Late Breaking Rail Industry News
| 8/20/01 |
ABC-NACO announced that it would resume operations at its facility in Sahagun, Mexico, on Aug. 20, following settlement of an 80-day labor dispute. The company said the agreement "provides for a modest wage increase in line with Mexican national averages and establishes new approaches for increasing both labor productivity and operating flexibility."
| 8/20/01 |
RailWorks unveiled its second-quarter results on Aug. 20, and the picture was not a rosy one. The company described a number of setbacks that contributed to a loss of $2.48 a share in the quarter. It cited accumulating debt problems that threaten the funding of ongoing operations. And it announced the resignation of two of its top officers and the appointment of "a senior financial crisis manager" as chief restructuring advisor.
Leaving the company are Chairman John G. Larkin and President and Chief Operating Officer Michael R. Azerela. Coming on as chief restructuring advisor is Shaun K. Donnellan, president of Glass & Associates, which RailWorks earlier retained to assist in devising a "recovery plan." Donnellan's responsibilities will include "improving cash management procedures, renegotiating credit facilities, and assisting John Kennedy in his duties as chief executive officer."
Chief factors in the company's first quarter loss were special charges totaling $33.7 million, or $2.19 a share. These included $12 million added to reserves for disputed change orders; $7.1 million in a reserve for doubtful accounts receivable; and $14 million for a loss associated with disposition of assets related to the construction business of the former RailWorks W. T. Byler subsidiary.
| 8/16/01 |
Kansas City Southern Railway and I&M Rail Link have formed a partnership to provide run-through carload service between Shreveport, La., and Davenport, Iowa, that saves 48 hours of transit time. The new service, called "rapid run-through," involves adding manifest traffic to existing grain trains and bypassing Kansas City, Mo. Upon arrival in Shreveport or Davenport, traffic makes a quick connection for delivery to final destinations south of Shreveport or north of Davenport. Northbound trains pick up traffic at DeQueen and Ashdown, Ark., before heading north, non-stop, to Davenport.
Rapid run-through is an add-on to an existing agreement between KCSR and I&MRL for co-marketing grain traffic and sharing Knoche Yard in Kansas City. "It ensures improved transit times and provides a more cost-efficient option for customers than over-the-road between the two markets," says KCSR Executive Vice President and Chief Operating Officer Gerald K. Davies.
| 8/16/01 |
Electrification of Caltrain is one of the rail projects proposed in a 25-year transportation plan for the nine-county Bay Area. The Metropolitan Transportation Commission unveiled the plan in mid-August and will be seeking public comments through September. The plan envisions the expenditure of $82 billion in federal, state, and local transportation funds, primarily to maintain 18,000 miles of streets and roads and to operate the region's public transportation system. About $7.7 billion in discretionary funding would be available for such projects as the Caltrain electrification.
| 8/16/01 |
A dozen bills directly affecting railroads await committee or floor action as Congress prepares to return to work Sept. 4 after its summer recess. A measure enthusiastically supported by both management and labor--the Railroad Retirement and Survivors Improvement Act--passed the House by a wide margin and has been introduced in the Senate with 71 co-sponsors. But it has been widely attacked as fiscally irresponsible and could be stalled by key legislators who prevented its passage last year. Other pending legislation would provide aid to smaller railroads to improve their infrastructure; phase out the 4.3 cent deficit reduction fuel tax; authorize Amtrak to issue $12 billion in bonds to build high speed rail corridors; and ease the way for transit agencies to gain access to the lines of freight railroads.
| 8/16/01 |
Burlington Northern and Santa Fe and Norfolk Southern are now offering coast-to-coast, third- and fourth-day premium intermodal trailer service designed to compete with team-driver truck transportation. The new service is for time-sensitive TOFC freight moving between Southern California and intermodal terminals at Rutherford, Pa., and Croxton, N.J. BNSF provides the line-haul service between Southern California and Chicago, while NS provides the line-haul service between Chicago and the East Coast. Eastbound service began Aug. 16 and runs Thursdays through Sundays. Westbound service began August 14 and runs Tuesdays through Saturdays. BNSF hands off the train to NS at NS's Ashland Avenue Yard in Chicago, eliminating cross-town drayage through Chicago. Transit time between coasts has been shaved 15 to 18 hours: L.A.-Rutherford services takes 75 hours; L.A.-Croxton service takes 84.
"This is another example of how BNSF and NS have partnered to provide customers with a cost-effective, intermodal solution that is truck-competitive," said BNSF Group Vice President-Consumer Products Business Unit Steve Branscum. Added NS Vice President-Intermodal Marketing Michael R. McClellan, "We are building on the successful seamless container services NS and BNSF launched earlier this year linking California to the Northeast and the Southeast. This is another step in the continuing evolution of interline products we plan to offer customers."
| 8/13/01 |
Trinity Industries and Thrall Car Manufacturing Company have entered into an agreement under which Thrall will merge its operations with Trinity's railcar manufacturing business in exchange for $165 million in cash and 7.5 million shares of Trinity stock. Trinity will make additional payments, not to exceed $45 million over five years, based on annual railcar production levels.
"The strategic combination of Trinity and Thrall's railcar businesses creates an ideal platform for providing customers with a full range of advanced railcar solutions," said Trinity President and CEO Timothy R. Wallace. "In the past, we have been very successful making strategic investments like this which generate benefits in the long term."
Current Thrall Chairman Craig J. Duchossois, who will join the Trinity Industries Board of Directors, said, "We're extraordinarily pleased about the merger and the opportunities it creates to capitalize on the talents of the newly combined team."
The combined railcar manufacturing operation will be led by a mixed group of senior officers from Trinity and Thrall, with current Thrall Vice Chairman Michael E. Flannery serving as CEO of the combined railcar enterprise. Subject to regulatory approvals, the transaction is expected to close by the end of the year.
| 8/9/01 |
A High Court has upheld the right of the British government to proceed with a plan to partially privatize the London Underground system. Overriding the objections of London Mayor Ken Livingstone and London Transport Commissioner Robert Kiley, the court held that Prime Minister Tony Blair's government could pursue its plan to turn over the Underground's infrastructure to private companies while keeping operations in the public sector. By the end of this year, the government plans to award 30-year concessions to three private groups which are expected to invest $18 billion in infrastructure improvements during the next 15 years. Kiley, who is widely credited with having revived the sagging public transportation systems of New York and Boston, has opposed the plan. He has warned that it could create some of the chaos that resulted from separating infrastructure and operations in the privatization of the British Rail system.
| 8/9/01 |
Kansas City voters on Aug. 7 rejected a proposed 0.5% sales tax increase to help pay for a 23.8-mile, $793 million light rail system. About 60% of the 66,000 votes cast were nay votes. Opposition to the plan by the pro-highway Greater Kansas City Chamber of Commerce is said to have been a major factor in LRT's loss at the polls. LRT advocates, led by Mayor Kay Barnes, immediately raised the possibility of going back to the polls with a better-funded campaign to win public support, possibly as early as next year. Mayor Barnes was quoted as saying that toward the end of this year's campaign, she sensed a swing toward light rail, suggesting that "this issue could have a life after this election."
| 8/8/2001 |
The U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) has confirmed what the rail industry already knows: the number of rail accidents and incidents is falling. As of April 2001, it fell more than 6% from the same time last year, the lowest it has been in ten years. The BTS's monthly Transportation Indicators report also showed that highway-rail fatalities decreased by more than 12%, while rail fatalities increased by slightly more than 1% over that same period.
| 8/8/2001 |
ABC-NACO announced Aug. 7 that it hopes to formalize within 60 days a joint venture with Zhuzhou Rolling Stock Works in Hunan Province to produce and sell Swing Motion® suspension systems in China. Prior to the beginning of production during the next year, ABC-NACO will supply up to 1,000 carsets of Swing Motion systems to China, with an initial order for 300 to be delivered in October. ABC-NACO is also producing wheels in China in a joint venture with Fatong Locomotive Works in Shanxi Province. "In a little over two years, the joint venture has about 50% of the total freight car wheel market," said ABC-NACO President and CEO Vaughn Makary. "We believe the Chinese market has significant potential for our advanced technology products."
| 8/8/2001 |
ABC-NACO says the weakest freight car market in 10 years helped drive net sales from continuing operations down to $97.4 million in this year's second quarter, a 27.5% decline from the corresponding period last year. The company reported a net loss of $24.5 million, including $9.2 million in restructuring costs, for this year's quarter, compared with a profit of $0.2 million in the 2000 quarter. Contributing to the decline in profitability were lower selling prices, due to competitive pressures and product mix, and the cost of maintaining idled facilities.
In announcing second-quarter results, ABC-NACO President and CEO Vaughn Makary commented, "Recently, we have completed a significant financial restructuring, reduced debt by $31.0 million, closed, idled, or sold 11 facilities, and reduced over 30% of our salaried employees. Unfortunately, ABC-NACO has been suffering from the same severe market downturn as many of our customers and other suppliers in the rail industry."
Makary also said: "Rail supply is a cyclical industry and it can turn upward as rapidly as it has slid into today's depressed conditions. . . . We believe our people, products, services, technology, and manufacturing processes are unsurpassed, and there is a significant long-term value in our businesses."
| 8/6/2001 |
Wisconsin Central Transportation Corp.'s second-quarter 2001 North American operating revenues of $93.7 million were a second-quarter record, topping last year's revenues of $93.0 million, despite a drop in carloadings. North American operating income for the second quarter was $25.9 million, compared to $24.2 million in the year-ago quarter. Operating expenses dropped to $67.8 million from last year's $68.8 million, largely due to a $1.2 million reduction in material costs. The operating ratio of 72.4% was an improvement of 1.5 percentage points over the year-ago quarter.
"Revenues were up because of a favorable shift in commodity mix as well as growth in our haulage business," said WCTC President and Chief Executive Officer-North American Operations Reilly McCarren. "Despite our most challenging economic climate in our 13 years, we improved operating income with an intense focus on efficiency and cost containment. By quickly adapting train operations to shifts in traffic flows, we offset higher diesel prices through conservation of fuel and other resources. Revenue weakness we saw in June has continued into the third quarter. As a consequence, we remain cautious in our outlook and have intensified our cost containment efforts."
WCTC's international operations, English Welsh & Scottish Railway and Tranz Rail Holdings Ltd., yielded second-quarter net income of $2.7 million, compared to a loss of $3.4 million in the year-ago quarter, including special items.
Combined North American and international net income for the second quarter was $15.5 million ($.33 per diluted common share), compared to second-quarter 2000 net income of $7.8 million ($.16 per diluted common share), including special items. For the six-month period ended June 30, 2001, WCTC net income was $27.1 million ($.58 per diluted common share) vs. $20.4 million ($.40 per diluted common share), including special items. The operating ratio of 77.1% remained the same.
| 8/6/2001 |
Burlington Northern and Santa Fe and CSX Transportation have instituted new run-through service for interline carloads by bypassing the Chicago gateway, a move they say will eliminate handling and improve transit time and service consistency. As many as 30,000 carloads a year will be affected.
BNSF traffic destined for New York and New England previously interchanged in Chicago will now be directly delivered to CSXT, rather than turned over to a local switching railroad for delivery. BNSF traffic destined for the mid-Atlantic markets of Baltimore, Philadelphia, and Portsmouth, Va.--also previously switched in Chicago--will now be assembled by BNSF at its Galesburg, Ill. facility, 155 miles southwest of Chicago. The change will result in a transit time reduction of one to two days.
Westbound traffic for BNSF will now be assembled by CSXT in Willard, Ohio, and moved directly to Galesburg and Kansas City, eliminating intermediate handling in Chicago. The move will save a minimum of 24 hours transit time.
"The new services are the result of cooperative research between the companies' service design groups to create more direct and simplified service to interline customers," said CSXT Executive Vice President-Sales and Marketing Mike Giftos. "In all cases, customers will see more consistent service, and that's critical to growing our business and providing more truck-like service."
"This strategic initiative provides our carload customers with a very competitive service offering between the BNSF network and points in the Northeast accessible to CSXT through the Chicago gateway," said BNSF Vice President-Network Development Pete Rickershauser. "Customers will benefit from equipment turning more efficiently and their products reaching their destination faster."
| 8/1/2001 |
Trinity Industries, Inc. continues to wait out the slumping railcar market by focusing on its other businesses, such as its construction products segment and inland barges, which have shown consistent improvement. According to Chairman, President, and CEO Timothy R. Wallace, the company has taken steps to stabilize business over the last several months while monitoring the industry's demand for railcars. "We are continuing to reduce our overhead costs as our rail production decreases," said Wallace. "We believe, long-term, this industry will return to more normal demand levels, and we are positioned to respond quickly." Trinity reported first quarter net income of 9.6 million, or 26 cents a diluted share, on revenue of $476.6 million, compared to $20.9 million, or 55 cents a diluted chare, on revenues of $533.7 million in the first quarter of the prior fiscal year.
| 8/1/2001 |
Union Pacific Railroad announced that it has been selected by General Motors Corp. as its lead rail transportation provider in the western U.S., effectively handling all of GM¹s finished vehicle traffic in the West. UP had transported 75% of GM's western traffic, and will now handle more than 2.5 million vehicles annually with 100% of GM's business. Under the multi-year agreement, UP will build or expand seven vehicle distribution facilities, make other facility improvements to permit around-the-clock vehicle unloading at all facilities, and install a new, state-of-the-art vehicle management system at each location.
UP also announced that it has teamed up with DaimlerChrysler Corporation and formed a new logistics company to track up to three million Chrysler Group vehicle shipments annually. The new company is called Insight Network Logistics, and is a wholly-owned subsidiary of Union Pacific Corp.
| 8/1/2001 |
Arkansas & Missouri Railroad President Larry P. Bouchet and Vice PresidentMarketing Mark Bonnell announced new joint marketing agreements with the Burlington Northern and Santa Fe, Union Pacific, and Kansas City Southern railroads that will "result in better and more efficient service for our key customers," said Bonnell. At the same time, a new division of the company was announced which will concentrate on "leasing/rail siding activities to grow our transportation business," according to Bouchet. The new division will develop various business opportunities using A&M's current assets and property ownings.
A&M also welcomed three new transportation customers on its rail systemRoll-Off Service, Inc, EPCO, and GSIexpanding on its current list of 130.
| 8/1/2001 |
The railroad industry cleared one hurdle to reforming Railroad Retirement with the passing of a bill in the House of Representatives that will allow pension fund assets to be invested in private securities instead of lower-yielding government bonds. The bill, H.R. 1140, also allows for retirement without reduced benefits at age 60 for employees with 30 years experience, and more benefits for surviving spouses.
Union Pacific Corporation Chairman and CEO Dick Davidson called it "a great day for railroad employees across the country," and said UP employees "are anxious to have this legislation signed into law by President Bush so it can take effect on January 1, 2002."
"The legislation allows the fund to be investedfor the first timein a diversified portfolio, bringing the railroad retirement system into the 21st century," said AAR President and CEO Edward R. Hamberger. "We look forward to working with the leadership of the Senate in the upcoming weeks to pass this important legislation."
Similar legislation, after passing in the House, was stalled in the Senate last year, but optimistic supporters have lined up 72 co-sponsors in the Senate for this bill¹s run in hopes of getting it passed on as a law.
| 7/26/01 |
Reduced operating income from both its domestic and Mexican operations caused Kansas City Southern Industries to post second quarter earnings that were down sharply from earnings in the same quarter a year ago--$4.7 million vs. $8.8 million, a 47% decline. At eight cents per diluted share, the earnings were in line with analysts' expectations. The general economic slowdown, plus reduced grain traffic due to flooding, contributed to the decline in domestic income. Earnings from KCSI's equity in Mexico's Grupo TFM were affected by higher operating expenses, which more than offset an increase in revenues. The KCSR/Gateway Western operating ratio for the second quarter was 88.1%, compared with 84.9% for the second quarter of 2000. Grupo TFM's operating ratio in this year's quarter was 74.6%, compared with 67.7% a year ago.
| 7/26/01 |
General Electric Transportation Systems (GETS) expects to complete the purchase of certain assets of Wabtec Corp. by Oct. 1. A cash price of $240 million, primarily for Wabtec's locomotive aftermarkets products and services, is stipulated in a definitive agreement announced July 26. GETS is purchasing Wabtec assets acquired as part of the MotivePower Industries merger in November 1999. They include Motor Coils Manufacturing, Wabtec Engine Systems, Wabtec Distribution, and MPI de Mexico. Wabtec will continue to own former MotivePower business units that are OEMs for heat exchangers, electronic components, brake rigging, and sanitation systems, as well as its locomotive plant in Boise, Idaho. Wabtec expects to use most of the proceeds from the sale to reduce debt to under $250 million, compared to a high of $572 million two years ago.
| 7/26/01 |
Rail World, Inc., the Chicago-based rail management and investment corporation headed by former Wisconsin Central Transportation Corp. chief Edward A. Burkhardt, is leading a consortium negotiating purchase of the rail properties of the Bangor & Aroostook Railroad System from Iron Road Railways, a Washington, D.C.-based holding company. The B&A system includes the Bangor & Aroostook Railroad, the Canadian American Railroad, the Quebec Southern Railroad, the Northern Vermont Railroad, and Logistics Management Systems.
Rail World's partner in the deal is Wheeling Corp., which, among other properties, owns 680-mile regional Wheeling & Lake Erie. Wheeling Corp. Chairman and CEO Larry R. Parsons, W&LE Chief Engineer Joseph J. Gonzales, and Jerry R. Davis, former President of Union Pacific and Southern Pacific, are independent investors.
B&A President and CEO and Iron Road Director Frederic W. Yocum, Jr., says talks with the consortium are aimed at addressing cash flow problems and the heavy debt load that has plagued the B&A in recent years. Burkhardt says the consortium is currently working on a business plan, and will meet with B&A creditors soon "to discuss our thinking and ask for their input." He also says the proposed purchase will be discussed shortly with key shippers and connecting railroads.
Though no firm date has been set for completion of the transaction, Burkhardt indicated it would occur within the next few months. "We have received full cooperation so far from everyone involved," he says. No preliminary purchase price was disclosed.
| 7/25/01 |
Lower costs and selectively higher rates helped North American railroads turn in a relatively strong performance as the national economy continued to weaken in the second quarter. A surge in coal traffic helped many carriers.
Union Pacific posted corporate net income of $243 million for the quarter, compared to $244 million for the same period last year. Railroad commodity revenue increased to $2.6 billion as average revenue per car rose by 2%. Energy-related revenues rose 18% and agricultural revenues were up 3%. On the downside, a 10% increase in fuel prices plus the costs of floods in Houston and the upper Midwest drove the operating ratio up 1.9 percentage points to 83.2%.
Burlington Northern Santa Fe Corp. reported freight revenues of $2.24 billion for the second quarter, about even with last year. Flooding conditions and rising fuel costs also affected BNSF, and operating income fell by $55 million to $428 million. This pushed the operating ratio to 80.9%, compared to 78.4% in the year-ago quarter.
Norfolk Southern stayed firmly on a turnaround course, shaving its operating ratio to 82.3% from the 82.5% recorded in the second quarter of last year. Net income in this year's quarter rose to $107 million from $99 million in the year-ago period (excluding a one-time gain of $17 million in the 2000 quarter from the sale of certain non-rail assets). Operating revenues this year were $1.59 billion, about even with the 2000 quarter, despite a 4% decrease in carloads. Chairman, President, and CEO David R. Goode found the company's progress encouraging "in light of the economic downturn that is proving to be longer and deeper than we anticipated."
A strong report also came from CSX Corp., which said it expected second quarter earnings from continuing operations to be around $118 million, up 125% from the $48 million the company earned in the year-ago quarter. Corporate Chairman and CEO John W. Snow said CSX Transportation performed well during the quarter; strength in coal coupled with rate increases in selected markets largely offset declines in other commodity groups. CSX planned to issue a more detailed report around Aug. 1.
Canadian National continued to be a star performer, improving its operating ratio in the second quarter by half a point to 68.1%. CN reported a 4% increase in revenues, to $1.4 billion (C), with five of its seven business units posting gains. Second quarter net income was $240 million, excluding non-recurring items, compared to $230 million in the 2000 quarter. Non-recurring charges included the costs of a workforce reduction program that is cutting 690 positions and is now 50% complete.
Canadian Pacific reported second quarter operating income of $206 million (C), up slightly from last year's record quarter. CP's operating ratio of 77.9% was up half a percentage point from last year. Second quarter revenues rose 3% to $931 million this year.
| 7/25/01 |
Trains began moving through CSX Transportation's Howard Street Tunnel in Baltimore late on July 24, six days after a 60-car train derailed in the century-old structure and set off a fire that persisted for more than four days.
What caused the derailment was not immediately clear. In its announcement of the tunnel reopening, CSXT did not comment on reports that the National Transportation Safety Board was questioning whether water from a broken pipeline had flowed into the tunnel and weakened the trackbed. Earlier reports blamed the train wreck for the pipeline break.
The accident caused major disruptions in Baltimore, including road closings, business shutdowns, and the cancellation of three Baltimore Oriole games.
If there was a bright side to a story that captured media attention around the world--including a front page picture in The New York Times showing flames spurting from the tunnel--it was a dramatic demonstration of the railroads' ability to handle hazardous materials safely. While several cars in the train carried hazmat loads, CSXT noted with satisfaction that the Maryland Department of the Environment had established that "no chemicals were emitted to the air at levels that would pose a hazard to public health."
CSXT President Michael J. Ward expressed appreciation to Baltimore city officials, the Baltimore Fire Department, and emergency response personnel whose efforts, he said, "safeguarded Baltimore and the surrounding environment."
| 7/23/01 |
After nearly four years of on-again, off-again merger talks peppered by a fair amount of hostility, the two largest unions representing train and engine service employees--the United Transportation Union (UTU) and the Brotherhood of Locomotive Engineers (BLE)--have reached agreement on a merger. The merger, which is subject to ratification by the rank and file, would take effect Jan. 1, 2002.
The merged union would be named the United Transportation Union-Brotherhood of Locomotive Engineers (UTU-BLE), and the logos of both would be retained. If approved, UTU-BLE would have approximately 185,000 members, and would be the bargaining representative for all unionized rail operating employees in the U.S. and Canada, yardmasters, Canadian rail traffic controllers, and thousands of other railroad, bus, air, and mass transit workers in both countries.
Stressing that individual craft autonomy would be retained in the merged union, UTU International President Byron A. Boyd, Jr., and BLE International President Edward Dubroski said in a joint statement, "It's time for the members of both unions to decide on the question of merger. We are asking our members to approve the creation of the largest combined rail, bus, and air union in North America. It joins the best of the proud, historic, and democratic principles embodied in both the UTU and the BLE, and has as its goal the protection and advancement of each of the autonomous crafts in which our members work."
The two union presidents said UTU-BLE "would produce substantial financial savings by ending hostilities that have distracted both of us from doing what we are paid to do--represent our members' interests with railroads and other transportation companies--by providing for streamlined operations. Most important, the new union would vastly enhance our power and influence at the bargaining table, in state legislatures and provincial parliaments, and in the halls of national legislatures in Washington and Ottawa."
| 7/23/01 |
Burlington Northern and Santa Fe Railway is offering guaranteed availability and placement of refrigerated boxcars through its Loading Origin Guarantees (LOGS) program, an online auction that allows customers to secure in advance refrigerated boxcar capacity for 4-, 5-, 13- or 26-week periods. BNSF says it will guarantee the availability and placement of empty railroad-owned or controlled refrigerated boxcars for the scheduled shipping period or make a default payment.
Initially, about 50% of BNSF's refrigerated loading capacity will be placed in the LOGS program, "ensuring that large and small shippers have an equal opportunity to secure equipment," says BNSF Assistant Vice President-Perishables Marketing Dave Fleenor. "It also allows us to improve equipment utilization."
The first auction for refrigerated equipment will be July 30, for shipments beginning the week of Aug. 27. Shippers can obtain more information at BNSF's website at www.bnsf.com/vicc/markets/perishables/carload.html.
BNSF introduced the LOGS program in January 2000 for centerbeam flat cars. LOGS has since been expanded to include plain boxcars and refrigerated boxcars.
| 7/23/01 |
The first week of July saw a continuing decline in railroad carload traffic, but intermodal volume rose for the first time in four months: 140,940 trailers and containers were handled in the week ended July 7, up 3.5% from the same week in 2000. It was the first increase since the week ended March 10.
Nationwide, carload traffic dropped 4.9%. The steepest decline, 11.1%, was in the East. In the West, carloads were down only 0.6%, thanks partly to a surge in grain movements. Measured in ton-miles, volume for the week ended July 7 was down 2.1% from last year.
In this year's first 27 weeks, carloads were down 1.1% from year-ago levels, intermodal was down 2.8%, and revenue ton-miles were up 0.4%.
| 7/19/01 |
Wabtec President and CEO Gregory T. H. Davies believes "it's prudent to assume that next year will remain challenging for freight rail supply companies." He made this comment on July 18 as Wabtec announced a $13 million drop in Freight Group sales during this year's second quarter and a $5 million increase in Transit Group sales. Excluding restructuring costs, the company reported earnings per diluted share of 26 cents this year vs. 27 cents in the year-ago quarter. Wabtec had 5,755 employees on June 30, reflecting a cut of 240 jobs in the second quarter and 500 since the beginning of the year.
| 7/19/01 |
Robert J. Kiley, the former New York City MTA chief who helped revitalize New York City's subways, is having a difficult time trying to do the same for London's underground system. Appointed chairman of London Transport on May 8, he was fired from that position by the Blair government on July 17 for continuing to oppose a plan to privatize London's infrastructure while leaving operations in the public sector. Kiley retains his position as Transport Commissioner for London under the city's mayor, Ken Livingstone, who also opposes the partial-privatization scheme. Kiley was quoted as saying his firing was "a transparent attempt to silence me and create a smoke screen" as he prepared to reveal damaging information about the underground system's condition. He said he would ask a court to halt the privatization plan.
| 7/17/01 |
The Paris-based International Transport Union (UIC) estimates that on a worldwide basis rail freight volume rose 1.8% in 2000 and passenger ridership was up 0.8%. In Europe, passenger traffic grew 2.3%, with ridershp on high speed trains up 11%. Freight traffic increased 7%, with international movements posting 12.5% growth. Intermodal freight transport rose 8%. All percentages are expressed in freight-kilometers and passenger-kilometers.
In its annual report, UIC also said that "rail cooperation on the international scale gathered momentum" in 2000 under the leadership of the UIC World Executive Council, chaired by Masatake Matsuda of East Japan Railways, with Charles Dettman of the Association of American Railroads as vice-chairman. Among the program's goals are joint research prxograms, including the launch of a project on optimizing wheel/rail interaction, and exchanges between railway research centers on five continents.
| 7/17/01 |
All modes of rail transit continued to post gains in this year's first quarter, reports the American Public Transportation Association. Light rail ridership was up 6.4%; heavy rail, 5.5%, and commuter rail, 4.3%.
Light rail's top performers were Portland, Ore., 7.5%: Boston, 7.5%; NJ Transit, 7.4%; and Baltimore, 6.1%.
Heavy rail systems reporting increases included the Washington Metro, 10.3%; MTA New York City Transit, 5.5%; and New Jersey's PATH, 6.2%. A major extension helped push Los Angeles Metro ridership up 95%.
Service expansion was also largely responsible for the 101% increase reported by the Dallas-Ft. Worth Trinity Railway Express. San Jose's Altamont Commuter Express reported a 70% increase in ridership, and Virginia Railway Express, 17.6%.
| 7/13/01 |
In a weak economy, Wabtec continues to show some strength. The company reduced its debt by about $35 million in the second quarter, and has doubled its debt reduction target for 2001 to $100 million. When it announces second quarter results July 18, Wabtec expects to report per-share earnings, excluding restructuring, of about 20 cents, compared to 27 cents in the year-ago quarter. Earnings "guidance" for the year is being reduced to 75-85 cents a share from $1.04. "Despite very difficult market conditions, we are profitable and are generating strong free cash flow," said President and CEO Gregory T. H. Davies.
It's difficult to predict when conditions will turn around, said Wabtec Chairman William E. Kassling. "Our freight railroad customers are continuing to defer aftermarket spending, in part to offset higher fuel costs; and the freight car and locomotive builders are cutting production further due to reduced demand for new rolling stock," he said. "We are, however, encouraged by the railroads' efforts to form joint marketing agreements as a means to increase traffic and market share, and we believe Wabtec offers many products and services that can help."
| 7/12/01 |
Trespassing deaths on railroad property rose to 142 in this year's first four months, up 26% from the 113 fatalities reported in the same period last year, according to the Federal Railroad Administration.
Highway-rail grade crossing incidents caused 140 deaths in the January-April period this year, compared with 142 a year ago. According to the FRA, trespassing and grade crossing incidents together account for around 95% of all rail-related fatalities.
The FRA's four-month report shows that there were 967 train accidents this year--64 collisions, 743 derailments, and 160 attributed to other causes. In the comparable period last year, there were 992 train accidents--78 collisions, 692 derailments, and 222 from other causes. The train accident rate in both years was 4.11 per million train miles.
| 7/12/01 |
Canadian National announced July 10 that the Government of Canada's Competition Bureau has cleared CN's proposed acquisition of the Wisconsin Central Transportation Corp. The Surface Transportation Board is expected to issue its decision by Sept. 7, provided no environmental assessment is required and there is no oral argument.
| 7/12/01 |
The Greenbrier Companies, Inc., had a manufacturing backlog of 4,600 freight cars valued at $230 million at the end of its fiscal third quarter on May 31. Three months earlier, the backlog was 4,300 units valued at $260 million. A spokesman said a difference in the mix of cars was mainly responsible for the lower per-unit value of the May 31 backlog, though pricing pressures were also at work.
