September 2004
NS elects Moorman president, promotes six senior execsIn a move to "take full advantage of the opportunities presented by our expanding markets and efficient transportation network," Norfolk Southern announced a shake-up in its leadership team. David R. Goode will retain his position as NS chairman and CEO until he reaches the mandatory retirement age of 65 in January 2006, but will turn over his role as president to 34-year NS veteran Charles W. Moorman on Oct. 1.
Moorman--whom Goode called a "seasoned, dynamic leader"--has served as senior vice president-corporate planning and services since 2003. Previously, he held the position of president of NS’s Thoroughbred Technology and Telecommunication subsidiary, and rose through the ranks of senior management in the transportation, personnel, labor relations, information technology, and strategic planning departments.
"Wick brings a tremendous depth of experience to his new position," spokesman Robert C. Fort told Railway Age, "and will lead the team that takes us to the next level."
Moorman’s direct reports will include: Vice Chairman and Chief Marketing Officer L.I. Prillaman, Vice Chairman and COO Stephen C. Tobias, and Vice Chairman and CFO Henry C. Wolf.
In addition, Goode announced the following promotions, effective Oct. 1: James A. Hixon, currently senior vice president-legal and government affairs, to executive vice president-finance and public affairs, reporting to Wolf; Mark D. Manion, senior vice president-transportation operations, to executive vice president-operations, reporting to Tobias; Kathryn B. McQuade, senior vice president-finance, to executive vice president-planning and chief information officer, reporting to Moorman; John P. Rathbone, senior vice president-administration, to executive vice president-administration, reporting to Moorman; Donald W. Seale, senior vice president-marketing services, to executive vice president-sales and marketing, reporting to Prillaman; and James A. Squires, vice president-law, to senior vice president-law, reporting to Wolf.
Goode commented that "NS is extremely fortunate to have such a talented executive team."
RailPower eyes Scandinavian marketRailPower Technologies announced that it has signed a memorandum of understanding with Swedish Train Technology for the marketing of its hybrid switching locomotive technology in Scandinavia. RailPower President and CEO Jim Maier said this is the company’s first major partnership in Europe. The Vancouver-based supplier of Green Goat® switchers also has announced plans for introducing the technology in Australia and Southeast Asia.
Wabtec inks deal with European rail supplierItaly-based Rutgers Rail S.p.A. will join Cobra Europe as an international subsidiary of Wabtec Corp. In an announcement today, Wabtec said that it has signed a definitive agreement with Rutgers AG to acquire the assets of Rutgers Rail, a manufacturer of brake shoes, disc pads, and interior trim components. The deal is slated to close by the fourth quarter. Rutgers Rail is expected to generate $45 million in revenues next year, which will be accretive immediately.
According to Wabtec Chairman and CEO William Kassling, it "represents the type of acquisition we will continue to pursue: a business with strong market share in products that we know, a substantial portion of aftermarket sales to provide long-term stability, the opportunity for cross-selling and operational synergies, geographic expansion to offset the impact of the North American freight rail cycle, and accretive to earnings in the first year."
Rail traffic soars at Port of NY/NJThe Port Authority of New York and New Jersey handled 138,227 rail intermodal containers in the first half of 2004, a 19% increase over the first half of last year. "The dramatic increase in intermodal cargo in the first six months of this year underscores the need to continue expanding ExpressRail," said Port Authority Chairman Anthony R. Coscia. "Last month, our board committed an additional $5 million to plan and design the next phases of the system, which will create ship-to-rail facilities at each of our major terminals, making us more efficient while reducing congestion on roads and highways."
Intermodal sets 16th record in 21 weeksU.S. railroads hauled a record 229,039 trailers and containers in the week ended Sept. 18, 13.1% more than in the corresponding week last year and 1.3% higher than the previous record of 226,074 moved in the week ended Aug. 28. "The 16 busiest weeks in history for rail intermodal traffic have all occurred within the past 21 weeks," said the Association of American Railroads. Regular carload traffic on U.S. railroads was up 0.9% in the latest reporting week, to 346,007 units.
Three Army bases will get Green Goat hybridsThe U.S. Department of Transportation is buying three RailPower Technologies Green Goat® hybrid switching locomotives for use at Army bases in Barstow and Sierra, Calif., and Fort Lewis Wash. The purchase contract, announced Sept. 23, was awarded by the DOT’s Volpe National Transportation Center to RailPower Hybrid Technologies Corp. of Erie, Pa., the U.S. subsidiary of Vancouver-based RailPower.
