larger stakes in BNSF Railway and Union Pacific.
On NS's "investor day" agenda will be a comprehensive overview of marketing strategies and business growth opportunities, operating efficiency initiatives, customer service enhancements, workforce sizing and development initiatives, and economic and performance trends."
UTU charges carriers are "playing a shell game"The United Transportation Union announced that it has filed a lawsuit in federal district court in East St. Louis, Ill., demanding that the railroads be required "to bargain in good faith and honor an almost five-year-old written agreement to address entry rates of pay related to employee training and experience."
"The carriers have been playing a shell game with us," said UTU International President Paul Thompson. "The blatant dishonesty of the labor carrier negotiators is precisely why the UTU has teamed with shippers to support increased federal oversight of the railroads, and why we are separately asking Congress, in a comprehensive safety bill, to mandate a minimum of employee training."
The UTU's rival, the Brotherhood of Locomotive Engineers and Trainmen, a Teamsters affiliate, joined a number of other unions in reaching a separate settlement with the carriers on most issues that are still pending with the UTU. In an impassioned letter to members on May 11, UTU's Thompson acknowledged the BLET settlement probably established a pattern on a number of issues, but said UTU would continue its fight on others, including entry-level pay.
In announcing the lawsuit against five major U.S. railroads with which it has been bargaining since November 2004, the UTU president said, "The railroads cannot be trusted to put safety and national security ahead of profitability. The railroads have so convinced investors of their market power to pillage shippers and assault labor that billions of dollars in private equity and hedge fund capital is pouring into the rail industry. . . . The expectation of these fast-buck artists--many of whom have a history of destroying companies by piling on debt and firing employees--is that railroads will double their freight rates and use the cash not to improve safety, training, and customer service, but to fund a massive buyback of stock intended to pump-up share prices. In the meantime, shippers, the public, and labor are being damned once again by railroad barons."
Managers replace striking CP workersAs a strike of around 3,500 Canadian Pacific track workers went into its second day, a contingent of approximately 1,300 managers moved in to perform daily track maintenance work. About 2,000 of the striking workers are engaged in capital projects, which have been suspended during the work stoppage. As the trains kept rolling, union leader William Behl complained, “The company isn’t even returning our calls.”
The union is asking a 13% pay raise over a three-year period for workers who now earn an average of $C42,000 a year. CP has offered 10%.
U.S. rail traffic decline continuesThe Association of American Railroads has reported that U.S. carload freight during the week ended May 12 was down 7.0% from the corresponding week last year and intermodal loadings were off 3.9%. Massive flooding in some sections of the country contributed to the fall-off.
In Canada, carload traffic for the latest week was down 0.7% and intermodal volume was up 5.3%. Kansas City Southern de Mexico reported a 9.2% decline in carload freight for the week and a 10.9% increase in intermodal traffic.
Omaha utility seeks $7 million in damages from UPThe Omaha Public Power District (OPPD) is suing Union Pacific for damages exceeding $7 million for actions taken by the railroad in the months following two derailments on a Powder River Basin coal line in May 2005.
The Omaha utility owns six 125-car trainsets for the transport of its coal by UP. In the lawsuit, filed in the District Court of Douglas County, Neb., OPPD gives its own version of events that curtailed coal deliveries to a large number of users.
”Beginning in the Spring of 2005,” said OPPD’s summary of its complaint, “UP seized upon roadbed deterioration and derailments caused by its negligent maintenance of a rail line in the Wyoming Powder River Basin to excuse is duty to deliver coal to OPPD. UP breached its contract with OPPD and its covenant of good faith and fair dealing by: 1) claiming force majeure based on conditions created by its negligence; 2) using the enhanced maintenance of the rail line caused by is negligence as a pretext to extend its force majeure claim for more than eight months; 3) falsely declaring that it had no responsibility for maintenance of the rail line [which UP shares with BNSF]; rationing deliveries of coal between OPPD and other UP customers; and 5) parking OPPD’s trains over OPPD’s objections. UP’s negligence and conversion of OPPD’s train sets have had a direct and proximate impact on OPPD. Its wrongful actions have continued through 2006 and into 2007 and have caused substantial damages to OPPD.”
UP had no immediate comment.
NS grabs its 18th Harriman GoldFor the 18th year in a row, Norfolk Southern has earned a Class A E. H. Harriman Gold Award. In Class A, comprised of line-haul railroads whose employees worked 15 million employee-hours or more during 2006, CSX Transportation earned a Silver and BNSF Railway a Bronze.
In Group B (line-haul railroads with 4 to 15 million employee-hours in 2006), the Gold award went to Kansas City Southern Railway, with silver Going to Canadian Pacific Railway’s U.S. operations and Bronze to the Long Island Rail Road.
In Group C, railroads with fewer than 4 million employee-hours, Florida East Coast Railway took the Gold, Central Oregon & Pacific Railroad the Silver), and BNSF’s Chicago Suburban Operation (contract commuter rail services for Metra) the Bronze.
Group S&T (switching and terminal) saw Birmingham Southern Railroad earning the Gold. The Silver went to Conrail, while the Bronze went to the Terminal Railroad Association of St. Louis.
Certificates of Commendation were awarded recognizing four railroads with continuous gains in employee safety improvements over a three year period and showing the most improvement between 2005 and 2006: CN (U.S. operations) for Group A, Kansas City Southern Railway (Group B), Northern Indiana Commuter Transportation District (Group C) and Birmingham Southern Railroad (Group S&T).
Harriman Awards are granted on the basis of the lowest casualty rates per 200,000 employee-hours worked as reported to and documented by the Federal Railroad Administration, using a formula that accounts for volume of work performed as well as the number of fatalities and occupational illnesses.
A Norfolk Southern employee earned the Harold F. Hammond Award for railroad safety for 2006: Kenneth L. Cheek, a carman in Bellevue, Ohio. Cheek is a 36-year veteran of the railroad industry who has never had a single injury or rule violation. In nominating him for the award, NS Chairman, President and CEO Wick Moorman described him as “a role model for the demonstration of the principles of safety.”
For the past 20 years, Cheek has been a member of the Bellevue Safety Committee, serving as chairman for 10 of those years. For two years, he has been an instructor at NS’s winter and summer safety workshops held in Bellevue and Detroit. He has been instrumental in the correction of more than 200 safety deficiencies, unsafe conditions, and potential hazards, and is also responsible for coordinating joint safety meetings with manufacturers, setting up customer facility tours and lecturing high school health and safety classes. Cheek has headed numerous safety committees, including one that oversaw the painting of each switch at Bellevue Yard with fluorescent paint and marked each track to highlight the switch at night—especially helpful during winter months when snow accumulated on the ground.
Nine other railroad employees were honored with Certificates of Commendation for their work in enhancing safety: James Armstrong, a locomotive engineer with the Central Oregon & Pacific Railroad in Roseburg, Ore.; Pat Bevier, a locomotive engineer with CSX Transportation in Willard, Ohio; Martin L. Jones, an electrician with BNSF Railway in Alliance, Neb.; Tim Kelly, a general foreman with Union Pacific in North Little Rock, Ark.; Timothy Morris, a conductor with Canadian Pacific Railway in Chicago; Timothy Parker, a track inspector with CN Railway in Champaign, Ill.; Dale Virts, a carman with Montana Rail Link in Missoula, Mont.; Wes Wilkins, a track foreman with Amtrak on the Northeast Corridor; and Barry Wilkinson, a locomotive engineer with Kansas City Southern in Shreveport, La. Wilkinson’s certificate was awarded posthumously.
“The nation’s railroad employees have once again reported impressive gains in safety and have posted their safest year in history,” said Association of American Railroads President and CEO Edward R. Hamberger at today’s E.H. Harriman Awards luncheon in Washington, D.C. “The industry and its employees continue to make safety as their highest priority, and that’s why we continue to see record declines in employee rates of injury and fatality. The fact that we would have the safest year ever for employees, even with the explosion in demand for freight rail and the huge number of new employees, underscores the success of employee training and the vigilance of every railroad employee. The railroads’ commitment to safety is an integral part of the culture of railroading in America. Today, employee injury rates have declined sharply—down more than 80% since 1980. In fact, today railroad employees have injury rates comparable with employees working in the retail or food service industry and lower than those in other modes of transportation.”
The Harriman Awards was founded by the late Mrs. Mary W. Harriman in memory of her husband, Edward H. Harriman, whom the AAR describes “an American legend in railroading.” Today, the awards are administered under the auspices of the E.H. Harriman Memorial Awards Institute, with support from the Mary W. Harriman Foundation. The Harold F. Hammond Award was established in 1986 and is awarded to an individual railroad employee who has demonstrated outstanding safety achievement during the preceding year. It is named for the late Harold F. Hammond, former president of the Transportation Association of America, who had served many years as chairman of the Harriman Awards selection committee.
DART investment paying off at two-to-one rate, study saysThe State of Texas will enjoy more than $8.1 billion in economic activity, increased tax revenue, and labor income from the region’s $4.86 billion investment in the 45-mile Dallas Area Rapid Transit light rail system and its planned 48-mile extension, according to a recent study. Conducted by the University of North Texas Center for Economic Development and Research, the study also found that DART’s annual operating expenditures of $342 million create additional statewide economic activity of $500 million each year. By 2014, that activity will jump to $650 million.
“What strikes me the most is how much economic activity actually exceeds the public monies it took to create the DART rail lines in the first place,” DART President/Executive Director Gary Thomas said during today’s announcement. “The message is clear, if ever there was any doubt: Transit pays off in a big way.”
The DART extension is already under way and slated for completion in 2013. Ground broke last fall on a new 27.7-mile Green Line, linking Southeast Dallas to Carrollton. The first four of 20 stations are scheduled to open by September 2009. Branching off from this line will be a 14-mile, seven-station Orange Line extending service to DFW International Airport. The existing Blue Line will expand service to the east in 2012 and south in 2018. And a second rail line will open in Dallas’s central business district in 2013. It’s anticipated that all extensions will add 60,000 weekday passenger trips--doubling current ridership.
USDOT announces first public-private partnership pilotThe U.S. Department of Transportation has selected the first candidate for its new Public-Private Partnership (PPP) Pilot Program: the proposed Oakland (Calif.) Airport Connector. The program's goal is to evaluate the benefits of PPPs--like the three-mile rail connector linking Bay Area Rapid Transit's existing Coliseum station--for federally funded transit construction projects.