On third-quarter revenues of $148 million this year, Greenbrier reported a net loss of $1.3 million. This included unusual charges of $1.2 million, or $.08 a share, related to work force reductions and production slowdowns. The near-break-even results were in line with revised expectations. In the same quarter a year ago, Greenbrier earned $4.2 million, or $.30 a share, on revenues of $172 million.
As it announced its third-quarter results on July 10, Greenbrier also announced a quarterly cash dividend of $.09 a share.
The company said it "continues to evaluate certain of its rail investments," which could result in additional unusual charges in the current fiscal year. Greenbrier has operations in the U.S., Canada, Mexico, and Europe.
| 7/12/01 |
CSX Corp. announced July 11 that second quarter earnings from continuing operations will be approximately $118 million, up 125% from the $48 million the company earned in the year-ago quarter. At the same time, Chairman and CEO John W. Snow said the company is cutting its quarterly dividend to 10 cents a share from the 30 cents it has paid since the fourth quarter of 1997. Snow said this action by the board "brings CSX generally in line with the rest of the railroad industry. We believe that more financial flexibility is in the best interests of our shareholders and will increase the company's value over the long term." The dividend is payable Sept. 14 to shareholders of record as of Aug. 24.
Snow said CSX Transportation performed well during the quarter. Strength in coal coupled with rate increases in selected markets largely offset declines in other commodity groups. "The railroad management team is doing a terrific job operating a fluid, high performing network and taking out costs," said Snow. "Rail operating income is up sharply as locomotives, cars, and crews are being utilized much more efficiently."
CSX will officially report its second quarter earnings on July 31.
| 7/10/01 |
European operators have announced nearly $1 billion worth of orders for passenger railcars. The Paris Transport Authority (RATP) awarded a $584 million contract for 805 metro cars to a consortium led by Alstom and Bombardier Transportation. The steel-wheeled cars will replace 40% of RATP's current fleet starting in 2005.
French National Railways (SNCF) is buying 100 new TER regional express electric railcars for $118 million from Alstom. SNCF also exercised an option with Alstom for 12 double-deck emus worth $70 million for the Paris region's RER system.
Swiss Railways placed a $120 million order with Bombardier and Alstom for 10 intercity tilting trains.
Bombardier received a $76 million order to overhaul and modernize 60 three-car trainsets for the Netherlands Railways.
| 7/9/01 |
The Association of American Railroads estimates that total freight volume for U.S. railroads in this year's first half was 727.3 billion ton-miles, up 0.5% from last year. Measured in carloads, traffic this year was down 0.9%. While most commodity traffic trailed 2000 levels, coal loadings were up 7.7%, accounting for the increase in ton-miles.
Intermodal volume in this year's first half ran 3% below last year's levels, reversing a trend of many years when trailer/container traffic was the pace-setter.
The decline worsened slightly toward the end of the half, with carload traffic down 1.1% and intermodal traffic down 3.2% in June this year compared with June a year ago.
"Clearly, the economy remains stuck in low gear," commented AAR Vice President Craig F. Rockey, though he said there were some indicaations that the national economic downturn may have "troughed."
| 7/9/01 |
Short line and regional railroad operator RailAmerica, Inc., looking to reduce debt through "asset rationalizations, sale/leasbacks, and equity infusions," has completed $4.8 million in locomotive sale/leaseback transactions, adding to $22.2 million in similar transactions completed in December 2000. The transactions complete the North American portion of RailAmerica's sale/leasback program. Chairman, President, and CEO Gary O. Marino says RailAmerica's projected 2001 lease payments are 3.2% of projected revenue, "nearly 20% below the industry average of 3.9%." The company, he says, has reduced long-term debt by $50 million, and is "on target to achieve a debt-to-equity ration of less than 2:1 by year-end 2001."
| 7/9/01 |
Norfolk Southern has opened a new intermodal terminal in Maple Heights, Ohio, near Cleveland. The $11 million, 70-acre facility, which replaces an NS intermodal terminal in downtown Cleveland, is used by northern Ohio shippers moving goods between Cleveland and the East Coast. NS calls it "the capstone terminal" in a conventional Midwest terminal network that also includes Pittsburgh, Toledo, Detroit, Columbus, Cincinnati, Lexington, and Louisville. Built on an existing railyard, the terminal is accessible from Interstates 480 and 271.
| 7/9/01 |
Union Pacific's new, $20 million distribution hub for DaimlerChrysler vehicles in Centreville, Ill., (southeast of St. Louis) is open for business. The 95-acre facility, part of an agreement UP forged with DaimlerChrysler in February 2000, includes staging capacity for 5,000 vehicles, four 2,400-foot loading/unloading tracks that accommodate 80 railcars, nine 3,000-foot tracks for up to 200 Thrall Car-built Q2 multi-level railcars, security lighting and fencing, and a 7,000-square-foot administration building. New vehicles are trucked to Centreville from DaimlerChrysler's Fenton, Mo., assembly plant, and shipped over UP to distribution centers in the U.S., Canada, and Mexico. The facility also handles DaimlerChrysler and Mazda vehicles shipped by rail for distribution at St. Louis area dealerships.
| 7/9/01 |
Burlington Northern and Santa Fe has posted ramp-to-ramp rates for intermodal service in more than 200 of its lanes on its website at http://bnsf.railprices.com. The rates, said BNSF, are the only domestic and full truckload rates it offers in these lanes. In addition, BNSF has eliminated minimum revenue commitments associated with these rates. "Shippers who can organize drayage and agree to terms outlined in BNSF's Intermodal Service User Agreement now have direct access to BNSF," the railroad said in a statement released July 9.
| 7/9/01 |
Simmons Machine Tool Corp., which manufactures equipment used in the maintenance of locomotive, freight car, and transit car wheelsets, has entered into an agreement with Arkansas Industrial Computing, Inc., to incorporate AIC's computerized Wheel Press Recording and Wheel Shop Management systems into Simmons' wheel press machines. The Wheel Shop Management System utilizes state-of-the-art data collection hardware--a combination of industrial computers, hand-held barcode scanners, and wireless barcode scanners--in conjunction with proprietary software to simplify data collection and speed production. AIC's Wheel Press Recording System generates mounting diagrams and provides information that simplifies data retrieval, reporting, inspection, and supervisory functions.
| 7/9/01 |
Burlington Northern and Santa Fe has launched Mexi-Modal, a new intermodal service "that creates a seamless and easy to use transportation network connecting major markets in Mexico, the U.S., and Canada." BNSF coordinates the entire transborder shipping process, door-to-door, through cooperation with Canadian National, TFM, and several Mexican trucking companies. Through the Mexi-Modal internet site (bnsf.com/productofferings), customers can check door-to-door rates for service in various lanes. By calling a BNSF customer service representative in the U.S., they can book loads and arrange for movement of freight.
Mexi-Modal consists of three service products:
1) MidBridge, which allows freight to be moved by rail in the U.S. and Canada and then by truck in Mexico by facilitating the purchase of products to occur at the "middle of the bridge" (the International Rail Bridge) between Laredo, Tex., and Nuevo Laredo, Mexico. This product, says BNSF, "mirrors how most transborder truck transportation is conducted today."
2) Laredo, which allows a customer to move full truckload freight from the U.S. or Canada by rail either to or from a designated warehouse in Laredo, Tex., enabling customers to store freight in Laredo for warehousing.
3) MexiStack, an all-rail product that allows the purchase of goods to occur at the U.S., Canadian, or Mexican origin or destination. North of the border, the customer's freight is moved by BNSF or CN; in Mexico, by TFM.
| 7/3/01 |
Sumitomo Corp. of America has acquired GeoFocus, a supplier of wireless GIS (geographic information systems) and GPS (global positioning system) technologies to the transportation industry, from Williams Controls, Inc. Former Federal Railroad Administrator Jolene M. Molitoris is president and CEO of GeoFocus LLC, as the company is now called. GeoFocus' TrainTrac TIMS (Train Information Management System), which provides train location, performance-to-schedule, and automated messaging and report generation, is in use on Florida's Tri-Rail (where it was developed), Metra (Chicago), Metrolink (Los Angeles), MBTA (Boston), and TRAX light rail (Utah). The company is based in Deerfield Beach, Fla.
| 7/3/01 |
In February, Burlington Northern and Santa Fe entered into an agreement with Dow Chemical Company to provide Dow with competitive rail service to a petrochemicals plant in Seadrift, Tex., (located about 120 miles southwest of Houston) by constructing a seven-mile rail line from Kamey, Tex., to Seadrift. The Surface Transportation Board has approved BNSF's plan; environmental review is pending. Construction should begin in the first quarter of 2002 and be completed in 2003. The new line will tie into BNSF's network by way of trackage rights over Union Pacific between Placedo, Tex., and Kamey. Currently, Dow's Seadrift operations is served only by UP.
| 7/3/01 |
Two of Amtrak's harshest critics in Congress--Republican Senators John McCain of Arizona and Phil Gramm of Texas--say they were surprised and disturbed when Amtrak mortgaged part of Penn Station in New York to raise $300 million. "Apparently, Amtrak's financial condition is so severe that without an emergency infusion of cash provided by this deal, it would face immediate bankruptcy," they told Transportation Secretary Norman Mineta in a letter June 22. They found the situation "especially troubling considering that Amtrak continues to boast it is on a glidepath to 'operational self-sufficiency.' Clearly, Amtrak has been dishonest to Congress and the American public regarding its true financial condition."
Amtrak President George Warrington took up the challenge at a Senate appropriations subcommittee hearing on June 28. He said he saw no chance that Amtrak could go bankrupt by the end of next year if it received its planned $521 million appropriation, though he acknowledged that unforeseen circumstances could change that. Warrington testified before a mostly-friendly subcommittee. Voters back home tend to like Amtrak; their representatives in Washington tend to want to get re-elected, and over the years it's been grass-roots support that has helped keep Congress in line and Amtrak in business.
| 7/3/01 |
CSX Corp. Chairman and CEO John W. Snow told a Senate subcommittee on June 28 that the Surface Transportation Board's new merger rules should encourage railroads "to develop and test ways to reap many of the benefits of consolidations without precipitously plunging down the merger track." Snow said he saw "little or no sentiment for additional major mergers among the rails themselves, from our customers, or from our investors." He suggested that the STB's tougher new rules may lead to a merger hiatus of perhaps five years.
In other testimony, Canadian National Chairman and CEO Paul Tellier said he knew of no current merger plans but "it is hard to forecast the future. We are keeping an open mind." It was the proposed merger of CN and Burlington Northern and Santa Fe, announced in December 1999, that caused STB to declare a 15-month moratorium on major rail consolidation activity while it re-examined the rules.
STB Chairman Linda Morgan told the Senate panel that "service is being discussed in a way it never has been before." Responding to shipper complaints that it was impossible to enforce STB's dictum that future mergers should enhance and not merely preserve competition, Morgan said the Board went "as far as it legally could go."
| 6/29/01 |
The U.S. House of Representatives has introduced its version of the High Speed Rail Investment Act, H.R. 2329. Primary sponsors are Reps. Houghton (R.-N.Y.) and Oberstar (D-Minn.). "We have had plenty of money for studies . . . but haven't had money to implement [them]," Oberstar said at a June 27 news conference announcing the bill. Also present was Amtrak President and CEO George Warrington, who said the measure "is not about Amtrak, nor about competing for resources with other modes of transportation, but about developing the third leg of an intermodal transportation stool." The Senate version of the bill, S.250, gives Amtrak authority to issue $12 billion in bonds over 10 years to help finance equipment purchases and upgrade rights-of-way and signaling systems for DOT-designated high speed rail corridors. It stalled in the Senate last year and was reintroduced earlier this year. Its most vocal opponent is Sen. John McCain (R.-Ariz.).
| 6/25/01 |
Gary O. Marino, president and CEO of RailAmerica, says the short line acquisition market "is better now than at any time in recent memory. . . . Between announced planned divestitures of rail lines from Class 1's and privately owned short lines that are on the market, we estimate that up to 15,000 track miles are available for acquisition. In the international arena, we believe there are around 20 privatization opportunities coming to market."
Marino made these observations at the annual meeting of RailAmerica shareholders in Boca Raton, Fla., June 22. While he said the company will meet or exceed its strategic growth goals in 2001, he also said that any future acquisitions must be "accretive to earnings and improve our leverage and debt coverage ratios."
RailAmerica, which claims to be the world's largest short line and regional railroad operator, owns 36 railroads operating 11,000 route-miles in the U.S., Canada, Australia, and Chile.
Marino told shareholders that 2000 was a record year for the company, and business has continued to rise in 2001 during an economic downtown. He said that in North America, RailAmerica's "same railroad" carloadings were up 4% through May while for the industry as a whole loadings were down 1.6%.
| 6/22/01 |
The Surface Transportation Board has conditionally granted Burlington Northern and Santa Fe approval to build a seven-mile line in Texas that would permit BNSF to tap traffic generated by a Union Carbide Corp. (UCC) industrial complex about 120 miles southwest of Houston. Final approval of the build-out is subject to environmental review. STB said the UCC complex, now served only by Union Pacific, ships several billion pounds of chemicals and plastics a year.
| 6/22/01 |
Partnering with CSX Intermodal, Burlington Northern and Santa Fe has introduced twice-weekly Ice Cold Express service between San Bernardino, Calif., and Little Ferry, N. J., serving the metropolitan New York-New Jersey market. The new service, providing fourth-evening delivery, cuts a day from previous rail transit times for temperature-controlled products. "With a service schedule to meet the demand for midnight deliveries, the Ice Cold Express is a highly competitive alternative to over-the-road transportation," said Steve Branscum, BNSF group vice president, Consumer Products Marketing. The Ice Cold Express uses unit trains of 53-foot Wabash National ReeferRailers(TM). It was introduced on a weekly basis between Southern California and Chicago in 1999 and expanded last October to Montreal and Toronto.
| 6/15/2001 |
AAR President and CEO Edward R. Hamberger, in a prepared statement, addressed the STB's new rail merger rules by saying "rail mergers should not be subject to a standard requiring enhancement of competition, but instead should remain subject to the test of whether a merger preserves competition -- the same test that applies to other industries under antitrust laws."
Hamberger pointed out that railroads carry 40% of the intercity freight moved throughout North America but receive only 10% of the revenues, indicating that "competition in the transportation industry is thriving."
| 6/14/2001 |
Effective July 1, Burlington Northern and Santa Fe will post expiration dates for current carload commodity rates on a new rate renewal calendar.
When BNSF's Industrial Products business unit realigned into two groups (sales and marketing) last March, "one of the main objectives of the move was to make it easier for customers to use BNSF's carload network," said BNSF Group Vice President-Industrial Products Dave Garin. Previously, rates were renewed "in a variety of ways based on different criteria. This created complicated procedures and timing disparities in the marketplace. The new process significantly simplifies our previous methods of renewing rates and will make rate renewals more logical and predictable for our customers."
The rate calendar, which is designed for BNSF Industrial Products customers, can be found at www.bnsf.com/vicc. BNSF says its goal is "to align all documents in a like commodity group for common-month expiration. It is not intended to infer only annual pricing actions nor any other pricing inference."
| 6/14/2001 |
Railcar financing and leasing company CIT Rail Resources has entered into what it calls an "unusual" $6.5 million agreement with first-time customer Virginia Electric & Power Company (VEPCO) for a full-service lease of 400 aluminum rapid discharge coal cars, built by Johnstown America.
As part of this arrangement, CIT funded an extension of the track coal hopper at VEPCO's Bremo Power Station at Bremo Bluff, Va. The extension accommodates the new, 286,000-pound-capacity coal cars, which are several feet longer than VEPCO's old, 263,000-pound-capacity steel triple hoppers.
"As the economy continues to experience uncertainty, we strive even harder to provide the most creative and flexible financing and leasing solutions to our customers," said CIT Rail Resources Senior Vice President George Cashman. "We employed innovative thinking and a customized approach to help streamline VEPCO's business at the least possible cost, by helping them secure cars with greater capacity and faster loading."
VEPCO Transportation Planning Specialist Jim Mawyer said CIT's efforts "will allow Bremo Power Station to not only stay competitive but will also help resolve some operational and safety concerns."
| 6/14/2001 |
Despite a continuing surge in coal traffic, U.S. railroad carloadings as a whole were 1% below year-ago levels in this year's first 23 weeks. The biggest declines were in metallic ores and metals, down 10.8%, and motor vehicles and equipment, down 10.6%. Coal loadings through June 9 ran 7.8% ahead of last year, and heavy, long-haul coal trains helped keep total revenue ton-miles 0.4% higher than a year ago. Intermodal traffic on U.S. railroads was off 3% in this year's first 23 weeks. In Canada, carload traffic was down 1.6% from 2000 levels; intermodal traffic rose by 2.6%.
| 6/14/2001 |
The Brotherhood of Locomotive Engineers Advisory Board voted June 11 to resume unification talks with the United Transportation Union. UTU President Byron A. Boyd, Jr., said creating a single operating union is necessary to prevent railroad management "from playing us off against one another." Boyd said unification will produce "a strong, single voice fighting for better wages, benefits, quality of life, and job security." The BE Advisory Board's June 11 resolution said the discussions should be reinstated as of their status on May 8, 1999, when BLE withdrew from the negotiating table.
| 6/12/2001 |
New York Sen. Charles Schumer, in a letter to Transportation Secretary Norman Mineta, stated that "before any contract is signed, it should be made public and there should be a debate," over Amtrak's plan to use Penn Station as collateral on an already-approved $300 million loan.
Schumer feels that if Amtrak were to default on the loan, it would "put a key component of the transportation system for New York and the entire Northeast Corridor at risk."
Amtrak, desperate for operating funding, plans to use the loan to cover expenses until the start of its fiscal year in October, and blames current cash problems on the delayed launch of its Acela Express program.
| 6/12/2001 |
Genesee & Wyoming has started hauling shipments from a new Western New York rock salt mine owned and operated by American Rock Salt. It replaces the original salt mine that was closed after collapsing in 1995.
Trinity Industries will provide a fleet of 600 new cars for the rail service, which are owned by American Rock Salt and managed by GWI. An estimated 750 monthly carloads are expected to be shipped until the third quarter, when production will ramp up and 1,200 carloads per month will be hauled to connections with CSX, Norfolk Southern, and Canadian Pacific.
| 6/12/2001 |
The Alliance for Rail Competition (ARC) has registered a bitter complaint against the Surface Transportation Board's new merger rules, declaring that they leave captive customers "to the mercy of expanding regional monopolies."
The rules "offer no reason for those captive customers to believe their concerns will be addressed to any better satisfaction than they have in previous merger proceedings," said Diane Duff, executive director of ARC, a lobbying group supported by shippers of coal, grain, chemicals, and other bulk commodities. "In fact, by emphasizing its support for the general concept of promoting "competition," the board appears to have missed the point altogether. Most agree that, to the extent that rail mergers improve rail operations, they could, at least theoretically, improve the railroad's ability to compete for truck-competitive traffic, although this has yet to be borne out in any previously completed merger. Rather, competitiveness concerns expressed by rail customers have always focused on the fact that little or no attention has been given to promoting competition among and between rail carriers."
Railroad reaction to the new rules was generally more positive, though it included what one observer characterized as "ritualistic grunts of disapproval."
Association of American Railroads President and CEO Edward R. Hamberger said that while the AAR was still reviewing the decision, "We continue to believe that new rail mergers should be not be subject to a standard requiring enhancement of competition, but instead should be subject to the test of whether a merger preserves competition -- the same test that applies to other industries under antitrust laws."
Approving words for the STB action came from Canadian National, whose proposed merger with Burlington Northern and Santa Fe a year and a half ago set off the 15-month merger moratorium that culminated in issuance of the new rules.
Canadian National President and CEO Paul M. Tellier said: "CN is pleased that the rules adopted by the STB will raise the bar for the quality of customer service in future railroad mergers. CN had urged the agency to adopt such an approach last year. CN is also pleased that the STB appears to have heard its concerns to apply higher public interest standards for mergers equally to all applicants -- both domestic U. S. companies and foreign-headquartered corporations."
CSX Transportation, while it said the new rules would make mergers more difficult to achieve, also said they could produce a "more stable environment" for forging railroad alliances.
| 6/11/2001 |
The Surface Transportation Board has issued a new set of major-merger rules that it says "substantially increase the burden on rail merger and consolidation applicants to demonstrate that a proposed transaction is in the public interest." The final rules closely follow those outlined in the STB's Notice of Proposed Rulemaking issued last Oct. 3. With Chairman Linda J. Morgan dissenting, the Board waived application of the new rules to the Kansas City Southern.
STB's announcement of the rules on June 11 said a key change will require applicants to show that a transaction "would enhance competition where necessary to offset negative effects of the transaction, such as competitive harm, and to address fully the impact of the transaction on service, including plans for service reliability." Competitive enhancements "could include, but would not be limited to, reciprocal switching arrangements, trackage rights, and efforts to eliminate restrictions on interchanges by short line railroads."
In a reaction statement issued by its Washington office, CSX Corp. found it "disappointing that potential mergers, and their accompanying benefits, will be judged on a decidedly harder and more complicated set of regulatory standards than those faced by other U. S. businesses." But CSX also said the decision "is likely to result in a more stable environment which will allow railroads to pursue alliances with other railroads that could very well result in substantial economic and operational benefits."
STB's decision ended a 15-month moratorium on major railroad consolidations that was triggered by a merger proposal announced by Burlington Northern and Santa Fe and Canadian National late in 1999. Rumors in recent weeks have suggested that BNSF and Norfolk Southern may make the first move under the new rules.
| 6/11/2001 |
The Greenbrier Companies announced on June 11 "significantly reduced earnings expectations" and said it has initiated a new round of workforce reductions and other cost-cutting measures. The company said it expects to post net losses for its third and fourth fiscal quarters, owing to reduced car production levels in North America as well as lower anticipated margins on certain car types in North America and Europe. For the total fiscal year, the company expects results ranging from about break-even to a slight loss. Earlier in June, Greenbrier reduced its corporate and commercial staff in North America by about 25%, or 35 positions. Greenbrier also said that so far this year it has laid off about 1,500 manufacturing employees, or 40% of the workforce at its three North American factories. Substantial layoffs have been made at Gunderson-Concarril in Mexico and Trentonworks in Nova Scotia, and one factory may face closure or temporary shutdown. At the Gunderson facility in Portland, Ore., 125 workers out of 1,200 were laid off in May and another 160 face layoff in July unless orders pick up in June.
| 6/8/2001 |
Pioneer Railcorp announced it has spun off the Elkhart Indiana division of its Michigan Southern operation to create a new railroad, Elkhart & Western (EWR). Pioneer said it formed the nine-mile EWR as a separate entity "to capitalize on its competitive access" and simplify interchange operations with the Norfolk Southern. EWR also connects with CSX Transportation at Fort Wayne, Ind., through a haulage agreement reached in negotiations with Norfolk Southern prior to the NS/CSXT acquisition of Conrail
| 6/8/2001 |
In one of several moves designed to shore up earnings in a faltering economy, Pioneer Railcorp announced that it has expanded its marketing department and purchased a third-party logistics company, Hudson Railway Services, thus entering the intermodal and logistics management market. The short line holding company said a slowing of the economy in the first quarter led it to expand its marketing department "in order to maintain market share and develop new traffic." Pioneer Railcorp President and CEO Guy L. Marino said that with Pioneer Logistics, a new division of Pioneer Railroad Services, Inc., the company can offer domestic and international intermodal service to any shipper in the country.
| 6/8/2001 |
CSX Transportation has notified customers that it plans to close most of its main line between Flomaton, Ala., and Pensacola, Fla., from July 2 to July 6 for a major rehabilitation that would take weeks if carried out under traffic. Working around the clock, more than 700 m/w employees will install more than 100,000 ties and six miles of rail, rebuild or repair 14 bridges, and clean up embankment shoulders on more than 60 miles of track. CSXT said there could be 24- to 48-hour transit delays for line haul traffic i rerouted to other railroads and gateways.
| 6/8/2001 |
Using a fleet of 600 new Trinity-built cars, Genesee & Wyoming early in June began hauling rock salt from a new mine at Hampton Corners in upstate New York. The cars are owned by American Rock Salt and managed by the railroad. GWI started out moving salt at the rate of approximately 750 carloads a month and expects that figure to rise to 1,250 carloads a month in the third quarter. The salt will be primarily used for de-icing roads in the northeastern states. About 2.5 million tons a year will be distributed by both rail and truck. The new rock salt mine, the first built in the U. S. in more than 40 years, is estimated to have 80 years of reserves in 10,000 acres of mineral rights.
| 6/8/2001 |
Canadian Pacific is investing $36 million (C) to accommodate a continuing increase in container traffic, which has edged out grain and coal to become its biggest revenue producer. CPR will spend $26 million to expand capacity by 55% at its Vaughan Intermodal Facility serving the Toronto area, $8 million to expand its Calgary Intermodal Facility two years ahead of schedule, and $1.6. million for improvements at Bensenville Yard in Chicago. In this year's first quarter, intermodal brought in 23% of CPR's revenue. Between 1996 and 2000, the railroad's intermodal revenue increased 29%.
| 6/7/2001 |
U.S. Transportation Secretary Norman Y. Mineta has given permission for Amtrak to put up parts of Penn Station New York as collatoral for a $300 million loan to cover an operating shortfall (see related story, June 6). "This transaction is not unlike steps taken by other private-sector companies to secure operating cash," said Amtrak President and CEO George Warrington in a statement.
| 6/6/2001 |
"There's no question Amtrak is facing very, very serious financial problems." That assessment came from U.S. Transportation Secretary Norman Y. Mineta during a briefing with reporters on June 5, at which he revealed that the cash-strapped passenger carrier has asked the White House permission to mortgage part of Penn Station New York for a $300 million loan to cover an operating shortfall. Amtrak is already $3 billion in debt with loans for capital projects, but this is the first time it has sought a loan to cover operating expenses.
Mineta, who expects shortly to be appointed to Amtrak's board of directors, also said that Amtrak probably will not be able to survive as a national system, and should instead limit its services to the Northeast Corridor, the West Coast, the Chicago hub, and possibly other selected routes, "rather than trying to blanket the country with service that is not financially viable." He said that it is "obvious" that Amtrak is not going to meet its Congressionally-mandated goal of operational self-sufficiency by Fiscal Year 2003, which begins Oct. 1, 2002. He said that restructuring Amtrak operations to a limited number of corridors could be an alternative to liquidation, which is technically supposed to happen if the self-sufficiency goal is not reached. But Amtrak does enjoy support in Congress--Senate Majority Leader Tom Daschle (D.-S.D.) and Minority Leader Trent Lott (R.-Miss.) both support a $12 billion capital bond bill--and it is widely believed that Congress would not permit liquidation to occur.