"We very much welcome this order for three Green Goat switchers," said RailPower President and CEO Jim Maier. "It comes after a lengthy due diligence process. The U.S. government has hundreds of switcher locomotives in the military and other installations. The order brings with it the potential for wider adoption of the technology throughout the U.S. military and DOT locomotive fleets."
Hiawatha line handily beats the forecastsMinneapolis isn’t yet ready to proclaim its three-month-old Hiawatha light rail line a thumping success: Metro Transit says it will take a year or so for any permanent change in transportation patterns to solidify. But the signs so far are encouraging.
The first phase of the line opened June 26 to overflow crowds, which some skeptics attributed to beginner’s luck. But in the first full month of operation, July, there were 462,463 boardings, almost exactly double the 231,400 that had been projected. In August, boardings rose to 476,835 vs. a projected 236,700.
The initial eight-mile, 12-station light rail segment runs from downtown Minneapolis to Fort Snelling. With the opening of five more stations later this year, service will reach the Mall of America and the Minneapolis-St. Paul International Airport.
Most freight trains pick up speedFor the week ended Sept. 17, U.S. and Canadian railroads continued to report relatively strong operating metrics to the Surface Transportation Board.
On Union Pacific, average train speed rose to 22.5 mph from 21.9 mph in the prior week, while average cars on line dropped to 321,124 from 324,152.
Burlington Northern and Santa Fe trains moved at an average 23.1 mph, up from 22.9 mph; cars on line declined to 202,067 from 202,650 in the preceding week.
CSXT posted average train speed of 21.4 mph, up from 20.1 mph in the earlier week, with an average 231,767 cars on line, up from 230,200.
Norfolk Southern reported average train speed of 22.5 mph, down from 23.1 mph; freight cars on line rose to 186,552 from 185,609.
Kansas City Southern trains moved at an average speed of 25.5 mph in the latest reporting week, up from 25.0 mph, and cars on line numbered 26,611 vs. 26,235 in the week ended Sept. 10.
Canada’s two major railroads maintained the highest train speeds among major North American railroads: CN’s 25.9 mph was exactly even with the prior week’s, and CPR’s dropped fractionally to 26.l mph from 26.2 mph. CN reported 110,386 average cars on line for the week ended Sept. 17, compared with 111,204; at CPR, cars on line numbered 65,993, down from 66,593.
TFM transaction encounters another roadblockKansas City Southern’s quest to assume full ownership of Transportación Ferroviaria Mexicana (TFM) and create, with other holdings, the NAFTA Rail system stretching from Chicago to Mexico City, has encountered another roadblock. Shortly after KCS and TFM co-owner Grupo TMM resolved their differences through arbitration and agreed to continue good-faith negotiations, Mexico’s Foreign Investment Commission delivered notice that it would not authorize the transaction. FIC approval is necessary for a foreign company to become a majority owner of a Mexican-based company.
KCS and TMM said the FIC’s decision "is not in the spirit of the North American Free Trade Agreement, nor consistent with previous decisions made by the FIC on foreign majority ownership, including ownership of another railroad in Mexico." KCS and TMM further said they "are actively involved in discussions with the FIC and close to an agreement to resolve these matters. [We] will seek reconsideration of this decision and remain confident that [we] should ultimately obtain approval of the transaction."
KCS and TMM have agreed to extend the current deadline of their April 20, 2003 acquisition agreement until June 15, 2005, to provide additional time to complete the TFM transaction.
SEPTA projecting massive cutsCiting a projected $62.2 million operating deficit for fiscal year 2005, the Southeastern Pennsylvania Transportation Authority is proposing a series of cost-cutting "contingency" measures, among which are a 25% fare hike, elimination of 1,400 jobs, and 20% service reduction that would eliminate all weekend trains and buses. The service reduction would amount to 725,000 passenger trips, 225,000 of which would be weekday trips.
The measures, which would take effect Jan. 1, 2005, have been described in rather dramatic terms as "agonizing" and "catastrophic" and undertaken "with great reluctance" by SEPTA General Manager Faye Moore and board chairman Pasquale Deon. Public hearings are scheduled for next month.
According to Pennsylvania law, SEPTA is required to adopt a balanced budget. Since 1997, according to figures released by the agency, SEPTA has managed to produce a small (less than $1 million) operating surplus in every year except 1999, when it ran an operating deficit of $2 million. The $919.7 million 2005 operating budget projects a deficit of $62.2 million. Projections through the next five years show the deficit ballooning to $295.8 million in 2010, without "a subsidy source having growth potential."
