October 2007
STB proposes new "paper barrier" rulesThe Surface Transportation Board announced that it is proposing new rules to address the "paper barriers" issue, in response to a renewed petition for rulemaking by the Western Coal Traffic League. Paper barrriers are interchange restrictions sometimes found in rail line sales or leases.
The board said that it unanimously concluded that it will "examine such provisions on a case-by-case basis, given the variations in the terms of such contractual provisions and in the circumstances in which they arise."
The board is also proposing "new disclosure rules to ensure advance regulatory scrutiny of any such provisions involving a new sale or lease for which board authorization is sought, as well as expedited discovery rules to ensure that parties challenging an existing intechange commitment can obtain quick access to the carriers' agreement."
Comments on the proposed regulations must be be filed by Jan. 2, 2008, and replies will be due by Jan. 22.
CN makes case for EJ&E acquisitionCN has asked the Surface Transportation Board for regulatory authority to acquire the principal lines of the Elgin, Joliet & Eastern for $300 million. CN wants the board to consider the acquisition as a minor transaction; this would permit CN to take control s early s mid-2008 of operations that will become the EJ&EW West Co.
CN and U.S. Steel announced an agreement in principle for the acquisition on Sept. 26. CN says the EJ&EW "would provide the 'missing link' to connect CN's five existing lines entering Chicago, filling a void in its network that has caused the company delays and higher costs."
In its STB filing, CN said the transaction "would reduce rail traffic congestion in Chicago's inner core and increase rail capacity for carriers operating in the city by dispersing CN trains along the EJ&E on the periphery of the Chicago metropolitan area." CN also noted that it plans to spend $100 million to upgrade EJ&EW's infrastructure.
UP adopts "What if?" management toolUnion Pacific has deployed "an exception plan optimization and execution management" program developed by a pioneer in the field, Logile, Inc. It "provides the capability to model, plan, and analyze exceptions to planned train operations, using predetermined best practices," said a joint statement by UP and Logile.
As explained by Mike M. Connolly, senior assistant vice president, Network Integration and Scheduling for UP: "Logile's solution allows us the opportunity to ask 'What if?' for various possible scenarios, in response to points of congestion, or unplanned events. We are able to evaluate the alternative solutions ranked by cost or effectiveness."
It also "tracks and records cost-evaluation feedback regarding what was planned vs. what really happened and is used for reference, trend analysis, and reporter, permitting managers to predetermine the quality of execution, adherence to the primary plan and qualification of plan exceptions."
Bombardier joint venture wins $1.5 billion Chinese contract The world's first EMU sleeper cars are included in a $1.5 billion order for 40, 16-car EMU trains (640 cars) that the Chinese Ministry of Railways has awarded to the joint venture of Bombardier Sifang Power (Qingdao) Transportation Ltd. (BSP).
The joint venture members are: Bombardier Transportation, whose share of the contract is valued at $596 million; Power Corp. of Canada; and China South Locomotive and Rolling Stock Industry Corp. It's the largest single order for rail passenger cars ever placed at one time in China.
Twenty of the trains will be designed for 155-mph-overnight sleeper service. The remaining 20 trains will be upgraded, 16-car versions of successful eight-car trains now being delivered to the Ministry of Railways as part of orders placed in October 2004 and May 2005.
Metro-North cosponsors transit-oriented development effortMetro-North Railroad today announced it is inviting developers to "Be in Beacon" to develop approximately 18 acres near its Beacon, N.Y., train station in Dutchess County. In conjunction with Beacon, the railroad issued a Request for Expression of Interest to help create Transit Oriented Development to link Beacon's riverfront area with its downtown.
The TOD is Metro-North's first such effort, making it a relative laggard among regional passenger railroads. By comparison, New Jersey Transit has participated or pursued numerous TOD projects throughout the Garden State for several years.
The RFEI is the result of a long-term collaboration among several entities, including Metro-North, the State of New York, Dutchess County, the City of Beacon, and other local stakeholders including members of the community, environmental groups, merchants, and elected officials.
GE announces three railcar mobile repair facilitiesGE Equipment Services, Rail Services today announced the opening of the first of three mobile repair facilities as part of its Repair Solutions suite of railcar repair services. A facility in LaPorte, Tex., currently is operational; two more will soon open in Mounds, Ill., and Waycross, Ga.
"As one of North America's largest rail equipment lessors, we have years of experience with maintenance and repair," said Jay Wileman, president and CEO of GE Equipment Services, Rail Services. "Our Repair Solutions, which include the capabilities of our new mobile facilities, provide an alternative to certain full-service shop repair work and will help rail equipment owners and users across North America keep shipments in motion and on their way to customers."
The mobile repair units work on assets within a 200-mile radius of their base facilities. Because the shop travels to the car, the call-outs reduce the total cost of light maintenance by eliminating freight, switching, and shop cycle time, while increasing asset availability, GE said.
GE also plans inspection stations at all three locations, which will provide HM-201 testing, designed to ensure the structural integrity of tank cars.
Oregon shippers mull buying short lineFarm and lumber companies near Corvallis, Ore., are offering to buy a 23-mile short line formerly operated by the Willamette & Pacific Railroad, which leased the route from Union Pacific. Service on the Bailey Branch was halted last summer after a series of derailments.
Bruce Carswell, president of the short line, said it was a first step toward asking federal authorities for approval to abandon the line. The shortline operator said low freight volumes did not justify the cost of repairs.
Nine shippers, including Hull-Oakes Lumber Mill in Dawson, Ore., had filed a lawsuit to get weekly freight service restored.he line reopened. But the plaintiffs dropped the suit earlier this month and entered into discussions with UP about buying the line. For its part, UP has offered to drop its asking price for the Bailey Branch from $2.1 million to around $1.8 million.
Senate passes "veto-proof" Amtrak bill The U.S. Senate late Tuesday afternoon approved S. 294, the Rail Passenger Investment and Improvement Act, reauthorizing funds for Amtrak.
The vote was 70-22, considered by some a "veto-proof" measure of support for the National Railroad Passenger Corp., often vilified b the Bush Administration as an inefficient government entity. President Bush issued a statement opposing the bill, but did not threaten a veto.
The Senate bill authorizes $3.335 billion for Amtrak operations for fiscal years 2006 through 2011, ranging from $455 million to $600 million per year; it also approves capital spending of $6.3 billion in amounts ranging from $813 million to $1.231 billion per year.
Comparable House action is not expected until early 2008. Pending action by the House and by any conference committee, the bill, if enacted would offer Amtrak the first long-term funding authorization since 2003. Congress has authorized continuing resolutions to tide Amtrak over.
"Instead of barely giving Amtrak enough to survive, our bill provides for Amtrak's capital and operational needs," Sen. Frank R. Lautenberg, the bill's sponsor, said prior to the vote.
FreightCar America net beats estimatesFreightCar America today reported third-quarter sales of $162.1 million and net income of $8.7 million, compared with sales of $395.5 million and income of $36.8 million in the corresponding period last year. Earnings per diluted share fell to $0.73 from $2.88 cents, but were well above analysts' Wall Street consensus estimate of 53 cents.
"The optimization of production at our low cost facilities and continued focus on cost control were pivotal to this quarter's profitability," said President and CEO Chris Ragot. He said lower costs helped offset lower volume and "a more competitive pricing environment."
The company ended the third quarter with a backlog of 4,940 unfilled orders, down from 5,589 on June 30 and 12,176 on Sept. 30, 2006.
CP posts higher income, sees strong 2008CP observed Investor Day in Calgary with the announcement that it expects to grow total revenue by 4%-to-6% in 2008 and hold expense increases to 3%-to-5%. Capital outlays next year will remain at this year's range of C$885 million to C$895 million.
Today's gathering of investors followed CP's announcement yesterday of a solid third-quarter that saw a 34% increase in net income to C$219 million, and a 3% increase in total revenue to C$1.2 billion, including special items. CP cut its operating ratio to 72.9% from 74.0% in last year's third quarter.
Diluted earnings per share increased 15% to $1.23, excluding long-term debt and other specified items.
"We moved record volumes," said CP President and CEO Fred Green, "and with the recent acquisition of Dakota Minnesota & Eastern Railroad, the largest regional railroad in the U. S., we are well positioned to continue our growth."
Chief Financial Officer Mike Lambert acknowledged "ongoing challenges with the strengthening Canadian dollar and fuel price pressures" and said expectations for adjusted diluted EPS for full year 2007 are at the lower end of a growth target range of 9% to 13%.
North Carolina Railroad studies adding extra trackThe North Carolina Railroad (NCRR) announced today a study to determine the costs to build track for rush-hour rail service on its existing line from Goldsboro to Greensboro. Kansas City, Mo.-based engineering firm HNTB Cos. was awarded the study contract of $400,000, funded by NCRR revenue.
Scott M. Saylor, NCRR president, said, "This study, for the first time, will show us the up front costs for additional tracks, bridges and other infrastructure that would be necessary for the different uses to co-exist on the same line." The study, which won't estimate ridership or operating costs, will take nine months to complete, and cost approximately $400,000, which the NCRR is funding out of its own revenue.
NCRR, a private railroad company owned by the state, manages the 317-mile rail route linking Charlotte to Morehead City Port, also serving Raleigh-Durham. Norfolk Southern has an agreement with NCRR to serve North Carolina freight customers, while Amtrak trains also use part of the route. NS will participate in the the study, which will examine the potential addition of four commuter trains in the morning and evening rush hours, as well as one midday train, to the existing traffic mix.
NS catching a breeze in BellevueCompared to other forms of heavy industry and certainly to motor vehicle transportation, railroads are about as "green" as they come. Norfolk Southern is taking environmental friendliness one step further by erecting a 50 kW wind turbine at its Bellevue, Ohio, yard to power the yard's wastewater treatment plant. Construction of the turbine is expected to begin in November and be complete by year-end.
The wind turbine, supplied by Entegrity Wind Systems of Boulder, Colo., consists of three 24-foot rotor blades mounted on an 80-foot tower. Based on the wind profile at Bellevue, it is expected to generate more than 100,000 kilowatt hours annually to power the pumps and controls of Bellevue Yard's wastewater treatment plant. The plant collects and treats the water used at the yard's maintenance facilities as well as rainwater runoff.
"This is one of the first times wind has been used to provide power to a railroad facility in the U.S.," said NS Vice President-Safety and Environmental Chuck Wehrmeister. "Norfolk Southern is assessing opportunities to utilize alternative renewable energy sources where practical. We are confident that the wind turbine at Bellevue Yard will be an immediate success, and we are looking at other facilities on the NS system to take advantage of wind power."
"Under-promised and over-delivered"Short line Nashville & Eastern Railroad, a 110-mile operation serving industrial and commercial customers in central Tennessee, says testing of National Railway Equipment Co. NREX 2009, a 3GS-21B N-ViroMotive GenSet locomotive, has gone much better than anticipated. The triple-engine switcher, which features three microprocessor-controlled modular engine-generator sets that operate alone or in tandem with each other as the pulling load dictates, delivered a fuel savings of close to 50% over a 16-day period, compared to a conventional switcher, according to Chief Mechanical Officer Gene Turnage.
“This was the first time I’ve been under-promised and over-delivered,” Turnage said. Added N&E Vice President and General Manager Craig Wade, “Our employees really enjoyed the experience of working with this locomotive. It never had to utilize more than one of its three engines during its runs and we greatly benefited from the onboard computer, which kept it from slipping up a grade in wet weather. Everybody was amazed at how quiet it was.”
NREX 2006 was loaned to the N&E for a trial in switching operations last September.
Custom Rail Car changes handsMississippi Railcar, LLC has purchased the railcar repair and maintenance operations of Meridian, Miss.-based based Custom Rail Car, LLC. Served by Genesee & Wyoming, Inc. short line Meridian & Bigbee Railroad, Mississippi Railcar has plans to expand CRC’s existing AAR M-1003-certified capabilities, among which are operating repairs, standard and specialized welding (including aluminum railcar welding), refurbishment programs, wreck work, exterior painting, and mobile repair.