In response to Mineta's pronouncements, Amtrak officials insisted that the carrier is still on "a glide path" to operational self-sufficiency, and that cutting back routes would be a mistake. Spokesman Bill Schulz said Amtrak believes there are opportunities to add service "where it makes economic sense." Chief Financial Officer Arlene Friner blamed the cash shortfall on late delivery of the Acela Express high speed trainsets, which began revenue service on the Northeast Corridor in December 2000, more than one year behind schedule. Amtrak says it needs a minimum of $1.5 billion per year in capital appropriations, triple its current appropriation of $521 million, just to keep its system in a state of good repair. Critics, like Sen. John McCain (R.-Ariz.), citing the $23 billion in capital and operating funds Amtrak has already received during its 30-year history, say that any further investment in Amtrak would be a waste of taxpayer dollars.
| 6/4/2001 |
Burlington Northern and Santa Fe is now offering 48-hour intermodal service between Chicago, Ill., and San Bernardino, Calif. Currently, BNSF transit times on this route, which uses the high speed "Transcon" main line, range from 50 to 54 hours, and "do not provide a departure early enough to make in-week deliveries," says BNSF Assistant Vice President-Intermodal Direct Marketing John Lucas. The new service, which begins June 5, offers Chicago departures on Tuesday and Wednesday mornings, with arrivals in San Bernardino on Thursday and Friday mornings. "Our less-than-truckload and parcel shippers have historically not been able to use intermodal to a great extent early in the week because of the extreme in-week competitive service expectations," says Lucas. "They have had to rely a great deal on expensive team-driver truck transportation. This new service is a direct result of listening to our most service-sensitive customers and providing them with a true competitive option to over-the-road transportation."
| 6/1/2001 |
Norfolk Southern has until June 11 to tell the Surface Transportation Board why the Board should not order the railroad to cancel its planned closing of car repair shops at Hollidaysburg, Pa., and keep them running at present capacity for a "significant" period beyond Sept. 1. The board based its action on pledges to keep Conrail shops open which NS made during the Conrail acquisition proceeding.
| 6/1/2001 |
Union Pacific Corp. announced June 1 that it hopes to move 4,100 employees into a new headquarters building in downtown Omaha by mid-2004. The UP board on May 31 authorized construction planning for the proposed 19-story, $340 million building to proceed. Final action is contingent upon favorable action on UP's application to the Invest Nebraska Board. The Invest Nebraska legislation, which was signed into law in late May, "will enable us to build a new, cost-effective headquarters," said UP Chairman and CEO Dick Davidson. He said the new building will consolidate employees now working at seven different locations in Omaha and St. Louis. It will have 1.1 million square feet of space and will be located on Douglas Street between 14th and 15th, south of the existing UP headquarters. The glass-exterior building will have a 19-story atrium.
| 6/1/2001 |
Fewer than half of the eligible voters bothered to return their ballots as members of the Brotherhood of Maintenance of Way Employes on May 30 ratified a tentative agreement reached with the National Carriers Conference Committee. Of 27,982 ballots sent out, 45% were returned and 69% of these approved the agreement -- a "difficult but wise decision," said BMWE President Mac Fleming. "As we stated to our members during the ratification process, this is not a good agreement," said Fleming. "However, given the overt anti-labor animus and pro-management bias of the members of the National Mediation Board and the Administration they serve, this agreement is far better than what we would have received from the political presidential emergency board that would be recommended by the NMB and appointed by President Bush."
| 5/31/2001 |
Adopting a practice already common in Europe, Amtrak has joined Icelandair in offering a single reservation good for a combined rail/air journey. Under a codeshare agreement that became effective May 31, travelers may purchase tickets good for Amtrak travel from Philadelphia or Washington, D. C., to Baltimore-Washington International Airport (BWI), connecting with Icelandair's daily flights to the UK and continental Europe. The train portion of the ticket will show an Icelandair flight number. The rail/air reservations are available only from travel agents and Icelandair, not from Amtrak. "This form of intermodal transportation has been quite successful in Europe, and our customer surveys indicated positive results in our test markets here," said Gunnar Eklund, Icelandair's general manager for the Americas.
| 5/31/2001 |
May 26 was a red-letter day for French railway technology. An eight-year old TGV that had already logged nearly 1.6 million miles set a world high speed endurance record, covering the 662 miles between Calais and Marseilles at an average speed of 190 mph. The train averaged 227 mph on a 155-mile new section of the high speed rail network between Valence and Marseilles, which will be opened for revenue service on June 10, following its ceremonial opening by French President Jacques Chirac on June 7. "This is a triumph for French industry and for all French railwaymen," said French National Railways President Louis Gallois. "It is now a record to beat."
| 5/31/2001 |
Under a ten-year contract, Burlington Northern and Santa Fe will move more than four million tons of coal annually from the Powder River Basin fields in Wyoming and Montana to Minnesota Power generating plants that serve 144,000 customers in northeastern Minnesota and northwestern Wisconsin. "Minnesota Power was the first utility in the early 1970s to ship Powder River Basin coal via unit trains from the western United States, and we've enjoyed a strong and growing relationship ever since," said BNSF Group Vice President Tom Kraemer.
| 5/31/2001 |
A Canadian National-CSX Intermodal marketing agreement announced May 28 offers five-day service between Vancouver, B. C., and New York (Kearny, N. J.). Other traffic lanes covered by the agreement include Toronto-Florida, four days, and Toronto-New York, two days. CSXI President and CEO Clarence Gooden said the agreement will give shippers "truck-competitive service with truck-competitive reliability at rail intermodal rates." Buffalo will be the gateway for shipments moving between Western Canada and the U. S. Northeast, and between Eastern Canada and markets in the I-95 corridor along the Eastern Seaboard; Chicago will be the gateway for traffic between Western Canada and the U. S. Southeast, Florida, and Mid-South.
| 5/31/2001 |
A Canadian National-CSX Intermodal marketing agreement announced May 28 offers five-day service between Vancouver, B. C., and New York (Kearny, N. J.). Other traffic lanes covered by the agreement include Toronto-Florida, four days, and Toronto-New York, two days. CSXI President and CEO Clarence Gooden said the agreement will give shippers "truck-competitive service with truck-competitive reliability at rail intermodal rates." Buffalo will be the gateway for shipments moving between Western Canada and the U. S. Northeast, and between Eastern Canada and markets in the I-95 corridor along the Eastern Seaboard; Chicago will be the gateway for traffic between Western Canada and the U. S. Southeast, Florida, and Mid-South.
| 5/25/2001 |
Railway Age is now accepting nominations for its 2001 Short Line Railroad of the Year and Regional Railroad of the Year awards. All Class II and III railroads are eligible. The awards recognize outstanding achievement in marketing, operations, customer service, and problem-solving of any kind. Nominations must be in Railway Age's New York office by July 16, 2001. Entry forms are available from: Christopher Ytuarte, Associate Editor, Railway Age, 345 Hudson St., New York, N.Y. 10014. Phone: (212) 620-7236. Fax: (212) 633-1863.
| 5/24/2001 |
Trinity Industries reported a net loss of $74.4 million on revenues of $2.74 billion, after unusual charges of $173.3 million, for the fiscal year ending March 31, 2001--reflecting a significant business downturn in its Railcar Group. Operating revenues for that group were $738.9 million in 2001, a 51% reduction from the $1.5 billion posted in FY 2000. The division posted an operating loss of $31.7 million after unusual charges, compared to a profit of $153.2 million the prior year. Operating revenues in Trinity's other business groups (Inland Barge, Parts and Services, Construction Products, Industrial) also dropped, but not nearly as much as the railcar operation.
"The North American railcar market is not showing signs of recovery at this point," said Trinity Chairman, President, and CEO Timothy Wallace. "Pricing for railcars remains very competitive, with a large portion of our customers electing to lease cars rather than purchase them. This coincides with our decision to expand our leasing business. Until we see more improvement in the North American rail market, we believe it is reasonable to expect that our net income in FY 2002 will be comparable to our FY 2001 net income, before unusual charges."
Those unusual charges related primarily to restructuring of Trinity's railcar operations, as well as various investment and asset write-downs, and severance costs. Without them, Trinity posted net income of $36.5 million in FY 2001, compared to $165.5 million in 2000. The Railcar Group, before unusual charges, posted an operating profit of $36.3 million for the year.
| 5/21/2001 |
The days when trains rumbling through or near western towns were a source of civic pride and a sign of prosperity have long since vanished. The Detroit, Minnesota & Eastern's proposal to extend its lines into Wyoming's Powder River Basin coalfields has raised widespread fears of environmental damage and threats to public safety along the proposed route -- 280 miles of new rail line in South Dakota and Wyoming and 600 of existing lines upgraded for a procession of coal trains in South Dakota and Minnesota. These fears, along with proposals for alternative routes, were the subject of a majority of the 8,500-plus comments the Surface Transportation Board received in response to a 5,000-page Environmental Impact Statement draft issued last September. They will be considered as the STB's Section of Environmental Analysis prepares a final EIS, due late this year.
| 5/14/2001 |
Burlington Northern and Santa Fe says a new $80 million intermodal facility in Stockton, Calif., will boost its intermodal lift capacity in the area from 120,000 to 300,000 units annually. The 425-acre facility has two loading and unloading tracks more than a mile long with the capacity to hold 150 intermodal cars, plus three storage tracks capable of accommodating 280 cars. BNSF said 15% of the total cost was for establishing a 55-acre wildlife sanctuary adjacent to the facility and a contribution of more than $9 million to San Joaquin County for intersection and roadway improvements.
| 5/14/2001 |
ABC-NACO reported net sales of $102.7 million for the first quarter, down $31.1 million from the first quarter of 2000. The company had a first quarter net loss of $18.1 million, compared with a loss of $500,000 a year ago. ABC-NACO said its performance reflected "significantly lower product demand from new freight car builders and continued reduced spending by the railroads on maintenance items such as loose wheels, replacement sideframes, and couplers."
| 5/11/2001 |
The Surface Transportation Board has agreed to handle the proposed Canadian National-Wisconsin Central merger as a "minor" transaction and has established a procedural schedule leading to a final decision by Sept. 7. CN President and CEO Paul M. Tellier said the schedule "is realistic and should give interested parties ample time to comment on it." The proposal has won the support of more than 330 individual shippers as well as the National Industrial Transportation League, said Tellier.
| 5/11/2001 |
In its new quarterly forecast, Economic Planning Associates (EPA) has cut its estimate of freight car production this year from 45,000 units to 38,600. That compares with 55,791 new cars delivered in 2000 and 74,223 in 1999. A slight increase is predicted for intermodal car deliveries this year, but production of other major car types will be down, slightly to sharply. Gondola car production will take one of the hardest hits, with deliveries expected to drop around 70%. EPA expects a five-year upturn in the freight cccccar market to begin late this year with deliveries rising to 42,500 in 2002 and to 64,500 by 2006.
| 5/7/2001 |
Amtrak has reached agreement with the Florida East Coast to operate trains serving eight additional communities on a route between Jacksonville and West Palm Beach. First, however, commitments are needed for an unspecified amount of state and local funding. Amtrak plans two daily round trips with stops in St. Augustine, Daytona Beach, Titusville, Cocoa/Port Canaveral, Melbourne, Vero Beach, Fort Pierce, and Stuart. Service will begin about a year from now if funding is secured in time for the first phase of capital improvement to begin in July. These improvements will include stations, signaling, and sidings.
| 5/7/2001 |
United Transportation Union President Byron A. Boyd Jr. has called on railroads to join the labor organizations in "a real and substantial dialogue concerning working conditions in general, and their potential impact upon the safety of operations in particular." He said such talks need to be "free of blame-game tactics" on either side and "must take place with new ground rules because...joint committees that have met in the past have been expensive endeavors without any enduring results." The railroads, while pointing out that the employee casualty rate has dropped 70% in the last two decades, have agreed that more needs to be done. A Federal Railroad Administration report shows that the casualty rate has essentially been on a plateau for the last four years.
| 5/7/2001 |
Railroad carloadings dropped 1.3% in this year's first 16 weeks and intermodal loads were down 2.6%. Revenue ton-miles were up less than one-tenth of 1%. Among 19 commodity groups, those showing increases were coal, up 7.8%; food and kindred products, up 5.5%; farm products excluding grain, up 5.1%; grain mill products, up 4.9%; and coke, up 2.4%.
| 5/4/2001 |
Wisconsin Central Transportation Corporation--the presumed merger partner of Canadian National--reported record first-quarter 2001 North American operating revenues of $92.7 million, topping last year's $91.9 million. Coal and wood fibers showed strong gains, though they were partially offset by softness in other markets. North American operating income was $16.8 million, compared to $18.1 million in the year-ago quarter. North American operating expenses were $75.9 million, up 3% from last year's $73.8 million, primarily due to increases in labor-related and fuel expenses. Fuel expense was up 21%, reflecting higher prices per gallon. The North American operating ratio was 81.9%, vs. 80.3% for first-quarter 2000.
On the international side, the contribution from English Welsh & Scottish Railway Holdings Ltd. was $3.8 million, vs. $2.6 million in the year-ago quarter. EWS operating revenues increased more than 4% while operating expenses increased 2.5%. The contribution from Tranz Rail Holdings Ltd. was $1.1 million, vs. $1.9 million in first-quarter 2000. Tranz Rail operating revenues were up 10%, while operating expenses were up 17%, including a fuel expense increase of 24%.
These results accounted for net first-quarter income for WCTC of $11.6 million, compared to first-quarter 2000 net income of $12.6 million.
| 5/1/2001 |
What the labor-management "safety summit" at Kansas City, Mo., on April 30 did to promote safer working conditions on the Burlington Northern and Santa Fe was not immediately clear, but it appears to have been a step toward more amicable relations between the United Transportation Union and the Brotherhood of Locomotive Engineers. The two unions have been at odds for several years, with the BLE fighting what it says is UTU's effort to create a single operating craft. The safety meeting produced an agreement between the presidents of the two unions and the BNSF to create a committee to recommend safety improvements in the wake of recent derailments. The union presidents also said the meeting was "a new beginning" (UTU's Byron A. Boyd, Jr.) that could "mutually advance the causes of our memberships" (BLE's Edward Dubroski).
| 5/1/2001 |
Genessee & Wyoming Inc. has announced a three-for-two stock split, a move that Chairman and CEO Mortimer B. Fuller said reflects "sustained strength of GWI's stock price, which has appreciated over 100% in the past 12 months, and our positive long term outlook driven by the balanced earning power of our North American and Australian operations." He said the split also "highlights our efforts to improve the liquidity of our common stock." The split will be in the form of a 50% stock dividend, payable June 15 to shareholders of record May 31. In this year's first quarter, GWI reported earnings per diluted share, before special items, of 72 cents, compared with 87 cents on the same basis in first quarter 2000.
| 5/1/2001 |
Kansas City Southern Industries has opened its first bulk transload center (TLC) in Spiro, Okla., and says it plans to open similar facilities in Louisiana and Mississippi later this year. The Spiro TLC, operated by Emerson Transload, serves bulk commodity shippers and receivers in the Ft. Smith, Ark., area who are not directly served by rail. KCSI said the TLC initiative is part of its effort to reach more customers by partnering with "select" logistics, trucking, and warehousing firms.
| 4/27/2001 |
President Bush has selected Jenna Dorn, who worked at the Department of Transportation during the Reagan years, to head the Federal Transit Administration. Dorn is currently president of the National Health Museum. A long-time associate of Elizabeth H. Dole, she was director of the Office of Commercial Space Transportation during Dole's tenure as DOT secretary. Dorn was assistant secretary at the Department of Labor when Dole headed that department, and she served as senior vice president-policy and planning, of the American Red Cross when Dole was ARC's president. She also worked for Martin Marietta as director of strategic planning.
| 4/27/2001 |
Amtrak, 30 years old on May 1, aproached its birthday in a growth mode. The national passenger railroad reported that ridership rose to more than 11 million and ticket revenue increased to $564.3 million in the first half of Fiscal Year 2001, improvements of 7% and 12.2%, respectively, from the first half of FY 2000. In the Northeast, revenue was up 19% for Acela Express/Metroliner service and 17.5% for Northeast Direct/Acela Regional trains. Among long-distance trains with increased revenue were the Texas Eagle, 20%; Carolinian, 7.8%; Crescent, 9.6%; and Capitol Limited, 16%. The Capitols in California posted a 36% increase in revenue, and the Cascades service in Oregon and Washington reported a 15% increase.
| 4/27/2001 |
In an article on ballast machines published in the April issue of Railway Age, the manufacturer of the KBC 750 ballast undercutter/cleaner was incorrectly referred to in the text on p. 54 as "KnoxKershaw." The correct name of the company is "Kershaw." The ballast machine in the accompanying photo (lower left) shows a KnoxKershaw High Speed Shoulder Cleaner, not a Kershaw KBC 750. Kershaw and KnoxKershaw are separate companies. Kershaw is a part of Progress Rail Services; KnoxKershaw is independently owned and operated. Phil Brown is not affiliated with KnoxKershaw.
| 4/26/2001 |
Steel Dynamics, Inc., says it will immediately begin construction of a $300 million rail and structural steel mini-mill in Whitley County, Ind., following final approval of the project by the U. S. Environmental Protection Agency. The new plant is scheduled to go into operation by the third quarter of 2002. It will produce head-hardened rail in lengths up to 330 feet as well as structural steel beams, pilings, and other components for bridges and buildings in the transportation and industrial markets.
| 4/26/2001 |
Kansas City Southern Industries cited high derailment costs in its U. S. operations as it reported first quarter income of $6.3 million, down from $10.4 million in the year-ago quarter. Per-share earnings from U. S. operations this year were zero vs. 12 cents last year. Earnings from KCSI's equity in Grupo FNM in Mexico were 10 cents a share this year, compared with six cents in the 2000 quarter. "Our casualty costs [in the U. S.] increased dramatically quarter to quarter due to unusually large expenses related to derailments as well as the settlement of a personal injury claim," said Chairman, President, and CEO Michael R. Haverty. "These derailments had a residual effect on our service levels, which has resulted in some operating inefficiencies." Haverty emphasized that the increase in derailment expense "is not reflective of the well-maintained physical plant of KCSR and Gateway Western." He suggested that track flaws had gone undetected by a contractor. All of this helped drive the operating ratio of KCSR/Gateway Western to 94% from last year's 86%. Higher expenses led to an operating ratio of 79.8% for Grupo TFM in this year's first quarter compared with 72.7% last year.
| 4/26/2001 |
Union Pacific Corp. reported net income of $181 million in the first quarter, helped by improved performance at Overnite Transportation. This was close to the $185 million net posted by the corporation in first quarter 2000. UP said that excluding Overnite, operating income was $430 million compared to $451 million in the same period last year. The railroad operating ratio rose to 83.8% from 82.9%. Productivity improvements partially offset rising fuel costs that added $35 million to expenses, or 1.3 points on the ratio, said the company. At Overnite, the operating ratio dropped 2.9 percentage points to 96.9%. UP Chairman and CEO Richard K. Davidson said that despite near-term economic uncertainty, "our unparalleled franchise and diversity of commodity mix enable us to maintain a very positive long-term outlook."
| 4/25/2001 |
Norfolk Southern's operating ratio in this year's first quarter was 86.7%, down from 91.4% in the first quarter of 2000. Operating revenues of $1.54 billion were 2% higher than in the year-ago quarter: expenses were down 3%. Coal revenues increased 13% and intermodal business was up 12%; general merchandise revenues dropped 5%. Income from continuing operations was $61 million this year vs. $14 million a year ago on a comparable basis. "Our restructuring initiatives are beginning to generate momentum," said Chairman, President, and CEO David R. Goode.
| 4/25/2001 |
Burlington Northern and Santa Fe reported operating income of $419 million in the first quarter, $91 million lower than in the comparable 2000 period. Revenues were up slightly to $2.26 billion on a 4% increase in ton-miles, but expenses rose 7% due to increased fuel costs, severe winter weather, and higher electricity and other energy costs. The operating ratio rose to 81.5% from 77.3% a year ago. BNSF said coal revenues declined 1% to $526 million as a result of lower revenue per unit on certain contract renewals. Higher demand for soybeans moving through the Pacific Northwest to China helped push agricultural commodities revenues up by 11% t0 $361 million.
| 4/25/2001 |
In mid-April, Amtrak activated North America's first Positive Train Control (PTC) system on a 65-mile stretch of track between the Michigan cities of Niles and Kalamazoo. Amtrak Intercity President Edward V. Walker said this will enable Amtrak to increase top speeds in the corridor from 79 mph to 90 mph this summer and ultimately to 110 mph. Amtrak also announced that, effective with the new spring/summer timetable starting April 29, it would cut 15 minutes from Chicago-Detroit travel time by replacing older Dash-8 locomotives with faster-accelerating GE P42 units. The journey will now be scheduled for five hours, 32 minutes.
| 4/24/2001 |
Only 8,413 new freight cars were ordered in this year's first quarter, and 60% were intermodal units. "It appears that freight car building is sinking into one of its severe cyclical declines," said Robert A. Matthews, president of the Railway Progress Institute. First quarter 2001 numbers were close to the 8,478 cars ordered in the final quarter of 2000. Freight car deliveries in the first quarter dropped to 11,070, the lowest first quarter level in seven years.
| 4/24/2001 |
Still recovering from problems that plagued the Conrail split-up, CSX Transportation reported improvements in "speed and fluidity" and other key operating yardsticks in the first quarter. But for parent CSX Corp., increased rail operating income was offset by higher expenses connected with non-rail affiliates. As a result, corporate net income slipped to $20 million, or 10 cents per diluted share, nearly 30% below analysts' expectations.
| 4/24/2001 |
A 13% increase in intermodal revenues helped Canadian National post first quarter net income of $202 million (C), a 3% increase from last year, excluding non-recurring gains in both the 2001 and 2000 quarters. Operating income was flat at $385 million (C), and the operating ratio was 72.5%, an 0.3% increase from a year ago. CEO Paul Tellier said the company expected performance for the remainder of the year to be even with or slightly ahead of the economy.
| 4/19/2001 |
Union Pacific is promising truck-like speed and rail-haul economics to users of its new boxcar "shuttle train" between the Pacific Northwest and Southern California. Speedlink, a logistics subsidiary of Genesee & Wyoming, Inc., is partnering with UP to provide what they describe as "one-call, door-to-door, multiple-stop service with inventory control and direct store delivery."
| 4/19/2001 |
Norfolk Southern and Burlington Northern and Santa Fe announced April 19 that they are teaming up to provide coast-to-coast, non-stop intermodal service, eliminating Chicago cross-town truck transfers and reducing transit time for customers by at least a day.
| 4/19/2001 |
ABC-NACO's newly-named president and CEO, Vaughn Makary, says the company should "return to profitability later this year." He said this will happen as the company begins to experience the full impact of "recent plant consolidations and productivity improvements" and other cost controls as well as the "ongoing growth of our rail services industries." ABC-NACO reported on April 18 that it experienced a net loss of $56.2 million in 2000, compared with a loss of $20.9 million in 1999.
| 4/17/2001 |
Flood waters surging around the Twin Cities of Minneapolis/St.Paul, MN, have forced both Canadian Pacific and BNSF to shut down various lines along the swollen Mississippi River, and both companies have had to repair damage, reduce service, and detour trains on others. Traffic on three Union Pacific routes has also been affected, and Amtak's Chicago-Seattle Empire Builder trains have been replaced by buses between Chicago and the Twin Cities due to high water along the tracks.
| 4/17/2001 |
Workers have begun replacing the 94-year-old catenary system that enables Metro-North and Amtrak trains along the Connecticut stretch of Metro-North's New Haven line between New Haven and New York. Over the next eight to ten years, 180 miles of wire on the route will be replaced at a cost of $300 million, and high speeds along the line may increase from 60 mph to 90 mph once the work is complete.
| 4/12/2001 |
The American Civil Liberties Union is considering a lawsuit over an agreement between Amtrak and federal agents in New Mexico that provides the U.S. Drug Enforcement Administration with vital passenger information for use in tracking down drug traffickers. Amtrak, which releases the names and destinations of ticketed passengers to DEA agents in Albuquerque, nets 10% of any cash seized from suspected drug couriers under the agreement, but ACLU members feel the disclosure of such information is a breach of constitutional rights.
| 4/12/2001 |
Paul M. Tellier, president and CEO of Canadian National, challenged all stakeholders in Canada's grain transportation and handling system to reduce the cycle time of hopper cars by 50%. Currently, the average time span between grain elevators and the port of Vancouver is 18.5 days, which Tellier aims to cut down to 11.
| 4/12/2001 |
The Railroad Retirement and Survivors' Improvement Act of 2001 inched closer to the "veto-proof" vote count of 290, resting 10 nods shy with 280 co-sponsors now in support. If passed into law, the bill (H.R. 1140) would improve surviving spouse benefits, provide full retirement benefits at age 60 with 30 years of service, and eliminate artificial caps on benefits.
| 4/12/2001 |
A lawsuit filed against the BNSF two months ago by the Brotherhood of Maintenance of Way Employes has been settled, as the BNSF agreed to cease all genetic testing of employees represented by BMWE and the Brotherhood of Locomotive Engineers. The railroad also agreed to destroy all blood samples and records of previous such tests.
| 4/12/2001 |
Kansas City Southern Railway and Mi-Jack Products, joint partners in the Panama Canal Railway Co., expect to open the new cross-Panama rail link between the Atlantic port of Colon and Pacific port of Balboa by July. Ships utilizing the Panama canal for moving cargo take from eight to 12 hours to cross, while the new rail line will make the same trip in one hour and 20 minutes.
| 4/10/2001 |
President Bush's proposed budget, released April 9, calls for reducing the maximum federal share of a mass transit capital project from 80% to 50%. DOT Secretary Norman Y. Mineta told reporters that local-federal matches have in any case tended to be negotiated rather than adhering to a rigid formula; he also said a lower federal match might help weed out poorly-conceived projects.
| 4/10/2001 |
The warring United Transportation Union and Brotherhood of Locomotive Engineers have called a cease-fire long enough to schedule a "safety summit" with Burlington Northern and Santa Fe in Kansas City, Mo., on April 30. The unions wrote to BNSF President and CEO Matthew K. Rose expressing concern over the number of recent accidents affecting train crew members. Rose replied, "We're always willing to talk about safety and working conditions at BNSF." UTU President Byron A. Boyd, Jr. said the meeting could signal "a new beginning" for the two operating unions, which have long-standing craft representation differences.
| 4/10/2001 |
Union Pacific Chairman and CEO Dick Davidson told a CNBC audience April 10 that UP is "pleased" with its first quarter performance and expects a flat second quarter, with the economy still down and fuel costs still high. But he foresees "a strengthening of the economy" in the second half. He said that while some commodities continued to be sluggish, UP experienced a "phenomenal" growth of 12% in coal shipments in the first quarter.
| 4/10/2001 |
Canadian National and Wisconsin Central Transportation Corp. filed a joint merger application with the the Surface Transportation Board on April 9, five days after WCTC shareholders approved the $1.2 billion transaction. The railroads asked the STB to treat their proposed merger as a "minor" transaction so that it would escape the Board's current moratorium on major-merger activity. CN said it has no plans to abandon any of WCTC's 2,800-mile North American network and will make "relatively minor" workforce cuts.
| 4/10/2001 |
Stepping up its effort to recapture perishables traffic from the highways, Burlington Northern and Santa Fe is extending its on-time intermodal guarantee program to cover service for temperature-controlled commodities in nine lanes. For a premium, BNSF has offered money-back guarantees for dry-freight shipments in select lanes since May 2000. "The vast majority of temperature-controlled goods moves over the road," said Steve Branscum, group vice president, Consumer Products, as he announced the new program April 9. "Our service guarantee program has been very well received by dry-freight shippers. We are extending the same service to shippers of temperature-controlled commodities to demonstrate that BNSF offers a reliable, competitive alternative to over-the-road transportation." BNSF has been a leader in providing innovative equipment and services to shippers of perishables (RA, Jan., p. 53).
| 4/6/2001 |
By any measure, the first quarter of 2001 was a poor one for U. S. railroad business. Carload traffic was down 1.6% from last year's first quarter, intermodal loads dropped 2.1%, and revenue ton-miles declined 0.4%. A surge in coal loadings in March and modest growth in agricultural products somewhat brightened the picture toward the end of the quarter, but there were continuing declines in other major commodity groups. U. S. and Canadian railroads together experienced a 1.9% decline in carload traffic in the first quarter and a 1.3% drop in intermodal loads.
| 4/6/2001 |
Wabtec subsidiary MotivePower Inc. has won an $80 million contract to supply 26 high-efficiency, aerodynamically styled locomotives to the Chicago area's Metra commuter railroad. A prototype is to be ready in late 2002, with delivery of the entire order to be completed in the first quarter of 2004.The new locomotives, Metra's first in nearly a decade, will have microprocessor controls and electronically controlled air brakes. MotivePower said it would receive progress payments from Metra for up-front design and engineering costs.
| 4/5/2001 |
The softening economy has led Burlington Northern and Santa Fe to eliminate $100 million in planned 2001 capital and other investments, and initiate moves to lower quarterly operating expenses by $20 million. BNSF also said its first-quarter results would include $40 million in charges for the write-down of certain non-rail investments and an after-tax $6 million extraordinary charge for early extinguishment of debt.
A big spender in the '90s, BNSF began cutting back in 1999, when capital programs, including operating leases, were scaled back from $2.5 billion to $2.275 billion, including $1.85 billion in cash outlays. In 2000, BNSF spent $1.76 billion, of which $1.4 billion was in cash. Earlier this year BNSF announced a 2001 capital program of $1.65 billion, including $1.5 billion in cash.
Increasingly recognized as one of America's best-run and most profitable railroads, BNSF last year had an operating ratio of 76.4% and a return on investment of 8.95%, the best of any major U. S. railroad. Early in April, a BNSF spokesman said the railroad's on-time performance was 91.2%, including carload, coal, and intermodal traffic.
| 4/5/2001 |
The Washington Metropolitan Area Transit Authority says sales of its SmarTrip(C) smart cards have exceeded 150,000, a milestone reached during the Metro's 25th birthday celebration in March. The Cubic-supplied SmarTrip cards, which were integrated with the magnetic stripe fare cards two years ago, were the first contactless smart cards introduced by a major U. S. mass transit system. The technology allows riders to use one card for trains and park-and-ride facilities; the cards will soon be adapted for use on buses as well. Cubic supplied the nation's second smart card system to the Chicago Transit Authority last August.
| 4/5/2001 |
ABC-NACO's board of directors announced the election April 3 of Vaughn W. Makary as chief executive officer and a director of the company. He was previously president and chief operating officer. Daniel W. Duval, a director of the company since 1995, was elected non-executive chairman of the board. It was also announced that Joseph A. Seher is retiring as chairman, CEO, and board member, and that Donald W. Grinter, retired chairman of the company, will not stand for election to the board at the next shareholders meeting. The management changes were announced four days after ABC-NACO said it had filed for an extension, to April 16, for reporting calendar year 2000 financial results. The company said it still needed to resolve several reporting matters, including those relating to the sale of its Signal division in February, and its credit facilities.
| 4/4/2001 |
President George W. Bush has selected Allan Rutter, former executive director of the Texas High Speed Rail Authority, to head the Federal Railroad Administration. He will replace Mark Lindsey, who has been acting FRA Administrator since Clinton appointee Jolene M. Molitoris resigned the post Dec. 31. Rutter has been transportation director in the Texas Governor's office, serving Bush in that position since 1995. Since then he has served under Texas Gov. Dick Perry. Rutter helped promote the high speed train concept in Texas from 1990 to 1995. That effort failed, due partly to opposition led by Southwest Airlines.
| 4/4/2001 |
Bombardier expects to complete the acquisition of DaimlerChrysler subsidiary Adtranz by May 1, following approval of the transaction by the European Commission on April 3. "The combination of Bombardier Transportation and Adtranz will rank the new entity as the global industry leader in all activities related to rail vehicles, with 37,000 employees, annual revenues in excess of $8 billion (C) and a backlog of $22 billion (C)," said Bombardier President and CEO Robert E. Brown.
| 4/4/2001 |
The Greenbrier Companies, Inc. announced new orders for 2,700 freight cars valued at $110 million, but President and CEO Furman said, "Overall, new railcar demand in North America remains soft." He added that while Greenbrier has doubled its share of the total market to more than 20% in the last year, "we are not immune to this downtown and, as a result, have significantly reduced production, laid-off personnel, and instituted cost containment measures." Furman made these comments April 3 as he announced net earnings of $70,000 for the second fiscal quarter ended Feb. 28, in line with previously disclosed revised forecasts, compared with $4.7 million in the comparable 2000 period. Greenbrier did not say who placed the new car orders. Furman said he expected the company's order backlog by May 31 to be even with or slightly higher than the Feb. 28 backlog of 4,300 units valued at $260 million.
| 4/3/2001 |
"Today marks a fresh start for our railways," declared Britain's deputy prime minister, John Prescott, as he announced on BBC radio that the government had approved an investment package of nearly $11 billion for the country's struggling rail network. It's the first phase of a planned $86 billion, 10-year public-private modernization and expansion program. Prescott said the government had agreed to a request from Railtrack, which owns and operates the British rail infrastructure, for an advance of more than $2 billion to help it resolve the financial crisis resulting from the Hatfield derailment last year. In return, Railtrack has agreed to stick to maintaining the existing network and turn over new construction projects to public-private partnerships. One result will be that Railtrack won't build the $3.6 billion second section of the Channel Tunnel Rail Link; instead, Bechtel will form a partnership with London & Continental Railways to do the job.
| 4/3/2001 |
We're pleased to announce the appointment of Christopher Ytuarte as Associate Editor of Railway Age. Chris, with experience reporting for newspapers and trade publications (the Record Enterprise in Plymouth, N.H., and, most recently, Supermarket News, in New York City), earned a B.A. from the College of Journalism at the University of Maryland-College Park. Chris replaces Marybeth Luczak, who has moved on to become Senior Editor at the Primedia publication, Circulation Management.
| 4/2/2001 |
In Montreal, Canadian National announced that around 5,000 shopcraft and other workers represented by the Canadian Auto Workers (CAW) had ratified agreements providing wage and benefit improvements and increased productivity. In Calgary, Canadian Pacific said it had reached a tentative agreement with 2,900 CAW workers providing wage and benefit increases in return for work rules changes. A ratification vote is expected in late April.
| 4/2/2001 |
Commuter trains in the United States carried 411 million riders in 2000, 5.2% more than in 1999 and the highest number since national commuter rail statistics were first recorded in 1980, the American Public Transit Association reported at its annual Commuter Rail Conference in Seattle.
| 4/2/2001 |
Amtrak will put two more Acela Express trains into Boston-Providence-New York service April 29, doubling weekday high speed schedules to two morning and two afternoon round-trips.