"The object of public-private partnerships is to better reduce and spread risks associated with new construction," said Federal Transit Administrator James S. Simpson during today's announcement. “We believe that this arrangement, which has worked so well in highway construction and operations, can be effectively carried over to public transportation."
The new program will allow USDOT to study whether the PPP arrangement "speeds completion, allows more reliable projections of project costs and benefits, and improves project performance." The connector project and future projects are expected use methods of procurement that integrate risk-sharing and streamline project development, engineering, construction, operation, and maintenance. The amount and terms of private investment will be a significant factor in project selection.
The Public-Private Partnership Pilot Program was authorized by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users for certain new "fixed-guideway capital projects," including rail and bus rapid transit.
Canada announces rail emissions agreementThe Canadian government's transportation and environmental agencies have signed a memorandum of understanding with CN, Canadian Pacific, VIA Rail, and Go Transit that's described as "a first step in a broader plan to reduce air pollution from railway operations consistent with the world-leading standards of the U.S. Environmental Protection Agency."
A joint statement by the Ministry of Transport, Infrastructure and Communities, the Ministry of the Environment, and the Railway Association of Canada said the rail operators "have collectively agreed to adopt greenhouse gas targets that will educed GHG emissions; prepare an action plan for GHG emissions reduction; purchase only new, EPA-certified locomotives; and upgrade existing in-service locomotives when they are overhauled, beginning in 2010, to the EPA standards in effect at that time."
"The agreement is similar to the approach taken in the auto sector by which voluntary action is to be followed by a regulation," said the statement. "This approach delivers immediate action to address air pollutant and GHG emissions from the railways while regulations are being prepared."
Global Railway doubles per-share earningsGlobal Railway announced today that it earned $1.2 million on revenues of $9.5 million, compared with earnings of $0.7 million on revenues of $7.8 million in the first quarter of 2006. Quarterly per-share earnings this year were eight cents (diluted), compared with four cents (diluted) in 2006.
"The sales growth for the quarter reflects continued strong demand in the railroad and transit markets," said President and CEO Terry McManaman. He described the outlook for the remainder of the year as "very encouraging," noting that major North American railroads plan to spend a record $9.4 billion on capital improvements in 2007.
FRA fields two new track inspection vehiclesThe Federal Railroad Administration today announced the formal launching of two inspection vehicles that it said will permit the agency to "triple the amount of track it inspects each year by automated means to nearly 100,000 miles." Designated T-19 and T-20, the new machines bring FRA’s total fleet to five.
FRA said that between now and July 1, the T-19 will inspect track in Maine, New Hampshire, Vermont, Massachusetts, New York, Pennsylvania, and Ohio. The T-20 will be working in Missouri, Kansas, Colorado, New Mexico, Arizona, California, Oregon, and Washington.
Buffet discloses investments in NS, UPWarren Buffet’s Berkshire Hathaway, Inc., disclosed late yesterday that as of March 31 it owned 6.4 million shares of Norfolk Southern, valued at $322 million, and 10.5 million shares of Union Pacific, valued at $1.07 billion. A month ago, the company revealed that it had acquired 39.03 million shares of BNSF railway, an 11% ownership stake.
In filings with the Securities and Exchange Commission, Berkshire said it began investing in railroads late last year. Business analysts pointed out that because Berkshire Hathaway’s investment decisions can strongly affect the marketplace, they are not always immediately disclosed.
In another filing with the SEC yesterday, it was revealed that investor Carl Icahn had acquired 2.68 million shares of CSX Corp, valued at $122 million, as of March 31.
Mercer Management Consulting now Oliver WymanMercer Management Consulting, one of the railroad industry’s longest-running consultancies, has consolidated operations with two of its other affiliated businesses, Mercer Oliver Wyman and Mercer Delta Organizational Consulting, under a new name— Oliver Wyman. The reorganized outfit operates in more than 40 cities globally with 2,500 employees and specializes in strategy, operations, risk management, organizational transformation, and leadership development.
Oliver Wyman is the lead company in the Oliver Wyman Group, formerly named Mercer Specialty Consulting, a $1.3 billion business unit of Marsh & McLennan Companies, Inc. (MMC). The Oliver Wyman Group also includes NERA Economic Consulting and Lippincott (formerly Lippincott Mercer). In addition to the Oliver Wyman Group, MMC’s subsidiaries include Marsh, Guy Carpenter, Kroll, and Mercer Human Resource Consulting, the only firm to retain the Mercer name.
NS names two senior executivesFollowing the announcement of Kathryn McQuade's departure to join Canadian Pacific as chief operating officer, Norfolk Southern has named Deborah H. Butler executive vice president-planning and chief information officer, and Fredric M. Ehlers vice president-customer service. Both appointments are effective June 1.
Butler joined Norfolk Southern in 1978 as a customer account auditor. She served in positions of increasing responsibility in operations before being named assistant vice president-transportation customer services in 2000 and vice president-customer service in 2002. In her new position, she will head NS’s strategic planning and information technology initiatives, reporting to Chief Executive Officer Wick Moorman and headquartered in Norfolk.
Ehlers, who succeeds Butler, joined Norfolk Southern in 1985 as a management trainee. He served in a number of transportation positions before being named director-transportation planning and operations systems in 1999 and assistant vice president-executive in 2004. Headquartered in Atlanta, he will report to Vice Chairman and Chief Operating Officer Stephen C. Tobias.
Maglev coming to Nevada?The Federal Railroad Administration is awarding a $962,240 grant to the Nevada Department of Transportation to complete preliminary environmental and engineering work on a 35-mile segment of a proposed maglev corridor between Las Vegas and Primm, Nevada. Among the issues to be addressed are: regional and local planning goals; current and future demographics and land use; growth and development patterns; and existing and planned transportation facilities and services.
Amtrak reports 5% increase in ridersAmtrak carried 14.3 million riders in the first seven months of the current fiscal year (Oct. 1, 2006-March 31, 2007), a 5% increase over the prior-year period. Northeast Corridor trains were again the busiest, carrying 5.7 million passengers, a 5.4% increase. Rounding out the top five routes were California’s Pacific Surfliner and Capitol corridors, New York-Canada’s Empire Corridor, and New York-Pennsylvania’s Keystone Corridor.
“Amtrak has seen record ridership increases for each of the past three years, and these mid-year numbers suggest that they will continue,” said President and CEO Alex Kummant. “As we recognize our industry during National Transportation Week, we are pleased to note that more and more Americans are discovering the importance of rail travel in our nation’s transportation system.”
TRB's Hazardous Materials Cooperative Research Program releases RFPsThe Transportation Research Board's Hazardous Materials Cooperative Research Program is looking for companies to respond to three RFPs. The first, "A Guide for Assessing Emergency Response Needs and Capabilities for Hazardous Materials Releases," is due June 26. The second, "Emerging Technologies Applicable to Hazardous Materials Transportation Safety and Security," is to develop a list of near-term (less than five years) and longer-term (five to 10 years) technologies that could help shippers, carriers, emergency responders, or government regulatory and enforcement agencies improve hazmat transport safety and security. Due June 28, this RFP also seeks to identify emerging technologies that "hold the greatest promise" of being introduced during these near- and longer-term spans as well as possible impediments to and opportunities for their development,
deployment, and maintenance. The third, "Hazardous Materials Transportation Incident Data for Root Cause Analysis," is due July 12. Its purpose is to develop a set of recommendations on how to improve the availability and quality of hazmat transport incident data, plus identify gaps and redundancies in reporting requirements and estimate the under-reporting of serious incidents. For more details, click here.
For WMATA , an improved employee safety programWashington Metro has hired DuPont Safety Resources to improve its safety program and reduce workers compensation costs, which amount to $17 million annually. Under a five-year contract, DuPont is charged with creating a new safety program and working with Metro on "changing the culture of the organization, increasing accountability, reducing lost-time injury days, cutting work-related injuries, and reducing bus and bus accidents by 50%."
DuPont will assess the transit agency’s current approach to safety and then develop customized training for all employees, according to Fred Goodine, Metro's assistant general manager-system safety and risk management. The consulting firm's techniques have already worked successfully at such companies as Los Angeles MTA, New York City Transit, General Motors, Georgia-Pacific, Exxon, and NASA. Its compensation is based on the program's success.
P&W reports quarterly lossesProvidence & Worcester posted a net loss of $1.2 million or 26 cents per share in first-quarter 2007 vs. a loss of $269,000 or 6 cents per share in the same, year-earlier period. Operating revenues fell 17.1% to $5.2 million from $6.6 million last year. According to the regional, this decline is due primarily to a 28.5% decrease in conventional traffic volume, somewhat offset by an increase in the average revenue received per carloading. Historically, the company says it experiences its lowest operating revenues and income during the first quarter of each year.
P&W saw significant reductions in coal, steel ingots, and contaminated soil volumes, which it says tend to vary throughout the year. Volumes of the commodities were "particularly high" during first-quarter 2006 and the "significant declines of all three during 2007 appear to be "largely coincidental." The traffic volumes of these and other commodities handled by the company in April are said to have returned to levels "more consistent with prior years."
Operating expenses remained virtually unchanged from 2006.
Rail Labor Bargaining Coalition, National Carrier's Conference Committee reach tentative agreementThe Rail Labor Bargaining Coalition has announced that a tentative agreement has been struck with the National Carrier's Conference Committee. Effective through Dec. 31, 2009, the agreement gives up no work rules, raises net wages more than 16% after cost sharing for Health & Welfare, caps employee H&W contributions at 15%, expands access to in-network medical benefits for the 25% of rail employees previously denied them, and provides no concessions on contracting out or the carriers' work exit demands, according to RLBC.
"This agreement represents a historic achievement for rail labor," said Fred Simpson, president of the Brotherhood of Maintenance of Way Employes, one of seven labor unions making up RLBC. RLBC represents nearly 85,000 rail workers, including members of the American Train Dispatchers Association, Brotherhood of Locomotive Engineers and Trainmen, Brotherhood of Railroad Signalmen, International Brotherhood of Boilermakers, National Conference of Firemen and Oilers/SEIU, and Sheet Metal Workers' International Association. The United Transportation Union has been negotiating separately.