Mississippi Railcar has also forged a long-term agreement with Chicago Freight Car Leasing Co. as a preferred railcar maintenance service provider for CFCL’s 9,000-car fleet.
Mississippi Railcar says it’s now "strategically positioned to support the extensive railcar service needs of customers operating railcars in the South and Southeast regions of the U.S."
Portland eyes more streetcar routesPortland, Ore., city planners are considering expansion of the Portlan d streetcar into a full-fledged network criss-crossing the city, and plan to seek neighborhood input to determine which areas would welcome such service first.
City officials assert that, unlike bus service, streetcars could generate business and political momentum for clusters of midrise housing and commercial centers that could spread the walkable feel of popular urban neighborhoods.
About 140 miles of the city's busiest streets show potential for new streetcar routes, said Patrick Sweeney, project manager for the Portland Office of Transportation. Those streets have dense enough housing, employment and shopping, and are zoned for more.
In the next six months, the city's transportation office will rank potential routes based not just on neighborhood and business support, but also on details such as relatively flat terrain and wide intersections for railcar turns.
Three open-houses sessions, the first occurring today, will offer city residents a chance to plead for or against a line in their neighborhoods, according to the Oregonian. "A community that has a corridor and advocates for their own corridor is so important to us," Sweeney said. "If they don't support it, we're not going to pick a fight with a neighborhood."
Car market moderates but remains strongIn a new freight-car forecast, Economic Planning Associates predicts "a moderation of deliveries next year to the level of 57,500 cars and intermodal units as boxcar and centerbeam demand remains subdued, coal car deliveries flatten, and small cube covered hopper assemblies ease from their frenetic pace of deliveries during the last three years."
The 2008 estimate is lower than this year's projected 64,500 deliveries and last year's 74,729. But longer term, says EPA, "demand for railcars will remain on a solid footing for years to come ... . Beginning in 2009, we look for a pickup in assemblies of coal, cars, Class F flat cars, intermodal platforms, and boxcars, which will boost deliveries to 59,500 units in 2009 and 61,300 in 2010. Deliveries will then remain in the 59,000 to 60,000 range in both 2011 and 2012."
EPA took note of the continued dominance of ethanol-related cars in the marketplace: "Of the 67,000 cars in the current backlog, 43,130 units, or 64.3% of the backlog, are tank cars or hi-cube covered hoppers. Even the recent agreement between GE and Greenbrier [for 11,900 cars over an eight-year period] involves tank cars and covered hoppers, m any of which we believe are destined for ethanol and DDG [an ethanol by-product] service."
Rail traffic continues lagging behind last year's paceCombined cumulative freight traffic volume for the first 42 weeks of 2007 on U.S. and Canadian railroads was down 2.6% from last year, with intermodal trailer and container traffic down 1.3% from 2006, the Association of American Railroads reported Thursday. Carloads totaled 16.99 million carloads for the period.
The overall trend for the year continued for U.S. railroads during the week ended Oct. 20, with U.S. carload freight down 332,461 cars, or 2.1%, from year-ago figures. Intermodal traffic fell 4.3% from 2006 levels.
Canadian carload traffic for the 42nd week gained 5.3% to 81.974 cars, while its intermodal traffic also rose 5.8% over one year ago. But its 42-week volume was down 0.7%, at 3,278,748 carloads, though intermodal was up 2.9% from a year ago.
Kansas City Southern de Mexico carload freight also rose 0.6% for the week ended Oct. 20, at 11,467 cars. KCSM intermodal volume rose 22.8% from the 42nd week of 2006. But, as in the U.S. and Canada, cumulative 42-week volume for 2007 was down 4.2% from last year, at 458,021 cars.
Amtrak pledges revisiting Pioneer serviceIn a letter Wednesday to U.S. Sen. Mike Crapo, R-Idaho, Amtrak President and CEO Alex Kummant said Amtrak would "immediately" evaluate resumption of Pioneer passenger train service in Washington, Oregon, Idaho, Utah and Colorado if an $8.2 billion funding bill is approved by Congress.
Kummant said the rail passenger corporation would weigh the feasibility of all or part of the long-distance route between Tacoma, Wash., and Denver. The Pioneer was discontinued in 1997.
Sen. Crapo believes potential ridership on the route is greater than that of 10 years ago, and noted that other long-distance Amtrak trains recently have fared well.
Crapo also said Amtrak critics are mistaken to demand that the railroad operate without some federal assistance, a view reinforced by the U.S. Senate Thursday as, by by vote of 66-28, it rejected an amendment by Sen. John Sununu, R-N.H., to reduce Amtrak funding in stages for long-distance trains.
CSX's Ward rejects hedge fund recommendationsCSX President and CEO Michael Ward, responding to an Oct. 17 letter from The Children's Investment Fund, has dismissed the hedge fund's itemized suggestions.
Ward, in an interview with the Financial Times, said the fund first suggested management launch a leveraged buyout of the company, then recommended borrowing heavily to finance a share buyback program. TCI holds a 4.1% stake in the company, but is known for its ability to leverage its clout to force changes in management personnel and mission.
The CEO defended CSX's capital expansion program of $4.9 billion over a three-year period, in order to prepare for anticipated traffic increases. "The amount of capital we're spending is right in line with what everybody else in this industry is spending," Ward said. TCI says the company's plans are risky given Congress' renewed interest in re-regulating rates.
KCS gets moving on new bridge to MexicoKansas Southern City announced that it plans to accelerate preliminary engineering for a new international rail bridge to Mexico, and expects to file the necessary applications with both U.S. and Mexican authorities in 2008.
The new bridge will cross the Rio Grande southeast of Laredo, Texas, along the proposed Texas DOT East Loop Bypass corridor. KCS has retained the firm of TranSystems to do the preliminary engineering needed for the applications. KCS noted that it has previously expressed its interest in a new international bridge and secure rail corridor generally along the TxDOT East Loop Bypass Corridor to remove international through-traffic from downtown Laredo and Nuevo Laredo, while retaining rail connections to the three vital rail yards: Union Pacific's Port Laredo, the Tex Mex Laredo Yard, and KCS de Medxico’s Sanchez Yard.
KCS said its plan will make the existing Tex-Mex right-of-way through Laredo and the KCSM right-of-way through Nuevo Laredo available for other public purposes--"like a possible commuter rail corridor for daily commuters between the U. S. and Mexico." KCS said that in June it signed a memorandum of understanding with the State of Tamaulipis and the City of Nuevo Laredo to work together on the project.
Credit Suisse moves BNSF to "neutral"The stock of BNSF, the favorite railroad of many investors, including Warren Buffett, has been downgraded to "neutral" by Credit Suisse analysts "in light of current valuation and the railroad's muted near-term earnings outlook."
A research report yesterday noted that the stock has increased more than 17% year to date and expressed concern "about the company’s prospects for meaningful margin expansion in light of significant long-term fixed headwinds and sustained volume increases."
"While our long term secular view on both BNI [the stock symbol] and the industry remain intact, we believe that BNI may have already reached what could be a near-to-intermediate term peak. Indeed, management's flat year-over-year EPS guidance for 4Q07 implies just 2% EPS growth for FY07--compared with double-digit growth expectations for both CSX and NP."
GATX reports strong income but softening marketGATX Corp. today announced third-quarter net income of $63.9 million, or $1.21 per share, compared to $43.6 million, $0.86 per share, in the 2006 period.
"Utilization of GATX Rail's North American fleet was 97.9% in the third quarter," said the company. "On a basket of common car types, lease renewal rates increased 17% over expiring rates with an average renewal term of 78 months." The company also said that year-to-date investment totaled $$425 million, including $319 million in new and used railcars and locomotives in North America and Europe.
Like many other current earnings statements, this one carries a note of caution about rail industry conditions. GATX President and CEO Brian A. Kenney said "weakness persists in a variety of freight cars and ethanol cars. Signs of a softening rail market were more widespread in the third quarter, and we are now executing in a more challenging market across our fleet. While we acre concerned about softening conditions in the rail market, we remain confident in our long-term strategy and optimistic that these conditions will provide GATX with attractive investment opportunities."
L.B. Foster earnings soar on new business and dividendA 42% surge in net sales plus incremental dividend income of $8.5 million pushed L.B. Foster’s third quarter earnings to $14.5 million, or $1.32 per share, up from $3.7 million, $0.34, in the 2006 quarter. Excluding the incremental dividend income, which was related to the company’s interest in the DM&E, earnings in this year's quarter were $0.64, exceeding the Wall Street estimate of $0.49. Sales were $135.8 million, compared to $95.5 million in the prior year quarter.
President and CEO Stan Hasselbusch said that while "Rail, Tubular, and Construction Products sales were very strong" in the third quarter, "we should note that Rail sales, as expected, were lower than the second quarter, primarily due to decreased new sales."
The company said that the incremental dividend income recorded in the third quarter came from previously unrecorded preferred stock dividends. L.B. Foster's gain on the sale of DME to Canadian Pacific Railway, approximately $122 million, will be recorded in the fourth quarter.
The price of L.B. Foster stock increased more than 9% following the earnings announcement. Since Feb. 28, the stock has doubled in price.
KCS trims 3.5 points from operating ratioKansas City Southern reported today that it brought its operating ratio down to 77.9% in the third quarter, a 3.5 point improvement. KCS posted revenue of $444.1 million in the quarter, up 6.8% from the 2006 quarter; operating income of $98.2 million, a 27% increase and a record; and net income of $42.8 million, or $0.48 per share, a 50% increase. This topped analysts' forecasts of $0.37.
"Within the context of a slower than expected economy, we are encouraged by the overall improvement in KCS's operating performance," said KCS Chairman and CEO Michael R. Haverty.
On the company's Mexican operations, Haverty had this to report: "Construction of Phase I of the Port of Lazaro Cardenas is complete, which brings the capacity to over 500,000 TEUs. Even prior to the expansion, third quarter revenue growth from Lazaro Cardenas was approximately 23%. The opening of Phase I will offer KCS customers new service options and will result in increased intermodal and carload traffic out of the port to both intra-Mexico and cross-border destinations."
Charlotte LRT to debut Nov. 24Charlotte, N.C., light rail revenue service will begin operations Saturday, Nov. 24, officials of the Charlotte Area Transit System have announced, characterizing the commencement of service as "on time." CATS Deputy Director John Muth said some minor work continues on station platforms, but major construction is "finished" on the 9.6-mile line.
The opening will occur after a vote Nov. 6 on the city's controversial transit tax, which provides a significant share of Charlotte's transit funding. CATS officials stress that regardless of the outcome of the vote, LRT will begin operations.
Railway Age conference: Passenger, freight rail interests in tuneIf there was one recurring theme at Railway Age's 14th Passenger Trains on Freight Railroads Conference, held Oct. 22-23 in Washington, D.C., it was this: Passenger rail and freight rail operators share common goals and common interests, and each understands that the health and long term growth of both are interdependent. Freight railroads are facing some tough challenges: strained capacity stemming from record volume growth, a need for public investment capital to supplement private funds, and the emergence of various interests—legislators and disaffected shippers, among others—that have banded together in an attempt to impose re-regulation and other sanctions that will ultimately cripple the industry. For their part, passenger rail interests—carrying a banner that declares, "This is one industry"—stand ready to do their part in ensuring the railroads' future.
"Amtrak's strategic focus is on development of passenger corridors," President and CEO Alex Kummant said in his keynote address. "Our goal is fast, frequent, reliable service over shorter distances," defined as up to 400 miles. To accomplish this, Amtrak is trying to leverage existing infrastructure to develop new corridor-type services. Examples he cited are California's various corridors, where train frequencies have been added (the best example being the Capitol Corridor); Pennsylvania's Keystone Corridor, where re-electrification has added frequencies; the Illinois corridors originating in Chicago, which have seen significant growth; and the Boston-Portland, Me., Downeaster, where capital investment has decreased trip time and allowed for a modest service expansion. "We can't grow corridor services if we can't provide frequent service, reliable performance, and inter-corridor, long distance, and commuter rail connections," Kummant said.