Amtrak said departures and arrivals will be arranged to allow same-day business trips between Boston and New York. Amtrak also plans to introduce weekend high speed service on the route to attract leisure travelers. More than 47,000 passengers have used Acela Express since it was introduced Dec. 11 and revenues have exceeded projections by 10%, said Amtrak President George D. Warrington.
| 4/2/2001 |
Class I railroads employed 161,351 people in mid-January, a decline of more than 5% since January 2000, according to the Surface Transportation Board. Maintenance of way and structures employment took the biggest hit, dropping 10.4% to 31,334 during the 12-month period. The only employment category showing an increase was that of executives, officials, and staff assistants, which grew 0.52% to 11,030.
| 3/30/2001 |
Six passengers and two crew members were killed when an empty Belgian National Railways passenger train ran through a red signal and continued on the wrong track for several miles before crashing head-on into a train carrying around 80 people. The accident occurred March 27 at Pecrot, about 15 miles east of Brussels.
| 3/30/2001 |
In a surprise decision, Spanish National Railways (RENFE) is splitting a $673 million order for 32 high speed trains for a new line running from Madrid to Barcelona and then to the French border. Siemens will supply 16 ICE 3 trains. Talgo-Adtranz will supply 16 trains based on a prototype completed last year. An unsuccessful bidder was Alstom, which earlier supplied Spain with standard-gauge AVE and broad-gauge Euromed trains based on the TGV design. The 32 new trains, capable of speeds of nearly 220 mph, will be the fastest production-series high speed trains in the world. RENFE wants to cut Madrid-Barcelona journey time to two hours and 30 minutes in order to compete effectively in one of Europe's busiest air corridors.
| 3/30/2001 |
As part of a $47 million (C) terminal consolidation, Canadian National will move its Montreal intermodal operations from Turcot Yard near the inner city to Taschereau Yard, a carload switching facility six miles west of downtown. The 210-acre Turcot property will become available for redevelopment, generating significant cash flow for the railroad. The consolidation is to be completed by the end of this year. It will increase CN's intermodal capacity at its Montreal hub by 30%.
| 3/16/2001 |
President Bush's decision to abandon his campaign pledge to impose mandatory controls on carbon dioxide emissions came as good news for the railroads. As the Union Pacific has pointed out in a position paper on Environmental Regulations and the Railroads, coal is the most carbon-intensive of the fossil fuels. It's also the most important commodity hauled by the railroads. In 1999, coal accounted for 43.7% of all railroad tonnage, 25.7% of carloads, and 21.8% of revenues.
The U.S. Department of Energy estimated in 1998 that full implementation of the Kyoto Protocol on environmental protection--which was signed by the U.S. but has not been ratified by the Senate--would reduce domestic coal consumption in the U.S. by 77% within 12 years.
"The Association of American Railroads commends President Bush for recognizing that carbon dioxide is not a pollutant under the Clean Air Act," said AAR President Edward R. Hamberger. "The nation's freight railroads, which transport more than two-thirds of the coal used to generate more than half of America's electricity, support the President's call for a balanced energy policy, including investment in clean coal technology. This balanced approach protects our environment, consumers, and an economy that depends on the affordable electricity coal provides."
The fears of coal-reliant industries were aroused when Candidate George W. Bush promised mandatory controls on carbon dioxide emissions and chided Candidate Al Gore for being willing to settle for voluntary controls. Those fears were reinforced when former New Jersey Governor Christie Whitman, who now heads the Environmental Protection Agency, indicated early in March that the President would stick with his campaign pledge. In the end, there was nothing to fear as the President announced that for a number of reasons, including the energy crisis in California, he had changed his mind.
| 3/14/2001 |
Metropolitan Railway Club of New York is offering college scholarships for the 2001-2002 academic year.
The Richard J. Collins Memorial Tuition Scholarship will award a minimum of $500 to qualifying dependents of MRCNY members who have been in good standing with the club for two years. Applications must be postmarked no later than May 11, 2001, and sent to: Metropolitan Railway Club of New York, c/o Mr. James M. Savarese, 51 Stavola Road, Middletown, NJ 07748.
| 3/13/2001 |
Rail traffic posted double-digit growth last year at the Port of New York and New Jersey. The Port Authority said ExpressRail volume grew to 178,002 containers, an increase of more than 12% over the prior year. To accommodate growth, a 13-acre double-stack railcar storage facility is being built at Portside Yard in Port Newark-Elizabeth.
| 3/7/2001 |
The Rail Transportation Division of the American Society of Mechanical Engineers has awarded $2,000 scholarships for the 2000-2001 academic year to John McCartney, University of Toledo, and Ken Bolec, Ohio State. Both have a heritage of railroading in their families and have indicated an interest in working in the industry after completing their mechanical engineering studies.
| 3/7/2001 |
Borealis Transportation Infrastructure Trust is buying Canadian National's 50% share of the 8,500-foot Detroit River tunnel. Borealis, which is controlled by the Ontario Municipal Employees Retirement System, will be co-owner with Canadian Pacific Railway of the tunnel, which links Windsor, Ont., with Detroit. CPR will operate the tunnel.
"This new partnership will ensure shippers have the benefit of competitive routing options in North America's most important and busiest free trade corridor," said CPR Executive Vice President-Commercial Hugh MacDiarmid. "It will give CPR operational control of a critical cross-border access linking Canada's most industrialized area and the U.S. heartland, and will ensure the infrastructure exists for the continued economic development of these regions."
CN and CPR bought the Detroit River Tunnel and Canada Southern Railway from Conrail in 1985. Ten years later CN completed a new tunnel under the St. Clair River linking Sarnia, Ont., and Port Huron, Mich.
Through an asset-sharing arrangement, CPR has been running 14 trains a week through CN's Sarnia-Port Huron tunnel and will continue to have access to that route as an alternative link between Ontario and Michigan.
Canada Southern will continue to be operated jointly by CN and CPR.
| 3/7/2001 |
Pioneer Railcorp has purchased the 25-mile Gettysburg Railway and is operating it as the Gettysburg & Northern. The line, laid with 130-pound rail, runs from a CSX Transportation connection at Gettysburg to a Norfolk Southern connection at Mount Holly Springs, Pa. Pioneer expects it to handle approximately 2,000 carloads a year for such customers as Inland Container, Knouse Foods Cooperative, Cadbury-Motts, and Ziegler Brothers. Pioneer also purchased the Gettysburg Scenic Railway, which will be the short line holding company's first major tourist operation. The Gettysburg rail properties were formerly owned by John H. Marino of Manassas, Va.
| 3/7/2001 |
Calling rail "the most efficient and practical means of reducing congestion in our urban transportation corridors," California Gov. Gray Davis joined Amtrak in announcing a 20-year, $10.1 billion plan to put faster trains on an expanded state passenger rail network.
The California Passenger Rail System 20-Year Improvement Plan, announced in Sacramento, is expected to help muster support for legislation now before Congress that would give Amtrak $12 billion in bonding authority for passenger rail corridors. States would have to put up a 20% share.
Among improvements in California rail service would be hourly trains between Los Angeles and San Diego, with trip time reduced from two hours and 45 minutes to less than two hours; hourly service between San Jose, Oakland, and Sacramento, with the current journey of three hours cut to two hours and 20 minutes; expanded Central Valley service between Bakersfield and Sacramento and Bakersfield and Oakland; and the first service in 30 years between downtown Los Angeles and downtown San Francisco.
There would be new or expanded service to Las Vegas, Palm Springs, Monterey, Reno, and Redding. Metrolink service would be expanded to the Antelope Valley, San Bernardino, and Riverside.
New train speeds would be as high as 125 mph.
"This is the work of a broad coalition sharing a fundamental belief that paving more highway lanes or building more runways won't meet the transportation challenges of the 21st Century in California," said Amtrak Vice Chairman Michael Dukakis.
Freight railroader Rob Krebs, chairman of the Burlington Northern and Santa Fe, said each of the passenger projects in the plan "addresses a community need, whether it's air-pollution reduction, traffic-congestion mitigation, downtown redevelopment, or other community quality-of-life benefits."
| 3/7/2001 |
The Brotherhood of Locomotive Engineers announced March 6 that it's mounting a campaign to kill Nebraska legislation that "would open the door for dangerous remote control operations."
The union said it supported provisions in a bill before the state legislature that would mandate a two-person crew on trains. But it opposes provisions "that would allow the use of off-cab remote control locomotives in terminals and allow the use of one-person crews in terminals."
Remote control of yard engines has been a contentious issue between railroads and some of their unions. The Federal Railroad Administration recently issued guidelines, in the form of a safety advisory, on the use of remotely controlled locomotives. In its March 6 statement, the BLE said "the FRA has not addressed the situation to the satisfaction of the BLE, thus prompting the union to formally request a rulemaking process."
| 3/7/2001 |
Greenbrier Companies announced March 2 that it expects earnings to be "significantly below" analysts' expectations for its second fiscal quarter, which ended Feb. 28, and for the fiscal year ending Aug. 31. The company cited reduced production in North America, particularly at its Trentonworks (Canada) and Gunderson-Concarril (Mexico) facilities. A complicating factor at Trentonworks has been production difficulties on a specialty car order for TTX. Greenbrier said there would be layoffs at the Canadian and Mexican plants but not at its Gunderson facility in Oregon.
| 3/2/2001 |
President Bush's proposed budget provides full funding for Amtrak and transit at levels authorized by Congress under long-term agreements. Amtrak will get its full capital authorization of $521 million for FY 2002, and the Federal Transit Administration will be funded at the authorized $6.7 billion level, which is $486 million higher than in FY 2001. Also fully funded will be the Federal Highway Administration, $32.3 billion, and the Federal Aviation Administration, $13.3 billion. Industry and labor groups reportedly joined Secretary of Transportation Norman Y. Mineta in a successful effort to forestall proposed cuts in authorized outlays.
| 3/2/2001 |
RailWorks is the successful bidder on a variety of rail transit, regional rail, and other projects valued at $100 million, bringing its backlog to a record $970 million.
The new business includes electrical and mechanical work in connection with the building of a terminal at Jamaica, Queens, to connect JFK International Airport's new AirTrain system with New York City subway and Long Island Rail Road trains; linear motor and power rail installation on the Millennium Line Transit System in Vancouver, B.C.; installation of track and related facilities on Denver's Central Valley light rail spur; and contracts to supply wood ties to regional railroads in the U.S. and Mexico.
Expressing optimism for the rest of the year, Chairman and CEO John G. Larkin said, "As 2001 unfolds, we would expect the bidding environment to remain robust, especially in the rail transit and regional railroad markets we have targeted."
RailWorks also announced that it is selling for an undisclosed sum its Detroit-based wholly-owned subsidiary FCM Rail, Ltd., a lessor of railroad maintenance and construction equipment. Proceeds will go toward debt reduction.
| 3/1/2001 |
Canadian National, whose intermodal business grew by 13% last year, will spend $40 million (C) to build a new intermodal terminal to accommodate further growth. The facility will be constructed on a 100-acre site near Milton, Ont., about 20 miles west of Toronto. CN's existing terminal in the Toronto area is in Brampton. CN says it collected $919 million (C) in revenues last year for moving 1.12 million trailers and containers.
| 3/1/2001 |
The new quarterly freight car forecast of Economic Planning Associates (EPA), published in February, calls for production of 44,750 freight cars in 2001, rising over the next five years to 46,250, 53,000, 59,000, 63,100, and 65,500, respectively. EPA's November 2000 "Outlook for Freight Cars" forecast production was 50,250 cars in 2001, followed by 51,250, 56,000, 60,250, and 63,500, respectively, in the next four years. EPA's November forecast of total 2000 production, 55,500 cars, was very close to the actual total of 55,751.
| 3/1/2001 |
As expected, production of new freight cars fell sharply last year, but orders were up slightly. Builders produced 55,781 cars in 2000 compared with 73,223 in 1999 and 75,685 in 1998, two unusually strong years. The undelivered backlog of cars on order has fallen steadily since July 1997 and was 22,648 on Dec. 31, compared with 33,142 a year earlier, according to the American Railway Car Institute Committee of the Railway Progress Institute. Orders were placed for 45,835 new cars in 2000, compared with 41,420 in 1999. While new orders were up for the year 2000 as a whole, they declined to 8,478 in the fourth quarter from 11,211 in the third quarter.
| 2/26/2001 |
Continuing its program to reduce debt by disposing of non-core assets, ABC-NACO has sold its Rail Systems Division to Balfour Beatty for $21.5 million. ABC-NACO said it was retaining certain assets of the division, which it is converting to cash. The Rail Systems Division provides signal, communications, and train control services for freight railroads and rail transit systems.
| 2/22/2001 |
Two Acela Express runs--a non-stop New York City-Washington D.C. roundtrip and a New York-Boston roundtrip--will be added to Amtrak's Northeast Corridor schedule on March 5, building on the present single Washington-New York-Boston roundtrip that has been in operation since Dec. 11, 2000.
The non-stop, two-hour, 28-minute northbound run will depart Washington Union Station at 6:50 a.m. and arrive New York Penn Station at 9:18 a.m. The southbound return will depart at 3:50 p.m. and arrive 6:18 p.m. On the Boston-New York run, the southbound will depart South Station at 6:12 a.m. and arrive New York Penn 9:40 a.m. The northbound return departs 6:00 p.m. and arrives 9:28 p.m.
Amtrak says the current once-a-day Acela Express roundtrip is performing 97% ontime, with average loadings of 300 passengers and revenues 8% above projections.
This will bring the number of Bombardier/Alstom-built Acela Express high speed trainsets in service to three, out of a total of 20. The remainder are to be phased in through the end of the summer. Once all are accepted and placed into revenue service, Amtrak plans to operate 19 daily New York-Washington roundtrips and 10 daily New York-Boston roundtrips.
| 2/22/2001 |
Ernesto Zedillo Ponce de Leon, 49, Mexico's president from 1994-2000, was elected on Feb. 22 to Union Pacific's Board of Directors.
Zedillo, according to a statement issued by UP, "was a major force in political and economic reform in Mexico for two decades. As Secretary of Economic Programming and Budget, he was integrally involved in the design and implementation of the successful economic reforms undertaken by the Mexican Federal Government in the early 1990s."
One of those reforms was privatization of Ferrocarriles Nacionales de Mexico. One of the resulting private carriers, Ferrocarril Mexicano (Ferromex, which began operations in 1998), is 26% owned by UP, which has six border connections with Mexico
| 2/21/2001 |
The Utah Transit Authority (UTA) is reported to have reached an agreement in principle with Union Pacific to buy access to the railroad's rights-of-way between Brigham City and Payson for $103 million. The agreement would permit UTA to put commuter trains on UP tracks between Ogden and Brigham City, where freight traffic is light, and build its own commuter line in UP's more-heavily-trafficked Salt Lake City-Ogden corridor. It would also open the way for further commuter rail development and extension of UTA's Trax light rail system. UTA says it can raise $59 million of the needed money if the state will put up $44 million. The plan has broad local, state, and federal political support. It's regarded as a major breakthrough in an effort that extends across much of the nation to operate more passenger trains, especially commuter and regional services, on freight railroad rights-of-way.
| 2/21/2001 |
Washington Metro General Manager Richard A. White says recent ridership gains "underscore the importance of why we need additional buses and railcars to accommodate the significant continued growth we anticipate in the future."
Metro's 2000 performance report, released recently, showed that Metrorail customers made 85,167,000 train trips in the second half of the year, a 7.4% increase over ridership in the first six months. Metrobus ridership increased to 72,354,000 trips, up 5.1% over the first half.
| 2/21/2001 |
More than 300 workers will be affected by Norfolk Southern's decision, announced Feb. 21, to close its car repair facilities at Hollidaysburg, Pa., "on our about" Sept. 1. NS said the employees will have the opportunity to transfer to other locations where it is consolidating car repairs.
"Changing economic conditions and excess capacity throughout the freight car repair industry have reduced our workload to the extent we cannot support continued operations at the shop," said Mark D. Manion, vice president-transportation services and mechanical.
NS delayed closing the shop last year under pressure from Pennsylvania Republican Congressman Bud Shuster, who was chairman of the House Transportation Committee. Shuster, whose home district included Altoona, resigned from Congress Jan. 31 after losing his committee chairmanship due to term limitations.
| 2/16/2001 |
At the age of 59, A. R. "Pete" Carpenter is closing out a career that has seen him become one of the most admired and respected railroaders of his time. During 38 years, all with CSX or its predecessor properties, this son of a railroad policeman rose from the position of brakeman on the Louisville & Nashville to the office of president and CEO of CSX Transportation, a position he held from 1992 to 1999. Carpenter announced that he is retiring from his position as vice chairman of CSX Corporation, which he has held since 1999, though he will continue to serve the company as a consultant on strategic issues.
CSX Chairman and CEO John W. Snow said that of the many "enormous" contributions Carpenter made to the company, "his most lasting legacy will be the culture change he initiated at CSX to break down the barriers that have existed for more than 100 years between labor and management, eliminate the autocratic management style that's been endemic in the rail industry, and approach our labor-management relationships in a spirit of partnership."
| 2/15/2001 |
Burlington Northern and Santa Fe says it has added rail-controlled trailers to the NACS containers already covered in its Internet-based ValueTrax program, where it sells excess capacity in select intermodal lanes at discounts. BNSF posts the special rates weekly. Since it was introduced in April 2000, ValueTrax has averaged about 100 loads a week, according to Ed Zajac, BNSF's assistant vice president-IMC marketing. "This expansion gives shippers a broader equipment offering and additional lanes with rates discounted as much as 10% to 15% in some cases," he said.
| 2/15/2001 |
Burlington Northern and Santa Fe's ValueTrax program, an Internet-based service that offers shippers weekly rate discounts for intermodal service in select lanes where BNSF has excess capacity, has been extended to railroad-controlled trailers. Participants can now use 45- or 48-foot trailers and NACS (North American Container System) containers, and tender loads to BNSF through a participating intermodal marketing company or full-truckload carrier. Discount rates are updated and posted on BNSF's website at www.bnsf.com/specials on Thursdays. Shippers can register at the site to receive weekly ValueTrax updates by e-mail.
| 2/15/2001 |
Canadian Pacific Railway has joined nine other intermodal carriers in the North American Container System (NACS), a doublestack network formed five years ago to facilitate the unrestricted interchange of 48- and 53-foot domestic containers. The other participants are Burlington Northern and Santa Fe, Canadian National, CSX Intermodal, I & M Rail Link, Kansas City Southern, Norfolk Southern, Texas-Mexican, Transportacion Ferroviaria Mexicana, and Wisconsin Central.
| 2/14/2001 |
A federal appeals court has ordered the Surface Transportation Board to reconsider a case in which it ruled against consideration of product and geographic competition in determining railroad market dominance.
The court rejected the argument of the Association of American Railroads and the Union Pacific that the law required the STB to consider both direct and indirect competition in such cases. But it said the Board was "arbitrary and capricious" in failing to consider language in the preamble to the Staggers Rail Act of 1980 which "manifests a preference for market-based rather than regulatory rate setting."
AAR President and CEO Ed Hamberger said railroads hoped the Board "will, on remand, recognize that product and geographic competition are integral components in competitive rail markets and must be considered in STB proceedings involving the reasonableness of rail rates."
| 2/13/2001 |
Under a reorganization plan announced Feb. 13, Canadian Pacific Ltd. will spin off Canadian Pacific Railway (CPR) and four other units into separate, privately-traded companies. The Calgary-based company said its aim is to maximize value for shareholders "by unlocking the current value of Canadian Pacific's businesses and by strengthening their ability to pursue even greater success as independent public companies."
Canadian Pacific Ltd. said it plans to distribute its 86% investment in PanCanadian Petroleum and its 100% interest in each of CPR, CP Ships, and Fording to holders of its common shares, with Canadian Pacific Hotels its only significant remaining business. This would give current shareholders stock in five separate companies. The Feb. 13 announcement said the plan could be modified in response to market conditions as the reorganization is implemented.
Canadian Pacific Ltd. reported record net income of $1.76 billion (C) in 2000. The railway unit reported 12-months operating income of $845 million and an operating ratio of 76.9%, an improvement of 1.3 percentage points from 78.2%, excluding a special charge, in 1999.
| 2/13/2001 |
Light rail advocates who argue that LRT does more than move people--it also moves and stimulates local economies--may have made their case all too well in Houston.
The beginning of construction on a 7.5-mile light rail starter line along Houston's Main Street, originally scheduled for Feb. 3, was indefinitely postponed by the action of anti-LRT forces that claim the line would do more to help downtown business development than to ease traffic congestion.
A lawsuit initiated by a city councilman (who lives 20 miles from downtown) challenges the right of the council to permit the use of city streets for light rail without a public vote. A temporary injunction against the beginning of construction was granted until the suit comes to trial in March. The MTA immediately suspended contracts worth $130 million.
Earlier, another opponent of the plan, Republican Congressman (and House whip) Tom DeLay, who represents a Houston suburb, tried to whip LRT advocates into submission by threatening to deny the project federal funding. He was successful in getting federal aid withheld, but the Harris County Metropolitan Transit Authority decided to go ahead with available funding.
| 2/12/2001 |
Burlington Northern and Santa Fe moved quickly to defuse charges that it was trying to impose genetic testing on some employees who had filed carpal tunnel syndrome claims. BNSF was named in the Equal Opportunity Employment Commission's first court action on the genetic testing issue, filed Friday, Feb. 9. BNSF lost no time in announcing three days later that it had agreed to an order to be entered by the Federal District Court in Sioux City, Iowa, in which it "voluntarily agreed to suspend testing that would identify a genetic cause for carpal tunnel syndrome in response to employee claims."
BNSF said that over the weekend, its executive team reviewed a pilot DNA testing program for carpal tunnel syndrome begun in March 2000 and decided to stop any such testing immediately.
BNSF said that about 125 members of a workforce of some 40,000 had filed claims since last March for carpal tunnel syndrome related injuries. "About 20 BNSF employees completed a medical examination to support their claims. Several employees refused to take the blood test, but none received any disciplinary action," said the railroad. BNSF said the EEOC "erroneously asserted that the DNA test had been broadly requested of BNSF employees, when in fact, the test had been requested only in response to a limited number of carpal tunnel injury claims. Further, the DNA portion of the medical examination was not being used to determine the employee's present ability to perform his or her job, as reported."
| 2/12/2001 |
In the railroad business, there's a demonstrable correlation between capital investment and traffic volumes, according to a productivity study by the Railway Association of Canada (RAC).
During the 10-year period 1987-1996, U.S. railroad traffic grew by 44% as U.S. carriers invested 15% of their revenues in improvements. Canadian traffic grew only 5% during the same period as investment by Canadian National and Canadian Pacific often dipped below 10%.
While the incentive for Canadian railroads to invest has "improved somewhat," said RAC, a railroad investment in the U.S. is still fully depreciated in half the time it takes in Canada.
Canadian railways are often more heavily taxed than U.S. roads. They pay out nearly 14% of their revenues in taxes on such "input" items as fuel, property, and investment, compared to 7.5% paid by their U.S. counterparts. Canada's tax on locomotive fuel is about two and one-half times that of the U.S.
Other indices also favor U.S. railroads. Labor productivity in Canada grew 220% between 1981 and 1998, while it increased 270% for major U.S. roads. Traffic density (gross ton-miles per track-mile) grew 131% on U.S. roads, while CN/CPR density increased by 79%.
While government policies impede progress in some respects, Canadian railroads nevertheless made great strides in the decade of the 1990s, said RAC: "In 1999, railway workload was almost 29% higher than in 1990. It was achieved with 14% less track, 12% fewer freight cars, 7% fewer locomotives, and a workforce 35% smaller."
Despite government constraints which they wish to see eased, CN and CPR are among the continent's most efficient railroads, with operating ratios below the North American average.
| 2/8/2001 |
Retired railroaders are living a little longer than they did a few years ago. That's the finding of the latest actuarial study conducted by the Railroad Retirement Board, an every-three-years exercise. The new report, based on 1997 data, was released early in February.
A comparison of the new findings with those reported by the RRB nine years ago shows that on the average a male railroader retiring at 60 can expect to live to the age of 79.8, up from 78.6; a worker retiring at 62 can anticipate living to be 80.2, up from 79; a railroader staying on the job until 65 can expect to live to be 80.8, up from 79.8.
Generally, women still live longer than men do. For example, a female railroader retiring at 60 may expect to live to the age of 83.9, 4.1 years longer than her male counterpart; a woman retiring at 65 will on average live to be 84.6, 3.8 years longer than a male retiring at 65.
| 2/7/2001 |
Norfolk Southern expects to pick up 100,000 new carloads of business annually from the location of 74 new industrial plants along its lines last year and the expansion of 43 existing facilities. NS said the new plants and expansions represent an investment of $2.3 billion by its customers. In former Conrail territory in the Northeast, the railroad's Industrial Development department assisted in the location or expansion of 25 industries expected to yield 10,000 new carloads of business a year.
| 2/7/2001 |
Carl Fehrenbach, a managing director of Berkshire Partners, has been appointed chairman of English Welsh & Scottish Railway (EWS). He succeeds Thomas F. Power, Jr., president and CEO of Wisconsin Central Transportation Corp., which has an equity interest in EWS. Power will continue to serve as a non-executive director of EWS.
Fehrenbach said the EWS board and the majority of its shareholders are committed to "the continued development of EWS as Britain's leading rail freight supplier."
Berkshire's announcement of the change said EWS expects significant growth over the next 10 years, with more than $1 billion committed to new locomotives and freight cars.
Fehrenbach also serves as a non-executive director at WCTC, Tranz Rail Ltd. in New Zealand, Australian Transport Network Ltd., and US Can Corp.
Boston-based Berkshire Partners manages five investment funds with $2 billion of capital for equity investments in a number of industries.
WCTC, which recently announced plans to sell its North American operations to Canadian National for $1.2 billion, has also been seeking buyers for its equity interests in EWS and railways in New Zealand and Australia.
| 2/6/2001 |
The Surface Transportation Board has concluded that Norfolk Southern and CSX "have substantially resolved their operational and service problems and... are in the process of successfully integrating from an operating perspective their respective portions of Conrail."
STB said the finding was based on its own monitoring plus 35 comments from shippers and others responding to the oversight reports of NS and CSX. In approving the Conrail split in mid-1998, STB provided for five years of oversight assessing the merger's implementation and the acquiring railroads' compliance conditions. The agency reserved the right to impose additional conditions if necessary.
"Several comments compliment the progress of NS and CSX in implementing the transaction thus far," said STB. "Although expressing some prospective concerns about the transaction, DuPont and ACC [American Chemistry Council] applaud its safe implementation....With respect to rail rates, ACC indicates that the division of Conrail and the resulting new rail-to-rail competition have resulted in reduced rates for a number of its members....Although some parties complain generally about service problems, most also note that service generally has improved significantly in recent months."
While some parties raised concerns about "potentially significant" environmental issues, STB found that "the oversight record clearly indicates that CSX and NS are actively working with the affected communities...."
STB said its findings in the oversight proceeding related mostly to "service issues that relate directly to the conditions we have imposed."