RLBC union membership are expected to ratify the agreement in June. Carrier-labor negotiations began in November 2004.
CN signs on COSCO Container Lines as first Port of Prince Rupert customerCOSCO Container Lines Americas, Inc., will be the first steamship company to route Asian freight through the new Port of Prince Rupert (B.C.) container terminal and along CN's rail network. CN has signed a contract with COSCO for the service, which is slated to start in the fourth quarter.
“Our partnership with COSCO, and Prince Rupert container terminal operator Maher Terminals of Canada Corp. is clear recognition of the competitive advantages of the new port facility and CN's rail network reach and superior service offering," CN Executive Vice President-Sales and Marketing James M. Foote said during today's announcement. "The Rupert-CN-Maher combination will inject meaningful port-rail-terminal capacity into the global supply chain, and will offer shippers the fastest, most efficient and most cost-effective routing for Asian traffic destined to and from the interior of North America.”
CN is building a $C20 million transload operation and intermodal terminal at Prince George, B.C., for handling containerized traffic to and from Asian markets through the Port of Prince Rupert.
In the Prince Rupert terminal's first phase, there will be an initial throughput capacity of 500,000 TEUs (20-foot equivalent containers) annually. Once completed, the facility is expected to handle 2 million TEUs a year.
CP readies for m/w worker strikeCanadian Pacific's maintenance-of-way workers are gearing up for a strike slated to start tomorrow at 11:59 PM (MDT). But the railroad says it's ready. It is deploying train management employees to maintain operations during the walk-out, which the Teamsters Canada Rail Conference Maintenance of Way Employees Division announced on May 12. The TCRC MWED represents some 3,200 CP employees, whose current collective agreement expired on December 31, 2006. The parties have been in negotiations since July 2006.
"Through a system-wide contingency plan, our company has taken the steps necessary to maintain our tracks for the duration of this job action," said CP Senior Vice President Brock Winter. "Our commitment to ensure safe train operations will continue."
The railroad has trained more than 1,300 employees to perform maintenance work and handle the roughly 1,200 positions affected by the strike. According to CP, other positions will not be replaced as they are associated with capital projects, which will be deferred. The strike will not affect other unionized employees in Canada or the U.S.
The TCRC MWED recently increased its wage proposals from 12% to 13% over the next three years (2007-2009), according to CP. The railroad's settlement offer calls for improved pension and benefits, as well as increases of 3%, 4%, and 3% over the three-year term, and is said to be consistent with agreements ratified by other CP unions. No further talks have been scheduled.
CP has renewed 99 collective agreements with 15 different unions over the last 12 years with just one short strike four years ago.
DHS to debut cargo-scanning pilot in Tacoma, Wash.The Department of Homeland Security has announced that it will soon establish a Rail Test Center at the Port of Tacoma (Wash.) to evaluate radiological and nuclear detection technologies for cargo that is transferred from ship to rail. The findings could be used at other intermodal rail/port facilities in the future.
"The deployment of radiation portal monitors can be much more challenging at seaports where cargo containers depart the port by rail," said Vayl Oxford, director of DHS's Domestic Nuclear Detection Office. "DNDO is particularly interested in testing the operational needs as well as evaluating innovative technical solutions to fit the unique radiological and nuclear detection requirements of intermodal terminals. Advances in this area will provide greater capabilities to our partners such as the Customs & Border Protection, United States Coast Guard, and Transportation Security Administration."
Among the tests up for consideration are: cargo scanning on the dock, during transfer to and/or upon entrance to the rail yard, in the container storage stock, during train assembly, and as the train leaves the port.
“Tunnel to nowhere” poised to go somewhereAn enormous tunnel boring machine, described by the New York Times as “a 200-ton robot that eats rock,” is scheduled to arrive, disassembled, from Italy at the Port of Newark on May 12. From there, it will be transported, piece by piece, to an underground cavern eight stories below the streets of New York City’s East Side. There, it will be assembled and, by year-end, begin working its way through the rock from 63rd Street to underneath Park Avenue, connecting the New York MTA’s so-called “tunnel to nowhere” with Grand Central Terminal. The machine will be joined by a twin next year and begin cutting a parallel tunnel. When the $6.3 billion East Side Access Project is completed in 2013, Long Island Rail Road commuter trains will be bringing passengers into Grand Central, realizing a long-awaited dream of city and transit planners.
The “tunnel to nowhere” is the lower level of the MTA’s double-deck 63rd Street Tunnel, originally built in 1969 but never completed. The upper level, which is used by the NYC Transit subway, didn’t have trains running in it until 1989 and wasn’t connected to the NYCT lines under Queens Boulevard until 2001.
U.S. ton-mile volume down 2.9% year-to-dateIn this year’s first 18 weeks, U.S. railroads hauled 5,579,834 carloads of freight, down 4.3% from the corresponding period last year, and 4,080,873 units of intermodal traffic, down 0.9%. These totals translated into 568.0 million revenue ton-miles, off 2.9% from 2006. In the week ended May 5, U.S. carload freight was down 4.9%, intermodal was off 1.3%, and ton-miles were down 3.7% below the same week last year.
Canadian carload traffic in the first 18 weeks was down 1.8% from last year, to 1,388,021 units, and intermodal traffic was up 1.5% to 806,459 trailers and containers. In the latest week, Canadian carload volume was down 1.5% and intermodal volume was up 5.8%.
Mexico’s largest railroad, Kansas City Southern de Mexico, reported carload volume down 5.3% to 193,414 cars year-to-date, and intermodal volume down 11.3% to 4,500 units. In the week ended May 5, carload traffic was off 14.4% and intermodal was down 13.2%.
PANY/NJ brings in the National Guard The Port Authority of New York and New Jersey will kick off a security pilot program next week, deploying up to 40 National Guardsmen at the 13-station PATH rapid transit system. The effort supplements existing security provided by the PANY/NJ police force. PANY/NJ has partnered with the states of New York and New Jersey on the project, which mirrors programs already in place at New York City's Penn Station and Grand Central Terminal. It also follows New York MTA's initiative to use federal, state, and local law enforcement to patrol commuter rail subsidiaries, Metro-North and Long Island Rail Road (see Railway Age Breaking News, "MTA beefs up security on commuter trains," March 22, 2007).
“Protecting an open, interstate transit system requires incredible cooperation, and the Port Authority is an appropriate vehicle to test bistate partnerships," PANY/NJ Chairman Anthony R. Coscia said during today's announcement.
Since 9/11, PANY/NJ has invested approximately $300 million to secure the PATH system, which is patrolled by PANY/NJ Police, including K-9 detection and special operations units. All PATH riders are subject to random bag inspections. An average of 230,000 passenger trips are taken each weekday on PATH.
Pennsylvania grants funds to small roads, shippersPennsylvania Governor Edward G. Rendell has announced the release of 40 grants, totaling $10 million, for railroad capital improvement projects. The funds will be distributed as part of PA DOT's Rail Freight Assistance Program. Among the grant recipients: Gettysburg & Northern, $282,000 to install turnouts and rehabilitate about 15 miles of track; Wheeling & Lake Erie, $402,500 to repair the Rook Subdivision Bridge and rehab track on the branch line; Reading Blue Mountain & Northern, $300,000 to restore track on the Lehigh Division; Clinton County Economic Partnership, $222,000 to rehab 1.9-miles of county-owned track to handle increased hazmat and other chemical traffic; Erie Forge and Steel, Inc., $400,000 to rebuild 2,100 feet of track within its plant; Times Publishing Co., $140,250 for rehabilitation of track serving its facility in Erie County; Western New York & Pennsylvania, $350,000 to upgrade its unit train coal corridor from the Monongahela region to power plants in New York and New England, as part of a continuing project; SEDA-COG Joint Rail Authority, $112,350 to upgrade the Lewistown Yard and Burnham track to serve an expanding fertilizer business and improve operations when interchanging cars with Norfolk Southern; Delaware-Lackawanna, $365,250 for the rehabilitation of the Pocono main line and Carbondale line; and PBS Coal, Inc., $500,000 to upgrade the former CSX Cambria line and improve track at the tipple that is being reconstructed for increased coal production.
New Jersey to add $1 billion to ARC potThe State of New Jersey’s North Jersey Transportation Planning Authority was expected to approve today an additional $1 billion in funding for the ARC (Access to the Region’s Core) project, raising the state’s total investment in ARC thus far to $1.5 billion. Some $2 billion already committed by the Port Authority of New York & New Jersey brings the amount to $3.5 billion—an important step in obtaining a Full Funding Grant Agreement from the Federal Transit Administration.
The $1 billion in additional ARC money involves flexing federal CMAQ (Congestion Mitigation and Air Quality) funds allocated to New Jersey over to mass transit. NJT says it’s “the largest flexing of such dollars for a public transit project in the state’s history.”
The CMAQ program, jointly administered by the Federal Highway Administration and the FTA, provides funding for surface transportation and other related projects that contribute to air quality improvements and reduce congestion. CMAQ was reauthorized in 2005 under SAFETEA-LU. It provides over $8.6 billion dollars in funds to state DOTs, MPOs, and transit agencies to invest in projects that reduce air pollutants regulated from transportation-related sources over a period of five years, through 2009. CMAQ funds are regarded by the FTA as part of the local match that enables a mass transit project to achieve a favorable rating in the federal FFGA process.
Additional CMAQ-derived ARC funding beginning in 2008 and continuing over the next 10 years is expected to consist of $50 million in 2008 and 2009, $75 million in 2010 and 2011, $100 million in 2012 and 2013, $150 million in 2014-2016, and $100 million in 2017.
Preliminary engineering and preparation of an FEIS (Final Environmental Impact Statement) are under way for ARC’s centerpiece, the $6 billion Trans-Hudson Express Tunnel. Transit Link Consultants, a joint venture of Parsons Brinckerhoff and SYSTRA Consulting, are performing the work. An FTA Record of Decision is expected by early 2008, with groundbreaking on THE Tunnel anticipated for 2009.