Declaring that "future corridor services will operate primarily on freight lines," Kummant--a former Union Pacific executive--said that Amtrak is "very interested in the condition of those systems. Traffic on freight railroads is growing. Capacity is growing, too—but not fast enough. The freights invest large sums in their infrastructure, but projected traffic growth will outstrip investment. Traffic increases are great news—if we have the infrastructure to handle them. Without adequate investment, we will see widespread congestion throughout the system."
Citing "episodic congestion" during the past decade in Los Angeles-originated container traffic and Texas-based chemical movements, Kummant said that such symptoms as longer actual transit times, lower speeds, and "harder, costlier" maintenance of infrastructure and equipment "are beginning to manifest themselves" on freight railroads. Such congestion, and the resulting lack of fluidity, is a real concern for Amtrak. "Congestion is not the sole cause of poor Amtrak on-time performance on freight railroads, but it's a contributing factor," Kummant said. "Passengers rate OTP highly. Up to a point, it's better to be reliable than late. Amtrak has temporarily lengthened certain schedules where there are physical impediments to achieving good OTP, in return for host railroad commitments to improve OTP while the impediments are removed--what we call 'Get Well Plans.' But lengthening schedules is not a strategy we can continue indefinitely, as it leads to higher crew and other costs, lower revenues, shorter equipment turns, and increased equipment requirements."
"System fluidity is not a railroad-only problem," Kummant stressed. "It's a transportation industry problem. The railroads have reestablished themselves as part of the national transportation economy, so the spotlight now shines on both their problems and opportunities."
Kummant called for "a national investment strategy to keep the rail system fluid. The recent AAR capacity study suggests Class I railroads will be able to generate about 70% of the capital they will need through 2035. This projection assumes no additional freight traffic diverted from highways, and also assumes no increases in intercity passenger or commuter traffic. This is a remarkable statement from the freight rail industry."
One problem: "Railroads are not rewarded by Wall Street for capital investment," Kummant noted. "Between 1996 and 2005, U.S. freight railroads invested 17.2% of revenue in recapitalization--five times the national industrial average. This is still not enough, so we need to take some bold steps. America needs significant investment in national transportation infrastructure, and capital improvements take time in the railroad industry. We shouldn't let signs of [an economic downturn] stop us, if they appear. A recession will slow growth, but won't stop it entirely. We should invest in anticipation of need--not in response to it. It will be easier to deal with the service disruptions capital improvement projects may cause during a slack period. Public-private partnerships may spur countercyclical investment."
Echoing the beliefs of many passenger rail interests, Kummant said that there are numerous opportunities for partnership. "There are limits to private capital availability," he said. "There is growing government interest for promoting rail investment as part of a genuine multi-modal transportation policy. A coalition of freight and passenger rail supporters would cross the political spectrum. Such a coalition would include chambers of commerce, environmental groups, labor, manufacturers, airlines, shippers, and the construction and real estate industries. To do this, Amtrak and the freight railroads will need a federal rail capacity policy. Congressional reauthorization of Amtrak could be part of the solution. Amtrak needs a dedicated funding source, so states and federal government must partner to establish a matching funding program for state investment in passenger rail. This proposal must come from within the industry, and we must work together."
Kummant said that such a funding program should be managed by states, in close cooperation with freight carriers and Amtrak--"a joint effort on the part of Amtrak, the freight railroads, commuter authorities, and government at all levels. Private property interests must be protected, but we must work with government to address the national mobility crisis."
Metro-North: A first in wheel truingMTA Metro-North Railroad on Nov. 8 will be demonstrating its newly commissioned tandem under-floor wheel truing lathe at its Croton-Harmon car and locomotive shops, Croton, N.Y. The lathe, a U2000-400D from Simmons Machine Tool, is said to be the only machine of its type in North America. It provides the capability of simultaneously measuring and then truing the tread of both wheelsets in a single four-axle truck to matching dimensions. Among its purported benefits are increased production and efficiency, and time savings. Railroaders interested in attending the 10:00 a.m. demonstration are asked to contact Metro-North’s Nick Leone at (212) 672-1232, or Simmons Machine Tool’s Andrew Healey at (518) 462-5431.
At the demonstration, Metro-North will be also be hosting the National Transportation Quality Consortium, described by M-N District Superintendent Janek Kozlowski as “a problem-solving think-tank.” The Consortium's purpose, he says, is “to open a dialogue among railroad industry and academia personnel about various issues with the goals of exchanging innovative ideas, standardizing practices and procedures, improving safety, bringing down costs, identifying and solving common problems, and helping members solve their own unique problems.” Founding Consortium members are Metro-North, Amtrak, Bay Area Rapid Transit, Los Angeles County Metropolitan Transportation Authority, MTA Long Island Rail Road, Massachusetts Bay Transportation Authority, New Jersey Transit, MTA New York City Transit, and Washington Metropolitan Area Transit Authority.
Norfolk Southern profit slips slightlyNorfolk Southern delivered “solid results” in the third quarter, CEO Wick Moorman said today, though revenues and earnings were down slightly from last year. The railroad’s earnings statement said that “fewer intermodal and coal shipments as well as weakness in the automotive-related and housing industries contributed to a 4% reduction in traffic volume.”
Revenues declined 2% to $2.35 billion, and net income dropped to $386 million from $416 million. This came to $0.77 per share, in line with analysts’ expectations. The operating ratio increased 1% to 71.1%.
“Softness in certain segments of the economy resulted in reduced traffic volumes, which we were substantially able to offset though pricing gains and cost control,” said Moorman. “We remain confident in the overall strength of our franchise, and we continue to take a long-term perspective as we plan new traffic corridors, improve technology, and support our workforce with the tools necessary to provide superior service.”
Wabtec posts strong earnings, raises forecastWabtec Corp. reported today that third-quarter sales increased 32% to a record $355 million and income from operations rose 12.9% to $46 million. Per-share earnings climbed to 55 cents from 35 cents, the company’s 13th consecutive quarterly increase.
“Based on its 2007 third-quarter results and outlook for the rest of the year, Wabtec now expects 2007 sales growth of 22-24% and earnings per diluted share of about $2.20,” said the company. Previous guidance anticipated sales growth of 12-18% and per-share earnings of $2.15.
Wabtec President and CEO Alfred J. Neupaver commented: “We’re focused on using our Wabtec Performance System to drive continuous operational improvements and implementing the company’s strategic growth initiatives: global and market expansion, new products, aftermarket expansion, and acquisitions.”
After record quarter, Harsco increases guidanceHarsco Corp. made an upward adjustment in its earnings guidance for the year today as it announced record results for the third quarter. The company now expects 2007 earnings from continuing operations to be in the range of $2.93-$2.97, compared to a previous range of $2.90-$2.95. “Using the mid-point of the updated guidance, this reflects an increase of approximately 33% over 2006’s diluted EPS from continuing operations of $2.21,” said the company.
For this year’s third quarter, Harsco reported income from continuing operations $70.3 million, up 30% from the third quarter last year. “Our Access Services and Minerals & Rail Technologies operating groups continue to achieve strong year-over-year performance,” and “these groups should continue to perform well in the coming year,” said Harsco Chairman and CEO Derek C. Hathaway.
Talgos back on lineThe last of the Talgo-manufactured railcars used in the operation of Amtrak Cascades service between Eugene, Ore., and Bellingham, Wash., returned to service on Oct. 21 after undergoing repairs at a maintenance facility in Seattle to repair small cracks discovered in welds of the upper portion of the carbody suspension support system on several cars. In early August, WSDOT, Amtrak, and Talgo agreed to remove the trains from service as a precaution.
“We are pleased that the trainsets were repaired and returned to service in time for the upcoming holiday travel season,” said Amtrak District Superintendent Kurt Laird. “Amtrak Cascades passengers will once again be able to enjoy the many onboard amenities they’ve grown accustomed to on this popular service.” Washington State Secretary of Transportation Paula Hammond added that the trainsets “were repaired earlier than originally anticipated and train travelers will be delighted to get back to the faster train schedules.”
Moody's rates railroad outlook "stable"Moody's Investors Service characterizes the railroad ratings outlook as "stable." "Demand for railroad capacity is at an inflection point as the U. S. economic outlook weakens, and it remains to be seen how well pricing will hold up in a more challenging economic environment," said Moody’s Senior Vice President Robert Janokwitz. He expects railroads to experience a 3% drop in carload traffic in 2007 with the trend continuing into 2008. He also suggests that pressure from customers will cause railroads to increase capital spending on improvements.
Strong pricing helps drive BN earnings to a recordBNSF Railway today reported record third-quarter earnings of $1.48 per diluted share, 11% higher than in the same period last year and well above the Wall Street consensus forecast of $1.37. The railroad's operating ratio fell to 74.6% from 75.9% in the 2006 quarter.
"BNSF achieved record quarterly revenues, operating income and earnings as a result of our diverse portfolio of businesses, strong cost control, and improved yields," said Chairman, President, and CEO Matthew K. Rose. "We were able to produce record earnings and quarterly operating income that exceeded $1 billion for the first time in our company’s history despite continued economic softness in our Consumer and our Industrial Products business groups. Although we have concerns near-term about the economy, housing markets, high fuel prices, and general consumer softness, we continue to be optimistic about the long-term future of BNSF."
Third-quarter freight revenue increased 4% to $3.95 billion, primarily due to "strong yields as well as volume growth in our Agricultural Products business," where revenue was up 10% on an 8% volume increase. Operating expenses increased by $50 million in the third quarter as a 4% reduction in compensation and benefits was more than offset by a 7% increase in fuel prices, said BNSF.
CN operating ratio rises as earnings dropCN's operating ratio increased by 3.5 points to 62% in the third quartet as operating income dropped 9% to C$768 million. Net income of C$485 million, including a C$14 million benefit from favorable tax adjustments, was down 1% from the same quarter of 2006. Revenue was essentially flat at C$2,023.
CN President and CEO E. Hunter Harrison called the third-quarter results a solid achievement given the challenges faced during the period. These included a 13% drop in forest products revenue, the railroad's largest commodity group, plus the impact of a stronger Canadian dollar and lower fuel surcharge revenues.
"In the near term," said Harrison, "CN anticipates continued weak market conditions in a number of segments, particularly forest products and construction materials. In addition we will continue to confront the financial impact of the Canadian dollar/U.S. dollar exchange rates and its effect on our customers. However, as a result of anticipated gains from the closing of our Central Station Complex and English Walsh and Scottish Railway transactions during the fourth quarter, CN expects to achieve full-year 2007 diluted-earnings per share growth of about 5%."
Alstom wins Tangier-Casablanca contractHigh speed rail is a business conducted at the highest levels in countries outside the U. S. This was demonstrated again today with the announcement in Paris that "during the visit of the President of the French Republic, a frame agreement between the Kingdom of Morocco and France" was reached for the supply a 930-mile very high speed rail system between Tangier and Casablanca.
The 200-km (125-mile) Tangier-Kenitra section will form the first phase and is expected to open in 2013. When the entire system is completed in 2035, it will be capable of carrying 120 million travelers annually on two routes: the Tangier-Marrakech-Agadir "link" and the Rabat-Fez-Oujda "Maghreb link."
Alstom will provide an initial 18 duplex trainsets.
In a separate contract valued at $105 million, Alstom will provide Moroccan National Railways with 20 Prima electric locomotives to be used in freight operations starting in 2010.
Detroit looks for a new mass transit master planThe Detroit Area's Regional Transportation Coordinating Council expects to receive a proposal next year for a new master plan incorporating commuter rail, light rail, and bus rapid transit segments, as well as conventional bus routes. The plan is being developed under the direction of John Hertel, who brings experience in state and local government to a task that he calls "very complicated."
In a recent progress report to Oakland County commissioners, he mentioned two relevant statistics: (1) Among the nation's 20 largest metropolitan areas, Detroit alone has no coordinated transit system; and (2) among the country's top 100 cities, Detroit has the most diffused job concentration.