As for individual service problems, STB noted they are handled informally through its Office of Compliance and Enforcement and "we continue to believe that private-sector solution yields the best results."
Oversight proceedings, the agency said, are not intended to be "a forum to relitigate issues resolved in the decision approving the transaction."
| 2/6/2001 |
CSX Transportation in cooperation with 136 short line and regional railroads has issued simplified prices for moving scrap paper to and from more than 100 paper mills. The CSXT 3342 price list is available on the railroad's website. "It is important to provide our scrap paper customers with quick access to market-based prices in a simplified format, enabling them to get rates and make decisions quickly while keeping costs down," said CSXT Assistant Market Manager Ivy Brown. "Including the short lines in our efforts to simplify pricing provides the added benefit of extended coverage." Garland Horton, director-marketing for short line operator Rail Management Corp., said he had received positive responses to the joint pricing effort from customers.
| 2/6/2001 |
Thomas F. Power, Jr., Wisconsin Central Transportation Corporation's president and CEO, says the company's North American railroads continued to perform well last year, despite a slowing economy and rising fuel costs. Operating ratios before special items were 73.3% for the fourth quarter and 74.5% for the year, "among the best in the industry," said Power. Reilly McCarren, president and CEO of North American Operations, said full-year revenues of $372 million set a record.
Income from overseas operations continued to languish. Fourth quarter equity in net income from affiliates--excluding a $1.1 million charge for organization changes in New Zealand's Tranz Rail--was $2.4 million, compared with $5.7 million in the 1999 period. Fourth quarter income from English Welsh and Scottish Railway was $1.9 million, down from $3.7 million in the 1999 quarter. All rail operators in the U.K. have been hurt by severe service disruptions caused by Railtrack problems.
| 2/5/2001 |
Burlington Northern and Santa Fe has launched an Internet-based tool that allows mines and utilities to forecast coal production and demand.
Located at a secure area of the BNSF website, the Coal Forecasting Tool, which BNSF says is a rail industry first, "allows mines to accurately report the number of tons of coal they will produce, while utilities can indicate coal demand." Information is updated between the 20th day of the current month and the fifth day of the following month, when the forecast is "locked." BNSF then uses this information "to develop operating plans designed to ensure an even flow of coal from BNSF-served mines to utilities, and other coal receivers across the country, creating a more efficient coal distribution system."
"This feature allows all parties to see what each is expecting in real time," says BNSF Group Vice President-Coal Business Unit Tom Kraemer. "We learned that the system of sending e-mails, faxes, or phone calls wasn't always working. This new tool will help ensure that BNSF continues to meet our coal customers' expectations."
| 2/2/2001 |
Amtrak and its Capitol Hill supporters are talking with increasing confidence about pouring billions of dollars in new federal aid into the intercity train system.
On Feb. 1, 51 Senators, including the majority and minority leaders, joined in sponsoring legislation that would provide Amtrak $12 billion in high speed rail bonding authority. This was $2 billion more than provided by a similar bill that passed the House last year but stalled in the Senate. The federal government would provide tax credits to bondholders. States would have to provide a 20% match.
Amtrak President George Warrington was quoted as saying that this would be just a beginning--"You have to get your foot in the door."
Warrington lost no time in explaining what he meant as he unveiled a plan on Feb. 2 asking for $1.5 billion a year over the next 20 years in capital assistance for Amtrak. He said such an investment would "modernize and expand the passenger rail system nationwide, accelerate plans for high speed service in 11 federally-designated corridors with the nation's busiest traffic, and leverage billions more in non-federal investment."
"The capital plan is the result of the most comprehensive assessment of long-term needs for intercity passenger rail," said Amtrak. "Over the past year, Amtrak has examined the need of modernizing its existing system as well as fully developing 11 federally-designated corridors where population density and transportation congestion are at their highest levels. The $1.5 billion annual federal commitment, together with leveraged state and private funds, would enable Amtrak to overcome historic under-capitalization of existing assets, modernize equipment, and improve service reliability."
About 65% of the funds would be spent outside the Northeast Corridor.
The capital plan that went to Congress is part of Amtrak's annual strategic business plan and sets forth a plan for achieving operations free of federal subsidy by FY 2003 as mandated by Congress.
Amtrak said it expected to fall $119 million short of its original budget plan in FY 2001, largely due to the delay in Acela Expressservice. But the company said it would "maintain its glidepath to zero federal support for operations by relying on its cash plan." Amtrak said that since FY 1999 it will have cut federal operating support from $318 million to $59 million this year.
In presenting its capital plan to Congress, Amtrak noted that "airline delays have grown 50% from 1997 to 1999 and driver delays rose 29% from 1992 to 1997 in metropolitan areas. Further development of passenger rail, especially in congested transportation corridors, is a highly cost-effective alternative that will help ease this gridlock."
| 2/2/2001 |
ABC-NACO has won a $16 million order to supply its advanced Axle Motion III suspension systems for 490 new Railtrack maintenance cars. It's an order that could lead to broad acceptance of the ABC-NACO system throughout Europe.
The Illinois-based company said its design was accepted after 18 months of testing during which Railtrack sought to determine which of several leading suspension systems "could haul the maximum allowable loads, at higher speeds, with significantly lower track forces and a high level of safety."
"Many European cars which are outfitted with suspension systems from an earlier, less demanding rail shipping environment, do not sufficiently minimize destructive forces that lead to track damage, excessive wheel wear, and subsequently high maintenance cost and down time," said ABC-NACO in its announcement. "The remedy is to haul less cargo or impose speed restrictions on the train which makes shipping by rail less efficient."
"This is the most significant order we have received to date in Europe and is certainly welcome in light of the dramatic slowdown in rail spending we are presently experiencing in North America," said ABC-NACO Chairman and CEO Joseph A. Seher.
Jim Longton, president of ABC-NACO, said the British order could help the Axle Motion III system become the standard for higher axle loads in Europe. "We have quoted on a number of new projects that were waiting for Railtrack's decision on our suspension system before moving forward," he said. He said progress has already been made in Sweden and Finland, and a major order is expected in Germany.
| 1/31/2001 |
Union Pacific has awarded a $1.8 million contract to LaBarge, Inc., to upgrade 1,100 public grade crossings in Illinois equipped with automatic warning devices with its CellularRTU remote monitoring devices.
The order follows UP's agreement with the Illinois Commerce Commission to improve safety at grade crossings throughout the state. The technology will provide UP with near-real-time crossing alarm and equipment status information, including early warning of power outages and potential malfunctions at remote locations. The system uses cellular telephone control channels, eliminating the monthly fees incurred for telephone land lines. Transmission charges of about 15 cents each are only incurred when data is delivered. Data is transmitted over LaBarge's nationwide ScadaNET Network to UP's Harriman dispatch center in Omaha.
The 1,100 crossings will be upgraded at the rate of 100-200 per month. LaBarge previously entered into a similar contract with Burlington Northern and Santa Fe to equip 800 crossings in Illinois.
| 1/30/2001 |
A consortium of five Class I's--Burlington Northern and Santa Fe, Canadian National, Canadian Pacific, Norfolk Southern, and Union Pacific--selected iRail, Inc., and GE Global eXchange Services to help form an independent company: RailMarketplace.com(sm). The company's website (www.RailMarketplace.com) will link worldwide buyers and sellers of rail equipment through an electronic, multi-currency, multi-lingual marketplace. With a goal of saving the rail industry some of the $15 billion it spends on supplies annually, the site will provide "significant reductions in sourcing costs, transaction costs, and purchasing cycle times" through fast, open access to goods and services.
GE Global eXchange Services and iRail were chosen to support the startup after the railroad consortium issued an RFP in mid 2000. According to Dave Sharma, chairman and CEO of iRail, Inc.--whose website, iRail.com, offers an e-marketplace for the railroad, marine, and transit industries--"iRail will be instrumental in developing market strategy, business plans, and content development for RailMarketplace.com, and will provide enabling technology, which will plug into GE Global eXchange Services platforms."
RailMarketplace.com's launch is set for this year's first quarter. Mark Davis, assistant vice president of e-business at Union Pacific, is interim CEO.
| 1/30/2001 |
Railroads generally maintained their earnings pace in 2000, though some suffered from a weakening national economy toward year's end. While historic highs were in short supply, especially on the traffic front, most carriers finished well in the black.
Canadian National continued its winning ways, with fourth-quarter income of $237 million (C), up 11% from the 1999 quarter, and earnings for the year of $879 million, compared with $746 million in 1999. CN's operating ratio was 68.3% for the quarter and 69.6% for the year. The benefits of a "scheduled railroad service plan" and broad-based cost controls offset rising fuel prices, said CN. The railroad amassed $386 million in free cash flow. CN announced that it was increasing its dividend by 11%.
Union Pacific reported net income for the fourth quarter of $229 million, excluding a workforce reduction charge of $72 million; this was down from $2421 million in the 1999 quarter. Net income for the year was $842 million, a 4% increase over 1999. UP's fourth quarter operating ratio rose 2.8 percentage points to 83.6%, excluding the special charge. Chairman and CEO Dick Davidson said that while the economic downturn will present a challenge, "Union Pacific has never been better positioned to turn such a challenge into an opportunity."
Burlington Northern and Santa Fe, which in the recent past has come under fire from Wall Street for high capital investment levels, issued a report highlighting the fact that its free cash flow during the year rose by $171 million to $431 million, "primarily driven by reduced capital spending." Operating income was down in the fourth quarter, due to sharply increased fuel costs and a slight reduction in revenues. BNSF said full-year adjusted earnings of $2.45 per diluted share represented an increase of 1% over 1999. BNSF's operating ratio was 76.5% for the fourth quarter and 76.4% for the year, up from 75.4% a year earlier.
Norfolk Southern reported fourth quarter net income of $44 million, up from $31 million in the year-earlier quarter, and full year net of $273 million, up from $239 million in 1999. A workforce reduction charge of $39 million brought fourth-quarter earnings down to $5 million; added to this, a $62 million workforce reduction charge in the first quarter resulted in reported net income for the year of $172 million. The railroad's operating ratio, excluding the special charges, was 88.2% for the fourth quarter and 87.0% for the year, compared with 90.8% a year earlier.
CSX Corp. reported combined rail and intermodal operating income of $205 million for the fourth quarter of 2000, compared with $197 million in the corresponding 1999 quarter; full-year operating income for the two business units was $713 million in 2000, down from $907 million in 1999. Corporate Chairman and CEO John W. Snow said 2001 results would depend heavily on the way the economy moves, but "with the operating progress we are seeing and strengthening demand for coal, we should have a nice pick-up in earnings this year."
Kansas City Southern Industries (KCSI) posted fourth quarter income from continuing operations of $3.6 million, compared to a loss of $7.2 million in the 1999 quarter. Contributing to this improvement of $10.8 million was an increase in U.S. operating income of $6.8 million, a $6.1 million increase in earnings from an equity interest in Mexico's TFM, and a decrease in interest expense. For the year, income from continuing operations increased $15.2 million to $25.4 million, helped by a $20.1 million increase in equity earnings from TFM.
| 1/30/2001 |
In a not-unexpected move, Canadian National and Wisconsin Central Transportation Co. announced today that that their boards of directors have approved a merger agreement under which CN will acquire all of WCTC's common stock in an all-cash transaction valued at $17.15 per WCTC share. WCTC has approximately 46.5 million shares outstanding, giving the transaction a total value of about $1.2 billion, including approximately $400 million of WCTC debt. The price per share represents a 21% premium over the $14.13 closing price of WCTC stock on Jan. 26.
CN President and CEO Paul M. Tellier called the transaction "a simple, straightforward, pro-competitive, end-to-end combination." No "two-to-one" points will arise in the U.S. as a result of the merger, he said, "and there will be no other significant adverse impacts on competition." Both railroads said they expected the U.S. Surface Transportation Board to treat the merger as a "minor transaction" not subject to the agency's current moratorium, and planned to file a merger application immediately after WCTC shareholders approve the transaction in April. CN reserves the right to terminate the merger agreement without penalty should the STB refuse to consider the application, but has agreed to pay WCTC a $24 million breakup fee should the STB impose "materially adverse conditions." Likewise, WCTC has agreed to pay this fee to CN should its shareholders reject the deal or entertain other offers. Pending shareholder approval, the transaction is expected to be completed by early fall.
Calling CN a "natural fit" for WCTC, Tellier said the combination "makes sense for several reasons. It will secure a link in CN's NAFTA network, the main line railroad connecting Chicago, Superior, Wis., and CN's transcontinental network across Canada." Under a 1998 haulage agreement, WCTC already transports CN freight between Superior and Chicago.
"Single-line service over this link under CN ownership will improve the competitiveness of CN/WCTC and their customers in Canada-U.S. trade, which is growing annually at more than 10%," said Tellier. "The efficiencies that will result from the acquisition offer the prospect of enhancing CN's top-line growth in the domestic U.S. marketplace and benefiting customers with improved through service at the busy Chicago gateway." WCTC will retain its own identity "at least for the foreseeable future."
Over three years, the merger is expected to generate $60 million in earnings improvements. Half of that is expected to come from revenue growth, particularly in paper and forest products, the other half from cost savings related to improved equipment utilization and consolidation of purchasing, information systems, and shop functions. CN said it intends "to minimize the impact of the combination on employees through attrition, retraining, and relocation."
CN expects WCTC to sell its equity in overseas rail ventures "as soon as possible." Tellier said that if WCTC is unable to sell its 42.5% interest in Britain's English, Welsh & Scottish Railway Holdings Ltd. by the time the merger is completed, CN will either undertake a "fire sale" to dispose of the railway, or give EW&S management "another chance" if it demonstrates it can continue to improve the railroad's operating and financial performance.
| 1/25/2001 |
A complaint frequently voiced by railroad suppliers is that their customers don't participate as much as they should in industry trade exhibitions. Railroads, on the other hand, say that their ranks are spread too thinly for them afford sending large groups of employees to trade shows.
Railway Systems Suppliers, Inc., according to Executive Director Donald F. Remaley, is addressing this problem with the first of what it hopes will be a series of specialized trade exhibitions designed to bring together C&S suppliers and their customers, specifically, the "hands-on" railroaders who actually use their products. The Western C&S Exhibition, which will be held May 15-17 at the Crown Convention Center in Kansas City, "is an effort to give people like signal maintainers, supervisors, trainers, and designers--those people who don't normally attend RSSI's annual exhibit--a chance to spend quality time with suppliers," says Remaley. "It's smaller in scale, and scheduled to coincide with the regular safety and training meetings that the railroads hold for their C&S employees. There are no technical sessions, and no social activities other than buffet lunches and dinners in the exhibit area."
Remaley says that 80% of RSSI members are small companies that don't necessarily have the opportunity or resources to spend a lot of time in the field. The exhibit, which is free to railroads, transit agencies, and government attendees, was developed by RSSI with Union Pacific and Burlington Northern and Santa Fe. "[UP Chief Engineer-Signals] Phil Abaray and [BNSF Assistant Vice President-Signaling] Denny Boll approached us and said, 'Why don't you come to where we are?'" says Remaley. "This exhibit is really a new concept. We think it will be of tremendous value to RSSI members as well as the railroads."
For more information, contact RSSI at (502) 327-7774; fax (502) 327-0541; email rssi@rssi.org.
| 1/25/2001 |
The Metropolitan Transportation Authority of New York has awarded a $418.9 million contract to Bombardier Transportation for an additional 350 R142 cars for New York City Transit. The order, announced Jan. 24, represents exercise of an option for 200 additional cars attached to a contract for 680 R142s awarded in July 1997 plus 150 cars to help handle soaring ridership. The new contract brings the total order to 1,030 cars valued at $1.3 billion. Bombardier says that with completion of the order in 2003, the Montreal-based company will have provided 1,855 cars to NYCT since 1982, nearly a third of the New York system's fleet.
| 1/23/2001 |
Responding to what it calls "an economic slowdown and changes in our transportation markets," Norfolk Southern has announced a restructuring plan in which it will cut its workforce by up to 2,000 employees, dispose of 12,000 surplus freight cars, sell or abandon 3,000-4,000 underutilized or duplicate track-miles, and consolidate or dispose of up to 10 underutilized or redundant facilities. All of this, which NS says is designed to "reduce costs and improve financial performance," will take place over the next 12 to 24 months. The employee cutbacks are in addition to those announced late last year.
The restructuring announcement came at the same time that NS declared a fourth-quarter 2000 dividend of 6 cents per share of common stock, a 70% decrease from the third-quarter 2000 dividend of 20 cents. NS Chairman, President, and CEO David R. Goode called the dividend reduction "a difficult decision but a necessary part of our restructuring."
NS also said it will be redesigning its service network to reduce operating costs and improve service, and has brought in consultant MultiModal Applied Systems for assistance.
| 1/23/2001 |
The Minneapolis Metropolitan Council has awarded a $56 million contract to Bombardier Transportation for 18 low-floor light rail vehicles for the 12.2-mile Hiawatha Corridor LRT, which will link downtown Minneapolis with Minneapolis/St. Paul International Airport and the Mall of America in Bloomington. LRV design and carbody fabrication will occur at Bombardier's Sagahun, Mexico, plant; final assembly will occur in Barre, Vt. An option for 24 vehicles, if exercised, will bring the contract's value to $112.4 million.
| 1/23/2001 |
The economy may weaken, but railroad capital spending will remain high, says Moody's Investors Service. The credit research company expects investment by nine large North American railroads to range between $6.5 billion and $6.6 billion this year, a decline of only 2% from 2000.
"Railroading remains one of the most capital intensive industries, and we believe that capital investment in the range of 18% to 20% of revenue is necessary for a Class I railroad to remain competitive," says Moody's in its latest Railroad Industry Outlook. The company says it considers underinvestment to be "a significant credit negative, and we carefully review the spending plans of each railroad in the context of that company's competitive position."
Forecasts updated late in 2000, says Moody's, "suggest a high level of spending even in the face of a potential economic slowdown. Moody's considers the investment to maintain the property at high standards throughout the cycle to be a conservative and appropriate strategy."
Moody's has this to say about the paths investment may take this year:
"Of note is the reduction in the relative percentage of spending on power and rolling stock to a more normalized 20% to 25% of the total. The industry aggressively added locomotives to the fleet over the last several years, as the lack of power contributed significantly to the merger-related congestion. The Class I's needed to lease in power on a short term basis at rents that in many cases exceeded the fully loaded costs of ownership. For the most part, this added power has been returned to the lessors, and the Class I's are expected to only lease power on a seasonal basis going forward. The industry seems set to add new locomotives at a rate of 700 to 800 units per year, just slightly in excess of the expected retirements.
"For railcars, the Class I's now own less than half of the cars in the North American fleet, as most of the very high rate of deliveries over the last several years were to shippers and lessors. Railcar deliveries over the next several years are expected to be well off from the 1998 high, and likely in the 35,000 to 40,000 unit range. The railroads themselves will focus on high-use cars such as coal and grain gondolas, auto racks, and certain cars used in delivery of forest products."
| 1/18/2001 |
The Railway Systems Suppliers, Inc., and Railway Engineering-Maintenance Suppliers Association are offering college scholarships for the 2001-2002 academic year.
RSSI will award scholarships of $2,000 per year for up to four consecutive years to the dependent children or grandchildren of employees of RSSI member companies in good standing with at least four consecutive years of membership. Applications are due by May 1. For details, contact RSSI Executive Director Donald F. Remaley at 9304 New LaGrange Road, Suite 200, Louisville, KY 40242; Tel. (502) 327-7774; Fax: (502) 327-0541; E-mail: rssi@rssi.org.
REMSA will provide seven $2,000 scholarships to current employees of REMSA member companies and their family members (spouses, children, and grandchildren). Students who have a potential interest in railroad-related careers and who are high school seniors or are enrolled full-time in two- or four-year colleges are eligible to apply. Applications are due by May 1. REMSA scholarship recipients are eligible to be considered for renewal of their scholarship assistance each year. For details, contact REMSA Executive Director Judi Meyerhoeffer at 210 Little Falls Street, Suite 100, Falls Church, VA 22046; Tel. (703) 241-8514; Fax: (703) 241-8589; E-mail: meyerhoeffer@remsa.org; Website: www.remsa.org.
| 1/18/2001 |
The national economic slowdown is affecting some railway supply companies, but important parts of the market--particularly rail transit--remain strong.
Wabtec on Jan. 9 was forecasting sales of $1 billion in 2001 with earnings projected to rise to $1.25 per share from last year's estimated $1.10. This forecast assumes flat business in the Freight Group and a 5% increase in Transit Group sales. The company warned that "any changes in capital spending by the railroads and/or the overall U.S. economic outlook" could lower these expectations.
The Greenbrier Companies reported that the slowdown had eaten into its freight car backlog, which dropped from 7,800 units on Aug. 30 to 6,200 on Nov. 30, the end of the first quarter of the company's fiscal year 2001. "As have our competitors, we have adjusted production in North America to reflect the overall slowdown in railcar demand," said President/CEO William A. Furman. He reported "continuing momentum" in the company's European operations, which he said "will help insulate us" from the slowdown at home.
Many expected the slowdown to be mild and possibly of brief duration. Lehman Brothers early in January was projecting gross domestic product growth of 3% to 4%, with a 15% probability of growth at or below 1%. In its Jan. 23 issue, Newsweek noted that rail carloadings, "a traditional business-cycle indicator," had fallen in both November and December 2000. But a Wall Street Journal survey of 54 economists near the beginning of 2001 found only two who believed the downturn would turn into recession.
| 1/16/2001 |
The Wisconsin Central Shareholders Committee to Maximize Value, led by ex-WCTC CEO Edward A. Burkhardt, has lost its proxy fight to unseat the company's current board of directors. The Wisconsin Central Transportation Corp. announced Jan. 12 that the Burkhardt group had failed to deliver the "consents" necessary to replace the board with its own nominees. During the course of the fight, the value of a share of Wisconsin Central rose to $16.50. Burkhardt holds almost 3.5 million shares. When he announced the proxy fight on Oct. 23, Burkhardt said that in the year following his forced departure from the company, the price per share had gone from $18.88 to $10.61.
Burkhardt promised to divest the company of unprofitable foreign investments and to explore the sale of its North American operations. WCTC's management soon announced that it had the same goals in mind, and retained investment bankers for guidance.
In an announcement acknowledging his failure to unseat the incumbent board, Burkhardt said he had received word from London that WCTC was now withdrawing from a planned sale of its equity in the English Welsh & Scottish Railway. WCTC denied that this was true.
Burkhardt said he did succeed in delivering enough "consents" to require all of WCTC's board to stand for re-election each year, replacing the present "staggered" board.
Said WCTC President and CEO Thomas F. Power, Jr.: "We are gratified by our stockholders' endorsement of the board and its program to maximize stockholder value. We are continuing to make good progress with our exploration of strategic alternatives and, with this expensive and time consuming distraction behind us, we can move forward even more aggressively."
| 1/12/01 |
Metra is placing a $79.4 million order with Motive Power Industries for 26 3,800-hp locomotives to be delivered by the end of 2004. Fifteen of the new units will replace locomotives that went into service 24 years ago on former Milwaukee Road lines and have been rebuilt twice. Seven units will replace locomotives still to be designated, and four are earmarked to handle planned service increases. Funding will be 80% federal and 20% local, the latter coming from Illinois FIRST funds.
Features of the aerodynamically-styled new locomotives will include inverter head end power (the inverter will reduce noise and emissions while the locomotives wait in downtown terminals); microprocessor control propulsion; electronically controlled air brake systems; and compliance with EPA Tier 1 emission requirements.
The locomotive order will be the Chicago commuter agency's first since the early 1990s. It was approved by the Metra board on Jan. 12. A month earlier, the board approved award of a contract to Sumitomo Corp. of America for 250 new gallery cars with an option for 50 more.
| 1/12/01 |
CIT Rail Resources has opened an office in Calgary to help it "effectively compete and further expand [its] Canadian rail business, which has the potential to grow dramatically," says Steve McClure, president of CIT Rail Resources, a business unit of Capital Finance and an operating group of CIT. "In short, to succeed in Canada, we have to be in Canada." Ross Parbery, who has joined the company as assistant vice president-Railcar Leasing, will manage the new office.
| 1/11/01 |
Union Pacific and City Public Service of San Antonio have extended for 14 years a coal-hauling agreement originally signed in 1985. "Capital improvements along our coal corridor, the purchase of high-horsepower locomotives, and our dedicated employees have helped Union Pacific provide a high level of service for our customers," said Lance Fritz, UP's vice president and general manager-energy. "The fact that City Public Service of San Antonio values this service enough to commit to a long-term relationship is gratifying."
| 1/10/01 |
The latest sign that major railroads may reverse their stance of many years and seek government aid came in a speech by Burlington Northern Santa Fe Corp. Chairman Robert D. Krebs in Washington Jan. 10.
Acknowledging that "it goes against my Republican instincts," Krebs said he was advocating "some form of public financing assistance for railroad rights-of-way projects that provide public benefits, like highway congestion mitigation, air quality improvements, or public safety enhancements."
Addressing the Transportation Research Board's Chairman's luncheon, Krebs observed, "We already have a number of good examples of public financing benefiting the community and at the same time providing side benefits to the freight railroads: the Alameda Corridor project in southeast Los Angeles; the expansion of passenger rail operations through California's San Joaquin Valley; both the CalTrans commuter rail programs; and the Sound Transit commuter rail launch last September in the Seattle area demonstrate viable approaches."
Krebs said studies show that big trucks pay 80% of their costs for use of highways and barges pay only about 12% of the cost of their rights-of-way. "I'm not advocating higher fuel taxes for trucks or barges--we've fought that battle for too long," said Krebs. "Railroads have been fighting--and losing--the 'competitive equity' battle as long as I can remember."
Krebs's remarks came in the context of comments on how railroads can improve customer service. Increased capital investment is one major road to improvement, he said, but the failure of the industry to earn its STB-calculated 9.3% cost of capital is resulting in lower investment levels. Meanwhile, he said, there's pressure from Wall Street to cut capital spending to improve stock prices.
Citing the need for "broader, seamless networks" in improving service, Krebs was bitterly critical of the Surface Transportation Board for aborting a BNSF-Canadian National merger. He said the merger promised at least $600 million in annual operating income benefits. "Our shippers and our stockholders simply cannot afford to leave benefits like that on the table," he said.
| 1/10/01 |
Burlington Northern and Santa Fe is expanding its existing intermodal service to Mexico with "ramp-to-door" service between major U.S. markets and Monterrey, Mexico City, and Queretaro. The new service "offers competitive pricing designed to streamline the process of shipping freight into and out of Mexico," says Richard Miller, director-Mexico Business.
A new pricing structure consolidates into one payment "several fees and charges most shippers didn't want to deal with." It includes payment of the in-bond transit authority fee for the rail movement between the border and Mexican destinations; drayage fees between Mexican intermodal facilities and the actual origin/destination (ramp-to-door or door-to-ramp service); and North American Container System (NACS) equipment charges for Mexico. It does not include rates normally paid by the Mexican receiver, including insurance outside the intermodal facilities and Mexican customs broker fees.
| 1/10/01 |
Norfolk Southern has agreed to pay $28 million to 7,700 African-Americans who have worked for the company since Dec. 16, 1989, and their attorneys. The payment is part of a consent decree ending a class action lawsuit alleging race discrimination in the company's promotion practices.
NS said it also agreed "to make extensive improvements to its procedures for identifying, training, and selecting candidates for promotion to higher-rated positions for all its employees." In addition, NS will "name a major railroad facility for a prominent African-American involved in the civil rights movement and/or the rail industry" and "will celebrate the contributions of African-Americans to the history of the railroad industry and to Norfolk Southern during African-American Railroader Month each February, starting 2002."
The agreement was reached after two years of voluntary mediation. The case had one plaintiff when it began in 1993. It was later certified as a class action and was tried in 1997 by a federal judge who had not issued his ruling when the agreement was reached.
NS has included $2.6 million of its 2001 capital budget to begin implementing the new systems and procedures. "These changes are not only good for members of the class in this case, but also for all of our employees and the future of the company," said Thomas Mullenix, vice president-human resources.
| 1/5/01 |
President-elect George W. Bush's choice of Norman Mineta to be Secretary of Transportation is widely regarded as evidence that the DOT will occupy a position of importance in the new administration.
Mineta, a former California Congressman who has served as President Clinton's Secretary of Commerce, is the only Democrat selected by Bush for a Cabinet level job, but his credentials are not those of a token appointee. A member of Congress for 21 years, Mineta served as chairman of the House Transportation and Public Works Committee and was a principal architect of the landmark Intermodal Surface Transportation Efficiency Act (ISTEA).
The railroads joined other carriers in welcoming the appointment. Association of American Railroads President Ed Hamberger praised Mineta for his "in-depth transportation expertise." Ed Emmett, who as president of the National Industrial Transportation League is the leading spokesman for shippers, called it "a great choice."
While Mineta has been widely regarded as a friend of passenger rail and labor, sources say that neither should count on his unwavering support in the future. "He is a partisan only of what he conceives to be sound policy," said a friend.
Publicly, Mineta avowed his dedication to political bipartisanship: "Cargo is not shipped by Republican or Democratic railroads, ships, barges, or pipelines." Bush said the Secretary-designate knows the importance of "a sound infrastructure" to the economy.
The biggest immediate task facing the new DOT chief will be trying to help airlines and airports get their acts together. He'll also be hearing from railroads, particularly the smaller ones, about their infrastructure needs, and from trucking interests about desired increases in the allowable sizes and weights of highway trailers. His choices for leaders of the railroad, transit, and highway administrations will be watched closely for their positions on safety and labor issues.
| 1/5/01 |
Pennsylvania Republican Congressman Bud Shuster, who stepped down as chairman of the House Transportation Committee on Jan. 3, announced the next day that he was resigning from Congress Jan. 31. Shuster, a powerful force in transportation legislation almost from the time he entered Congress in 1972, relinquished the chairmanship because of rules limiting a committee chairman's terms.