DHS awards transit agencies another $14.2 million for security The U.S. Department of Homeland Security today announced that it is awarding $227.8 million in FY 2007 grants to transit agencies, intercity bus systems, and ports “to prevent, protect against, respond to, and recover from terrorist attacks, major disasters, and other emergencies.” As part of DHS’s Transit Security Grant Program, Tier II or lower-risk intracity rail and bus systems will receive $14.2 million; Amtrak, $8.3 million; and ferries, $7.2 million. Separate awards were announced in January for the eight highest-risk Tier I urban area transit agencies ($141 million); ports ($202 million); and intercity bus systems ($11.6 million).
These grants are part of DHS’s total FY 2007 grant program, valued at $445 million. The program, which bases investment on risk, also includes buffer-zone protection for such high-risk/high-consequence facilities as chemical plants ($48.5 million) and truck security programs ($11.6 million).
NS orders NREC GenSetsNorfolk Southern has ordered two new N-ViroMotive GenSet road-switcher locomotives from National Railway Equipment Co. The locomotives, triple-engine 3GS-21B Ultra-Low Emitting units, produce 2,100 hp and are EPA certified and CARB (California Air Resources Board) recognized. NREC says they have “industrial engine NOx emission levels that are best in class worldwide for original equipment manufacturers of freight haul locomotives, are already proven in service, and are effectively 5-8 years in advance of future anticipated EPA emissions regulations.” They’re identical to 60 units NREC is building for Union Pacific.
Each of the three 700-hp GenSets in the locomotives incorporates an industrial grade QSK19L (19 liter) engine that is exclusive to the NREC N-Force electronic control system. Compared to conventional road-switchers, they offer an 80%-plus reduction in nitrous oxide (NOx) and particulate matter (PM) emissions, 50% to 65% improved tractive effort adhesion efficiency, and 35% to 50% average fuel savings capability in switching and road switching duty cycle services. Microprocessor-based electronic controls and modularized mechanical platforms decrease maintenance requirements by 35% or more, and they exceed stringent regulatory noise level requirements for off-road capital equipment. According to NREC, a 3GS-21B GenSet recently achieved a 64%-plus fuel savings in service on the Providence & Worcester Railroad Co. in Worcester, Mass., compared to using the railroad’s GP40-2 units.
Alstom wins $242.6 million Brazilian railway contractThe Săo Paulo Metro has exercised a 96-car option with Alstom, valued at $242.6 million. It follows an initial order for 66 rapid transit cars, which Alstom delivered to the Brazilian company about a decade ago for operation along Line 2. Production on the new cars is expected to begin in mid-2007 and wrap up in 30 months.
NJT/AMT dual-mode RFP is outNew Jersey Transit and Montreal’s AMT (Agence Métropolitaine de Transport) have released a request for proposals for a joint procurement of dual-mode diesel/a.c. catenary commuter rail locomotives. The initial purchase calls for 30-35 units; options could bring the total number to as many as 70. NJT and AMT, working with prime engineering consultant STV, Inc., have developed a detailed technical specification for the locomotives, which must be capable of running multi-level commuter rail coaches in push-pull configuration at speeds up to 125 mph in single or multiple-unit locomotive consists. Responses to the RFP are due at NJT by July 20, 2007, and a pre-proposal conference is scheduled at NJT headquarters in Newark, N.J., for May 31. NJT and AMT will be awarding separate contracts.
Dual-mode diesel/third-rail-electric propulsion has been around for quite some time in North America, but locomotives that combine a.c. catenary with diesel propulsion have not been seriously attempted. NJT and AMT now want to provide passengers with one-seat rides between electrified and non-electrified territory while avoiding the enormous cost of electrification. NJT already operates services where a transfer is required and is moving ahead on the multi-billion-dollar ARC (Access to the Region’s Core) project, which includes two new rail tunnels under the Hudson River. AMT plans to construct new lines that feed into an existing electrified line, the 25Kv Deux Montagnes Line, which serves Montreal’s Central Station and which includes a three-mile-long tunnel. AMT plans to connect the non-electrified Blainville Line to the Deux Montagnes Line just outside the tunnel, and construct a new, non-electrified Repentigny-Mascouche Line, which will feed into the Deux Montages at Mont-Royal.
According to STV, today’s modular locomotive designs should be able to support a dual-mode locomotive configuration within several constraints. Among these are Amtrak’s tunnel clearances (the locked-down-pantograph height in the Hudson River tunnels is 14 feet 7 inches), carbody space (no more than 75 feet long), noise levels, EPA emissions compliance (Tier II, with Tier III coming up in 2010), tractive effort, and weight (Amtrak’s maximum locomotive weight on the Northeast Corridor is 288,000 pounds GRL for speeds above 79 mph). The challenge for builders will be to fit a diesel power plant and an electrical transformer into one carbody within those parameters.
Industry observers say potential builders for this new-design locomotive are Siemens, Alstom, Bombardier, and Vossloh. They say it’s unlikely that EMD or GE will bid, though either builder could partner with someone else to supply diesel power plants. EMD, for example, supplied diesel engines for NJT’s PL42AC, which is built by Alstom.
RailWorks acquired by its management and a private equity firmRailWorks Corp. announced today that it has been acquired by Wind Point Partners, a private equity investment firm, in partnership with RailWorks management. MatinPatterson Global Opportunities Partners has owned the company since 2002. RailWorks President and CEO Jeffrey M. Levy said the change of ownership will not affect the company’s operations or its management team.
RailWorks is based in New York City and has approximately 1,300 employees at more than 30 offices throughout the U.S. and Canada. The company’s two operating groups, Track and Transit Systems, serve a broad mix of customers including freight and passenger railroads.
“The transportation infrastructure market is booming, and RailWorks is poised to capitalize on that growth,” said Nathan Brown, a managing director of Wind Point Partners.
EPA honors Railpower with Clean Air AwardFrom a field of 75 nominees, including other locomotive technology companies, the Environmental Protection Agency has selected Railpower Corp. to receive EPA’s Clean Air Excellence Award in the technology category. “This award validates the environmental benefits of Railpower’s yard and road switcher locomotives,” said Railpower President and CEO José Mathieu. The company supplies Class I and other railroads with locomotives that reduce emissions and increase efficiency.
FECR sets new service record for UPSFlorida East Coast Railway has set a new failure-free service record for its largest domestic intermodal customer, UPS. During the 700-consecutive-day period, the railroad handled more than 62,000 intermodal loads, allowing UPS to deliver 95 million-plus packages on time. This is a new record for any transportation company serving UPS, according FECR, Railway Age’s 2007 Regional Railroad of the Year. The Class II regional told RA in April that it was striving to surpass its previous 698-day record (set in 2005) in May 2007.
“Setting and eventually surpassing our own failure-free service record demonstrates and validates our continuous commitment to provide world-class service to our customers,” FECR President John D. McPherson said during today’s announcement.
Added UPS Vice President-Transportation Randy Welch, “We rely on partners like FECR to provide great customer service despite the daily challenges they may face. This new milestone demonstrates that FECR has linked customer service to business success in meeting service commitments.”
Florida East Coast Industries, parent company of FECI, is expected to be acquired by Fortress Investment Group, LLC, in the third quarter.
Transportation Services Index up in MarchThe U.S. DOT’s Bureau of Transportation Statistics announced that the Transportation Services Index (TSI) was up 1.6% in March from February, rising after a two-month decline. It was the fourth increase in the past 12 months and the largest increase since February 2004. The TSI for freight rose 1.3% in March and the TSI for passengers rose 2.5%. For the first quarter, the TSI climbed 0.8%, the fourth consecutive December-March increase. Freight saw a 0.6% increase; passengers, 1.3%. TSI is a single seasonally adjusted index of the month-to-month changes in the output of services provided by the railroad, air, truck, inland waterways, pipeline, and local transit industries.
U.S. lags the world in infrastructure planningA new report by the Urban Land Institute and Ernst & Young, “Infrastructure 2007: A Global Perspective,” is strongly critical of this country’s “relatively low investment in virtually all aspects of mobility-related infrastructure--airports, public transit, railway systems, roads, and bridges.”
The report calls America “more a follower and no longer a world leader when it comes to infrastructure. Other countries marshal vanguard strategies and provide the contemporary lessons for developing best practices in public/private finance, intermodal transport, congestion pricing, and high speed rail. [In the U.S.] there is a tendency to invest in the infrastructure we have rather than on the infrastructure we will need.”
The Urban Land Institute surveyed 30 state transportation planning directors with the following results: "87% said that the nation's transportation infrastructure is not capable of meeting the nation’s needs over the next 10 years. The respondents warned that 97% of roads, bridges, and tunnels, and 88% of transit rail systems will require at least moderate improvements in the years ahead. An estimated $185 billion in additional funding will be required for road systems over the next five years alone.”
Solving the problem will require more than greater commitment to infrastructure, the report warns: "In addition to revamping funding mechanisms for construction and operations, long-term solutions must include rethinking land-planning models so they are far less auto-dependent and offer plenty of options for getting from one place to another. If driving continues to be the only practical transportation in many metropolitan areas, no amount of infrastructure will be adequate.”
BLET, BNSF reach tentative agreementThe Brotherhood of Locomotive Engineers and Trainmen (BLET) and BNSF Railway have agreed in principle on a BNSF-specific contract that would augment the national settlement between BLET and Class I railroads. The agreement is subject to ratification by BLET members on BNSF and is contingent on ratification of the national agreement’s terms.
In a joint statement, the railroad and the union said the agreement "would provide unprecedented levels of profit-sharing and secure the scope of BLET members’ job responsibilities in the future, particularly as train control technology advances." BNSF recently received approval of a PSP (Product Safety Plan) from the Federal Railroad Administration for the Wabtec Railway Electronics-supplied ETMS positive train control system, which was tested successfully in Ilinois and is now being implemented in Texas. Labor has raised objections to ETMS, saying the railroad intends to use it as a springboard to one-person train crews. BNSF has maintained that one-person train crew langauge had to be included in the ETMS PSP under FRA guidelines and did not mean that the railroad had specific plans to undertake such an initiative.
The agreement provides improvements in so-called "certification” pay, health and welfare benefit eligibility standards, meal allowances, and territory familiarization pay. It also provides a new rule governing the bidding and bumping process.
“This agreement is a major step forward in the already constructive and valued relationship between BNSF and BLET,” says BNSF Vice President-Labor Relations John Fleps. “It demonstrates in the plainest way the good that comes when labor leaders and management work hard together to solve the large issues which face the company and our employees. We appreciate BLET’s professionalism and willingness to discuss progressive approaches to work and pay issues on a BNSF-specific basis; we look forward to our locomotive engineers’ playing a key role and sharing in the company’s success for many, many years to come.”