An earlier effort to address the issue was aborted last year when a state appeals court ruled that the Detroit Area Regional Transit Authority had been illegally established. There remains, however, enough federal funding to continue planning.
Genesee & Wyoming to acquire Maryland MidlandUnder an agreement announced today, Genesee & Wyoming (GWI) will pay $29.1 million in cash for 87.4% of Maryland Midland Railway, a 63-mile short line operating between Glyndon and Highfield, Md. Lehigh Cement, Maryland Midland's biggest customer and largest shareholder, will retain its 12.6% ownership.
"The Maryland Midland is an excellent short line and a good geographic fit with our York (Pa.) operations," said GWI CEO John C. Hellmann. "The Maryland Midland's customer base is highly competitive in the U.S. concrete and aggregates market, and we look forward to providing quality customer service for the long term."
Amtrak headed for best year in its historyAmtrak says that fiscal Year 2007 will see the railroad deliver "its highest ridership and ticket revenues ever," thanks mainly to "Acela's service improvements, prudent advertising investments, and sustained Regional growth driven by a good value proposition." Amtrak is projecting a total of 25.8 million trips in FY07 and ticket revenue of $1.52 billion, topping FY06 ridership by 11% and exceeding the revenue budget by $50 million.
This forecast comes in Amtrak’s latest monthly performance report, which says improved on-time train performance "coupled with weakened air service quality and reliability" helped boost its August 2007 ridership to 2.4 million trips, 10% over August 2006 and 7% over budget.
"Ticket revenues of $140 million were +13% vs. FY 06 and +7% vs. budget due mostly to continued strength in the North East corridor," said Amtrak. "The market remains favorable to Acela's consistent, reliable service, faster trip times, additional departures between New York and Boston, and strong on-time performance (88% FY07 through August)."
Northeast Corridor regional ridership was up 8% over last year and 12% over budget. In other corridors, August ridership and ticket revenue on average were up 9% and 12%, respectively.
Long-distance ridership this August was 7% ahead of last year and 12% over budget. Ticket revenues were up 6% and 4%, respectively. Among long-distance trains, only the Texas Eagle and the Empire Builder fell short of year-ago ridership.
Amtrak noted that the FY07 budget assumed fare increases in April for most long distance trains, but "these fare increases were not implemented because of current ridership trends which suggest that another fare increase on most LD trains would not be tolerated by the market."
Sprinter plans split-train morning serviceMorning riders in north San Diego County, Calif., will have better transfer connections between buses and Sprinter diesel light rail transit (DLRT) under a plan in which two-car consists will split at Vista Transit Center, roughly the midpoint of the 22-mile line linking Oceanside and Escondido. The split will offer eastbound service to Escondido, the eastern terminus, one hour earlier than originally planned.
"We will send one-half on to Oceanside and the other half will turn around. We will save about an hour and get back into Escondido at 5 a.m. instead of 6 a.m.," said Tom Kelleher, a spokesman for the North County Transit District. The schedule change must still be finalized, but has been advanced after public input objected to the initial schedule released in May.
Such "split/merge" rail operations are a relative rarity among current U.S. rail operations, although the nation's rail and transit operators historically has employed the approach.
Kelleher said the Sprinter's 15 stations each have train platforms large enough to accommodate two linked vehicles, adding that the trains can be easily separated once at a station. Stefan Marks, manager of service development at the district, credited transit planner Kurt Luhrsen for the idea. "It will take an extra couple of minutes to uncouple the trains in Vista, but we think it will work," Marks said.
The 22-mile Sprinter DLRT route is scheduled to debut late this year. It is the second DLRT operation to commence in the United States, following New Jersey Transit's RiverLINE linking Camden and Trenton, N.J., which opened in 2004.
Paul Weyrich: National security requires rail networkConservative activist Paul Weyrich has proposed a National Defense Public Transportation Act that would create a "network of paratransit and fixed-route bus services, along with new electrified streetcar and light rail lines, serving virtually every destination in America, connected at multiple points to Amtrak’s (and potentially other) intercity passenger trains."
"These intercity passenger trains would provide the long-haul part of the journey, while the buses and local electric trains performed the collector/distributor function," said Weyrich in a paper co-authored by William S. Lind at the Free Congress Research and Education Foundation, which Weyrich heads. "Both rail and bus services could be increased as necessary, in response to greater demand. Fares set on a cost-per-mile basis would keep tickets affordable to ordinary people. It would again become possible to travel from any point in America to any other point, without using a car."
To pay for the national surface transportation network, two funding methods are proposed:
"Put all transportation tax and user fee payments in one transportation trust find to be allocated among all modes. National security considerations should be a primary factor in deciding the allocations.
"Because both the Pentagon's and the department of Homeland Security's budgets are driven to a significant degree by our dependence on foreign oil and our resulting involvement in the Middle East, we suggest that the National Defense Public Transportation Act receive annual funding equal to 5% of the combined DOD and DHS budgets. This funding, like DOD's and DHS's, would come from general revenues, as is appropriate for national security measures."
The study was underwritten by the Business Members of the American Public Transportation Association.
Santa Ana considers streetcar loopCalifornia holds the most U.S. light rail systems (five) of any state, but Santa Ana may become the first city in the Golden State to apply modern streetcars to its downtown core. The Orange County municipality
is studying plans for a $100 million line, according to Public Works Director James Ross; it would pay for the line with money made available through the Orange County Transportation Authority.
Santa Ana was involved in an LRT proposal that fell apart due to widespread opposition among citizens and Orange County officials alike. But four city officials plan a trip to Portland, Ore., considered by many a model of success for U.S. streetcar efforts -- to evaluate the mode.
"It's something that is really going to define who we are," Councilman Carlos Bustamante said during a council study session this week. "It's an exciting concept. Let's get it done."
Houston Metro backs LRT for five linesIn a move surprising some, Houston's Metropolitan Transit Authority board Thursday gave its approval to pursue light rail transit for five proposed lines, instead of splitting efforts between LRT and Bus Rapid Transit.
The MTA board, as expected, also voted to plan the proposed University LRT line on a Richmond-Wheeler route, a choice that has generated some controversy and outright opposition.
"We now feel we can pass federal muster [to obtain 50% FTA funding] by going to light rail on all five lines at once," board chairman David Wolff said. "We can't help but believe that people will be thrilled by it."
Houston had pondered a "Bus Rapid Transit convertible" plan, building infrastructure for eventual LRT conversion while first applying buses to develop various routes.
Metro President and CEO Frank Wilson said the change could add about $600 million to the five lines' cost, which was the estimated cost of converting from BRT. But the total would remain at the $2 billion previously cited, which was based on the rail assumption, he said. Wilson also said the construction timeline, with all five carrying passengers by late 2012, should not change.
Railcar orders fall, while backlog narrowsRailcar orders declined 30% in the third quarter from second-quarter activity, dropping to 8,121 from 11,595, the American Railway Car Institute Committee of the Railway Supply Institute reported. Orders fell 62% from the year-ago quarter level of 21,466 units.
Third-quarter car deliveries of 15,032 units declined less dramatically, down 7% from the second quarter's 16,143 units and off 21% from 19,008 units in the 2006 third quarter.
The Committee notes that the railcar backlog of 67,000 units for the third quarter was less than the 73,911 cars recorded in the second quarter.
"Ethanol-related demand continues to drive industry orders," an Oct. 17 Wachovia Capital Markets research report stated, categorizing the backlog as "healthy." "Orders for these car types accounted for just over 50% of the railcar orders" in the third quarter, and the backlog "gives us confidence that demand remains strong for certain railcar types for at least the next 12 months," Wachovia's report said.
Hoffa hails union victory on rail safetyThe U.S House of Representatives yesterday passed the Railroad Safety Improvement Act, H. R. 2095, by a vote of 377 to 38. Teamsters General President Jim Hoffa called it "a major victory for our rail members, the engineers, trainmen, and maintenance of way workers who ensure that this nation's rail system runs safely." Fred Simpson, president of the Brotherhood of Maintenance of Way Employees Division of the Teamsters Rail Conference, commented: "We've been fighting Norfolk Southern for years about eliminating their disgusting camp cars and finally Congress is backing us up."
The act also sets new limits for limbo time for locomotive engineers and trainmen. "This is a step in the right direction to impede the rail carriers' abuse of our much needed rest time," said Don Hahs, president of the Brotherhood of Locomotive Engineers and Trainmen.
Meanwhile, the reaction of BLET's rival in operating employee representation, the United Transportation Union, showed that the two were right in step on this issue. Said UTU International President Paul Thompson: "Railroads have been thumbing their noses at public safety, national security, and their workers' well-being, and now a bi-partisan super majority in the House has shoved that arrogant thumb back up the railroads' egos."
A major provision of the legislation that was opposed by railroads would set a deadline of 2014 for installation of positive train control; railroads say they would rather move at their own pace toward this important but costly milestone rather than one established by Congress. Complicated issues remain to be resolved, they point out, including that of interoperability, which a railroad working group is currently addressing.
In record quarter, UP cuts operating ratioUnion Pacific reported today that it set new quarterly records in both volume and revenue in the three-month period ended Sept. 30 and cut its operating ratio by an impressive 5.1 points to 76%. Operating revenue was up 5% to $4.2 billion, operating income increased 34% to $1.0 billion, and net income rose to $532 million from $420 million in the corresponding quarter last year. This came to $2.00 per diluted share, easily beating the Wall Street consensus estimate of $1.77.
"I'm particularly pleased that our operating initiatives, along with the capital investments we are making for growth and efficiency, enabled us to improve customer service in the face of record volume," said UP Chairman and CEO Jim Young. He sounded a note of caution for the immediate future: "Near-term we remain cautious on the economy and see challenges from rapidly increasing diesel-fuel prices. However, we are confident regarding Union Pacific's opportunities to further improve returns through profitable revenue growth and greater productivity. I believe the future is bright because of the men and women of Union Pacific who are dedicated to working safely to improve customer service and shareholder value."
CBTC aids service enhancements for MTA Canarsie LineMTA New York City Transit's installation of Communications Based Train Control (CBTC) on its Canarsie L Line, linking Manhattan with Brooklyn, will allow it to reduce weekday headways from 4 minutes to 3.5 minutes during the morning rush, as well as add trains during the rush-hour "shoulders" and on weekends. MTA NYC Transit also will increase service on its 7 Flushing Line.
Ridership has increased by 48% on the L since 1998 and 26% on the 7 since 1998. "The historic growth on these lines illustrates their vital importance to the communities they serve, especially because they serve areas with little or no other mass transit options," said MTA Executive Director and CEO Elliot G. Sander.
"The Canarsie Line has seen a substantial growth in ridership since 1998, but the old signal system prevented us from adding the amount of service necessary to meet demand," said MTA NYC Transit President Howard H. Roberts, Jr. "With the addition of more equipment on the line in the form of new R160 cars, and the completion of CBTC installation, we can finally provide relief for our riders—especially in Williamsburg and Greenpoint, where ridership has grown the most."
London Underground renews Alstom maintenance contractTube Lines, the company commissioned by railway operator London Underground to rebuild 40% of the London metro system, has renewed its contract with Alstom Transport for the maintenance of the Jubilee Line fleet, in a deal worth 117 million euros ($167 million).
Alstom Transport has handled the maintenance of this fleet since 1996. Under the renewed contract, Alstom will maintain the fleet until 2017. The Jubilee Line fleet currently consists of 63 trainsets manufactured by Alstom.
In a statement, Alstom said the line has seen traffic frequency increase significantly in recent years, due to the development of the East London districts (in particular the business district of Canary Wharf). Traffic is expected to continue to grow as the line will serve the facilities for the 2012 Olympic Games.
Port Authority eyes funds for New York Cross-Harbor freight tunnel The Port Authority of New York & New Jersey is expected Thursday to endorse a freight rail tunnel under New York Harbor, connecting Brooklyn with Jersey City, N.J., and to seek $100 million in federal funding to advance the project, according to The New York Times. The tunnel is projected to cost at least $7 billion.