The 68-year-old legislator was criticized by an ethics committee last September for an alleged improper relationship with a lobbyist, but his popularity in Pennsylvania's Ninth District remained high--one of his final acts was persuading Norfolk Southern to keep a railroad shop open in Altoona--and he was reelected without opposition in November. Health considerations reportedly led to his decision to leave Congress.
Association of American Railroads President Ed Hamberger called Shuster "a tireless advocate for mobility and transportation safety and efficiency" and praised his bipartisanship.
| 1/5/01 |
The "Custom Tracing" section of Burlington Northern and Santa Fe's website, which gives customers up-to-the-minute online shipment information, has been improved with several new features. Up to 300 units can now be traced at once by entering the railcar, container, or trailer number. In addition, automotive customers can track individual vehicles by their vehicle identification numbers.
Customers can go to bnsf.com, select "Custom Tracing" under "Tracing Tools," and then enter the equipment or vehicle identification numbers to access:
*
Bad Order Code,
which informs customers if equipment has a mechanical defect, allowing them to plan for shipment delays.
* Waybill Errors, which alerts customers that there may be billing errors and allows them to make necessary corrections to avoid delays.
* Lot and Row Location, which informs shippers of trailer or container location in any of BNSF's 35 intermodal facilities.
* Storage Due Date, which tells customers the day storage charges begin for rail equipment stored at any BNSF intermodal yard.
* Next Event, which helps customers plan transportation services by telling them the next scheduled event according to the shipment's service scheduling plan.
*
Goal Date and Time,
BNSF's operating goal for shipment delivery.
| 1/4/01 |
The United Transportation Union, which last year was defeated in its effort to turn the Union Pacific into a single-operating-craft railroad, will try again this year. UTU's new effort will be based on a late-December National Mediation Board ruling involving the Terminal Railroad Association of St. Louis. That ruling, said UTU, "clearly indicated the Board is now ready to find a single craft or class of operating employees is appropriate where the facts indicate 'a mandatory progression from train service to engine service, the regular ebb and flow of employees from train service to engine service, and [a] similarity in working conditions and job functions....' "
The UTU dismissed as ultimately unimportant a ruling the same day in which the NMB denied UTU's petition for reconsideration of the UP representation case. "[T]he same kind of evidence in the same format that won the Terminal Railroad of St. Louis case can be presented in a new Union Pacific case," said UTU International President George L. Little. In any event, he added, "Since the only dissenter to the Board's view on a single craft of operating employees, Chairman [Ernest] DuBester, will be leaving the Board July 1, 2001, we are contemplating filing a new application on Union Pacific at an appropriate time in the near term."
In his dissent, DuBester commented: "While the work and operating conditions of engineers, conductors, and trainmen is interrelated to some degree, their primary job functions are not substantially similar."
While claiming a victory in the NMB's decision against reconsideration of the UP case, the BLE viewed the split TRRA decision with alarm and indignation. In a year-end petition for reconsideration of the TRRA case, BLE declared: "The majority's determination to paint a distorted picture by emphasizing the 'similarities' of the clearly distinctive jobs is incredible at best and disingenuous at worst. Indeed, the 'logic' of the majority's decision would also mean that pilots and flight attendants have similar job functions and duties because, although only pilots operate the aircraft, both classes of employees inspect equipment, work on airplanes, share similar work schedules, communicate with passengers, and practice safe work habits. At bottom, the manner in which the majority has diminished the importance of and the uniqueness of the engineer's functions plainly appears explicable only as a result-driven initiative: to end the separation of two decidedly different crafts."
| 1/2/01 |
The Ohio Central Railroad System has purchased the 42-mile Pittsburgh Industrial Railroad (PIRR) from RailAmerica for $7.7 million. PIRR is one of the RailTex short lines acquired by RailAmerica a year ago. It operates from Arden to Neville Island, Pa., just west of Pittsburgh. To reduce debt, RailAmerica has been selling "non-core, non-strategic assets." With the PIRR sale, said CEO Gary O. Marino, "we have now completed more than $116 million of sales and transactions."
| 12/29/00 |
Robert P. DeMarco, publisher of the Simmons-Boardman Publishing Corporation's Rail Group, has announced that Marybeth Luczak, associate editor of Railway Age, has been named managing editor, reporting to William C. Vantuono, editor.
"Marybeth Luczak brings to her job the informed writing and editing skills that make Railway Age the leader in the railway trade publishing field," said DeMarco. "It is a pleasure to announce her well-earned promotion."
Luczak joined Railway Age in September 1997. She holds a B.A. degree in English and psychology from Fairfield University and an M.A. degree in journalism from the S.I. Newhouse School of Public Communications at Syracuse University. She resides in Fairfield, Conn., with her husband, Stan Osowiecki.
| 12/28/00 |
Union Pacific announced that it is reducing planned capital spending for 2001 and cutting about 2,000 jobs, about 4% of its workforce. UP said it was taking these actions because of "clear signs of an economic slowdown."
Citing a fourth-quarter traffic increase of 1% over a year ago--"considerably below our forecast"--plus the impact of severe early-winter storms, UP also said its earnings for the quarter would be in the range of 87 cents to 90 cents a share, compared with 95 cents in the 1999 quarter. UP, which earlier had said it would invest "nearly $2 billion" in capital improvements this year, did not immediately announce a revised figure.
| 12/28/00 |
Norfolk Southern has budgeted $806 million for capital improvements in 2001. This is $63.8 million more than the $747.2 capital program NS announced a year ago for 2000. But the comparison could be misleading. Last year's budget did not include the acquisition of 150 locomotives through a leasing arrangement. This year's budget includes the purchase of 160 locomotives as part of a $256 million equipment program.
Roadway capital outlays are budgeted at $449 million in 2001, compared with $576 million last year. This year's program includes $264 million for rail, crosstie, ballast, and bridge programs; $63 million for new or improved intermodal facilities; $35 million for marketing or industrial development initiatives; $35 million for signal and electrical projects; and $23 million for environmental projects and public improvements such as grade crossing separations and crossing signal upgrades.
NS unveiled its 2001 capital program on the same day it announced that fourth quarter 2000 earnings per diluted share, excluding a workforce reduction charge, were likely to be in the range of five to 10 cents, compared with a Wall Street expectation at that time of 20 cents. NS said its lower earnings were due to a traffic decline caused by a softening economy, a change in traffic mix, and record high diesel fuel prices which averaged more than $1.06 cents in the quarter.
| 12/28/00 |
Amtrak's new flagship high speed rail service, the Washington-New York-Boston Acela Express,has been operating at two-thirds capacity or better and has encountered only minor technical glitches since revenue service start-up on Dec. 11, 2000. The high speed trainset, introduction of which was delayed by over a year due to mechanical problems, has been making one roundtrip per day between Washington and Boston and has been operating within three or four minutes of schedule, according to Amtrak's Cliff Black. It was not available two days during its first week of service, but since then has been performing "quite well."
"Even with a 5:00 a.m. departure, we're seeing upwards of 50 people board at Washington," Black told Railway Age."That's good for so early in the morning. With only one trainset in service, we wanted to build ridership on the New York-Boston leg, and that's where the ridership has been strong. People seem more than willing to pay the $120 fare between New York and Boston, which is double that of our NortheastDirectservice." The Acela Expressdeparts New York Penn Station at 8:00 a.m. and Boston's South Station at 5:12 p.m., taking about 3.5 hours between the two cities. Capacity is 304 people, and typical loadings between New York and Boston have been around 200.
It's possible that Amtrak will add another
Acela Expressrun later in January. This may include a two hour, 28-minute express schedule between Washington and New York with only one intermediate stop (Philadelphia), about 15 minutes faster than the current schedule.
| 12/28/00 |
The Washington Metropolitan Area Transit Authority will acquire an additional 50 new railcars and continue major rail and bus expansion projects--all without raising fares--under three proposed FY 2002 budgets that will take effect July 1. Totaling $1.57 billion, they include an operating budget of $829 million, a capital improvement plan of $671 million, and a rail construction program worth $73 million. The WMATA board is expected to approve final figures in June.
In addition to the railcar acquisition (an option on an existing contract with AAI for 192 cars), WMATA plans to add 4,400 parking spaces, address water leaks in several rail tunnels, rehab escalators and elevators, install a new radio communications system, and add 48 maintenance-of-way and 29 station manager positions.
In related news, WMATA has started work on a new Red Line station near the intersection of New York and Florida avenues, N.E.--the first station on the system to be inserted between two existing stations (Union Station and Rhode Island Avenue). The cost of the New York Avenue Station will be shared by the District of Columbia ($34 million), the federal government ($25 million), and private land owners ($25 million). It's expected to spur $1 billion in business development and create 5,000 jobs. Work continues on the five remaining Green Line stations that are part of the originally planned 103-mile system. Ridership is expected to increase to 1.6 million per day in FY 2002.
| 12/28/00 |
The Belt Railway of Chicago now has a high-tech means of monitoring its locomotive fleet and improving locomotive utilization.
BRC has awarded a contract to Nexterna (part of Fenix, a technology holding company formed by Union Pacific Corp.) for a wireless data system including hardware, middleware, software, and application hosting services. The system enables real-time data communications between BRC's dispatch center and its locomotive fleet. A "communications management unit," described by Nexterna as "a ruggedized onboard computer called an ARC," is mounted in each locomotive and used to capture real-time GPS tracking information that documents locomotive utilization and location. This data is transmitted to Nexterna's host data center, where it can be accessed via the Internet. Onboard equipment includes a Pentium-based computer with Microsoft's NTE (NT Embedded) operating system, built-in wireless modems, and a GPS receiver.
The integrated system includes Nexterna's OptiPathô mobile data communications software, which provides a data communications link between BRC's host business application server and its locomotives. The link "can use a single wireless network or multiple wireless networks," says Nexterna. "In environments where the coverage of a single wireless network is insufficient, the middleware evaluates the immediate conditions affecting a message transmission and selects the most desirable 'least-cost' path available using a set of configurable messaging rules."
The system also includes OptiTracô, described as "an advanced mobile resource management tool that allows BRC to gather detailed information about a single locomotive's idle-time as well as fleet utilization statistics." It integrates GPS and GIS (geographic information system) technologies with wireless data communication technology to automatically collect locomotive tracking data.
Rather than manage an in-house network operations center, BRC uses Nexterna's turnkey ASP (Application Service Provider) services, which hosts and monitors the applications, "ensuring uptime and providing support 24 hours a day, seven days a week." ASP, says Nexterna, "lowers up-front capital investment and information technology staffing needs by offering integration of software, wireless messaging and computer hardware, consolidated air time, and financing." Applications are hosted at Nexterna wireless data center in Omaha and accessed on the Internet.
| 12/28/00 |
VIA Rail Canada is paying Alstom approximately $125 million (C) for 139 new coaches, sleepers, and food-service cars originally planned for service through the English Channel tunnel. The so-called Nightstock cars, with construction mostly complete, have been in storage in the UK since the planned sleeping-car service from London to Amsterdam, Dortmund, Frankfurt, and Paris was scrapped in the mid '90s. VIA has been testing three of the cars since last June. "The new trains are contemporary in design, have full waste retention, and include special features to maximize accessibility for passengers with restricted mobility," said VIA.
"The purchase of the new cars is the latest step in the rejuvenating passenger rail in Canada," said Transport Minister David Collenette. Via Chairman and interim CEO Marc LeFrancois called it "a phenomenal opportunity for VIA, our customers, and all Canadians."
The cars will be phased into service starting next fall. While some have questioned their suitability for Canada, VIA said it has carried out tests "to ensure the equipment meets Transport Canada safety standards and is compatible with Canadian operating conditions."
| 12/28/00 |
The PRIMA family of locomotives, available in electric and diesel-electric versions for both freight and passenger operations, is designed for "boundary-free European operations," according to manufacturer Alstom Transport. The electric version is "equipped for multi-voltage usage with pan-European signaling and safety systems," and can operate "unimpeded throughout the continent."
Common to all PRIMA locomotives is a "modular architecture adaptable to different market operations," says Alstom. Known as "Optionic DesignÆ," it allows for a common carbody shell structure and internal cab arrangement; adaptability for standard, meter, or broad gauge in either four- or six-axle configurations with d.c. or a.c. traction motors; and suitability for passenger, heavy freight, or light freight operations. It's described as "a blend of standardization and customization." Alstom's ONIXô IGBT control system, which is employed on most Alstom railway vehicles, is used on all PRIMA locomotives.
The prototype PRIMA locomotive is a four-axle, 4,200-kW, multi-voltage electric freight unit with a top speed of 85 mph. Also available is a four-axle, 135-mph, 4,800-kW passenger version; a six-axle, 85-mph, 6,500-kW freight version; a twin-unit (eight-axle), 75-mph, 9,600-kW heavy freight version; and a four-axle, 135-mph, high-power (6,000-kW) version derived from Alstom's current ASTRID line but featuring IGBT control technology. Several diesel versions are available in four- and six-axle arrangements with a.c. or d.c. propulsion. These range in axle loadings from 18 to 24 tonnes and horsepower from 1,400 to 2,600 kW. Among them is Britain's Class 67, which features an EMD prime-mover.
| 12/26/2000 |
Shippers are fuming over a Surface Transportation Board decision that they say makes it harder for them to challenge Union Pacific rates. Ed Emmett, president of the National Industrial Transportation League (NITL), says STB's decision "could be the beginning of the end for an agency that seems to be completely focused on taking care of the railroads."
STB served the decision Nov. 30. It denies a petition by the Western Coal Traffic League (WCTL) for reconsideration of a May 12, 2000 decision in which STB found that UP's expenses in correcting the service problems that followed its absorption of Southern Pacific were not "unusual" and could therefore be recorded as a normal expense of doing business. As NITL sees it, "This makes it more difficult for shippers to challenge UP's rates, by raising the costs, and the threshold, for an STB finding that a rate is unreasonably high."
"The most absurd aspect of the WCTL decision," said NITL, "is a statement by the STB that the UP service crisis was not caused by the UP/SP merger at all: 'In an effort to tie all of the precipitating events together, WCTL attempts to portray the service crisis as a "direct consequence" of UP's "ill conceived" merger with SP. . . . But . . . rather than causing the service crisis, UP's implementation of the merger in Texas--and its integration and absorption of a weak and deteriorating SP system--effectively marked the end of it.'"
NITL's Emmett said that "in the long term, these kinds of decisions do neither the railroads nor the customers any good. They merely maintain status quo and the status quo is a railroad industry that is going nowhere. Somebody has got to start thinking in terms of a new North American railroad industry, including a look at finances that will allow railroads to grow and in fact meet capital requirements rather than just 'hold on to what they've got.'"
This is not the first time that shippers have clashed with the STB. Emmett said the decision in the UP case "has the same effect as the Board's refusal to grant the request of the League for a 'safety' net in the Conrail transaction. Such a condition would exclude the acquisition premium paid for Conrail by CSX and Norfolk Southern railroads in the base for revenue adequacy, variable costs, and the jurisdictional threshold for unreasonable rates. The League has continued to pursue its case in the courts."
| 12/19/2000 |
Johnstown America Corp. has re-entered the mill gondola market, completing its first production run of a newly-designed line of cars at its Danville, Ill., facility.
JAC's first new mill gon, being built for CIT Corp. and Burlington Northern and Santa Fe, is a 66-foot model with six-foot sides. It features stronger end and side construction, lighter weight, a maximum GRL (gross rail load) of 286,000 pounds, and JAC's patented center sill design. It's designed to handle finished and semi-finished steel, scrap metal, aggregates, soil, construction debris, and other commodities. The full line includes inside lengths from 52 feet, six inches to 66 feet, and side heights up to 10 feet, with a variety of optional features for specific product applications.
| 12/19/2000 |
Johnstown America Corp. has re-entered the mill gondola market, completing its first production run of a newly-designed line of cars at its Danville, Ill., facility.
JAC's first new mill gon, being built for CIT Corp. and Burlington Northern and Santa Fe, is a 66-foot model with six-foot sides. It features stronger end and side construction, lighter weight, a maximum GRL (gross rail load) of 286,000 pounds, and JAC's patented center sill design. It's designed to handle finished and semi-finished steel, scrap metal, aggregates, soil, construction debris, and other commodities. The full line includes inside lengths from 52 feet, six inches to 66 feet, and side heights up to 10 feet, with a variety of optional features for specific product applications.
| 12/19/2000 |
Freight railroads have rarely dealt directly with consumers, but Burlington Northern and Santa Fe is changing that with a service that allows consumers to ship their personal vehicles via autorack anywhere in the U.S., at a cost that BNSF says is 30% less than shipping a vehicle by truck. BNSF's CarsOnTrack program, launched Dec. 7, lets consumers arrange a shipment, pay for the service with a credit card, and track a vehicle from origin to destination. Aimed at people moving long distances, it uses a new website, carsontrack.com, as a "virtual station agent." CarsOnTrack is currently being offered only between Los Angeles and Chicago, using BNSF auto ramps in Commerce City, Calif., and Naperville, Ill., but should be expanded to other corridors.
"This service will allow BNSF to offer individual consumers the same safe, efficient, cost-effective vehicle shipping that we've provided the top vehicle manufacturers for decades," says BNSF Vice President-eBusiness Development Kathleen Regan. "And, while we will target the individual consumer, we also anticipate a potential market for off-lease or turn-back vehicles headed to auctions and used car lots." This, she says, will help BNSF earn revenue on autorack backhauls, which often run empty while returning to assembly plants for loading.
| 12/14/2000 |
Chicago's Metra has awarded a $398.6 million contract to Sumitomo Corp. of America to supply 250 stainless steel bilevel commuter cars with an option for an additional 50. The new cars will replace Metra's oldest cars, including those dating back to 1950. They will also allow Metra to add trains to the North Central Service route to Antioch and the Southwest Service line to Orland Park, following completion of track and signal improvements on both by 2005. Illinois First, a $12 billion state funding program, will fund the project. Sumitomo will supply the car shells and components for assembly at Super Steel of Milwaukee, Wis. Delivery is scheduled to begin in 2003 and end in fall 2005.
| 12/14/2000 |
Estonia has picked a U.S. consortium as preferred bidder for a 66% interest in the 125-mile government-owned railway, Eesti Raudtee. The Kingsley Group is the majority owner of the consortium, which is known as RailEstonia. CSX Corp. and RailAmerica each has a 5% interest in the consortium. RailAmerica will be the operator of Eesti Raudtee, which runs from the Russian border west to the Port of Talinn and south to Valga in southern Estonia. The line has annual freight revenues of approximately $70 million, earned mainly from hauling oil and oil related products.
The Estonian operation will strengthen RailAmerica's claim to being the world's largest short line and regional operator. Chairman, President, and CEO Gary O. Marino said RailAmerica "will seek to improve the operation by implementing certain North American rail operating practices and short line rail efficiencies, as well as new business opportunities."
| 12/13/2000 |
Class I railroads employed 168,740 people in mid-September 2000, a drop of 5.41% from the year-earlier figure, according to reports submitted to the Surface Transportation Board. The steepest decline, 10.63%, was in the professional and administrative category. These other declines were reported: executives, officials, and staff assistants, 4.31%; maintenance of way and structures, 5.84%; maintenance of equipment and stores, 5.85%; transportation (other than train and engine), 5.71%; transportation (train and engine), 3.60%. The Class I's account for slightly less than 90% of all railroad employment, according to the Association of American Railroads.
| 12/13/2000 |
Burlington Northern and Santa Fe announced that its Los Angeles Intermodal Facility recorded its one millionth lift of the year recently--"the first time that one million intermodal containers/trailers have been lifted at a single facility anywhere in the world in less than one calendar year," according to Carmen Iacullo, general director-Hub and Facility Operations. BNSF said it expected total lifts at its 35 intermodal facilities throughout the U.S. to exceed 6.3 million units in 2000.
| 12/12/2000 |
Wisconsin Central Transportation Corp. announced that two proxy voting advisory services have advised their clients not to support WCTC's former CEO, Edward A. Burkhardt, in his fight to regain control of the company. They are Proxy Monitor Services and Institutional Shareholder Services. WCTC also said the State of Wisconsin Investment Board, which owns 9.8% of the company's common stock, is supporting current management. Both WCTC and Burkhardt have said they want to explore the sale of WCTC holdings at home and abroad to maximize shareholder value.
| 12/12/2000 |
Shippers are fuming over a Surface Transportation Board decision that they say makes it harder for them to challenge Union Pacific rates. Ed Emmett, president of the National Industrial Transportation League (NITL), says STB's decision "could be the beginning of the end for an agency that seems to be completely focused on taking care of the railroads."
STB served the decision Nov. 30. It denies a petition by the Western Coal Traffic League (WCTL) for reconsideration of a May 12, 2000, decision in which STB found that UP's expenses in correcting the service problems that followed its absorption of Southern Pacific were not "unusual" and could therefore be recorded as a normal expense of doing business. As NITL sees it, "This makes it more difficult for shippers to challenge UP's rates, by raising the costs, and the threshold, for an STB finding that a rate is unreasonably high."
"The most absurd aspect of the WCTL decision," said NITL, "is a statement by the STB that the UP service crisis was not caused by the UP/SP merger at all: 'In an effort to tie all of the precipitating events together, WCTL attempts to portray the service crisis as a "direct consequence" of UP's "ill conceived" merger with SP...But...rather than causing the service crisis, UP's implementation of the merger in Texas--and its integration and absorption of a weak and deteriorating SP system--effectively marked the end of it.'"
NITL's Emmett said that "in the long term these kinds of decisions do neither the railroads nor the customers any good. They merely maintain status quo and the status quo is a railroad industry that is going nowhere. Somebody has got to start thinking in terms of a new North American railroad industry, including a look at finances that will allow railroads to grow and in fact meet capital requirements rather than just 'hold on to what they've got.'"
This is not the first time that shippers have clashed with the STB. Emmett said the decision in the UP case "has the same effect as the Board's refusal to grant the request of the League for a 'safety' net in the Conrail transaction. Such a condition would exclude the acquisition premium paid for Conrail by CSX and Norfolk Southern railroads in the base for revenue adequacy, variable costs, and the jurisdictional threshold for unreasonable rates. The League has continued to pursue its case in the courts."
| 12/11/2000 |
Jolene M. Molitoris will resign as Federal Railroad Administrator on Dec. 31 and will become president and chief executive officer of TranSuccess, Ltd., on Jan. 2.
TranSuccess, which is based in Boca Raton, Fla., is to become the holding company of GeoFocus, Inc., a developer of safety-enhancing wireless technology systems for the transportation industry, and SuccessAdvocates, Inc., a consulting group.
Molitoris was appointed FRA Administrator in April 1993, the first woman to hold that office. She has served longer than any other administrator and has become widely known for her policy of zero tolerance of rail safety hazards. "During her tenure, Jolene brought this nation the seven safest years in rail history for every safety category we measure," said U.S. Department of Transportation Secretary Rodney E. Slater. The DOT announcement said that "FRA-led partnerships with rail labor, management, and others helped reduce train accident fatalities by 87%, rail employee casualties by 34%, and highway-rail crossing fatalities by 35%."
Molitoris called her new position "a great opportunity to work with industry and communities around the world to help them take advantage of leading-edge technology to enhance transportation safety."
GeoFocus's TrainTrac TIMS, a management and information system, is used by the Chicago's Metra and South Florida's Tri-County rail commuter systems and by Salt Lake City's TRAX light rail line.
| 12/8/2000 |
Matthew K. Rose, 41, was elected chief executive officer of Burlington Northern and Santa Fe on Dec. 7 with the warm endorsement of his predecessor, Robert D. Krebs.
"He is tough-minded, but he is an optimist," Krebs said of Rose. "He is decisive, yet thorough. He is open and supportive, and he has gained people's respect throughout the organization. People want to work for Matt. He's very proud of what the people of BNSF have accomplished in the five-plus years since our merger."
Rose has been president and chief operating officer of BNSF since June 1999. His election as CEO was effective immediately. Krebs, 58, continues as chairman. The change had been expected, though some felt Krebs may have accelerated it when he failed to achieve a merger of BNSF with Canadian National. BNSF and CN scuttled their merger proposal when the Surface Transportation Board imposed a 15-month moratorium on major railroad consolidations.
Before joining BNSF in 1993, Rose was vice president-transportation for Norfolk Southern's Triple Crown Services.
Rose announced this leadership team: Thomas N. Hund, 46, promoted to executive vice president and remaining as chief financial officer; Carl R. Ice, 43, promoted to executive vice president while continuing as head of the operations department; Jeffrey R. Moreland, 56, promoted to executive vice president and continuing to lead the law and chief of staff departments; Charles R. Schultz, 53, executive vice president and chief marketing officer; and Peter J. Rickershauser, 51, vice president-network devilment.
| 12/8/2000 |
The Railroad Applications Special Interest Group (RASIG) presented its first Innovative and Pioneering Applications of Operations Research at Railroads Award to Norfolk Southern Director Roger Baugher at the RASIG officers meeting in San Antonio recently. According to RASIG, a chapter of the Institute for Operations Research and Management Science, Baugher's work over the past 10 years to "propose and see through the implementation of dynamic blocking plan management tools, moving to algorithmic rather than table-driven solutions to update the railroad operating plans, has represented a true inroads into how operations research should be utilized in transportation companies."
| 12/7/2000 |
The Surface Transportation Board reports that Class I railroad return on investment (ROI) dipped to 6.05% for the 12 months ended Sept. 30, down slightly from the 6.8% reported in the year-ago period. Among individual carriers, double-digit ROIs were posted by Grand Trunk Western, 21.02%, down from 27.66%, and Illinois Central, 10.7%, up from 8.28%. Other ROIs (with year-ago comparisons): Burlington Northern and Santa Fe, 9.31% (9.57%); Kansas City Southern, 7.69% (7.52%); Union Pacific, 7.28% (5.84%); Soo Line, 5.38% (3.83%); Norfolk Southern, 4.67% (6.76%); and CSX Transportation, 2.65% (5.48%).
In operating revenues for the 12 months ended Sept. 30, UP ranked first with $10.45 billion, followed by BNSF, $9.15 billion; CSXT, $6.07 billion; Norfolk Southern, $6.06 billion; IC, $699.2 million; KCS, $536.9 million; Soo Line, $549.8 million; and GTW, $373.11 million.
| 12/7/2000 |
A management buyout of Helm Holding Corp., a leading, San Francisco-based operating lessor of locomotives and freight cars, has been announced. The transaction was accomplished through the repurchase of 80% of the closely-held company's common shares from three majority stockholders. New Chairman and CEO David R. Eckles, who retains a "significant" stock ownership, said $400 million in funding provided by FleetBoston Financial's Transportation Group "provided us with the flexibility needed to complete this complex transaction and move forward into our next phase of growth."
John F. Dains has been named president and chief operating officer and Joseph F. Mckenney, senior vice president-strategy. Recent management additions include Michael R. Bayles, executive vice president-marketing, formerly president and CEO of Standard Car Truck Co.; and Barbara W. Wilson, senior vice president and chief financial officer, who worked 15 years for BankBoston Corp. and was most recently with the Investment Banking Group at Houlihan Lokey Howard & Zukin.
| 12/7/2000 |
New customs procedures will reduce the wait for Amtrak passengers crossing the U.S.-Canadian border. The most important change is one requiring
Maple Leafand
Adirondackpassengers to submit date-of-birth and citizenship information before their tickets are issued. Border crossing agents receive this information in time to perform necessary background checks before the trains reach the border. Both trains operate daily roundtrips--the
Maple Leafbetween New York and Toronto and the
Adirondackbetween New York and Montreal.
| 12/5/2000 |
Canadian National says deregulation has reduced shipper rates in Canada by 35%, with the result that "today rates are the lowest in the western world--60% below the international average." But enough is enough. CN told the Canadian Transportation Act Review Panel that "continued rate erosion--which forced access or forced average rate regulation would exacerbate--would jeopardize Canadian railroads' financial capacity to invest in the infrastructure needed to take advantage of NAFTA trade flows growing at 10% annually."
In its submission to the panel, which is conducting a statutory review of the National Transportation Act of 1987 and the Canada Transportation Act of 1996, CN said the government should help, not hinder, the efforts of Canadian roads to compete in North American Free Trade Agreement markets. CN said mandated rail access and new rate regulation as proposed by interest groups in Western Canada would violate NAFTA and World Trade Organization rules and "undermine the viability of Canadian railroads."
| 12/5/2000 |
Tenants of a new business and industrial park in Midlothian, Tex., will have competitive rail service under a build-out plan approved by the Surface Transportation Board. The 1,700-acre park, RailPort, is adjacent to Burlington Northern and Santa Fe tracks. The Ellis County Rural Rail Transportation District received STB authority to build 4.8-mile line across BNSF tracks to a Union Pacific line. A grade-separated crossing is planned.
| 12/4/2000 |
Nexterna, General Electric Transportation Systems, and GE Harris Harmon have entered into an agreement that they say could be a landmark in locomotive efficiency improvement. They call the partnership "a major step forward in establishing an industry standard for on-board communications and computing technology for locomotives," dramatically improving locomotive operating efficiencies, utilization, reliability, and maintenance.
The agreement calls for GE Harris Harmon to be the exclusive North American distributor of Nexterna's Mobile Resource Management technology, which includes software products "with in-vehicle technologies that help companies wirelessly extend the power and capabilities of information systems to mobile workers."