“BLET is pleased to have reached this tentative agreement with BNSF,” says BLET vice president Stephen D. Speagle. “It reflects BNSF’s unique position in the railroad industry and will enable BNSF locomotive engineers to participate fully in the railroad’s long-term growth.”
FEC Railway profits drop, operating ratio risesThe Florida East Coast Railway experienced a relatively weak first quarter due to a softening of the residential construction market and reduced motor vehicle traffic. Revenues dropped 11% to $59.8 million, and railway operating income decreased $4.4 million to $14.4 million. The operating ratio rose to 76.0% from 71.9% in last year’s first quarter.
“On a positive note, we are seeing successes from our aggregate customers in shifting their focus from residential to commercial and infrastructure construction,” said FEC Industries Chairman, President, and CEO Adolfo Henriques. “In the long run, we expect Florida’s positive macroeconomic and demographic trends to continue to drive demand for goods, especially those that the railway transports. We continue to look for improved year-over-year comparisons in the railway business in the second half of this year as we begin to benefit from the initiatives undertaken to enhance our profitability.”
The other major business segment of Florida East Coast Industries, Flagler Development Group, had a stronger first quarter, with both revenues and operating profits up.
The earnings announcement came one day after FEC announced that it has entered into a definitive merger agreement with Fortress Investment Group, LLC.
BNSF enhances "green" design plans for new intermodal facilityBNSF Railway's proposed Southern California International Gateway (SCIG) will be "the greenest rail facility in the United States," says Chairman, President, and CEO Matthew K. Rose.
Based on input from residents, community leaders, and elected and port officials, the railroad is ensuring that only 2007 model-year or newer trucks are used (exceeding compliance with the San Pedro Bay Ports Clean Air Action Plan); trucks are limited to traveling on specified non-residential truck routes and are equipped with GPS devices to monitor and enforce compliance; SCIG's operating contractor give qualified local residents first priority for all new job offers; a workforce training program is implemented to assist area residents in obtaining these jobs; an "urban forest" is planted at the site to improve air quality and aesthetics; and a sound wall east of SCIG is constructed to diminish current freeway noise. These features are in addition to SCIG's planned use of electric cranes, LNG or equivalent yard tractors, and low-emission switchers.
With traffic from the Ports of Los Angeles and Long Beach expected to double by 2020 and nearly triple by 2030, SCIG is "a crucial part of the solution to meeting the ports’ forecasted growth while minimizing regional traffic and air quality impacts," according to BNSF. The new facility will provide near-dock capacity and direct access to the Alameda Corridor.
CSX plans for long-term, double-digit earnings growthAnticipating double-digit average annual increases in earnings per share through 2010, CSX Corp. announced today that it will repurchase another $1 billion in company stock, for a total current program of $3 billion; increase its quarterly dividend by 25%; and increase capital investments to improve “safety, service reliability, and capacity.”
“These actions emphasize our confidence in the earnings power in CSX businesses as demand for our rail and intermodal services is robust and expected to grow,” said CSX Chairman, President, and CEO Michael Ward. “We remained committed to driving shareholder value through earnings growth and a balanced approach that includes stock buybacks, dividend increases, and long-term investments that also benefit our customers, our employees, and the national economy.”
P&W reports 64.5% fuel savings with NREC GenSetThe Providence & Worcester announced that it achieved 64.5% fuel savings in an operational test last month of an N-ViroMotive GenSet locomotive from National Railway Equipment Co. (NREC).
P&W conducted the test at Worcester, Mass., using the NREC locomotive together with its own GP-40-2 locomotive in switchyard operations for six to seven hours a day for nine days.
“This test demonstrates the advantages of NREC’s GenSet design with microprocessor control of three modular engine-generator sets in reducing fuel consumption as well as emissions, while still providing superior attractive effort efficiency,” said Jim Wurtz, NREC’s vice president-marketing and sales.
Fortress to acquire Florida East Coast IndustriesFlorida East Coast Industries, Inc., announced today that it will merge with Fortress Investment Group, LLC. The $3.5 billion, all-cash transaction is expected to close in the third quarter. FECI will pay a special dividend of $21.50 per share in cash, and with the merger, shareholders will receive $62.50 in cash for each share of FECI common stock they hold. The deal includes FECI's existing debt. This represents a 13% premium to FECI shareholders.
"The value created by this transaction is a direct result of our employees' dedication, commitment, and hard work over many years," FECI Chairman, President, and CEO Adolfo Henriques said during the announcement. "We look forward to working together with Fortress to continue to build our businesses."
The merger was unanimously approved by FECI's Board of Directors. The transaction's close is subject to customary closing conditions, including receipt of regulatory approvals and the approval of the holders of a majority of the outstanding shares of FECI common stock. Upon completion of the deal, FECI will become a privately held company, and its common stock will no longer be publicly traded.
Fortress acquired regional and short line operator RailAmerica earlier this year.
FRA must improve safety oversight, says DOT Inspector GeneralThere's room for improvement in the Federal Railroad Administration's oversight of highway-rail grade crossing safety, according to the U.S. DOT's Office of the Inspector General (OIG). OIG's audit report, published May 3, found that "FRA can do more to ensure compliance with mandatory reporting requirements, including reviewing the railroads' grade crossing collision records and assessing civil penalties for reporting failures." In addition, it determined that "FRA has no assurance that sight obstructions are addressed at passive grade crossings (those without automated warning devices) in most states."
The report recommended that FRA develop and implement an action plan for conducting periodic reviews of each railroad's grade crossing collision records and promptly notify railroads when unreported collisions are identified; test random samples of railroads' grade crossing collision reports to determine whether the information is accurate, timely, and complete, and compare such reports to those generated by local law enforcement agencies; and issue a violation and assess a civil penalty each time a railroad fails to submit a grade crossing collision report in accordance with federal requirements, on a consistent basis. Additionally, the report said, "FRA should assess higher civil penalties against each railroad that repeatedly fails to report crossing collisions."
The report also suggested that FRA "work with FHWA [Federal Highway Administration] to develop model legislation for states to improve safety by addressing sight obstructions at grade crossings that are equipped solely with signs, pavement markings, and other passive warnings."
In a statement released today, Federal Railroad Administrator Joseph H. Boardman said, "reducing the frequency and severity of collisions at highway-rail grade crossings is vital and we have consistently provided innovative engineering, education, and enforcement solutions to help reach that goal." In addition, he said, "We recognize the value of obtaining valid and reliable data, and concur with the OIG’s recommendations that improved data collection and analysis can aid states in determining where safety improvements are made, and to optimize their use of resources available for that purpose."
New York MTA chairman to resignNew York MTA Chairman Peter S. Kalikow today turned in his resignation after seven years on the job. He is the second longest-serving chairman in the agency's history, and served as a board member for two years prior to becoming chairman. Under his leadership, a number of major projects have moved forward, including MTA New York City Transit's Second Avenue Subway and MTA Long Island Rail Road's East Side Access.
"I would like to thank Peter Kalikow for his service to the State and the MTA, and for working cooperatively with MTA Executive Director and CEO Lee Sander since his appointment in January," said New York Governor Eliot Spitzer. "I will be looking for a new chairman who will help oversee Lee's ambitious plans for the agency."
Kalikow will take leave once a successor is confirmed. He will then focus his efforts on HJ Kalikow & Co., LLC, an 80-year old family real estate development company, where he serves as president and CEO.
Bombarder lands $115 million U.K. contract U.K.-based Southern Railway and Porterbrook Leasing, Ltd., have awarded Bombardier Transportation a $115 million follow-on contract for 48 Electrostar vehicles. The railcars, slated for delivery by January 2009, will help ease overcrowding on Southern and Thameslink services in the South of England.
Bombardier has already supplied more than 1,600 Electrostars to three U.K. operators, including Southern, c2c, and Southeastern. Also, in 2006, Transport for London ordered Electrostar-type trains for the East London Line and North London Railway, and in 2010, the South African Gautrain will run Electrostar trains for the first time during the Soccer World Cup.
BNSF begins new "green" pilot in L.A.BNSF Railway is testing natural gas hostler trucks at its Hobart Yard in Commerce, Calif., as part of a continuing effort to reduce emissions. The 10 hostlers, which were selected by the railroad's intermodal contract operator (Parsec, Inc.) and funded by a grant from the California Air Resources Board, will be used to move containers throughout the intermodal facility. They are expected to reduce nitrous oxide and particulate matter by 90% vs. the standard off-road diesel tractors, and cost, on average, $49,000 more than the diesel versions.
If the pilot program is deemed successful, the hostlers could be used at other select facilities, including the proposed Southern California International Gateway.
“BNSF is committed to lowering emissions and improving air quality in the Los Angles basin by testing environmentally friendly technology as it becomes available,” said Mark Stehly, BNSF's assistant vice president-environment and research development. In the Los Angeles area, the railroad already operates four liquified natural gas (LNG)-powered switch engines and a battery-powered switcher (the Green Goat).
“This is the first step toward phasing out the diesel hostlers and switching to all natural gas yard tractors,” added David Budig, vice president for Parsec.
Clean Energy, Inc., is providing liquefied natural gas for the new vehicles.
Rail Infrastructure Act introduced in HouseThe Freight Rail Infrastructure Act of 2007 has been introduced in the House as H.R. 1218 by Representatives Kendrick Meek (D-Fla.) and Eric Cantor (R-Va.). It’s a companion bill to S. 1125 which was introduced in the Senate last month.
In a statement, Association of American Railroads President Edward Hamberger thanked “the numerous business groups that are lining up behind this legislation, including the U.S. Chamber of Commerce, the National Mining Association, the American Association of Port Authorities, and the National Retail Federation."
Hamberger said the tax credits will "provide a mechanism by which railroads can increase their investment in expansion, delivering additional public benefits in the process.”
In a tepid economy, rail traffic sagsApril 2007 saw declines in both rail carload and intermodal shipments in the U.S., a trend consistent with “the tepid level of growth” in the national economy, according to the Association of American Railroads. “The big questions right now are how long the difficulties in the housing and other sectors will continue and to what extent consumer spending will offset future weak activity,” said AAR Vice President Craig F. Rockey.