Through a spokesperson, Pennsylvania Governor Ed Rendell questioned whether SEPTA’s drastic measures are necessary, but did say that he supports "a funding stream dedicated to mass transit and is hopeful to work with the legislature in the coming months to develop plan." Two Republican state legislators, Rep. John Taylor of Philadelphia and Sen. Stewart Greenleaf of Montgomery County, have introduced a bill that would increase the percentage of the state sales tax that goes to public transit.
Transportation fatalities on a declineIn 2003, U.S. transportation fatalities fell slightly to 44,888 from 45,311 in 2002, according to preliminary figures recently released by the National Transportation Safety Board.
Rail fatalities, which account for 1.7% of the 2003 transportation total, dropped to 767 from 861 in 2002. Every rail category showed improvement: Two passengers were killed in 2003 compared to seven in 2002; grade crossing fatalities decreased to 329 from 357 in 2002; and light rail, heavy rail, and commuter rail fatalities dropped to 173 from 220 in 2002.
Accounting for about 95% of the fatality totals, highway transportation saw the largest decline in 2003, falling to 42,643, compared with 43,005 in 2002.
Aviation was the only transportation mode that showed no decrease in any subcategory, according to the NTSB. The total number of people killed in aviation accidents climbed to 707 in 2003 from 625 in 2002. General aviation accidents showed the largest increase in the aviation area, rising to 626 from 581 in 2002. Also showing an uptick in fatalities were air taxi operations and scheduled passenger carriers.
Overall, marine fatalities fell to 759 from 809 in 2002, with every area except commercial passengers showing a decrease.
Pipeline fatalities increased slightly overall to 12 in 2003 from 11 in 2002--all in the gas pipeline category. There were no fatalities in the liquid pipeline category.
"I am very pleased to see the decrease in transportation fatalities," said NTSB Chairman Ellen Engleman Conners, "but until that number is zero, there is still work to do."
CN selects new BC Rail operatorShortly after closing its BC Rail transaction with the British Columbia government this summer, Canadian National selected Great Canadian Railtour Co. as the operator of tourist trains in British Columbia and Alberta, Canada. GCRC will introduce Whistler Mountaineer on BC Rail between North Vancouver and Whistler, B.C. It also will expand its current Rocky Mountaineer service in Western Canada, by operating a new route that links Whistler and Jasper, Alta., via Prince George, B.C. The Rocky Mountaineer will run on BC Rail trackage between Whistler and Prince George and CN trackage to Jasper. Full-scale operation will begin in 2006.
Railroad toll bridge opens for serviceNorfolk Southern, the Delaware DOT, and the Port of Wilmington have completed a $13.9 million overhaul of Shellpot Bridge, which crosses the Christina River. After sitting dormant since 1994, the 106-year-old bridge has a new life as a railroad toll bridge.
Under terms of the construction agreement, DelDOT funded the rehabilitation project, and NS is compensating the state over the next 20 years based on bridge usage. An electronic railcar placard "reader" will count the number of cars crossing, and NS will pay DelDOT an annual minimum, regardless of traffic. For the first 5,000 cars crossing annually, NS will dole out $35 a car; after 50,000, it will pay $5 a car.
Previously, NS trains operating in Wilmington ran on Amtrak's Northeast Corridor through the Wilmington Transit Center, limiting Port service. Shellpot Bridge, whose reconstruction started in April 2003, will offer greater service flexibility and ease congestion.
During the announcement on Sept. 3, NS Senior Vice President-Corporate Planning and Services Wick Moorman called the project "a model for public-private partnerships throughout the country," adding that Delaware is "clearly committed to economic growth and maximizing its freight transportation potential."
Amtrak jettisons mail contractsCiting interference with its core business of operating passenger trains, and profits that—if they exist at all—are miniscule, Amtrak will cease hauling the U.S. Mail as of early October.
Amtrak’s decision to cancel its $60 million contract with the U.S. Postal Service ends an association that began soon after Amtrak was formed in 1971. By that time, the USPS had ceased operating RPO (Railway Post Office) cars; most of the mail Amtrak has been hauling up until now consists of Second- and Third-Class bulk and drop shipments, handled in boxcars and RoadRailers. Profitability of the mail service, after terminal facilities, drayage, dwell times, and other factors are considered, "is debatable," Amtrak spokesman Cliff Black told Railway Age. "The revenue is simply not worth the trouble, considering the negative impact it has on our passenger trains."
Amtrak has also dropped virtually all of its money-losing Express business, which at one time (prior to David Gunn’s appointment as President and CEO) was touted as part of the carrier’s "glide path to self-sufficiency." Amtrak still operates two ExpressTrak perishables services under a court order imposed when ExpressTrak filed for bankruptcy.