Should the PA commit to the project, it would mark a reversal of its opposition to the proposal (and rejection of the funds) two years ago. Ironically, the PA was created in 1921 "to administer the common harbor interests of New York and New Jersey," including freight rail transportation. Backers of the project in recent years have been led by Rep. Jerrold Nadler, D-N.Y.
"It makes sense for us to look at the feasibility of the tunnel and its impacts on quality of life and other issues, and at the same time, take advantage of some significant federal funds that are available," said Stephen Sigmund, a PA spokesman.
PATH commits $500 million to CBTC upgradePort Authority of New York & New Jersey officials today announced $500 million for the overhaul of PATH's signal system that could increase passenger capacity increase by 20% on the bistate system.
As reported in the April 2007 edition of Railway Age, PATH will install communications-based train control technology (CBTC) to increase throughput and passenger flow through the system. Installation is scheduled to begin next year, with completion in 2014.
PATH's current fixed-block signal equipment limits the ability to increase capacity, and many of the system's components are no longer produced or supported, have exceeded their expected useful lifespan, and/or have become increasingly difficult to repair or replace, officials said.
Three suppliers -- Siemens, Thales, and Bombardier -- are competing for the contract, but PA officials today made no mention of any company chosen to supply the CBTC equipment.
New PA-5 cars from Kawasaki will be phased into the system beginning next year and continuing through 2011. The PA board previously approved $809 million to replace PATH's entire 340-car fleet; today's announcement bolsters the total funding package to $1.3 billion.
PATH currently handles about 227,000 riders per day, officials said.
WMATA derailment blamed on rough wheelThe National Transportation Safety Board (NTSB) said it has determined that a Washington Metrorail derailment on Jan. 7 was caused by wheel climb "initiated by rough wheel surface created during maintenance." The fifth car on a six-car Green Line train derailed as it went through a standard No. 8 turnout near the Mt. Vernon Square station. Twenty-three of the 80 passengers aboard the train were treated at a hospital and released.
"The accident was also caused by the lack of quality control measures to ensure that wheel surfaces were smoothed during the maintenance procedure, the lack of a guard rail on the No. 8 turnout, and Washington Metropolitan Area Transit Authority's failure to have an effective process to implement safety improvements identified following similar accidents and related research projects," said NTSB in a report released today.
"Findings from this accident investigation have identified several items that are common to previous derailments that WMATA has experienced," the Safety Board pointed out. "The previous derailments involved empty trains traveling at low speeds while traversing No. 8 turnouts or as the train maneuvered through a curve with a radius of less than 500 feet. These derailments also involved some cars that had recently been cycled through a WMATA maintenance facility to undergo a wheel-truing process."
The board recommended that WMATA implement procedures "to ensure accurate wheel truing, including the regular alignment and indexing of cutting heads on wheel milling machines, and establish a process, including a single point of responsibility, for timely evaluation and action on proposed safety improvements identified in previous investigations and research projects."
CSX reports "strong" third-quarter earningsCSX Corp. reported third-quarter net earnings of $407 million, or 91 cents per share, including 24 cents per share from discontinued operations. Operating income rose 16% on a year-over-year basis, while the company notched an operating ratio of 78%, which it noted was "a 240 basis point improvement on a comparable basis from the same period last year."
In the same quarter last year, the company reported earnings of $328 million, or 71 cents per share, including 17 cents per share from insurance gains and the resolution of certain tax matters. On a comparable basis, excluding these items, earnings per share from continuing operations increased 24% on a year-over-year basis.
"Our core earning power continues to improve in a more challenging transportation environment," said CEO Michael Ward. "The CSX team delivered exceptional levels of safety and service for our customers and excellent third quarter results that build on the superior value we have delivered for our shareholders over the last three years."
Third-quarter revenue was $2.5 billion, a 3% increase over the comparable 2006 quarter, driven by an 8% improvement in revenue per unit that offset a 4% decline in volume.
At noon, shares of CSX were up 5.5%.
A. Stucki expands engineering departmentA. Stucki Co. has created two new positions in chemical and mechanical engineering within its engineering department. The new chemical engineer will work primarily with the company’s elastomer product line, developing and improving current products as well as creating new products. The new mechanical engineer will focus on the casting, forging, and design aspects of A. Stucki product lines. The company did not divulge the names of its two new engineers due to "strategic reasons."
A. Stucki Vice President-Engineering Jim Kennedy said adding two engineering positions "is a reflection of the company’s continual focus on the future and commitment to providing customers with design, engineering, and technical support expertise for all applications. The greatest immediate impact will be seen in cost reduction. By expanding our current product lines and designing in a more cost effective manner, we are continuing to grow while still maintaining the quality and exceptional customer support our clients have grown to expect."
Investment fund's ire at CSX includes capital programDemands by the Children's Investment Master Fund for management changes and improved performance at CSX Corp. could pose a risk to the railroad's annual capital expenditures. The fund holds 4.1% of CSX stock, or about 17.8 million shares.
The fund called for separating the roles of chairman and chief executive officer and adding new directors with railroad experience, and for CSX to justify its capital spending program.
CSX estimates its capital expenditures for 2007 will total about $1.7 billion, up from roughly $1.1 billion in 2005. The company has said it is "committed to capital levels of $1.6 billion to $1.7 billion annually through 2010."
But in a letter addressed to the CSX board of directors, the fund challenges the railroad's overall business competence. "It is our view that CSX management does not fully understand the economics of the business, is cavalier about potential risks, is undisciplined about spending, is unrealistic about future prospects, is complacent about operational under-performance and unnecessarily adversarial towards labor, shippers and shareholders," the fund wrote.
The fund also wants the Jacksonville-based company to allow shareholders to call special meetings and align management compensation with shareholder interests.
Berkshire reduces UP and NS holdingsBerkshire Hathaway's announcement earlier this year that it was investing heavily in the shares of three railroads was widely viewed as a vote of confidence in the industry's future. It has now been disclosed that in this year's second quarter, Berkshire cut its holdings in Union Pacific from 10.5 million shares to 4.1 million and reduced its stake in Norfolk Southern from nearly 6.4 million to 3.7 million shares. Following its customary practice, Berkshire gave no reasons for its actions which it revealed in a filing with the Securities and Exchange Commission yesterday. There was no mention in the filing of Berkshire’s 17.2% ownership, around 60.8 million shares, of BNSF Railway.
Cincinnati to unveil downtown streetcar planThe Cincinnati City Council's economic development committee today is unveiling a fiscal plan for a four-mile, $100 million downtown streetcar line. Backers, including local political officials and developers, argue that the line would add $2 billion in redevelopment revenue to the Queen City's economy.
The plan reportedly will rely on bonds that will be repaid with tax income generated by new development along the streetcar line.
The proposal seeks to return vacant buildings to the tax rolls, including conversion of some current downtown parking lots, by creating a transit-oriented neighborhood in Over-the-Rhine, where downtown workers can live without owning cars, and where visitors can leave their cars in outlying lots and ride streetcars to riverfront events. Later extensions would add service to the University of Cincinnati and nearby hospitals.
Advocates cite the experience of Portland, Ore., as the model for the Cincinnati streetcar proposal. Officials say Portland has added more than 7,200 new homes and 4.6 million square feet of new commercial development along its 7.2-mile-long streetcar line since it opened in 2001.
Voters in Hamilton County previously rejected a $2.3 billion light rail proposal.
VIA funding package counters inflation's effects Canada's C$691.9 million, five-year funding package for VIA Rail Canada Inc., announced Friday, is designed to counter the railroad's loss of purchasing power during the past decade due to inflation.
The package includes C$516 million in capital funds over a five-year period to address fleet renewal, including refurbishment of F40 locomotives and LRC passenger cars, as well as strategic infrastructure improvements to eliminate rail bottlenecks. The remaining C$175.9 million, also over five years, will go toward VIA Rail's operating costs.
"While VIA Rail's annual funding level was frozen in 1998, the effects of inflation over the past decade have had an impact on the purchasing power of this Crown corporation and its ability to maintain its aging fleet of locomotives and cars," the government said in a statement. "Once the capital investment program is complete, VIA will be able to operate without this additional funding."
Canada reaches accord on federal grain hopper fleetCanada's Ministry of Transport and Ministry of Agriculture announced Friday an agreement between the government and both Canadian Pacific and Canadian National for the operation, maintenance, and refurbishment of approximately 11,900 grain hopper cars.
Under the agreement, Canada will continue to provide the hopper cars to the rail companies at no cost for the transportation of regulated grain. It also will continue a taxpayer benefit of up to C$15 million per year, derived from railway payments for using the cars for purposes other than regulated grain movement. Finally, Canada will reburbish the fleet to ensure good operating condition, including replacement of cars as older vehicles are retired from service.
In May 2006, Canada committed to retaining ownership of the grain hopper car fleet, after earlier exploring options for selling the fleet.
LA mayor backs LRT access to LA-Ontario airportLos Angeles Mayor Antonio Villaraigosa reportedly now favors extending the Gold Line east from its current terminus in Pasadena to access Los Angeles-Ontario International airport, as one way to relieve congestion at Los Angeles International Airport.
Transportation activists in the San Gabriel Valley and San Bernardino County are hoping to attract state funds to finance such an extension, roughly 35 miles in length. The line would use ex-Santa Fe right-of-way.
Villaraigosa had expressed a preference to extend the Wilshire Boulevard subway west through the Fairfax District, Beverly Hills and West L.A. to Santa Monica.
Locomotive orders help propel GE's third quarterGeneral Electric Co. today reported a 14% increase in third-quarter earnings, in line with expectations, as the Fairfield, Conn.-based company cited robust performance in its energy and transportation businesses, particularly in overseas markets.
Chairman and chief executive Jeffrey R. Immelt said that profit grew 12% in the infrastructure segment, led by a strong performance in the oil and gas, transportation, and energy businesses. That included strong sales globally of aircraft engines, gas turbines and locomotives, the company said.
U.S. freight traffic mixed Freight traffic on U.S. railroads was mixed compared with the same week last year during the week ended October 6, the Association of American Railroads (AAR) reported Thursday. Total volume was estimated at 35.5 billion ton-miles, up 1.1% from the comparable week last year.
Carload freight totaled 336,315 cars, down 0.3% from last year, with loadings up 2.0% in the West but down 3.2% in the East. A total of 242,871 trailers and containers were loaded during the week, down 3.2% from the comparable week last year. Container volume was down 2.0%, while trailer loadings were off 7.0% from last year.
Among individual carload commodities, metallic ores were up 16.5% from last year. nonmetallic minerals gained 10.4%, and grain rose 5.3%. Lumber and wood products fell 16.1%, coke declined 15.9%, and primary forest products fell 13.6 percent.
On Canadian railroads, carload traffic totaled 80,336 cars, down 0.1% from last year, while intermodal volume totaled 52,682 trailers or containers, up 6.1% from last year.
Combined cumulative volume for the first 40 weeks of 2007 on U.S. and Canadian railroads totaled 16,163,859 carloads, down 2.7 percent from last year, and 11,128,947 trailers and containers, down 1.2 percent from last year.
Carload feight on railroad Kansas City Southern de Mexico (KCSM) during the week ended October 6 totaled 11,619 cars, down 7.4% from last year. KCSM reported intermodal volume of 5,655 trailers or containers up 37.8%.
MTA receives five bids for two rail yardsNew York's Metropolitan Transportation Authority (MTA) said late Thursday it had received five development proposals by deadline for its Eastern and Western Rail Yards sites. The request for proposals, issued last July, calls for development of the air space over the two development sites that comprise the MTA's John D. Caemmerer Rail Yard on the west side of Manhattan, used by the Long Island Rail Road.
MTA said the five submissions were from:
1. Extell Development Co.;
2. Brookfield Properties Developer LLC;
3. The Related Companies;
4. TS West Side Holding, LLC (a Joint Venture of Tishman Speyer and Morgan Stanley); and
5. Hudson Center East LLC and Hudson Center West LLC (a Joint Venture of Vornado Realty Trust and The Durst Organization, Inc.).