Carload freight was down 2.2% in April from April 2006, and trailer/container loadings were down 4.1%.
Commodities showing decreases in April included crushed stone, sand and gravel, 7.5%; grain, 6.9%; metals and metal products, 8.1%; and coal, 0.5%. Gains were registered by chemicals, 2.5%, and petroleum products, 8.4%.
For this year’s first four months, total U.S. carloads were down 4.2%, with the biggest drops in motor vehicles and equipment, down 11.4%; crushed stone, sand and gravel, down 11.8%; and grain, off 7.5%.
U.S. intermodal traffic was down 0.9% for the first four months. Total rail volume, measured in ton-miles, was off 2.9%
Canadian rail carload traffic was up 0.3% in April, but down 2.0% for the year to date. Intermodal traffic was up 1.8% in April and up 1.4% for the first four months.
Kansas City Southern de Mexico reported a 2.2% decline in April carloads and a 4.7% drop in the first four months. Intermodal units were up 19.2% in April and 11.1% year to date.
Pacer earnings drop on softening volumesPacer International, Inc.'s earnings took a hit from softening domestic intermodal and truck volumes in the first quarter. For the three months ending April 6, the third-party logistics and freight transportation provider saw income from operations fall 41% to $14.4 million, compared to $24.4 million in the same period last year. Revenues dropped $4.3 million to $465.1 million vs. $469.4 million a year earlier. The recent quarterly results included $1.8 million in severance costs and restructuring charges and a $1.8 million write-off of loan fees associated with the refinancing of Pacer’s credit facility.
“The softer domestic market impacted the company’s rail brokerage, trucking, and domestic Stacktrain operations and was partially offset by increased wholesale auto and wholesale international volumes,” said Pacer Chairman and CEO Mike Uremovich. “We are making changes at Pacer to streamline operations and increase efficiency and profitability in both of our operating segments and in the corporate offices. We have incurred severance costs during the quarter that will reduce employment, and we plan on closing four facilities within our logistics segment by June 2007.”
Management continues to implement process improvements and is looking for other savings opportunities, according to Pacer. In addition, the company has "favorably" refinanced its debt, increased its borrowing capacity to a total of $250 million, and has extended the maturity of its credit agreement to the year 2012. "We expect these actions to provide additional framework for improved results," Uremovich said.
Safety Vision president receives U.S. Small Business Administration awardSafety Vision President Bruce Smith is one of 54 winners of the U.S. Small Business Admministration's (SBA) Small Business Person of the Year awards. Smith founded the Houston-based mobile video surveillence firm in 1993, and has expanded it from a single camera line distributor to a designer, manufacturer, and installer of a complete product suite. Safety Vision's 115-plus employees in six U.S. offices now serve an international client base.
SBA said it based its selection on business staying power, territorial expansion, square footage occupied, increase in net worth, and growth in personnel, among other criteria. One award recipient was chosen from each of the 50 U.S. states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam.
Safety Vision has contributed to the community by supporting the Texas Children’s Hospital, St. Jude Children’s Research Hospital, PBS, and the Houston Food Bank. In addition, after Hurricane Katrina, the company volunteered man-hours and floor space to run a designated drop-off point for hurricane-relief items and established a 100% company match for employee cash donations to the American Red Cross Hurricane Katrina Relief Fund.
"This is a special award for me--as a businessman, a Texan, and an American," said Smith. "I'm proud of the growth and accomplishments of the company I founded, and I'm proud of the contributions we've made to the country's economy and to the safety and wellbeing of its citizens."
CP, BLET strike tentative dealCanadian Pacific's U.S. subsidiary, the Soo Line Railroad, has reached a tentative contract settlement with the Brotherhood of Locomotive Engineers & Trainmen (a division of the Rail Conference of the International Brotherhood of Teamsters). The settlement, which covers 440 locomotive engineers, is expected to be ratified by mid-June.
The Soo Line and BLET have agreed to apply the terms of the recently negotiated BLET national settlement, and Soo Line will place its engineers in the Railroad National Healthcare Plans.
The settlement was reached April 23, and will cover the five-year period from 2005 until 2009. It includes a 17% boost in general wages as well as increases in employee premium cost sharing and several other benefit cost containment programs.
Trinity revenues, earnings, and backlog growTrinity Industries reported first-quarter earnings from continuing operations of $59.1 million on revenues of $828.5 million, compared with earnings of $38.5 million on revenues of $724.7 million in the corresponding period last year.
The company said its TrinityRail Group received orders for 8,500 cars during the first quarter and shipped 6,570 cars. On March 31, the order backlog was 37,790 cars, 12,250 cars greater than one-year earlier and the highest North American backlog in the company's history.
Trinity's Leasing Company fleet continued to grow and contained 32,500 units on March 31, up from 26,000 a year ago.
Trinity also benefited from 33% revenue growth in its Inland Barge Group in the first quarter.
NYAB wins Australian order for electronically controlled pneumatic brakesAustralian mining company Fortescue Metals Group, Ltd., has selected New York Air Brake to provide electronically controlled pneumatic (ECP) brakes for 400 married pairs of iron ore cars and 17 new GE locomotives.
The equipment will enter service in late 2008 as part of Fortescue's new Pilbara Iron Ore and Infrastructure Project. More than 45 million tons of ore is slated to move from mines in the Pilbara region to Fortescue's new port site at Anderson Point in Port Hedland.
NYAB's EP-60 technology is said to improve train braking performance by using electronic signals to transmit brake commands from the locomotive to the cars simultaneously. Because stopping distances are shorter and in-train forces are reduced, NYAB says that railroads can operate longer and heavier trains at higher speeds, with significantly improved safety and fuel economy. NYAB's ECP system is AAR approved.
NASA workers hurt as special train derailsNASA and ATK Launch Systems have joined the Federal Railroad Administration in investigating the derailment of a Meridian & Bigbee Railroad (M&B) special train carrying space shuttle rocket motor segments. The accident occurred near Pennington, Ala., Wednesday morning.
“Several members of the NASA family were injured in this serious accident,” said Wayne Hale, NASA’s space shuttle program manager.
NASA said the train, which included a passenger car to monitor the shipment, was crossing a trestle, "which collapsed under the locomotives. Six people were injured when the two locomotives and the passenger car dropped about 10 feet and turned on their side." Three additional cars derailed, while the other 10 remained upright. The cargo did not spill.
"Our foremost thoughts and concerns are with the injured," said Mortimer B. Fuller, chairman and CEO of Genessee & Wyoming, Inc. (GWI), M&B's parent company. "Safety is the number-one priority of our company."
According GWI, "Repairs to the under-deck structure of the trestle were completed by a bridge contractor earlier this week, and the trestle was tested prior to being placed back in service yesterday morning. Whether any connection exists between the repairs and the incident will be determined by the investigation."
NASA noted that similar shipments “have been transported across country by rail for more than 26 years with an excellent record of safe transportation.”
M&B traffic of approximately 100 freight cars in each direction is being temporarily rerouted while the damage is repaired. The railroad estimates that repair work will take one month.
Greenbrier announces major order, senior staff changesGreenbrier Companies announced that it will build 1,700 new double-stack interposal platforms similar to a type currently in production for another customer at its Gunderson facility in Portland, Ore. The source of the new order was not named.
In a separate announcement, Greenbrier said that in accordance with a succession plan, L. Clark Wood, 64, retired April 30 as president of Greenbrier’s manufacturing operations. Alejandro Centurion, who joined Greenbrier in 2005 as managing director of Gunderson-Concarril in Mexico, has been promoted to president-North American operations, with responsibility for all of the company’s new railcar and marine business on the continent. Bob Hickey, formerly vice president and general manager of TrentonWorks in Nova Scotia, been named to the new position of senior vice president-North American manufacturing, staff and operations. Fernando Estrada has been hired as general manager, Gunderson-GIMA, Greenbrier’s new railcar joint venture in Monclova, Mexico.
John Nussrallah has resigned as president of Greenbrier Europe for family reasons but will continue to provide senior advisory services to the company. William Green has been named managing director of Greenbrier Europe’s supervisory board.
Portec: Backlog strong, outlook positivePortec Rail Products, Inc., has reported first-quarter 2007 revenues of $27.5 million, up from $23.1 million in the prior-year quarter, and net income of $1.205 million, up from $1.033 million last year. This year’s quarter included non-recurring costs, net of tax, totaling $331,000.
“Our core track component businesses showed solid and improved performance,” said President and CEO Richard J. Jarosinski, “and Kelsan Technologies, in particular, had a significant improvement in operating and net income compared to the first quarter of 2006. The acquired businesses of Vulcan Chain and Coronet Rail also contributed to our higher sales and net income for the quarter. . . . Our backlog is strong and the outlook for the industry remains positive.”
Comprehensive safety bill, including PTC implementation and FRA reorganization, introduced in the HouseThis week, Rep. James Oberstar (D-Minn.) introduced the Federal Railroad Safety Improvement Act of 2007 (H.R. 2095), which is slated to “prevent railroad fatalities, injuries, and hazardous materials releases.” Among its provisions, the bill seeks to restructure the Federal Railroad Administration as the Federal Railroad Safety Administration (FRSA), placing greater emphasis on its safety role, and require Class I’s to implement, by 2014, positive train control for safety purposes. Supporting the House Transportation and Infrastructure Committee chairman’s bill are Rep. Corrine Brown (D-Fla.) and Rep. Don Young (R-Alaska).
Bill requirements include:
* Establishment of the FRSA. With safety its highest priority, the FRSA's goal will be to reduce accidents, injuries, and fatalities. The President will apppoint the office's administrator, and the Department of Transportation secretary will appoint a chief safety officer, a newly created position. FRSA will be required to double the number of safety inspectors from 400 to 800 by the end of 2011.
* A railroad safety strategy. The DOT secretary will develop a long-term strategy for improving railroad safety. This will include an annual plan and schedule for achieving such goals as reducing the number and rates of accidents, injuries, and fatalities involving railroads; improving the consistency and effectiveness of enforcement and compliance programs; identifying and targeting enforcement at, and safety improvements to, high-risk highway-rail grade crossings; and improving research efforts to enhance and promote railroad safety and performance. In addition, the DOT secretary and FRSA administrator will assess, at least semi-annually, the FRSA’s progress. The DOT secretary also will report annually to the House Committee on Transportation and Infrastructure and the Senate Committee on Commerce, Science, and Transportation on that progress as well as annual plans.