Nexterna is part of Fenix, which is a Union Pacific Corp. technology holding company.
| 12/4/2000 |
Burlington Northern and Santa Fe and Matson Intermodal System, Inc., a subsidiary of Matson Navigation Co., have introduced Pacific Coast Express, a new intermodal service that offers twice-weekly rail service for international steamship and commercial customers moving freight along the I-5 corridor between Los Angeles and Seattle. Creating the new service involved restructuring Matson's all-water, port-to-port Pacific Coast Service to include a rail container movement over BNSF. "The added frequency of the new service is designed to allow customers more flexibility in scheduling their freight shipments," said Matson Intermodal System President Ron Forest. "We are confident we can deliver a transportation package for long term customers that is reliable, efficient, and cost competitive."
| 12/4/2000 |
The Greenbrier Companies reported solid strides last month in building up backlog and increasing market share. "As of Sept. 30, 2000, industry backlogs in North America were 26,000 cars, down 30% from the 37,000 railcars at Sept. 30, 1999," said Greenbrier President and CEO William A. Furman. "During this same time period, Greenbrier's North American backlog grew almost 50% to 6,100 units. Our market share has more than doubled to 23% from 11%. In Europe, our operations exceeded their stand alone break-even goal for the quarter, a significant improvement from the first three quarters." Greenbrier announced that in its fiscal fourth quarter, which ended Aug. 31, net earnings of $5.4 million--up from $5.3 million in the year-ago quarter--exceeded analysts' earlier estimates by 50%. For the fiscal year, earnings were $14.4 million on revenues of $619.4 million, compared with the prior year's net of $19.5 million on revenues of $618.5 million.
| 12/4/2000 |
Soaring fuel prices and the higher cost of capital have caused its customers to cut back on spending this year, but ABC-NACO says next year will be a different story: "Earnings are expected to return to positive territory. Based on our current revenue projections and planned cost reductions for 2001, EBITDA [earnings before interest, taxes, depreciation, and amortization] is anticipated to be in excess of $100 million." This forecast came as ABC-NACO reported a third quarter net loss of $7.1 million, before unusual charges, on revenues that were down 10% to $131 million; and a nine months net loss, before restructuring charges, of $6.5 million on sales of $443.1 million, compared with earnings of $3.4 million on sales of $475 million in the 1999 period. Expressing optimism, Chairman and CEO Joseph A. Seher said: "Management is focusing on three major areas to improve shareholder value. We anticipate growing revenues in 2001, reducing debt through disposition of non-core assets, and improving earnings through completion of our APT [advanced precision technology] program."
| 11/29/2000 |
Amtrak is introducing a frequent-rider "Guest Rewards" program that permits members to earn points for free travel on Amtrak, transfer points for flights on three participating airlines, exchange points with the Hilton HHonorsÆ program, earn free stays at several hotel chains, and earn free car rentals from Hertz. Amtrak customers start earning points simply by enrolling in the program, which they can do by calling 800/307-5000. They earn two points for each dollar spent on Amtrak travel. In the Washington-New York-Boston corridor,
Metrolinerand
Acela Expresscustomers will earn 500 points for each travel segment. They can also earn points when they rent a Hertz car or stay at participating hotels. Amtrak announced the new program on Nov. 29 as tickets went on sale for the
Acela Express,scheduled to go into regular revenue service on Dec. 11.
| 11/29/2000 |
General Electric Transportation Systems will deliver 51 4,400-hp a.c. traction locomotives to Canadian Pacific next year. The new order, announced Nov. 27, will bring CPR's total a.c. fleet to 381 units, which the railroad says will give it "the highest fleet proportion of a.c. locomotives of any major railway in North America." CPR said its a.c. fleet will have the hauling capacity of about 690 conventional d.c. locomotives.
| 11/29/2000 |
New Orleans-based International Shipholding Corp. (ISC) plans to introduce rail ferry service between Mobile, Ala., and Coatzacoalcos, Mexico, in mid-January. CG Railway, a short line formed by ISC, will be the U.S. link to the ferry. The Ferrosur railroad is the joint venture partner in Mexico. The service will operate every four days using two 585-foot roll-on/roll-off ferries with 30-foot high sidewalls. Each vessel has a capacity of 60 railcars.
ISC said the service is designed to meet the need for "another entry/exit system for the Canadian-Eastern U.S.-Mexican trade that would give railroads predominantly operating east of the Mississippi River direct access to Mexico." ISC said CG Railway last month was completing interline agreements with Canadian National/Illinois Central, Norfolk Southern, CSX Transportation, and Burlington Northern and Santa Fe.
| 11/22/2000 |
Canadian Pacific announced that beginning Dec. 11 it would increase published tariffs by 4%, "reflecting a general tightening of the rail and truck markets across North America." At the same time, CPR will impose a 3% fuel cost adjustment, which it will roll back when prices moderate. Grain movements, whose rates are largely controlled by the government, are not affected by either measure.
| 11/22/2000 |
Canadian Pacific President and CEO Rob Ritchie says CPR is ready to join in private-public partnerships in which it would "share responsibility for the planning and development of new freight services--an area that has been the railway's sole domain. But a warning--we are not prepared to have it confiscated."
Ritchie's remarks came in an address to the Vancouver Board of Trade in which he strongly defended differential pricing, which is under attack in Canada, as in the U.S., by interests that want to see rates cut "at the high end of the scale."
"CPR is ready to depart from the standard model of the railway owning and controlling everything," said Ritchie. "We are ready to show a new level of flexibility and creativeness."
But he said if the current statutory review of the Canada Transportation Act produces measures that further limit the rail industry's ability to price differentially, "it will be harder, if not impossible, for railways to recover their fixed costs. This will lead to more under-sending . . . Service will be adversely affected."
Ritchie said there are already private-public partnerships in commuter rail service, where governments own the equipment and market, price, and subsidize the service, with railways operating the trains under contract.
As an example of how this principle could be extended to freight service, CPR said "government and railway could cooperatively design a superior truck-and-train service aimed at taking trucks off the highways to reduce road upkeep costs and greenhouse gas-emissions, and improve safety for passenger cars. Ownership of the equipment and responsibility for promotion and pricing of the new service would be negotiable."
| 11/16/2000 |
Amtrak has placed an order with Trinity Industries for 100 boxcars for its mail and express service, with an option for an unspecified number of additional cars as the service expands. John Nussrallah, Trinity's railcar group president, said the contract is in line with the company's product diversification initiatives. "Trinity will be entering the high speed railcar market where safety control is critical and stringent criteria must be met," said Nussrallah. "Our engineers worked closely with Amtrak to redesign Trinity's existing car so that it not only accommodated but exceeded the customer's needs."
| 11/16/2000 |
Canadian National has acquired a minority interest in FreightWise, an Internet company incorporated late in 1999 to match buyers and sellers of transportation. Other investors in FreightWise include Burlington Northern Santa Fe Corp. and General Electric. FreightWise recently announced that it had successfully completed a controlled launch with a group of shippers and carriers, including Schneider National and J.B. Hunt. CN said Canadian shippers, beginning in mid-2001, will have the choice of purchasing domestic and transborder intermodal services through FreightWise. CN said small shippers in particular will benefit from being able to "find a carrier, get a price, order equipment, and track, trace, and pay--all online."
| 11/15/2000 |
Airport authorities at Dallas/Fort Worth and Tampa have awarded people mover contracts valued at $262.5 million to Adtranz.
A $239-million contract for a new system at Dallas/Fort Worth International Airport marks the first order for Adtranz's new people-mover vehicle, the Innovia. The five-mile, dual-track system, employing 64 vehicles, will connect existing terminals with a new terminal and a parking area.
In Tampa, the Hillsborough County Aviation Authority awarded Adtranz a $23.5 million contract to connect the new "E" terminal to the existing terminal with an 800-foot dual elevated guideway using four vehicles. The agreement extends Adtranz's long relationship with the Tampa airport, which installed the first commercial people-mover system in 1971.
Adtranz also announced that it has won its first order in Spain--a $117 million contract for a people-mover system linking a new terminal with a satellite terminal at Madrid's Barajas Airport. Included are 19 vehicles and approximately 1.5 miles of underground running surface.
| 11/15/2000 |
Pioneer Railcorp says it was able to increase third quarter operating income by 6% to $805,000, despite the loss of income resulting from a service disruption to subsidiary Alabama & Florida's principal customer. "Third quarter results were positively affected by increased operating income from the company's equipment leasing operations by approximately $195,000 in the period, primarily from increased revenue generated from locomotive leases and an increase in the utilization of its railcar fleet by non-affiliated roads," said the holding company. Pioneer's 14 short lines operate 415 miles of track in nine states.
| 11/15/2000 |
RailAmerica has made new strides in its debt-reduction effort. The short line/regional railroad operator recently announced an agreement to sell Kalyn/Siebert, L.P., the Texas-based operation of its discontinued truck trailer manufacturing subsidiary, for $32.5 million. Gary O. Marino, RailAmerica's chairman, president, and CEO, said the sale "substantially repays the asset sale bridge loan debt incurred with the purchase and financing of RailTex in February 2000 [and] will now allow us to concentrate on the efficient operation of our core railroad businesses." RailAmerica has also announced the signing of letters of intent to sell other non-core assets for $15.5 million. These include Kalyn/Siebert Canada, Inc., plus a minority interest in Quebec Railway Corp. and an unidentified small railroad. Marino said these and previously announced transactions bring total non-core asset sales to approximately $100 million, the company's stated goal for the year.
RailAmerica also announced higher revenues, EBITDA (earnings before interest, taxes, depreciation, and amortization), and carloadings for the third quarter and the nine months ended Sept. 30. Contributing to this growth were the acquisition of RaiLink and Toledo, Peoria & Western as well as RailTex. But "same railroad" carloadings were also up, 10% for the third quarter and ll% for the nine month period.
| 11/14/2000 |
The New York City area's subway and commuter rail lines were losers at the polls last month. Upstate voters defeated a $3.8 billion bond act that would have funneled $1.6 billion to the New York Metropolitan Transportation Authority to help finance a five-year, $17.1 billion capital improvement program. The bond measure was defeated by around 50,000 votes out of 2.9 million cast. While it won heavily in the New York metropolitan area, it was rejected by 64% of upstate voters who thought the money would disproportionately benefit the southeastern population bloc.
New York MTA's share would have helped fund a program calling for 1,130 new subway cars and renovation of 64 stations, plus work on linking the Long Island Rail Road with Grand Central Terminal and providing rail access to La Guardia Airport.
| 11/14/2000 |
With the addition of ePay for freight billing and payment, Burlington Northern and Santa Fe says it has become the first railroad to provide customers with a complete set of electronic offerings for handling freight transactions. "BNSF customers can now order cars, provide billing instructions, provide car-switching information, track and trace their shipments, and pay for cars via the BNSF Web-site," said the railroad.
Todd Olsen, assistant vice president, finance and information systems planning, said ePay was offered to a limited number of customers earlier this year to solicit feedback. "As a result of our customers' recommendations, we recently added a dispute resolution function that made the tool even more valuable," said Olsen.
| 11/13/2000 |
Burlington Northern and Santa Fe and Matson Intermodal System, Inc., a subsidiary of Matson Navigation Company, have introduced Pacific Coast Express, a new intermodal service that offers twice-weekly rail service for international steamship and commercial customers moving freight along the I-5 corridor between Los Angeles and Seattle. Creating the new service involved restructuring Matson's all-water, port-to-port Pacific Coast Service to include a rail container movement over BNSF. "The added frequency of the new service is designed to allow customers more flexibility in scheduling their freight shipments," said Matson Intermodal System President Ron Forest. "We are confident that we can deliver a transportation package for long term customers that is as reliable, efficient, and cost competitive as Matson's other domestic ocean transportation and intermodal services."
| 11/10/2000 |
NJ Transit acknowledges that rising ridership is "generally good news." But it also brings its challenges, said NJT executive director Jeff Warsh as he announced that ridership was up 6.8% in FY 2000 on 12 commuter rail lines and two light rail lines, and bus ridership was up 2%. "Right now, we are asking our passengers to bear with us as we bring nearly 1,900 new railcars, locomotives, and buses on board over the next five years to help us address our overcrowding issue," said Warsh.
NJT trains carried an average of 103,050 weekday riders, accounting for 206,100 weekday trips, in FY '00. Rail ridership has increased 43.4% in the last ten years. Today, there¹s an average of 6,000 standees on morning and evening peak trains.
Growth is expected to be accelerated with the completion of the Secaucus Transfer, the Montclair Connection, and Newark Airport Station, plus improvements to the Penn Station New York East End Concourse.
To cope with rising rail demand, NJT is acquiring 200 single level cars to be delivered by fall 2002 plus 200 bi-levels for which specifications are now being completed. The fleet will be further strengthened by the rehabilitation of 116 Comet II cars. NJT is also buying 57 new locomotives--33 electric units to be delivered by December 2002 and 33 diesel-electrics, for which a contract is expected to be awarded next spring. Meanwhile, to accommodate a growing volume of highway riders, NJT has awarded the biggest contract in bus-industry history, $500 million, for up to 1,400 cruiser buses.
| 11/10/2000 |
Soaring fuel prices and the higher cost of capital have caused its customers to cut back on spending this year, but ABC-NACO says next year will be a different story: "Earnings are expected to return to positive territory. Based on our current revenue projections and planned cost reductions for 2001, EBITDA [earnings before interest, taxes, depreciation, and amortization] is anticipated to be in excess of $100 million."
This forecast came as ABC-NACO reported a third quarter net loss of $7.1 million, before unusual charges, on revenues that were down 10% to $131 million; and a nine months net loss, before restructuring charges, of $6.5 million on sales of $443.1 million, compared with earnings of $3.4 million on sales of $475 million in the 1999 period.
Expressing optimism for the near future, Chairman and CEO Joseph A. Seher said: "Management is focusing on three major areas to improve shareholder value. We anticipate growing revenues in 2001, reducing debt through disposition of non-core assets, and improving earnings through completion of our APT [advanced precision technology] program."
| 11/10/2000 |
E-business and logistics are trendy issues in the transportation business, and the people who brought you the International Intermodal Expo are putting them together in the form of an e-Logistics Expo. It's scheduled to be held at the Georgia World Congress Center May 9-11, 2001. The sponsors are GFB (the Georgia Freight Bureau), founder of Intermodal International Expo, and the Logistics Institute of Georgia Tech. It was agreed last spring to hold the Intermodal Expo every other year rather than every year; the year 2001 is an off-year, making room for the new expo on e-logistics.
The sponsors call it a "knowledge trade show." "The amount of knowledge needed for a company to make the best e-logistics decisions possible has just exploded," said Expo Director John Youngbeck. "We recognize that in any size company, teams of people sharing information and knowledge are making the big-ticket decisions regarding their company's e-logistics purchases. The e-Logistics Expo was designed to help educate these teams and bring them together with solutions providers."
| 11/10/2000 |
The Greenbrier Companies reported solid strides last month in building up backlog and increasing market share. "As of Sept. 30, 2000, industry backlogs in North America were 26,000 cars, down 30% from the 37,000 railcars at Sept. 30, 1999," said Greenbrier President and CEO William A. Furman. "During this same time period, Greenbrier's North American backlog grew almost 50% to 6,100 units. Our market share has more than doubled to 23% from 11%. In Europe, our operations exceeded their stand alone break-even goal for the quarter, a significant improvement from the first three quarters."
Greenbrier announced that in its fiscal fourth quarter, which ended Aug. 31, net earnings of $5.4 million--up from $5.3 million in the year-ago quarter--exceeded analysts' earlier estimates by 50%. For the fiscal year, earnings were $14.4 million on revenues of $619.4 million compared with the prior year's net of $19.5 million on revenues of $618.5 million.
| 11/10/2000 |
Alstom and the Electro-Motive Division of General Motors have agreed in principle to form a joint venture, Alstom EMD Services, that will provide maintenance for locomotives of all makes to railroad customers worldwide. An announcement said the plan was still subject to a definitive agreement and the completion of due diligence. Paris-based Alstom will hold a majority interest in the company.
Alstom Transport Sector President Michel Moreau said that by joining "Alstom's worldwide reach in the transportation business with EMD's proven reputation for product design and quality, the joint venture is expected to make more companies globally competitive in the locomotive maintenance marketplace."
Alstom Transport claims sales of $3.44 billion and a near 20% market share of the rolling stock, signaling, and other products and services it supplies to the global rail industry. EMD in its 78-year lifetime has shipped more than 56,000 locomotives to 73 countries.
Alstom and EMD have worked together in the past and there has been talk of more lasting bonds between the two companies.
| 11/10/2000 |
RailWorks reported an operating loss of $40.5 million in this year's third quarter, including primarily non-cash restructuring and other charges of $48 million related to costs associated with the restructuring of acquired companies, settlement of legacy construction claims, and other acquisition-related costs. In the same period last year, RailWorks posted an operating income of $17.6 million. Third quarter revenues this year were $163.9 million compared with $137.4 million in the 1999 third quarter.
| 11/8/2000 |
In line with levels guaranteed by the Transportation Equity Act for the 21st Century (TEA 21), the FY 2001 Transportation Appropriations Act provides funding totaling $6.271 billion for the Federal Transit Administration. That's an 8.2% increase over the prior year. Of particular importance to rail transit interests is a fixed guideway capital program of nearly $2.17 billion, an 8% increase. It's divided equally between new starts/extensions and modernization of existing rail facilities.
These are some of the earmarked projects:
Atlanta's North Line Metro extension, $25 million; Chicago METRA commuter rail projects, $35 million; Chicago Transit Authority's Ravenswood and Douglas branch reconstruction projects, $15 million; Dallas North Central LRT extension, $70 million; Denver Southwest Corridor LRT, $20.2 million; Dulles Corridor, $50 million; Tri-County (Florida) commuter rail, $15 million; Girdwood-Wasilla, Alaska commuter rail, $15 million; Long Island Rail Road East Side access project, $8 million.
Los Angeles North Hollywood LRT extension, $50 million; MARC (Maryland) commuter rail, $10 million; New Jersey Hudson Bergen LRT, $121 million; Oceanside-Escondido, Calif., LRT extension, $10 million; SEPTA (Philadelphia) Schuylkill Valley rail project, $10 million; Pittsburgh Stage II light rail, $12 million; Sacramento South Corridor LRT, $35.2 million; Salt Lake City University LRT, $2 million; San Diego Mission Valley East LRT, $31.5 million; BART airport extension, $80 million; San Jose Tasman West LRT, $121.5 million; San Juan Tren Urbano, $75 million; Seattle LRT, $50 million; St. Louis-St. Clair LRT extension, $60 million; Twin Cities Hiawatha Corridor LRT, $50 million.
| 11/3/2000 |
Wisconsin Central, which is in the middle of a proxy battle with former CEO Ed Burkhardt for control of the company, today issued a statement in which it said its board of directors was "pursuing a full range of strategic alternatives to maximize shareholder value."
Wisconsin Central said it has retained the investment banking firm of Goldman, Sachs & Co. "to act as financial advisor to the Board in evaluating alternatives including, but not limited to, sale of the Company and divestiture of its international holdings." Those holdings include a 42.5% equity interest in English Welsh & Scottish Railway Holdings Limited, Great Britain's primary freight railroad, 24% equity interest in Tranz Rail Holdings Limited, New Zealand's nationwide railroad and transportation company, and 33% equity interest in Australian Transport Network Limited (ATN), which operates on the Australian mainland and in Tasmania.
Should Wisconsin Central decide to follow this route, it would be similar in intent to what Burhardt proposed to do when he formed the Wisconsin Central Shareholders Committee to Maximize Value and filed a proxy statement with the Securities Exchange Commission late on Oct. 20. Burkhardt said the committee proposes a program that would include discontinuing investments in "highly risky and low return international rail privatizations," including a pending investment in Jordan; "liquidating or spinning off" the company¹s interests in its "poorly managed and underperforming overseas rail investments"; and "exploring the sale of North American operations to a strategic buyer." Canadian National has in the past been mentioned as a likely buyer.
Thomas F. Power, Jr., President and Chief Executive Officer of Wisconsin Central, said, "Over the past 15 months under new leadership, we have made substantial progress in strengthening the Company--increasing revenues, improving cash flows, and repurchasing shares. The Board is proceeding expeditiously on a full range of strategic alternatives to unlock the value of the Company's domestic and international assets for the timely benefit of our shareholders."
| 10/31/2000 |
Connecticut-based Genesee & Wyoming, Inc. (GWI) is about to expand its interests in Australia. GWI holds a 50% interest in Australian Railroad Group Pty Ltd (ARG), which has agreed to purchase Westrail Freight, a 3,280-mile system of standard and narrow gauge track, from the government of Western Australia. The other 50% of the joint venture is held by Wesfarmers Limited, a public corporation in Perth, Australia. The purchase price is $323 million, including working capital and acquisition fees. GWI will partially pay its share by contributing its wholly-owned Australian operation, the Australia Southern Railroad (ASR), to ARG along with its interest in Asia Pacific Transport Consortium, which has been selected to build and operate a line between Alice Springs and Darwin in the Northern Territory of Australia. GWI said ARG's combined operations, including those of ASR and Westrail, will serve the western half of the Australian continent and will be the country's largest private rail operator with pro forma results for the 12 months ended June 30, 2000, of $184 million in revenues and $57 million in earnings before interest, taxes, depreciation, and amortization.
| 10/27/2000 |
Citing "improvements and efficiencies identified as part of [our] combination preparation," Burlington Northern and Santa Fe and Canadian National have forged a haulage agreement that provides agricultural products customers in Illinois and Iowa "new seamless service." CN will provide haulage service for BNSF between East Dubuque, Ill., and Cedar Rapids, Iowa, and BNSF will provide haulage service for CN between East Dubuque, Peoria, and Centralia, Ill. In addition, it will "reduce transit times and train volumes in the Chicago terminal area."
| 10/27/2000 |
Canadian National has maintained its position as America's most efficient major railroad, posting a third quarter operating ratio of 69.4%, an improvement of 1.4 points. CN reported operating income of $407 million (C) and net income of $216 million, both up 9% over year-ago levels. Third quarter revenues rose by 4% to $1.33 billion. Operating expenses rose by less than 2%, to $923 million, despite higher fuel prices and the costs associated with increased traffic volumes. In reporting these gains, CN President and CEO Paul M. Tellier highlighted "the continuing success of our 'scheduled railroad' plan in improving service, controlling costs, and increasing asset utilization."
Canadian Pacific, with third quarter operating income up 6% to $222 million (C), held its operating ratio to 75.6%. Revenues rose by 4% to $910 million. Operating expenses were up by 4% to $689 million, but would have been flat without higher fuel prices despite a 7% increase in traffic. President and CEO Robert Ritchie said locomotive utilization was up 15%, fuel efficiency improved 6%, and average train weights increased 3% over the third quarter of 1999 when CPR introduced an operating plan designed to improve productivity.
Burlington Northern Santa Fe Corp. reported a third quarter operating ratio of 75.3% compared with 73.0% in the year-ago quarter. BNSF's operating income, $571 million, was down $60 million from the 1999 quarter, mainly due to a $61 million increase in fuel costs. Revenues of $2.32 billion were 1% below last year. Expenses, excluding fuel, were down by $26 million even with a 2% increase in business.
Union Pacific's operating ratio dropped to 80.2%, down 0.4% from the 1999 quarter and a quarterly "best" since the merger with Southern Pacific. UP said this improvement came despite a 64% increase in fuel costs which had 4.1 points of negative impact on the operating ratio. UP reported operating income of $550 million, up 8%, on commodity revenues that increased 5% to a record $2.65 billion.
Norfolk Southern's operating ratio in the third quarter remained high, at 86.1%, though down from the 90.3% recorded for the 1999 period. Third quarter revenues were up 1% from last year, lower than expected, said Chairman, President, and CEO David Goode, because of an economic slowdown, mild weather in the railroad's service region, and a change in traffic mix.
CSX said its core rail and intermodal businesses had third quarter operating income of $190 million on revenues of $1.79 billion, compared with operating income of $213 million on revenues of $1.77 billion in the 1999 quarter. No rail operating ratio was immediately available.
Wisconsin Central Transportation Corp. reported an operating ratio for its North American operations of 71.2% in the quarter, down from 72.5% in 1999. WCTC said its major offshore operation, English Welsh & Scottish Railway, made a third quarter contribution of $1.5 million to the company's third quarter net income of $14.5 million.
Kansas City Southern Railway/Gateway Western posted a third quarter operating ratio of 87.0% compared to 87.8% a year ago. KCS Industries' investment in Grupo TFM continued to pay off as the Mexican railroad's operating ratio dropped to 76.9% from 79.1% last year. "Our equity earnings from Grupo TFM for the nine months ended Sept. 30 have increased $14 million, or almost 300%, compared with the same 1999 period and have been the primary contributor to our income from continuing operations during 2000," said KCSI President and CEO Michael R. Haverty.
| 10/27/2000 |
Burlington Northern and Santa Fe last month introduced what it said was the industry's first "Carload Service Assurance" in connection with new services in the I-5 corridor: five days between Vancouver and either San Francisco or Los Angeles, and seven days between Vancouver and Phoenix. For a premium of 10-15%, customers can buy a full money-back guarantee in select lanes for ontime delivery of each carload of freight. For a price premium of 5% per car or a 15% increase in contract volume, BNSF will provide cash-back allowances for each car arriving late. There's also a no-strings option permitting use of the new services without a contract, with no time or volume commitments, at no extra cost.
| 10/27/2000 |
ABC-NACO and Union Pacific have entered into their second long-term supply agreement, this one involving pre-plated turnouts. ABC-NACO will source components such as ties, fasteners, and rail and combine them with its own parts to assemble complete turnouts for field installation. The supplier will maintain an inventory of critical parts for emergencies. The railroad will benefit from lower inventory costs, lower shipping costs, and timely delivery to work sites. An earlier multi-year agreement involves providing new and reconditioned wheel sets at more than 100 UP car repair sites. The Internet allows UP staff to check inventories, place orders, and follow shipments through the ABC-NACO web site.
"Our strategy of enhancing traditional services with Internet access has rapidly increased the repair, service, and maintenance portion of our overall business," said ABC-NACO Chairman and CEO Joseph A. Seher. "We now believe that we can reach our long-term goal of 70% of our sales being maintenance and repair sooner than previously indicated."
| 10/26/2000 |
Members of the Brotherhood of Locomotive Engineers operating Union Pacific trains on the Platte-South Morrill, Neb., coal line have voted overwhelmingly against a six-month trial agreement designed to provide predictable work schedules and reduce fatigue. A factor in the vote was said to be a provision that would have reduced pay opportunities for some members.
"Earlier this year our membership at North Platte demanded development of a schedule for over-the-road engineers that would meet a balance between work and home life," said BLE General Chairman Michael Young. "This proposed agreement contained 146 guaranteed scheduled days off annually [and] appeared to meet that challenge. The proposed plan is innovative with advanced work-rest scheduling designs. It represented tremendous cultural change for both our membership and management, which may have accounted for the lack of acceptance at North Platte."
The agreement also would have established a pay system guaranteeing minimums on a per trip basis, with additional compensation for overtime and away from home expenses.
A new pay system and predictable work times are elements of a proposed four-year agreement between the railroads and the United Transportation Union that was out for ratification last month.
| 10/26/2000 |
Burlington Northern and Santa Fe and Canadian National have entered into an agreement creating a RoadRailer network linking California and Arizona with Montreal and Toronto. BNSF on Oct. 16 began operating ReeferRailers in Ice Cold Express service beyond Chicago into Canada with loads of southwestern fruits and vegetables. CN said Montreal and southern Ontario shippers of products that traditionally move in dry highway trailers would have access to a 3,000-mile RoadRailer network into southern California.
| 10/24/2000 |
"CN's view is that the future of railroading depends on improving service," and integrating CN's service with that of its 80 connecting short lines is a key to that future, Canadian National President and CEO Paul M. Tellier told the railroad's 2000 Short-line Workshop in Montreal on Oct. 24. Tellier pledged that CN would further strengthen its already strong ties with the smaller roads. He said 25% of CN's business now originates or terminates on short lines, up from 5% five years ago, and "when that much of our business relies on short line service, we know we need to work together."
Tellier said the Canada Transportation Act, which largely deregulated the railroads, has produced a system that is delivering "excellent results." A statutory review now under way provides opportunities for further improvement, he said. Among other things, he said the system should be modified to make it easier for large roads to transfer segments to short lines. Since the Transportation Act was enacted in 1996, CN has transferred more than 4,000 miles of track to short line operators.
| 10/24/2000 |
Edward A. Burkhardt, Wisconsin Central Transportation Corporation's ousted co-founder and CEO, announced the mounting of an effort to put in a new board of directors that would try to reverse the company's sagging fortunes.
The Wisconsin Central Shareholders Committee to Maximize Value filed a proxy statement with the Securities Exchange Committee late on Oct. 20.
Burkhardt said the committee proposes a program that would include discontinuing investments in "highly risky and low return international rail privatizations," including a pending investment in Jordan; "liquidating or spinning off" the company's interests in its "poorly managed and underperforming overseas rail investments"; and "exploring the sale of North American operations to a strategic buyer." Canadian National has in the past been mentioned as a likely buyer.
Burkhardt said net income had dropped 17% in the year following his departure from the company, and the price-per-share had gone from $18.88 to $10.61. He continues to own almost 3.5 million shares.