The cost to lease or maintain aging equipment was another factor in Amtrak’s decision to exit the mail business. Black said Amtrak will most likely scrap its aging 1400- and 1500-Series low-level MHCs (Material Handling Cars), and sell its fleet of 70000-Series high-cube MHCs. Disposition of its RoadRailer fleet is undetermined.
Dropping the mail contract will impact three Amtrak long-distance trains—the New York-Chicago Three Rivers, New York-Pittsburgh Pennsylvanian, and New York-Miami Palmetto. The Three Rivers, which typically consists of five passenger cars (including a sleeper) and anywhere from 15 to 20 mail and express cars, will be discontinued as of Nov. 1 and consolidated with the Pennsylvanian on a new schedule. The new service will operate to Chicago until March 1, 2005, after which it will be trimmed back to Pittsburgh. The Palmetto will be trimmed to a New York-Savannah, Ga., run.
However, the Washington, D.C.-Chicago Capitol Limited and New York-Chicago Lake Shore Limited, as well as several other long-distance trains, will have faster schedules with elimination of mail-handling at Toledo, Chicago, Washington, and other locations.
Approximately 300 Amtrak employees will be affected, primarily at terminals and stations. Among them are 33 onboard service positions in Pittsburgh, which will be eliminated. Amtrak said some workers will be able to exercise their seniority rights for jobs elsewhere, including the package shipping business that will continue on trains with checked baggage.
Grade crossing deaths continue to riseThe Federal Railroad Administration posted preliminary statistics on its website Sept. 1 showing that 196 people were reported killed at U.S. highway-rail grade crossings in this year’s first six months. That’s a 24.8% increase over the 157 crossing deaths reported to the FRA in the first half of 2003. Trespasser deaths declined, with 214 reported in January-June this year, compared with 228 in the corresponding 2003 period.
U.S. DOT Inspector General Kenneth Mead has announced an audit into whether the FRA is adequately overseeing grade crossing safety. The audit will encompass inspections, and accident reporting/investigations. It follows a series of articles published in the New York Times in July alleging that railroads have engaged in such practices as failing to promptly report grade crossing fatalities to the Department of Homeland Security National Response Center, failing to preserve evidence from crash scenes, interfering with accident investigations, and repairing malfunctioning grade crossing warning equipment before investigators arrive at an accident scene. The audit will involve FRA and Federal Highway Administration records as well as those from regional FRA and FHWA offices and sate highway authorities. It was prompted by a request from Reps. James Oberstar (D-Minn.) and Corrine Brown (D-Fla.) and Sen. Ernest Hollings (D-S.C.).
Intermodal sets and resets records"Four of the top 13 highest volume intermodal weeks ever, including the highest week ever, occurred in August 2004," according to the Association of American Railroads. For the month as a whole, intermodal traffic rose by 10.8% over August 2003, to 876,056 trailers and containers. U.S. railroads originated l,364,950 carloads of other traffic in August, 1.5% more than in August of last year.
STB rejects limits on TTX car poolingThe Surface Transportation Board has extended TTX’s car pooling authority for 10 years. In a decision handed down Aug. 31, the board also rejected the requests of 11 car leasing and related companies to "limit the TTX pool to intermodal flat cars only or to intermodal and autorack cars."
These companies, noted the board, "distinguish between the ‘free-running’ nature of TTX’s intermodal flat cars (which are more frequently exchanged among member roads to reduced empty car-miles), and the dedicated, sometimes shipper-specific, service into which other, specialized flat cars frequently are placed. They claim that pooling of specialized flat cars yields few, if any, benefits that could not be achieved through other means, and they complain that TTX offers usage rates on specialized flatcars that competitors cannot match without forgoing reasonable profit."
Declaring that "we do not see any merit in so limiting TTX’s authority," the board went on to say: "Pooling specialized flat cars results in improved asset utilization, largely because of TTX’s understanding of railroad network operations, its extensive experience in fleet management, and its direct relationship with its railroad members. Also, TTX spreads the risk for specialized flat car investment, particularly for those flat car types that experience highly fluctuating demand, such as chain tie-down flatcars."
Those requesting limitations on TTX’s pooling authority were Bombardier Capital Rail, CIT Rail Resources, C.K. Industries, First Union Rail, GATX Rail, GE Rail, David J. Joseph, Mitsui Rail Capital, North America Freight Car Association, Progress Rail Services, and Trinity Industries.