* Hours of service reform. To address employee fatigue, the bill says that a railroad may not require or allow a signal employee to remain or go on duty unless that employee has been off duty for at least 10 consecutive hours during the prior 24 hours; for a period in excess of 12 consecutive hours; or unless that employee has had at least one off-duty period of at least 24 consecutive hours in the past seven consecutive days. It also prevents railroads from forcing signalmen into emergency time for routine repairs, maintenance, and inspection of signal systems and from communicating with signalmen during their off-duty time. For train crews, the bill says that a railroad may not require them to remain or go on duty unless that employee has been off duty for at least 10 consecutive hours during the prior 24 hours; for a period in excess of 12 consecutive hours; or unless that employee has had at least one off-duty period of at least 24 consecutive hours in the past seven consecutive days. In addition, it eliminates limbo time. Time spent in deadhead transportation to a duty assignment, time spent waiting for deadhead transportation, and time spent in deadhead transportation from a duty assignment to the place of final release would be considered on-duty time. Finally, the bill prohibits railroads from communicating with train crews during their off-duty time.
* Employee sleeping quarter reform. Railroads may not provide sleeping quarters in an area or in the vicinity of an area in which rail switching or humping operations are performed.
* Fatigue management plans. Each railroad will be required to submit a fatigue management plan to the DOT every two years, with the first plan filed within a year after the bill is enacted. Railroads will be required to work with employees on a plan to identify and prioritize all situations that pose a risk of safety that may be affected by fatigue, in addition to other measures. Each railroad must consider addressing such employee issues as education and training; opportunities for identification, diagnosis, and treatment of any medical condition that may affect alertness or fatigue; effects on employee fatigue of emergency response situations (including derailments and natural disasters); scheduling practices involving train lineups and calling times, including work/rest cycles for shift workers and on-call employees that permit employees to compensate for cumulative sleep loss by guaranteeing a minimum number of consecutive days off; and minimizing the incidence of fatigue that occurs as the result of working at times when the natural circadian rhythm increases fatigue.
* Employee protections. A railroad engaged in interstate or foreign commerce will not be able to prevent an employee from--or discharge, discipline, or in any way discriminate against an employee for--filing a complaint; testifying in a proceeding; notifying, or attempting to notify, the railroad or DOT of a work-related personal injury or work-related illness of an employee; cooperating with a safety investigation by DOT or National Transportation Safety Board; furnishing information to the DOT, NTSB, or other office on any accident or incident resulting in injury or death to an individual or damage to property occurring in connection with rail transportation; or accurately reporting hours of duty. In addition, a railroad will not be able to prevent or discharge, discipline, or in any way discriminate against an employee for reporting a hazardous condition; refusing to work when confronted by a hazardous condition related to the performance of the employee's duties; or refusing to authorize the use of any safety-related equipment, track, or structures, if the employee is responsible for the inspection or repair of the equipment, track, or structures, when the employee believes that the equipment, track, or structures are in a hazardous condition.
* Positive train control systems. Within one year of bill enactment, each Class I will be required to develop and submit to the DOT secretary a plan for implementing positive train control. PTC must be put in place by December 31, 2014, to: prevent train collisions and over-speed derailments, provide protection to maintenance-of-way workers within established work-zone limits, and prevent the movement of a train through a switch left in the wrong position.
* Warning in non-signaled territory. Within a year of bill enactment, railroads will be required to install automatically activated devices, independent of switch banners, which capture rail employee attention and clearly convey the status of the switch both during the day and at night, and warn crews of misaligned switches.
* Track safety. Within a year of bill enactment, railroads will be required to conduct ultrasonic or other appropriate inspections to ensure that rail used to replace defective segments of existing track is free from internal defects; perform rail integrity inspections to manage a service failure rate of less than 0.1 per track mile; and encourage use of advanced rail defect inspection equipment and similar technologies as part of a comprehensive rail inspection program.
* Certification of conductors. With six months of bill enactment, the DOT will prescribe regulations and issue orders to establish a program requiring the certification of train conductors. The program will require that conductors on passenger trains be trained in security, first aid, and emergency preparedness.
* Minimum training standards. Within 180 days of bill enactment, the DOT secretary will establish minimum training standards for each craft of railroad employees. Railroads will be required to qualify or otherwise document the proficiency of their employees in each craft regarding their knowledge of, and ability to comply with, federal railroad safety laws and regulations and railroad rules and procedures. Railroads also will be required to submit their own training and qualification programs to the FRSA for approval.
* Emergency escape breathing apparatus. Within six months of bill enactment, railroads will be required to provide emergency escape breathing apparatus for all crewmembers on freight trains carrying hazmat that would pose an inhalation hazard in the event of release; and provide crewmembers with appropriate training for using the apparatus.
* Locomotive cab environment review. Within one year of bill enactment, the DOT secretary will transmit to the House Committee on Transportation and Infrastructure and the Senate Committee on Commerce, Science, and Transportation a report on the effects of the locomotive cab environment on the safety, health, and performance of train crews.
* Prompt medical attention. Railroads will not be allowed to deny, delay, or interfere with the medical or first aid treatment of an employee who is injured during the course of employment, or discipline, or threaten discipline to, an employee for requesting medical or first aid treatment, or for following orders or a treatment plan of a treating physician.
Deemed the "strongest rail safety legislation introduced in Congress in more than three decades," UTU International President Paul Thompson said that “rail labor is going to work collectively and constructively to see it is passed into law with a veto-proof majority." Also supporting the bill are the Brotherhood of Locomotive Engineers and Trainmen, Brotherhood of Maintenance of Way Employes Division, Brotherhood of Railroad Signalmen, and the American Train Dispatchers Union.
A hearing on the bill by the House Rail Subcommittee is scheduled for May 8.
US&S partners with Chinese firm on train control projectsUnion Switch & Signal International (an Ansaldo STS subsidiary) has signed a 10-year industrial and commercial collaboration agreement with the Chinese company Zhejiang Zheda Insigma Group Company Ltd. (Insigma) to provide mass transit signaling control systems throughout China.
The first project covered by the agreement is the construction of a signaling system for Shenyang Metro Line Co.'s 17.4-mile Line 1. Insigma, which has already been awarded the contract, will use key components of US&S's communications-based train control system. US&S's portion of the contract amounts to $10 million.
With Chinese rail capacity expansion on the rise, signaling system projects are estimated to top $400 million over the next two years. The new agreement with Insigma is slated to "strengthen" Ansaldo STS's presence in this country, where it is already providing the Shitai dedicated passenger line's signaling system, worth $40.7 million. Ansaldo has landed significant contracts in the fast-growing areas of India, South Korea, Malaysia, and Australia, as well.
Rail fatalities up slightly in January-FebruaryRail fatalities in the U.S. increased 4.3% to 120 in this year’s first two months compared to 115 in January-February 2006, according to statistics posted April 30 on the Federal Railroad Administration’s website.
There were 60 trespasser fatalities, the same as last year; 55 highway-rail grade crossing fatalities, up 1.9% from last year; two fatalities in train accidents vs. none last year; and three employee fatalities in other incidents, vs. one last year.
A total of 1,966 accidents and incidents were reported in this year’s first two months, down 6.5% from last year. There were 25 collisions, down 24.2%; 304 derailments, down 7%; and 197 yard accidents, down 24.2%.
Bombardier joint venture lands $203.8 million contractShanghai Mass Transit Line 7 Development Co. has placed a $203.8 million order for 192 MOVIA metro cars with Bombardier Transportation and its joint venture partners in China. Bombardier's share of the contract is valued at $63.9 million.
The new metro cars will be built at Changchun Bombardier Railway Vehicles Co. Ltd.'s facilties in China, and propulsion equipment will be manufactured at Bombardier CPC Propulsion System Co. Ltd.'s site in Changzhou and Bombardier Transportation's plant in Vasteras, Sweden. Deliveries are slated to begin in second-quarter 2008 and wrap up in 2009.
The order follows a 306-car contract for Shanghai Metro's Line 9, which was awarded last November.
EPA sees a recovery aheadAlthough freight car orders have been impacted by a slowing U.S. economy and sluggish traffic in various commodities, Economic Planning Associates says the downturn is temporary.
“Amid rising fuel costs and slumping traffic, the railroads are encountering a difficult financial environment,” EPA said in its first-quarter 2007 railcar overview. “Although revenues continue to advance, profits are being squeezed. Nonetheless, railroads are looking beyond the current lackluster haulings environment and are proceeding with long range plans to improve service and financial results. Fortified by last year’s strong profits and cash flow, the roads have once again expanded their capital budgets in 2008. . . . After a dismal first quarter, we look for improvements in both commodity and intermodal haulings. Even though our soft economy and weak construction market will dampen growth in commodities such as metals, aggregates, lumber, motor vehicle and parts, and primary forest products, we expect rebounds in coal, grain, and food products to join with the already expanding chemicals sector to move year over year commodity haulings comparisons into the positive column during the remainder of this year and into 2008.” But, cautioned EPA, “Due to the extremely weak start, commodity haulings in 2007 will end up at about the same level as last year.”
How has this affected railcar demand? Said EPA: “While the dynamic growth in ethanol production is escalating demand for certain equipment types (tank cars and hi-cube covered hoppers), the slowing economy, adverse weather conditions, and poor profit performance among the roads in the first quarter have all served to dampen demand for other car types. Blizzard conditions in the west, along with mine closures have slowed coal haulings while a number of new cars still sitting in storage have constrained short term demand for coal cars. The collapse of the housing market has all but shut out demand for centerbeams while sluggish manufacturing activities are dampening demand for mill gons and bulk head flats, not to mention domestic container hauling equipment. Boxcar demand is being negatively impacted by a weak paper environment, a flattening in North American light vehicle production, and a lack of current interest in insulated and refrigerated equipment.” Intermodal is fairing somewhat better: “While a weak first quarter in both manufacturing and imports of foreign products have dropped trailer on flat car volumes and dampened the expansion in container traffic, intermodal investments will be well founded as we proceed through this year and into the years to follow.”