All five bidders submitted proposals for both the Eastern and Western Yards. Proposals will now be evaluated by MTA staff and then reviewed by a selection committee with a majority of its members appointed by MTA and with two representatives from Hudson Yards Development Corp. The recommended proposal(s) for each yard will then go to the MTA Board for consideration in the first quarter of 2008.
Information on the design proposals will be made available for public review and comment prior to the submission of the Selection Committee's recommendations to the Board.
Maryland supporters rally for Purple Line Now!The former Coalition to Build the Inner Purple Line made its revamped debut Wednesday as Purple Line Now! at a fundraiser in South Silver Spring, Md. The event reportedly raised $30,000, to be used to advocate the light rail line linking Bethesda and New Carrollton, while also forming a circumferential link with the Washington, D.C. metro system, connecting at four transfer locations.
Supporters included local residents, federal, state, and Montgomery County elected officials, developers, and even a representative of the American Automobile Association.
Backers note the Purple Line would cost $600 million to build, funded by federal sources and Maryland's Transportation Trust Fund. "The big issue is will everyone in this room support a gas tax increase to get this money," said Montgomery County Councilwoman Nancy Floreen (D-At Large). But other transit needs throughout the state, including Baltimore, have kept the Purple Line from becoming a priority.
Queensland Rail orders 25 more Siemens locomotivesAustralia's Queensland Rail Wednesday chose Siemens Transportation Systems to supply 25 Class 3800 heavy-haul electric locomotives, at a cost of about $154 million. Delivery will begin at the end of 2009, spanning about one year.
The contract is an extension to an existing order placed last year for 20 new locomotives due to be delivered and placed into service in Queensland during 2008. It is also in addition to the contract with QR to upgrade 63 Class 3700 locomotives.
Siemens' plant in Munich-Allach, Germany, will handle the order, which the railroad will employ to expand its locomotive fleet in the Goonyella Coal Systems, allowing Queensland Rail to provide increased haulage capacity through increased payload of each train, to improve cycle times and lower operating costs.
ECP in revenue service on NSNorfolk Southern today achieved a milestone in U.S. railroading, operating the first revenue-service freight train equipped exclusively with ECP (electronically controlled pneumatic) brakes. The train, consisting of three new General Electric locomotives and 115 new FreightCar America hybrid (aluminum/stainless steel) coal gondolas equipped with New York Air Brake’s EP-60 ECP technology, is now used in regular service between coal mines in southwestern Pennsylvania and the Keystone Generating Station in Shelocta, Pa. The ECP-equipped train is operating under a Federal Railroad Administration waiver.
Over the next several months, NS will equip 30 GE locomotives, 210 “quick-drop” FCA coal hoppers (capable of rapidly discharging their contents from bottom hopper doors), and 230 FCA hybrid gondolas with ECP brakes for use in dedicated coal train service.
ECP brakes have the potential to reduce train stopping distances by up to 60% over conventional air brakes. ECP utilizes electronic signals transmitted car-to-car by a wireline, activating all brake valves simultaneously to apply and release brakes throughout the length of the train, and maintaining constant pressure in the train’s air line. The ECP method contrasts sharply with conventional pneumatic braking, in which a change in train line air pressure triggers the brake valves to apply or release brakes. Brake propagation throughout a train can take as much as several seconds, depending upon train length, with conventional technology.
ECP brakes have been the subject of intensive research and testing since the early 1990s but because of technical and institutional reasons have been slow in implementation among North American railroads. Last year, the FRA, with consultant Booz Allen, concluded an exhaustive study outlining the potential safety and business benefits as well as the projected costs of implementing ECP throughout the railroad network, beginning with unit coal trains and concluding (in roughly 10-15 years’ time) with cars in general interchange service. The study, and a subsequent Notice of Proposed Rulemaking, effectively jump-started ECP. The proposed rule is based on the provisions of the waiver and is “designed to further promote the deployment of ECP brakes on more trains,” FRA said.
The FRA has authorized NS and BNSF Railway to equip and test certain locomotives and freight cars with ECP brakes for their potential to shorten stopping distances and improve railroad and public safety, network capacity and efficiency, asset utilization, fuel savings, and equipment maintenance. The FRA waiver allows NS and BNSF trains equipped with ECP brakes to travel up to 3,500 miles—more than double the current maximum distance—with fewer stops for routine brake inspections than currently required by federal regulations. “Since ECP brake technology provides continual electronic self-diagnostic system checks that inform train crews when maintenance is required, the need to stop for routine brake tests becomes unnecessary,” FRA said. “An intermodal container train equipped with ECP brakes originating from a West Coast port could operate all the way to Chicago without stopping, except for refueling and crew changes. Similarly, ECP brake-equipped coal trains are expected to make quicker deliveries from western coal fields to eastern and southern power plants because stopping for routine brake tests would be unnecessary.”
FRA said that, in the interests of safety, the waiver and proposed rule include several conditions, among them requirements that railroads clearly define a process for rectifying brake problems discovered en route, ensure that ECP brake inspections are performed only by qualified mechanical inspectors, and provide appropriate training to train crews.
FRA said BNSF also received waiver approval and is expected to operate ECP trains before year-end 2007.
Knorr-Bremse opens Suzhou plantMunich, Germany-based Knorr-Bremse AG today officially began operation of its new plant in Suzhou, China, about 75 miles northwest of Shanghai. About 600 employees will produce and sell braking systems for rail vehicles at the new site, which aims to expand the company's position in the Chinese market and establish it as a Chinese manufacturer.
Knorr-Bremse Rail Vehicle Systems already has received orders from China totaling roughly $185 million, the company said. It also notes exports from China are increasingly important, with Knorr-Bremse supplying equipment to Chinese vehicle manufacturers exporting to Pakistan, Bangladesh, Nigeria, Iran, Myanmar and Thailand.
"Today, Knorr-Bremse is the leading manufacturer of braking systems for local and state-of-the-art mainline trains in China," said Heinz Hermann Thiele, company owner and chairman of the Supervisory Board, at the inauguration ceremony, which was attended by representatives of the Chinese Railway Ministry and local authorities.
Genesee & Wyoming volume suffers in third quarterGenesee & Wyoming Inc. today reported traffic declines during the third quarter of 2007, including September.
The company attributed the decrease to declines in farm & food products traffic, blamed on the Australian drought, pulp & paper products traffic, due to general market weakness, and other commodity traffic, affected by discontinuation of haulage traffic.
The short line's third-quarter volume totaled 206,199 carloads, down 8.7% or 19,679 carloads, compared with the third quarter of 2006. September traffic of 63,947 carloads declined by 12.7%, or 9,332 carloads, compared with September 2006.
G&W's Mexican operations are being terminated due to damage caused by Hurricane Stan in October 2005, resulting in zero carloads during September 2007 compared with 2,340 carloads in September 2006. Mexican operations for the third quarter generated 1,339 carloads, down from 7,717 carloads comparable third quarter last year.
Excluding carloads from G&W's Mexican operations, traffic in the third quarter of 2007 decreased by 13,301 carloads, or 6.1% percent, compared with the third quarter of 2006; traffic in September 2007 decreased by 6,992 carloads, or 9.9%, compared with September 2006.
Study cites MARTA as economic driverAtlanta's MARTA system contributes significantly to creating jobs and economic growth in the state and Atlanta region, according to a new study by the University of Georgia’s Carl Vinson Institute of Government.
Using the Georgia Economic Modeling System, the Institute found that the Metropolitan Atlanta Rapid Transit Authority is a major economic driver in the region and its impact is expected to increase considerably during the next 50 years.
The 169-page study looked at the net economic impact of the region’s investment into MARTA employment, infrastructure, and operation over the state with a focus on the 28 counties of the Atlanta Metropolitan Statistical Area (MSA). Among the study's findings:
MARTA contributed to an estimated $2.0 billion in the region and $2.1 billion in the state in total output of goods and services in 2001. MARTA's contribution to total output is estimated to grow to $10.3 billion in the region and $10.5 billion in the state by 2055, more than double the total forecasted output of the forestry and timber industry in the state.
MARTA helped to create approximately 19,600 jobs in the region in 2001, which equates to slightly more than the size of the regional food manufacturing industry.
The transit authority is expected to create an estimated 45,500 jobs in the region by 2055, the equivalent of the forecasted size of the region’s hotel industry.
Residents in the region receive a direct economic benefit that is significantly greater than the sales tax payments made to fund the system. Per capita personal income was $52 greater than it would have been. That impact is expected to be $237 by 2055.
"MARTA has a far reaching impact on the economy of this state by making it possible for hundreds of thousands of people to get to work each and every day," said MARTA General Manager Richard McCrillis. "This region’s investment into the MARTA system has been integral to its economic success and will continue to attract businesses and foster a growing and diverse workforce in this state."
Greenbrier to supply 11,900 cars to GE The Greenbrier Cos. and the Rail Services division of GE Equipment Services announced today an agreement for Greenbrier to supply 11,900 tank cars and covered hopper cars for Rail Services over an eight-year period. Tank cars will make up the majority of the order, marking Greenbrier's entry into the tank car manufacturing market in North America.
As part of the agreement, Greenbrier will install GE's proprietary VeriWise™ RAIL fleet management technology on the railcars during the manufacturing process.
Initially, Greenbrier will produce 30,000-gallon non-coiled, non-insulated tank cars, which are used to transport ethanol, methanol and more than 60 other commodities. Greenbrier plans to develop and produce other general-purpose tank cars in coming years. The agreement provides for flexibility in car type mix to meet future market needs and fluctuations.
Delivery of the first 3,400 railcars is slated for the third calendar quarter of 2008, with completion expected by the first half of 2011. Deliveries beyond this first group of railcars are subject to fulfillment of certain competitive conditions, the companies said.
GE's VeriWise RAIL solution generates information about a railcar's location and the environmental conditions inside it for customers, who can use the information to enhance safety and security, improve shipment delivery cycles and increase the productivity of their fleet operations.
William A. Furman, president and chief executive officer of Greenbrier, said, "We are gratified at the confidence GE Rail Services, the largest operating lessor in North America, has placed in us by selecting Greenbrier to supply its new freight car needs. Our recently formed joint venture facility, Greenbrier-GIMSA, is expected to provide low capital cost access to competitive tank car production. This facility also has additional space to expand production further, once we have ramped up tank car production, should market conditions support it. We intend to capitalize both on our prior experience in building tank cars in Europe and Canada and on GE Rail Services' vast knowledge of tank cars, to help ensure the smooth start-up of this new product line."
Jay Wileman, president and chief executive officer of GE Equipment Services, Rail Services, said, "GE is excited about the opportunity to build our cutting-edge asset intelligence technology into railcars with such a high-quality railcar builder. We look forward to working with Greenbrier."
Oklahoma ponders purchase of rail routeOklahoma may move to purchase 66 miles of railroad between McAlester and Shawnee, currently owned by Union Pacific, in a public-private venture. The state reportedly has been eager to acquire the out-of-service route for 15 years in order to aid numerous manufacturers.
In a bipartisan effort, state legislators and others envision linking the line to active right-of-way operated by Arkansas-Oklahoma Railroad Co., a short line with interchange points in Oklahoma City and McAlester.
One study, now dated, projected a cost of up to $10.8 million to acquire the property, plus another $50 million to improve it to Class One conditions, capable of handling traffic traveling up to 10 miles per hour.
"In the last 40 months we've been able to create about 150 jobs in our industrial park, and I can promise you that of those 150 jobs, railroad played a role in all of them," said Jim Mills, executive director of the McAlester Economic Development Service, voicing support for public-private ventures. "There was a time when rail wasn't even discussed, but now you won't stay on the list. That's what economic development is all about -- staying on the list until the client decides if they want to locate there or not."
NS enlists MicroPact for labor relations softwareHerndon, Va.-based MicroPact Engineering, Inc., announced today that Norfolk Southern has selected the company's entelliTrak's Labor Relations (LR) Edition software for use at the railroad's headquarters in Norfolk, Va., and in the field.
MicroPact will integrate entelliTrak's LR Edition with Norfolk Southern's enterprise document management system, enabling NS to store case files, track grievance data, and create daily activity reports, status reports, and data trend analysis reports. The LR Edition will reduce paperwork and facilitate access to the data from field locations.
"We design our products to include 90% of what a customer in that industry needs," said Growson Edwards, MicroPact's director of business development. "They only require slight modifications that are specific to their company, and they are ready to go."
Alstom, Balfour Beatty form signaling joint ventureAlstom and Balfour Beatty announced today that Signalling Solutions Ltd., a new joint venture company, has been created. Each company holds a 50% stake.
The new structure will be responsible for contracts worth more than 100 million euros ($141.6 million). Approximately 340 people from Alstom and Balfour Beatty will work for the new company, which has offices in the United Kingdom.
Signalling Solutions will offer planning, design, product supply, installation, testing and commissioning for all types of railways, combining the railway signalling resources of Alstom Transport Information Solutions and Balfour Beatty Rail Projects. The company says the signalling market in U.K. and Ireland, the company's target market, is worth 720 million euros, and is growing significantly, with several projects of resignaling and enhancement of existing systems in the works.
In a statement, Philippe Mellier, president of Alstom Transport, said: "This joint venture symbolises a real alliance between Alstom Transport and Balfour Beatty to better serve our customers. We are fully committed to supporting Signalling Solutions in its work ahead."
Manfred Leger, Balfour Beatty group managing director responsible for Rail Engineering and Services, said: "The combined strengths of Alstom and Balfour Beatty make this company a one-stop shop with a highly experienced workforce able to understand and deliver the complex systems of today’s signalling technology."
NJ Transit adds service to serve new Newark arenaNewark, N.J., Mayor Cory A. Booker, joined by officials from New Jersey Transit and the Port Authority of New York & New Jersey, today announced transit upgrades designed to handle increased demand stemming from the opening of the Prudential Center sports and entertainment complex.
Beginning Oct. 28, NJ Transit will add evening limited stop services on its Northeast Corridor and North Jersey Coast Line trains, originating in New York and servicing Prudential Center attendees at Newark-Penn Station. Upgraded service will also be added to the Raritan Valley Line, while bus and light rail schedules will be adjusted as well.
NJ Transit noted the four new express trains on the NEC, and the three express trains on the NJCL, "will operate Monday through Friday, regardless of whether there is an event at Prudential Center."
NJ Transit also said it will install a ticket vending machine within the Prudential Center, adjacent to the Box Office, for customer convenience, and has renovated existing access points at Newark-Penn Station that are close to the arena to facilitate pedestrian access to the site.
Austin-San Antonio commuter rail proposal survivesThe Austin-San Antonio Intermunicipal Commuter Rail District's board has allocated $100,000 to keep a commuter rail proposal alive for a 2012 start date. The placeholder sum will go in part to engineering studies on sections of a proposed service linking the two Texas cities, and also toward efforts to get funding into the now-empty rail relocation fund that the Texas Legislature created and voters approved, says Sid Covington, chairman of the ASA executive committee.
Covington said much of the 112-mile route, owned by Union Pacific, is single track, particularly on its northern portion, requiring passing sidings. UP and Amtrak currently use the line. The ASA proposal depends in part on the relocation of UP's freight operations, estimated to cost $2 billion, according to the Texas Department of Transportation.
Ultra-low emissions switcher hailed as successNational Railway Equipment Co. today announced that an N-ViroMotive™ GenSet locomotive operating at The Massachusetts Bay Commuter Railroad Co. is operating with dramatic emissions reduction, fuel savings, and reduced maintenance. The GenSet locomotive is an EPA certified and CARB recognized three-engine 2100 HP (3GS-14B) Ultra-Low Emitting GenSet locomotive. MBCR operates rail passenger service for the Massachusetts Bay Transportation Authority.
"Our field operators are impressed with the cab features, particularly the extraordinarily low internal and external noise levels, ultra low emissions and exceptional fuel efficiency," said Richard Davey, MBCR deputy general manager. "In fact, we just fueled the N-ViroMotive unit a couple weeks ago for the first time since May when we received it from NREC. For us that translates to significant cost savings for our railroad."
NREC said the locomotives operate with 80%-plus reduction in nitrous oxide (NOx) and particulate matter emissions, 50% to 65%-plus improved in tractive effort adhesion efficiency, and 35% to 50% average fuel savings capability in switching duty cycle services.
The units also feature state of the art microprocessor-based electronic controls and modularized mechanical platforms which significantly decrease maintenance requirements; they also "easily achieve" regulatory noise level requirements for off-road capital equipment.
RailComm gets BNSF Havre Terminal contractBNSF's Havre Terminal in Montana will expand its existing RailComm Domain Operations Controller (DOC®) system by adding track protection and power switch automation capabilities to strategic locations throughout the terminal, RailComm has announced.
The diesel shop already utilizes RailComm's remote control derail and blue flag protection system through a DOC® system installed earlier this year.
The added expansion includes a local control interface to both new and existing field equipment such as power derails and power switch machines. This will be accomplished by utilizing RailComm's field-proven universal switch controller (USC). The RailComm USC allows the RailComm DOC® system to provide remote control to any third party (new or existing) field equipment.
"This is a perfect example of cooperation between the mechanical department and the operations department by utilizing the DOC® platform for completely different missions, while taking advantage of the same redundant servers to save cost," said Greg Fogarty, RailComm's senior field engineer, in a statement.
As DM&E deal closes, L.B. Foster gains $149 millionWith consummation of the sale of the Dakota, Minnesota & Eastern to Canadian Pacific yesterday, minority DM&E stockholder L.B. Foster said it received approximately $148.8 million in exchange for its preferred stock, warrants, and common stock, with an additional $2.15 million being deposited into two escrow accounts to secure certain of the DM&E's obligations. "As a result of this payment Foster will record pretax gain on the sale of its investment of approximately $122.9 million in the fourth quarter and will record incremental dividend income of $8.5 million in the third quarter," said a Foster announcement issued in Pittsburgh today. Foster said it may also receive $41.6 million if and when CP begins construction of DM&E's proposed extension into the Powder River Basin coalfields, and up to $84 million more when an agreed-upon milestone has been passed in haulage of coal on the new line.
Growth probability outweighs recession risk, says CN's CFOWill the housing slump pull railroads into recession? The risk "cannot be ruled out," CN Chief Financial Officer Claude Monee said in Ottawa yesterday, but he added: "The probability is still much higher that we will have good growth next year." Lumber and lumber products account for more than one-fifth of CN's business, and volume has been down as much as 12% this year. "The question is, will this industry have a contagion effect on the entire economy, or will there be a quick pickup?" said Mongeau.
Transit ridership rises, led by commuter rail The American Public Transportation Association announced today that public transit agencies provided 74 million more trips in year’s first six moths than they did in the corresponding period last year, with commuter rail setting the pace. Commuter rail ridership was up 5.5% , with especially strong performance reported by Harrisburg, Pa. (47.5%), Dallas, Texas (17.0%), Miami (15.4%), Oakland (14.9%), Stockton, Calif. (10.0%), San Carlos Calif. (8.7%), and Long Island, N. Y. (7.7%).
Light rail ridership increased 4.1% nationwide during the period, with Denver showing greatest improvement (78.9%). Light rail ridership was also up in St. Louis (37.8%), New Orleans (34.2%), Kenosha, Wis. (26.5%), the State of New Jersey (19.8%), San Jose., Calif. (12.2%), Memphis (12.1%), and Baltimore (11.9%).
Heavy rail (subway) ridership grew 2,8% in the first six months, with the biggest growth in Atlanta (10.7%), New Jersey (7.2%), Staten Island, N. Y (6.4%), and San Francisco (5.9%).
Bus ridership was up nationally by 0.6%, and demand response (paratransit) ridership increased by 3.7%.
U.S. carload and intermodal volume down in SeptemberCarload traffic on U.S. railroads in September was down 0.9% from September 2006, to 1,340,285 cars, and intermodal volume declined 2.5% to 963,278 trailers and containers, the Association of American Railroads reported today. Commodities showing carload gains in September included chemicals, up 6.7%; coal, up 1.1%; and grain, up 6.9%. Among commodities showing declines were lumber and wood products, down 6.9%, and metals and metal products, down 13.5%.
Canadian carload traffic was down 1.1% in September to 320,077 and intermodal volume was up 4.1% to 195,237 units. Kansas City Southern de Mexico reported carload traffic down 4.8% in September to 44,570 loads and intermodal traffic up 9.9% to 20,723 containers and trailers.
CP completes DM&E transaction and names trusteeCanadian Pacific announced today that it has completed its acquisition of the Dakota, Minnesota & Eastern and has placed shares of the U.S. regional in an independent voting trust pending review of the transaction by the Surface Transportation Board. Richard Hamlin, retired National Director for the Transportation Practice of KPMG LLP and now a consultant, will serve as CP's trustee. The regulatory review process is expected to take less than a year. If the STB approves the transaction, CM&E will become part of CP's overall U.S. network.
STB chief warns of re-reg backlashPositions on rail re-regulation that were stated last week at a House Transportation Committee hearing were amplified yesterday at a Senate Judiciary subcommittee session on S. 772, the Railroad Antitrust Enforcement Act.
William L. Berg, president of Wisconsin's Dairyland Power cooperate, was among those pleading the case of shippers who claim that antitrust protection is permitting railroads to gouge their customers. Berg said an increase in rail freight rates for hauling coal required the utility to increase the rates it charges consumers by more than 20%.
The Surface Transportation board has come under considerable criticism during the hearings for what some view as its pro-railroad stance, but Chairman Charles D. Nottingham told the Senate panel that the board "understands, and is sensitive to, the concerns of rail customers about rail rates and service."
"It is doubtful, however," said Nottingham, "that rail customers would benefit from the changes proposed in the present legislation; indeed the legislation may well make rate and service conditions worse than better. The bill would make efficient, uniform regulation of the rail industry more difficult by creating duplicative and overlapping regulatory schemes. Subjecting the rail industry to a patchwork of judicial injunctions at the behest of localities scattered across the country could cause a ripple effect of operational problems for freight, Amtrak, and commuter rail transportation."
Board denies conditional exemption for new Alaska lineThe Surface Transportation Board issued a decision today denying the request of the Alaska Railroad (ARRC) for a conditional exemption from prior approval requirements for authority to begin work on a new 80-mile main line. The line would extend southeasterly from Mile 20 on ARCC's Eilson Branch near North Pole (just south of Fairbanks) to the Delta Junction/Fort Greely area. Known as the Northern Rail Extension Project, the line would host both freight and passenger trains and is expected to bring new tourists to the area.
In today's decision, the STB commented: "ARRC requests that we conditionally grant the requested exemption authority by advancing the transportation aspects of the project in advance of the environmental issues. Even though no construction could begin until the environmental review is completed and the board issued a final decision allowing construction to begin, if appropriate, ARRC asserts that a preliminary decision on the transportation merits would enhance its ability to secure funding and allow it to finalize details relating to the engineering of the project, procure equipment and materials, plan and arrange constriction contracts, and work on permitting requirements ... ARRC asserts that it must be certain that regulatory approval for the project is obtainable before it undertakes these tasks."
The board acknowledged that it had approved such conditional exemptions in the past, but said "the benefits to a construction applicant have always been open to question" because a possible outcome of the environmental review is rejection of the proposal. The board said the current case "reflects no unique or compelling circumstances" and said the railroad has not demonstrated that "a two-step decisional process is necessary for it to obtain funding."
The board's Section of Environmental Analysis (SEA) is currently preparing a draft EIS on the project.
Seattle streetcar to debut in mid-DecemberOperations testing of the South Lake Union Streetcar will begin this month, and open to the public in mid-December, according to Josh Stepherson, Seattle's community liaison on the project, addressing a meeting of the South Lake Union Friends and Neighbors Community Council. The streetcar will offer free rides for the balance of December.