As a result, EPA has revised its freight car order and delivery forecast: “We have lowered our 2007 estimate of railcar assemblies to 65,600 units. In 2008, we expect deliveries to ease moderately to 63,000 cars as boxcar and centerbeam demand remains in the doldrums, coal car deliveries flatten, and small cube covered hopper assemblies ease from their frenetic pace of deliveries during the last three years.” Going forward, EPA expects demand for railcars “will remain on solid footing for a number of years to come” due to such factors as replacement pressures, technological advance, and legislative measures that favor investment in rail.
“A renewed expansion of the U.S. economy and the rail customer markets, the projected growth of merchandise trade (both exports and imports), and the continued diversion of some truck traffic to rail, will lead to further growth in railcar orders not only in the second half of 2007 and in 2008, but will also serve to support healthy levels of railcar demand out to 2012,” concluded EPA. “Anticipated continued improvements in the revenues and profits of the rails and their major customers will serve to facilitate the decision to invest in rolling stock. After 2008, we expect the annual level of deliveries to moderate somewhat, but still remain at historically high levels. From 62,000 units in 2009, we envision deliveries to ease gradually to 60,300 units in 2012.”
Amtrak appoints new CFOWilliam H. Campbell will join Amtrak as CFO, effective May 21. He will be responsible for planning, directing, and overseeing all financial activities, and report directly to Amtrak President Alex Kummant.
A 20-plus-year finance veteran, Campbell served most recently as a director in KPMG LLP's Federal CFO Advisory Services practice, based in Washington, D.C. He also has held the positions of CFO for the Department of Veterans Affairs, managing a $65 billion annual budget; chief engineer and deputy commander for the Naval Supply Systems Command; and CFO for the U.S. Coast Guard.
WATCO acquires Millennium RailPittsburg, Kans.-based Watco Companies, Inc., is merging Millennium Rail, Inc., (MRI) into its stable of railroad company holdings. A repair and maintenance service provider, MRI handles fleet management, general repair and maintenance, and specialty freight car manufacturing and program work at eight U.S. shops.
“Car repair was one of our founding businesses, starting with our car repair shop in Coffeyville, Kans., in 1985,” Watco CEO Rick Webb said during today's acquisition announcement. “In addition to Coffeyville, we also currently operate car repair shops in Pittsburg; Jacksonville, Fla.; and Houston, Texas. By making this acquisition, we are strengthening a very important part of our business that positions us well because of MRI’s capabilities in tank car repair. This will be significant with the future role of ethanol in rail transportation.”
Webb expects to hire additional employees at each of MRI's facilities in Hollidaysburg, Pa.; Council Bluffs, Iowa; Junction City and Neodesha, Kans.; Marshall and Hockley, Texas; Zwolle, La.; and Wood River, Ill.
Watco operates 16 railroads in 14 states.
Patriot takes over Rarus Railway operationsPatriot Rail Corp. has acquired Anaconda, Mont.-based Rarus Railway Corp. The purchase will give the short line holding company--established late last year by former RailAmerica Chairman, President, and CEO Gary O. Marino--an additional 26 miles of main line freight service track between Anaconda and Butte, Mont., 40 miles of line located in four switching yards, and numerous passing sides. The deal also includes Rarus' 20-bay locomotive roundhouse, wheel shop, and machine shop in West Anaconda, and the Copper King Express excursion train service, which Patriot will continue to operate. In 2006, Rarus hauled 11,512 carloads, primarily copper tailings, impacted soils, copper concentrates, and slag with its fleet of 12 locomotives.
“Rarus has numerous opportunities for expansion beyond its existing customer base, and we will be investing new capital to grow the company,” said Marino, Patrio's president and CEO. “We will work closely with local and state officials and with Patriot’s business partners throughout North America, to pursue economic development opportunities.”
Patriot’s first rail acquisition, the Tennessee Southern, has reported a 53% increase in carloads during its first six months under the new holding company.
FreightCar America posts quarterly resultsFor the first three months of the year, FreightCar America sales of $322.5 million on net income of $23 million rose 10% and 7.5%, respectively, over the same period last year. About 22% of first-quarter sales were for non-coal-carrying railcars. Sales for the previous year's quarter did not include these cars.
“Profitability remained strong as we diversified our production mix to include more non-coal-carrying railcar types,” President and CEO Chris Ragot said during today’s announcement. “Once again this quarter, we benefited from optimizing the production mix at low-cost facilities. We will continue to focus on cost controls to drive profitability.”
Order books and backlog sagged for the first three months of the year, however. New car orders came in at just 768--falling 25.5% over first-quarter 2006 and 65% over fourth-quarter 2006, according to the manufacturer. Backlog was 6,006 units--dropping 35.5% from fourth-quarter 2006 and 66.2% from first-quarter 2006.
“During this time, our cost reduction activities have significantly increased, including our ongoing evaluation of manufacturing capabilities,” Ragot maintained. “Our strategic initiative to enhance revenue growth through development of other railcar types is on schedule and we continue to explore other opportunities to enhance shareholder value.”
North Carolina Railroad, NCDOT partner on track-rehab projectNorth Carolina Railroad has teamed up with the North Carolina Department of Transportation on a $20 million project to restore nine miles of track between Greensboro and High Point. The work, expected to begin later this month and wrap up in 18 months, will provide a second main track to increase rail capacity in the area. It will be completed in three phases and include an improved train control signal system. NCDOT is providing $16 million to the effort; NCRR, $4 million.
“This project will enhance both freight and passenger rail efficiency through North Carolina,” NCDOT Deputy Secretary-Transit Roberto Canales said during today's announcement. “Our partnership with NCRR helps meet funding needs, and we will continue to work together on other track improvement projects between Greensboro and Charlotte.”
“As the state continues to grow, it is critical that we add tracks so that we can accommodate existing industries and serve new businesses that are considering locating in North Carolina,” added Scott Saylor, NCRR president.
NCDOT’s Rail Division has completed preliminary design plans for the project, and Norfolk Southern, the final plans. NS will manage project construction with additional oversight by NCDOT.
UP, NS improve transcontinental serviceUnion Pacific and Norfolk Southern’s eastbound domestic transcontinental intermodal service, including premium BlueStreak trains, will be faster as of May 21 thanks to a rerouting over Kansas City Southern’s Meridian Speedway.
Traffic will shift from the Memphis gateway to a new Shreveport, La., gateway by combining UP’s Sunset Route between Los Angeles and Texas with NS’s and Kansas City Southern’s Shreveport-Meridian, Miss. joint venture line, which is nearly 150 miles shorter. Standard service to Atlanta will improve by one day to fifth-morning availability. BlueStreak premium service to Atlanta now will be available on the fourth afternoon, providing truck-competitive transit speeds of 600 miles per day. Cut-off times in Los Angeles will be moved to later in the day to allow more shipments to depart on that evening’s train. All eastbound domestic shipments will originate at UP’s LATC Intermodal Terminal in Los Angeles.
“Since expanding service and capacity in this lane in February, BlueStreak has been running 100% on time,” the railroads said in their announcement. “[We] continue to make major investments to expand capacity and enhance service performance on this route.”
In addition, westbound domestic service is expected to be shifted to the Shreveport gateway during the third quarter of 2007. International shipments will remain routed via the Memphis gateway, with service improvements planned for later this year. Service details are available at www.nscorp.com/intermodal/ and www.uprr.com.
Railpower names marketing and sales chiefRailpower Technologies Corp. announced the appointment of John T. Norris as vice president of marketing and sales. Railpower CEO Jose Mathieu said Norris’s specific industry knowledge and outstanding reputation with Class I railroads “will prove key to the growth of our order book.”
A veteran of 25 years in the railway business, Norris spent 15 years with Alstom Signaling (formerly General Railway Signal), rising to the position of product sales manager and vice president-railroad sales; most recently he was a partner with Rail Development Corp., where he held the position of vice president marketing and sales.
A supplier of hybrid locomotives, Railpower has approximately 90 units in service and will have over 150 in operation by midyear.
Paoli-Philadelphia line due for major work Amtrak plans to launch a major trackwork project between Philadelphia and Paoli, Pa., on June 7. A crew of more than 140 will install 60,000 concrete ties and 60 miles of CWR to complete the restoration of the quadruple track line. Part of Amtrak’s Keystone Corridor, the line is also used by SEPTA’s Regional R5 trains.
The project is a continuation of a Keystone Corridor upgrade that began five years ago. In partnership with the Pennsylvania Department of Transportation, Amtrak restored all-electric service along the corridor last October. Since then, ridership has grown 17%. In March, 70,930 passengers traveled on Keystone corridor trains, making it the fourth busiest corridor service on Amtrak’s system.
Kathryn McQuade moving to Canadian PacificNorfolk Southern Executive Vice President Planning and Chief Information Officer Kathryn McQuade has been appointed Executive Vice President and Chief Operating Officer of Canadian Pacific, reporting directly to Fred Green. She will become a member of CP’s Management Committee and will chair the Operating Committee. She assumes her new duties June 1.
McQuade’s move is most certainly an indication of greater cooperation between NS and CP. Is it a prelude to a merger announcement? “In her new role, [McQuade] will be responsible for providing the strategic leadership and integration between our rail operations, information technology, and strategic sourcing groups,” said CP’s internal announcement on her appointment. “Her skills, U.S. experience, and strategic relationships are a strong complement to our experienced leadership team. The strategic insight she has gained from exposure to best practices at NS will strengthen our overall vision to become the safest and most fluid railway in North America. Kathryn brings more than 26 years of experience in key leadership positions at NS where she was involved in major change initiatives including the development and implementation of current Thoroughbred Operating Plan and various quality and ‘best practices’ programs. She has proven leadership in information technology and strategic planning and an extensive background in all areas of finance. She has worked closely on operational issues and network opportunities with all the major and regional railroads and short lines.”
CP Senior Vice President Operations Brock Winter will be reporting to McQuade. “Kathryn, Brock, and the operations leadership team will advance the operations technology for the 'railway of the future' including long term strategy on [CP’s Integrated Operating Plan] and the assessment of emerging technologies to improve safety, productivity, and capacity,” the announcement stated. “In addition, Brock will take on the added responsibilities of CP’s intermodal operations across North America.” Also reporting to McQuade are Vice President Business Information and Technology Allen Borak and Vice President Strategic Sourcing Jonathan Legg.