The $50.5 million project will allow streetcars to travel a 1.3 mile route between Westlake, in downtown Seattle, and South Lake Union, initially handling an estimated 1,000 rider trips per day. Czech Republic-based Inekon Group A.S. is supplying three "Trio" consists for the service.
UP moves record volumes of SPRB coalUnion Pacific set an all-time coal loading record in the Southern Powder River Basin in September, moving an average of 37.1 trains a day for a total of 1,114 trains loaded in a 30-day month. UP also set a seven-day record in the last week of the month, with 278 trains loaded, a daily average of 39.7.
UP, which shares the SPRB Joint Line with BNSF Railway, said a Joint Line daily record was also set Sept. 29 and Sept. 30, with 79 trains loaded both days.
In September, UP reported 110 missed SPRB loading opportunities, 86 of which were attributable to mines, 10 to the Joint Line, one to utilities, and 13 to events on the UP. The railroad said these missed opportunities were partially offset with 43 extra loadings.
Bombardier to refurbish Norwegian fleetUnder a $91 million contract announced today, Bombardier Transportation will carry out a major refurbishment of 56 Class 5 coaches that it originally built for Norwegian State Railways between 1977 and 1981. A major change will be replacement of existing bogies with Bombardier BT500 units. Interiors will be redesigned, with a new climate control system and new lighting and seats. New bistro coaches and family coaches are also part of the project. The work will begin in November and is to be completed by June 2010.
Brazil awards new rail concessionThe mining company CVRD, formerly known as CompanhiaVale do Rio Doce, has submitted a winning bid of $810.3 million for a 30-year concession to operate a 447-mile segment of railroad known as the North-South Line in northeastern Brazil. CVRD was the sole bidder in an auction at the Sao Paulo stock exchange.
CVRD is to modernize, maintain, and operate the railroad in a corridor with strong potential traffic in soybeans, sugar, and ethanol. The line runs from Palmas to Acailandia. CVRD already operates a smaller stretch of the same railway, between Acailandia and Estreito, which connects with CVRD's own rail line from its Carajas ore mine to the port of Itaqui.
Feds award $128 million for Norfolk light railFederal Transit Administrator James S. Simpson traveled to Norfolk, Va., yesterday to sign the paperwork awarding Hampton Roads Transit (HRT) $128 million in federal funding to help pay for a 7.4-mile light rail system--to be called The Tide--that is scheduled to go under construction in November. The line will extend from the Eastern Virginia Medical Center through downtown to Newton Road.
The Tide is expected to stat rolling in 2010; ridership projections range between 7,000 and 11,000 daily.
Federal funding didn’t come quickly or easily. The Virginian Pilot noted that the FTA had the project under study for three years, a scrutiny resulting in a less costly project than the $360 million line originally envisioned. The FTA funding will be augmented by $33 million in city funds, $31.9 million in state money, and $39.2 million from other federal conduits.
KCS restructures executive departmentKansas City Southern has announced the promotion of three officers to executive vice president as part of a reorganization. They are: Scott E. Anderson, promoted from senior vice president and chief information officer to EVP and chief information officer of KCS and EVP and chief operating officer of the Kansas City Southern de Mexico (KCSM); Warren K. Erdman, promoted from senior vice president of corporate affairs to EVP of corporate affairs, KCS; and Larry M. Lawrence, promoted from senior vice president strategies and staff studies and assistant to the chairman to executive vice president and assistant to the chairman of KCS.
Also, William H. Nolen has been promoted from vice president transportation to senior vice president operations for Kansas City Southern de Mexico, succeeding Manuel Zulaica, who has left the company. He will report to Jose Zozaya, president and executive representative of KCSM.
GRS ready to take over Greenbrier plant in MexicoUnder a just-completed long-term lease arrangement, Greenbrier’s Gunderson Rail Services (GRS) unit will take over GATX’s Tierra Blanca, Mexico, railcar maintenance facility. Another long-term agreement calls for GRS to operate the shop to maintain cars for GATX and other customers in Mexico.
GATX, which operates around 6,000 freight cars in Mexico, purchased the Tierra Blanca shop[ in 1994 from FNM Railroad. The facility occupies 38 acres of land and provides full-service tank car and general freight car repairs including cleaning, painting, and lining.
Bombardier wins $316 million in new contractsBombardier Transportation announced today that it has received two new contracts worth a total of $316 million for European passenger trains and trams.
A $242 million order covers the supply of 42 Talent 2 four-car trains for Deutsche Bahn Regio AG, which will use them in suburban service in the Nuremberg area. It's the first firm order in a framework agreement signed earlier this year for up to 321 vehicles.
The second order of $74 million for 19 low-floor trams is from another German company, Rhein-Neckar-Verkehr GmbH. It represents the exercise of an option contained in a contract signed in 1998 for up to 198 trams. XRNV took up the first option, for 16 units, in 2004.
BNSF provides new tools for citizen security groupsBNSF Railway announced that it has produced two new videos illustrating how community groups and law enforcement agencies can help in "the fight against terrorism and vandalism to protect global commerce." These videos and an expanded web site is part of the railroad's Citizens for Rail Security Program.
BNSF's program is designed to alert citizens and officers to be on the lookout for: trespassers; suspicious packages or other articles left on railroad property; unusual conduct in neighborhoods near or around tracks or yards; crimes in progress such as theft; and threats or hostile language against railroads.
"One video is aimed at communities and residents who can help secure America's rail network by knowing what to report and how vest to describe the location or scene," said BNSF. "The other video, aimed at law enforcement agencies, educates officials on railroad safety, who to call to report something or someone suspicious, and basic railroad operations and terminology."
The expanded web site is www.citizensforrailsecurity.com.
A. Stucki launches new web siteA. Stucki Co. has announced a "new and enhanced Stucki.com web site" redesigned to improve navigation, layout, organization, and functionality, according to company president and CEO Bill Kiefer. In a statement, Kiefer noted "there are a few areas still under construction," but the company chose to launch the site "due to the enhanced resources and tools available."
The developer of railcar dynamic control products says the site provides a consistent and unified brand image, a cleaner and more organized interface, more current content, and a more user-friendly approach.
"A. Stucki Company, Independent Draft Gear, and American Industries are still separate operating companies. However, this new site now offers our customers one resource," Kiefer said. "In the coming weeks, we will be turning off the IDG and AI stand-alone sites. Although the sites will be inactive, the web site addresses for these two sites will remain active with a redirect to the new Stucki.com."
South Dakota short line resumes service to grain shippersRevenue grain shipments on the Dakota Southern Railroad, a short line supported by the state of South Dakota, resumed on Oct. 1 following a seven-year absence. The short line has secured a haulage agreement with BNSF to facilitate service resumption.
"We're sort of dipping our toe back into the grain business," said Alex Huff, president of the line.
Huff said many elevator operators doubted service would resume, and acknowledged that service next year would depend, in part, on how shippers respond to the service this year.
Dakota Southern's line is currently open as far west as Vivian, S.D., where it has been paved over at a highway crossing. The state has committed to installing a grade crossing there, if the railroad has enough business to the west to justify it. South Dakota bought the right-of-way, formerly owned by the Milwaukee Road, in 1980.
Balfour Beatty Rail names Chris Durden VPChris Durden has been named vice president of business development for Balfour Beatty Rail, Inc., responsible for planning, leading, and coordinating all areas of business development and estimating within BBRI. Durden previously was vice president of business development and marketing for RailWorks, and prior to that was with CSX Corp.
"This is a key appointment, and one critical to achieving our marketing and sales objectives," said Paul Copeland, president and CEO of Balfour Beatty Rail, a wholly owned U.S. subsidiary of Balfour Beatty plc. "As we continue our growth and focus in North America, and on building upon the relationships that we have established, Chris' leadership and experience will certainly enable us to achieve our goals and objectives in an effective and efficient manner."
Cleveland RTA is No. 1 among large systemsThe American Public Transportation Association has picked the Greater Cleveland Regional transit Authority as this year's Outstanding Public Transportation system among 50 or so of the largest transit systems in the U.S. and Canada. These systems provide at least 30 million rides a year. RTA General Manager Joseph Calabrese told the Cleveland Plain-Dealer that winning the top award has been a goal since he joined the agency seven years ago. Cleveland RTA's trains and buses, which carry more than 57 million riders annually, have posted ridership increases in each of the last four years.
Austria orders 17 new Bombardier trainsAustrian National Railways (OBB) Passenger Service is acquiring an additional 17, four-car Talent trains from Bombardier Transportation at a cost of approximately $79 million. These will join an existing fleet of 171 similar trains that have been providing regional and local service in Austria since their phase-in starting in 2001. The trains are designed for speeds up to nearly 90 mph. Stephane Ramnbaud Measson, president, Marine and Metros, at Bombardier Transportation, said the Talent’s modular and flexible concept has made it widely popular, with 780 orders now in hand from Germany, Austria, Hungary, Norway, and Canada.
New UP-NS intermodal service: On-time or freeUnion Pacific and Norfolk Southern today announced a fast new intermodal service westbound from the Southeast to Los Angeles that will cost customers nothing if their shipments don’t arrive on time. The on-time-or-free service will cut one day from existing schedules.
The two railroads said it's part of their commitment to improve capacity, service quality, and speed by shifting domestic traffic to a new route over the Shreveport, La., gateway that is 130 miles shorter than the former route using the Memphis gateway. The new service is made possible by improvements to the Meridian Speedway, the NS-Kansas City Southern joint venture corridor between Meridian, Miss., and Shreveport, a direct-rail connection between the Southeast and the Southwest. Eastbound service over the route was launched this past May following test operations in the improved corridor last December.
The new westbound service offers fourth-morning availability for BlueStreak intermodal shipments from Atlanta to Los Angeles, fifth morning from Charlotte and Jacksonville, and sixth morning from Miami.
FCM Rail CEO donates $1 million to MSU rail courseDennis Gilstad, founder and president of rail equipment and financial services firm FCM Rail Ltd., has contributed $1 million to help launch the Edward A. Burkhardt Chair in Railway Management at Michigan State University. The chair honors Burkhardt, founder, president and CEO of RAil World Inc. and Rail World Holdings Inc., who also ran the former Wisconsin Central Ltd.
The certificate program is slated to commence in January, and will include classroom and online components that can be completed within six months. Course content will include railroad operations and networking, strategic planning, and management and decision-making skills.
"This effort should culminate in degree programs that will be determined by market demand of the national and international rail communities," Gilstad said in a statement. "The rail and transportation industries have substantial academic and executive development needs."
Ethanol boom in question; impact on rails uncertainThe boom in ethanol production, spurred by environmental concerns, may be running into countervailing economic forces that could deflate demand, according to a Sept. 30 New York Times article. Amid many issues, the newspaper cited a backlog in orders for specialized ethanol rail cars to ship the surplus production.
"Many rail terminals at the ethanol plants do not have spurs large enough to accommodate the long trains that ethanol promoters like to call 'virtual pipelines,'" the paper reported. "And pumps from the storage tanks to the rail cars at the terminals often do not have sufficient capacity to load trains quickly and efficiently."
The Times quoted Phillip C. Baumel, economics professor emeritus at Iowa State University, who noted that some ethanol producers have increased production markedly, resulting in "inadequate attention to meeting transportation and distribution needs."
The Department of Agriculture has warned of "several supply chain issues that could inhibit growth in the ethanol industry," including a backlog in rail tank car orders that grew to 36,166 rail cars by the end of the first quarter in 2007 from about 10,000 in the third quarter of 2005.
CSX purchases Florida tract for terminalCSX Corp. has acquired 318 acres from the City of Winter Haven for a state-of-the-art intermodal and automotive terminal. Evansville Western Railway, Inc., a CSX affiliate company, acquired the property.
CSX made the move in part to reroute some freight operations in central Florida to accommodate planned commuter rail operations in a four-county area, with Orlando as the hub.
A Development of Regional Impact review will be conducted to evaluate the effects of the terminal on the region. The company will work with the state and Polk County in an effort to address any concerns identified.