The proposed new board, in addition to Burkhardt, would include John W. Barriger, vice president of The Derson Group and a former Santa Fe Railway officer; Raymond C. Burton, Jr., chairman and CEO of TTX; Robert E. Dowdy, a transportation consultant and former short line CEO; Aaron J. Gellman, former director of the Northwestern University Transportation Center; Michael W. Howell, former marketing director of Railtrack in the U.K.; Henry Posner III, chairman of the Railroad Development Corp.; and Andy Sze, managing partner of Ginkgo Enterprise and formerly president and CEO of the Clipper Group.
| 10/20/2000 |
Transtar, Inc., has entered into a reorganization and exchange agreement with its two voting shareholders, Transtar Holdings, L.P., and USX Corp. In this reorganization, Transtar Holdings would exchange all of its shares in Transtar, Inc., to USX for 100% ownership of Transtar, Inc., direct subsidiaries Bessemer & Lake Erie Railroad Co., Duluth, Missabe and Iron Range Railway Co., Pittsburgh & Conneaut Dock Co., and USS Great Lakes Fleet, Inc., and their subsidiaries. USX would become the sole owner of Transtar, Inc., and its remaining direct subsidiaries: Birmingham Southern Railroad Co., Elgin, Joliet and Eastern Railway Co., Lake Terminal Railroad Co., McKeesport Connecting Railroad Co., Mobile River Terminal Co., Inc., Union Railroads Co., Warrior & Gulf Navigation Co., and Tracks Traffic and Management Services, Inc., and their subsidiaries. The reorganization is subject to approval by the Surface Transportation Board and antitrust clearances.
| 10/19/2000 |
The Columbus and Greenville, a 242-mile short line based in Columbus, Miss., will upgrade track at a cost of $2.4 million so that it can handle 286,000-pound loaded cars. Canadian National is financing the work in return for a 10-year commitment by Delta Western Feed Mill, Inc., to route via CN a large portion of the grain moving to its catfish feed production plant on the C&G main line west of Indiana. Delta Western is an affiliate of C&G and its largest customer.
| 10/18/2000 |
The first of Amtrak's 150-mph
Acela Expresstrains is scheduled to go into regular revenue service on Dec. 11 between Washington and Boston. One roundtrip a day is initially scheduled.
Amtrak announced the long-delayed start-up as it accepted the first of 20 trainsets being supplied by Bombardier and Alstom. The "official" launch of the high speed service will take place on Nov. 16 with a day of ceremonial events along the Northeast Corridor. Between that time and Dec. 11, there will be preview runs for customers, travel agents, and corporate clients. The train may also be chartered by professional sports teams.
Regularly scheduled service cannot begin until a second trainset is delivered. Amtrak said it will increase service as it receives additional trains. "By the time all 20 trains are delivered next summer, Amtrak will be running 19 roundtrips daily between New York and Washington and 10 roundtrips between Boston and New York," said the announcement.
Originally scheduled to go into service more than a year ago, the trains were delayed by a series of technical problems, ranging from premature wheel wear and truck-hunting to broken bolts. Because they'll be the fastest trains in North America, they have also had to undergo rigorous and extensive testing to meet Federal Railroad Administration safety standards.
The
Acela Expressesare a key component in Amtrak's master plan for weaning itself from federal operating subsidies. Amtrak expects the new trains will generate $180 million a year in revenues--a hunk of cash for a railroad whose total revenues were $1.1 billion in the fiscal year that ended Sept. 30.
The loss of a year of revenues has been costly, though in announcing FY 2000 results Amtrak said it was "successfully continuing along the congressionally-mandated glidepath" to operational self sufficiency by FY 2003. "This glidepath reduced Amtrak's assistance from $484 million in FY 1999 to $362 million in FY 2000," said the national passenger railroad. "The company has successfully met its operating self-sufficiency targets for the last three years and fully expects to continue doing so through FY 2003."
| 10/18/2000 |
Railway Power Systems is the name of Caterpillar's newest business unit established to provide the rail industry with power systems for locomotives, diesel multiple units, railcars, maintenance-of-way equipment, and head-end electric power. "This new organization enhances Caterpillar's ability to meet all the power needs of the railway industry worldwide," says Chuck Wills, recently named head of the business unit. Railway Power Systems is headquartered in Mossville, Ill.
| 10/17/2000 |
CSX Transportation is claiming an industry first with its introduction of car tracing via the wireless Internet. "Using a cellular telephone equipped with a Wireless Application Protocol (WAP)-enabled web browser, a customer can enter a railcar's initial and number to receive the latest event information on the car," said the railroad. The information is available at http://wap.csx.com.
"CSXT was the first railroad to offer an Internet-based customer service solution with TWSNet, and we are leading the industry's expansion of electronic commerce to the wireless Internet," said Chuck Wodehouse, president of CSX Technology. And that's just a beginning, said Michael F. Porkert, manager-TWSNet: "Wireless car tracing is the first of many wireless services that we plan to introduce as we expand the functionality of our wireless web applications. For example, customers will be able to release empty cars or even submit a plant switch request any time, any place, indoors or on the go."
| 10/11/2000 |
Burlington Northern and Santa Fe and Amtrak have joined the Federal Railroad Administration in creating a Joint Diversity Task Force to "develop strategies to ensure the full participation of minorities, women, persons with disabilities, and others under-represented groups in all aspects of the railroad industry."
"The Task Force will place special emphasis on effectuating improved recruitment and career development opportunities in the industry now and in the future," said U.S. DOT Secretary Rodney E. Slater, Federal Railroad Administrator Jolene Molitoris, BNSF Chairman and CEO Robert D. Krebs, and Amtrak President and CEO George D. Warrington in their joint announcement of the initiative.
"In addition," they said, "the Task Force will develop an educational outreach strategy intended to inform elementary, secondary, and college students about career opportunities in railroading in a manner that fosters diversity."
FRA Administrator Molitoris said the initiative "makes good business sense."
"The strategies the Task Force will develop will have a direct impact on the bottom line," she said. "The most successful 21st Century companies will be those that utilize the abilities of a diverse workforce that reflects the customers they serve."
| 10/6/2000 |
Arthur J. McGinnis, Sr., 89, chairman of the Simmons-Boardman Publishing Corporation and a leader in trade magazine publishing for more than half a century, died on Oct. 5. He lived in Allenhurst, N.J.
A native of Paterson, N.J., Mr. McGinnis earned a B.A. degree at Fordham University in 1932 and an M.B.A. at Harvard in 1934. He went to work for the Simmons-Boardman Publishing Corporation in New York in 1940 as an associate editor of Railway Age, covering financial news. He became a financial officer of Simmons-Boardman and gradually acquired control of the company and became its chief executive officer. For six years he served as publisher of The American Builder, at that time the company's flagship magazine.
While he was mainly involved in the business side of publishing, Mr. McGinnis maintained a keen interest in editorial matters. To generations of editors he sought to convey the message, "Our job is not to get words onto a page, but off a page and into the reader's mind."
Mr. McGinnis several years ago turned over active management of Simmons-Boardman to his son, Arthur J. McGinnis, Jr., who is president of the company.
Arthur Joseph McGinnis was born April 5, 1911, the son of Arthur L. and Rose Seyer McGinnis. He married Roselind P. Diskon of Paterson in 1939. Mrs. McGinnis died in 1982. Their oldest daughter, Roselind (Mrs. Joseph W.) Mullen, of Moraga, Calif., died in 1996.
In addition to Arthur J. McGinnis, Jr., who lives in Belle Mead, N.J., three daughters survive: Carolyn McGinnis and Patricia McGinnis of New York City, and Kathleen (Mrs. Alfred A.) Stein of Palm City, Fla. Mr. McGinnis also leaves seven grandchildren and six great-grandchildren.
| 10/5/2000 |
RailWorks has joined a growing group of suppliers in announcing lower earnings expectations for the remainder of the year. RailWorks also said it has speeded up implementation of an integration/restructuring plan; terminated discussions for a possible sale of the company in a leveraged transaction; and will not proceed with the planned acquisition of the Transportation Systems Group of AAI Corp. RailWorks said it expects second-half earnings to range from break-even to $0.10, not including a largely non-cash, third quarter charge of $35-40 million associated with restructuring and other costs. Net income for the full year is expected to range between $0.50 and $0.60. RailWorks attributed the earnings slowdown to slow approval of TEA 21 funding grants, reduced spending by MTA New York City Transit due to a delay in state funding, and a temporary reduction in spending by Class I railroads.
| 10/5/2000 |
The Surface Transportation Board says it plans to require railroads with a common parent to file consolidated financial reports starting with calendar year 2001 operations. This would be in line with a determination by the Financial Accounting Standards Board that financial statements should generally use consolidated reporting for all majority-owned subsidiaries. The effect could be to create at least three new Class I railroads as a result of the combined reporting of Wisconsin Central, a regional, and its two related short lines; Montana Rail Link and I&M Rail Link; and the Transstar railroads, which range alphabetically from the Bessemer & Lake Erie to the Union. There could also be shifts from Class III to Class II status. Class I carriers have inflation-adjusted annual revenues of at least $250 million; Class II, $20-250 million; and Class II, below $20 million.
| 10/5/2000 |
Portec Rail Products, Inc. has assembled a group of allied yet independent companies to form The Friction Force(SM) Alliance. It's described as "a one-stop-shop featuring multifaceted resources working together to provide complete solutions for friction management of the wheel/rail interface for increased rail and wheel life, reduced fuel consumption, derailment prevention, and noise reduction." The Friction Force(SM) Alliance, says Portec, "can custom-tailor a package of services and equipment to meet the wheel/rail interface challenges and budgets of railroads and light rail transit systems. The ease of how a railroad or rail transit system can obtain these complete solutions, and know the performance and economic benefits of those solutions, is what makes this alliance unique."
The Friction Force(SM) Alliance is comprised of Portec Rail (friction assessment, implementation, and management of products and services including complete friction management application systems, engineering/consulting, field service support); CH&I Technologies Inc. (Oil Bank(r) patented bulk transfer technology); Diversified Metal Fabricators (high speed rail tribometer developer and manufacturer); Kelsan Technologies Corp. (proprietary friction modifiers for noise abatement, rail/wheel life extension, and energy savings); NRC (National Research Council--rail/wheel friction technology); and Zeta-Tech Associates (maintenance planning, component life forecasting, economic analysis).
The goal of the Alliance, says Portec, is to "provide proper Assessment, Implementation and Management [AIM(tm)] of a wide variety of wheel/rail interface challenges."
| 10/5/2000 |
Lockheed Martin announced that it has signed an agreement with Transrapid International-USA to seek opportunities to deploy Germany's magnetic levitation technology in the U.S. Their immediate goal is installing a Transrapid maglev system in one of seven corridors that are vying for $950 million in federal construction funds after receiving lesser amounts for preliminary studies.
Under development in Germany for more than 20 years, the Transrapid system was scheduled to be installed between Hamburg and Berlin until rising costs and the popularity of conventional high speed trains scuttled the project early this year. Since then, the developers, a consortium of Siemens, Adtranz, and ThyssenKrupp, have been looking for another place to showcase their technology.
The announcement said Lockheed Martin Mission Systems, which is based in Gaithersburg, Md., would "assure the Americanization" of the technology and provide a command, control, and communications system.
Six of the seven U.S. maglev contenders are said to have selected Transrapid technology.
The competing proposals call for: (1) a 40-mile line between Baltimore and Washington; (2) the first 40 miles of an Atlanta-Chattanooga line; (3) the first 42 miles of a line connecting Las Vegas with Oakland, Calif.; (4) a 45-mile line linking Pittsburgh Airport with the city and eastern suburbs; (5) a 75-mile system from Los Angeles Airport to downtown and beyond; (6) a 40-mile line from New Orleans to the airport and northern suburbs; (7) a 40-mile line from Port Canaveral, Fla., to the Kennedy Space Center and Titusville Airport.
| 10/4/2000 |
The Surface Transportation Board wants future railroad mergers to "enhance" competition, not merely "preserve" it. That's the major change in merger rules advanced by the STB in a Notice of Proposed Rulemaking issued Oct. 3.
In its summary of the proposed new rules, the Board said it would "require applicants to propose specific remedies to keep open major existing gateways, retain build-out and build-in options, and preserve the opportunity of shippers in the so-called bottleneck situation to obtain a contract rate for one segment of a movement in order to separately challenge a rate for the remainder of the movement."
The Board said it also would "look for other competition-enhancing proposals, such as those related to paper barriers" and encourage "innovative ways of enhancing competition throughout the network."
The summary said that "given the import of future consolidation," the Board found it "no longer appropriate to limit the focus of its conditioning power to preserving competition and essential services, and . . . would impose conditions as necessary to mitigate or offset all types of harm to the public interest, including conditions that would enhance competition."
The Board said that "because claimed benefits in recent mergers have often been delayed or frustrated by transitional service problems," it would "carefully scrutinize future claims of merger benefits and associated time-frames to ensure that they are well-documented and reasonable projections."
Because any major merger proposal could trigger other applications, STB said it would carefully consider the "downstream effects."
"We must be careful that at the end of the day a balanced and sustainable rail transportation system is in place," said the Board.
Addressing the contentious issue of "cram-down," where collective bargaining agreements are abrogated by merging carriers, STB urged "negotiated solutions," adding that it "respects the sanctity of collective bargaining agreements," which should not be changed "except to the very limited extent necessary" to carry out a merger.
As for merger applications involving Mexican and Canadian railroads, the Board said it would require applicants "to cooperate with the Federal Railroad Administration concerning safe implementation of those transactions, and would require applicants to show that any applications approved by the Board are consistent with the North American Free Trade Agreement and would not undermine the nation's defense needs."
The initiative to rewrite merger rules was set off by the announcement of Burlington Northern and Santa Fe and Canadian National last December that they intended to file a merger application. Asserting that such a move could signal a final wave of consolidations, the STB declared a 15-month moratorium on merger applications. That moratorium, which survived a court challenge, expires next June.
The NPR that was issued Oct. 3 in STB Ex Parte No. 582 (Sub-No. 1) may be viewed at www.stb.dot.gov.
| 9/29/2000 |
The Surface Transportation Board in late September issued a draft environmental impact statement on the Dakota, Minnesota & Eastern's proposed $1.4 billion build-out into the Powder River Basin that DM&E President Kevin Schieffer calls a "significant boost" for the project. The 2,000-page DEIS recommends a modified route, known as Alternative C, that's similar to DM&E's original alignment but "appears to be the least environmentally intrusive alternative," says the STB. Public comments will be accepted until Jan. 5, 2001. Schieffer says his preliminary read of the report didn't reveal "any particular concerns that can't be addressed."
The STB report addresses bypasses for several communities along the 860-mile route, 260 of which would be new line. Two, for Rochester, Minn.--where residents have mounted strong opposition to the prospect of 70 or more freight trains per day operating through town--would produce significant environmental impacts if built, says STB. The agency has requested "further comments on which alternative would be environmentally preferable and the extent to which the community should contribute to the cost of a bypass, if one is approved." Schieffer, who maintains that communities like Rochester and Brookings, S.D. (DM&E's home base) should shoulder at least part of the cost of a bypass, says the language in the report is encouraging.
Public hearings on the DEIS begin Oct. 30.
| 9/29/2000 |
The American Short Line and Regional Railroad Association recently submitted a proposal to the Environmental Protection Agency and the Federal Railroad Administration to provide short lines and regionals with an environmental, health, and safety training/mentoring program to increase compliance with regulations. While EPA offers an Environmental Screening Checklist and Workbook for Short Line Railroads (visit www.transource.org) as well as a toll-free fax-back number to answer any environmental questions (888/459-0656), the agency does not go out to the railroads and explain regulations in small road applications. This program would include environmental awareness training as well as site assessments that identify environmental, health, and safety compliance issues. ASLRRA would be program administrator, Black & Veatch, contractor, and EPA and FRA, funding sources for project development.
| 9/29/2000 |
Robert W. Blanchette, an erudite and blunt-spoken railroad lawyer, died Sept. 25 in Washington at the age of 68. He served successively as Penn Central bankruptcy trustee, Federal Railroad Administrator in the first Reagan Administration, and vice president and general counsel of the Association of American Railroads.
| 9/29/2000 |
ABC-NACO announced that it expected revenues in the second half to be 15-20% lower than in the first. But Chairman and CEO Joseph A. Seher said anticipated increases in rail spending in 2001 coupled with the company's cost-cutting initiatives could translate next year into EBITDA (earnings before interest, taxes, depreciation, and amortization) of more than $100 million, twice the expected 2000 level. The company said it was closing its Melrose Park, Ill., facility and consolidating production into plants using Advanced Precision Technology (APT), which turns "manufacturing processes that are labor-intensive into machine-paced processes." ABC-NACO said its targeted reduction of 1,200 jobs associated with the APT program will be completed earlier than anticipated, reducing annual costs by more than $40 million with benefits starting to show in this year's final quarter.
| 9/27/2000 |
Wisconsin Central President and CEO J. Reilly McCarren says that over the next six months WC will begin "rolling out elements of a fundamental redesign of carload management."
"The industry's existing business model has gone as far as it can go in delivering results that adequately address the requirements of both customers and investors," said McCarren. "Innovation is needed to make railroads attractive to both groups. We intend to be a leader in this area."
McCarren's comments came in a statement in which WC said it expected to report third-quarter earnings near the bottom of the range of analysts' mid-September expectations. WC said it planned to eliminate 44 salaried positions in a restructuring that would see the Transportation Department become "a flatter organization, with clearer lines of accountability," and the Engineering Department become "leaner," reflecting "current and projected reductions in capital spending, as a significant, accelerated multi-year program of track structure improvements and capacity additions winds down."
| 9/26/2000 |
The Midwest Regional Rail Initiative, an alliance of nine states and Amtrak, has invited bids by Nov. 1 for a tender to build and maintain a fleet of 13 tilting trainsets and construct three maintenance facilities.
This is the first stage of a $3.5 billion, 10-year plan to expand intercity passenger services radiating from Chicago. Amtrak will eventually require another 60 to 70 trains.
The 125-mph trainsets can be powered by diesel-electric or gas turbine engines. They must accommodate between 300 and 400 passengers in two classes. There will also be a buffet car, plus two cars to carry express packages. Amtrak wants to introduce the new trains in 2003 on three routes from Chicago: to Detroit, to St Louis, and to Madison via Milwaukee. All routes will be upgraded to allow operation at 110 mph initially. The new trains will allow Amtrak to triple train frequency on the Detroit and St Louis routes to nine per day, to run 17 trains a day to Milwaukee instead of seven, and to run 10 to Madison, which will be a new destination for Amtrak. Substantial cuts in journey times are planned.
Talgo America, the U.S. subsidiary of Patentes Talgo, Spain, will offer an FRA-compliant version of its new Talgo XXI tilting train.
| 9/25/2000 |
The Surface Transportation Board has granted the application of Camas Prairie RailNet, Inc. (CSPR) to abandon its 66.8-mile line between the Idaho towns of Spalding and Grangeville. STB said it found the line's projected annual operating loss to be $158,467.
| 9/22/2000 |
Always a newsmaker, but not always a good-news maker, Amtrak has won an uncommonly favorable press in recent weeks. The media reported these developments:
(1) Both Vice President Al Gore and Texas Gov. George W. Bush gave passenger trains their warm endorsement in response to questions posed by the Associated Press on Sept. 17.
"Our national railroad network, which helped build our country and is an important economic lifeline, is a crucial component of our public transportation system," said Governor Bush, standard-bearer of a party that just a couple of decades ago tried to put Amtrak out of business. "I support a healthy intercity passenger rail system. I support current efforts to make Amtrak more efficient and competitive."
Vice President Gore, whose party has long trumpeted its support of a new generation of fast trains but has been slow to help get them moving, asserted: "High speed rail reduces highway and airport congestion, improves air quality, stimulates the economy, and broadens the scope of personal choice for traveling between our communities. . . . I am proposing a major commitment to build high speed rail systems in major transportation corridors across the nation."
(2) In a Sept. 20 editorial, The New York Times declared, "The time has come for Congress and transportation officials to promote high speed rail service as a means of alleviating air traffic congestion." This was in support of legislation moving through Congress that would permit Amtrak to raise $10 billion for designated high speed rail corridors by issuing bonds whose holders would be paid in tax credits. Republican Senator William Roth of Delaware, chairman of the Senate Finance Committee, gave the legislation a friendly nudge by attaching it to an economic redevelopment bill.
(3) A number of newspapers--including The Times--took note of the fact that on some of the worst days of airway and airport congestion, Continental Airlines was speeding some of its Northeast Corridor customers on their way by putting them on Amtrak trains.
(4) Best of all, it appeared likely that after a year of frustrating and costly delays, Amtrak would be able to put the first of its 150-mph
Acela Expressesinto service between Washington and Boston at least by Oct. 29, when the new timetable goes into effect. It's a train, wrote Don Phillips in The Washington Post on Sept. 17, that Amtrak test crews and others who have ridden it describe as "one sweet machine."
All of this came as Amtrak announced it had ended its "best summer ever" with record ticket revenues of $108.4 million in August and ridership of 2,097,471, highest in 21 years.
There were those who were quick to demand to know what other railroad would have the gall to repeatedly announce revenues but not expenses, and what other business would consider it a point of pride to be just where it was 21 years ago. But a public tired to death of jetlock and fed up with price shock at the gas pumps didn't seem to care. It wanted to get moving, with with as few hassles as possible, and Amtrak was beginning to look like the way to go.
| 9/21/2000 |
Explaining the decision of Bombardier, Inc., to acquire Adranz from DaimlerChrysler in a $711 million deal, Bombardier Transportation President Jean-Yves Leblanc says that despite a current softening of demand in some countries, coming years will see an expanding global market for mass transit products. "Over the next five years, we expect the market to grow by 20% to 25%," he told reporters at the Innotrans Trade Fair 2000 in Berlin. "We are determined to be a significant part of that growth."
| 9/21/2000 |
The American Railway Engineering and Maintenance of Way Association is inviting all interested parties to submit papers for possible publication and/or presentation at the AREMA Annual Conference and Exposition in Chicago next year. Papers will be selected based on their originality, timeliness, and suitability within the broader context of such AREMA Functional Group subject tracks as passenger and transit, communications and signals, track, structures, and engineering services. AREMA must receive three copies of an abstract no longer than 250 words and a completed submittal form by Dec. 15. For more information, contact AREMA, Annual Conference 2001, 8201 Corporate Drive, Suite 1125, Landover, MD 20785-2230; FAX (301) 459-2230.
| 9/20/2000 |
Burlington Northern and Santa Fe customers can now buy a money-back service guarantee in three additional intermodal lanes: Southern California-Dallas/Fort Worth, Kansas City-Southern California, and Chicago-Portland. BNSF introduced the service-guarantee incentive in May in the Chicago-Seattle, Chicago-Southern California, and Chicago-Dallas/Fort Worth lanes. The program permits shippers to pay a premium for guarantees at three service levels. There's a 100% refund each time the railroad fails to meet the scheduled availability time for customer pick-up. BNSF said "several hundred" guaranteed loads had moved as of mid-September, including some that would otherwise have traveled by highway.
| 9/20/2000 |
The climate for the use of one-person crews on short lines continues to show signs of warming. In California, legislation requiring two-person crews on all trains at all times was defeated after a strenuous lobbying effort was mounted by short lines with an assist from Union Pacific. Labor interests pushed the legislation for "safety" reasons. The American Short Line and Regional Railroad Association said three short lines in California have achieved a perfect safety record since they began operating with one-person crews--"when safety considerations permit"--three years ago.
| 9/20/2000 |
Canadian National plans to build a little over three miles of track near Baton Rouge, La., to connect subsidiary Illinois Central's existing line along Louisiana Highway 19 with an expanded ExxonMobil Chemical Co. plant. Starting in 2002, CN expects to get around 11,000 carloads a year from a plant now served only by Kansas City Southern. Plant manager Guy Tremblay said a second rail carrier will not only ease the strain on existing rail facilities but "will provide single-carrier service to points through the 16,000-mile Canadian National Railway system, opening new markets for the products we make in Baton Rouge."
| 9/20/2000 |
The Surface Transportation Board has determined that the cost of capital to the railroads in 1999 was 10.8%. It has further determined that only the 646-mile Grand Trunk Western, with a return on investment (ROI) of 25.4%, earned the cost of capital last year and was therefore "revenue adequate" under the meaning of the Staggers Rail Act of 1980. GTW, with a little over one-half of 1% of total route mileage, is the smallest of the Class I's. All of the others fell short of revenue adequacy, though Illinois Central came close with an ROI of 10.01%. IC's nearly 2,600 miles give it a little more than 2% of total route mileage. Both GTW and IC are Canadian National subsidiaries.
Other Class I ROI's in 1999 were: Burlington Northern and Santa Fe, 9.53%; Union Pacific, 6.82%; Kansas City Southern, 6.42%; Norfolk Southern, 5.17%; CSX Transportation, 3.82%; and Canadian Pacific subsidiary Soo Line, 2.52%. The industry's overall ROI was 6.93%.
| 9/19/2000 |
The Timken Company and Tranergy Corp. have teamed up to form Friction Management Services, LLC--a joint venture offering an "intelligent," top-of-rail lubrication system. TracGlideô "optimizes train operation by reducing friction during rolling motion, and, under braking conditions, generating friction for more efficient braking."
Driven by an on-board lubrication control computer that gathers such data as locomotive position, speed, brake status, track condition, and temperature from sensors, this "smart" system calculates the amount of friction modifier to dispense and applies it to both rails after the last axle of the locomotive. Timken will market the Tranergy-patented product, which has been tested in varying conditions by U.S. railroads, the Association of American Railroads, and Transportation Technology Center, Inc.
According to Friction Management Services, the water-based friction modifier is environmentally safe and reduces tractive effort and lateral forces in curves. "The result for customers is lower fuel costs, increased productivity, reduced wheel and rail wear and track maintenance, cleaner operation, less track fatigue, and increased hunting threshold, which reduces vibration," says Vinod K. Dasari, president-rail for The Timken Company. "In eight years of development and three years of testing, the system demonstrated fuel savings as high as 42%," adds Sudhir Kumar, Ph.D., president, chairman, and founder of Tranergy. "Productivity increases have topped 5% in many cases."
| 9/18/2000 |
After nine months of negotiation and competitive bid solicitation, the Association of American Railroads, Transportation Technology Center, Inc., and Federal Railroad Administration have signed a "Care, Custody, and Control" contract agreement, allowing AAR to manage TTCI for another ten years, from 2002 to 2012. AAR has been overseeing TTCI--its for-profit subsidiary--since 1982. Since then "the railroad industry's train accident rate has decline by more than half, employee casualty rates have fallen more than 60%, and railroad productivity has more than tripled," said AAR President Ed Hamberger. "Work performed at TTCI has had a lot to do with these gains in safety and efficiency."
The FRA, which "stands to benefit significantly from the new contract's capital investment and maintenance requirements," will receive preferential rates for use of equipment and infrastructure at the facility for government-sponsored research.
| 9/18/2000 |
The American Railway Engineering and Maintenance of Way Association is offering $1,000 undergraduate scholarships for the 2001-2002 academic year. Engineering students interested in pursuing a career in railway engineering are encouraged to apply. Applicants must be enrolled as full-time students in four- or five-year programs leading to a bachelor's degree in engineering or engineering technology and must achieve at least junior status in that academic major by the beginning of the fall term 2001. Applications are due February 1, 2001, and successful applicants will be notified by April 15, 2001. For more information, contact AREMA at 8201 Corporate Drive, Suite 1125, Landover, MD 20785; Tel. (301) 459-3200; FAX (301) 459-8077.
| 9/18/2000 |
The American Short Line and Regional Railroad Association will present the 1999 "Jake Awards" and "Jake Awards with Distinction" to member short line and regional railroads with outstanding safety records at its annual meeting in Chicago on Oct. 2. Twenty-seven roads will be recognized with the "Jake Award" for no Federal Railroad Administration reportable personal injury, lost workday, or fatality in 1999; 153 will be honored with distinction for no FRA reportable personal injury, lost workday, fatality, or train accident in 1999.
ASLRRA has sponsored the awards--named after long-time railroader L.S. "Jake" Jacobson, Copper Basin Railway vice president and general manager--since last year. Jacobson created the awards to recognize small roads whose proven safety successes come from dedication and attention to details.
The award presentations, says ASLRRA President Frank K. Turner, "represent over 40% of our member railroad companies."
To see the list of winners, visit ASLRRA's website at www.aslrra.org.
| 9/18/2000 |
Canadian Pacific has decided to close the doors of its Thief River Falls, Minn., intermodal terminal after experiencing a 65% decrease in volume during the first half of the year over the same period in 1999. According to CP, the Nov. 30 closing will not affect the Thief River Falls rail yard or rail yard employees.
Traffic from the terminal's primary export products--seeds, edible beans, and other specialty agricultural products--has been declining steadily. Customers, said CP, are increasingly choosing trucks to haul such commodities to CP's terminal in Winnipeg, Manitoba, where they are loaded onto railcars for shipment to Canadian ports. Over the past five years, CP considered closing the 15-year-old terminal but instead opted to develop domestic shipments, asking ocean carriers for more business.
CP will still operate an intermodal terminal in Minneapolis to serve international customers.
| 9/18/2000 |
CSX Corp. is selling its subsidiary CTI Logistx for $650 million in cash to TNT Post Group N.V. (TPG), a European logistics company providing mail, express, and logistics services under the Royal PTT Post and TNT brands. Proceeds of the sale will be used primarily to retire long-term debt. CTI Logistx, a logistics solutions provider to companies in the automotive, tire, electronics, rail, general industry, and retail business segments, is based in Jacksonville, Fla.
| 9/18/2000 |
Canadian National, the City of Memphis, and the Memphis & Shelby County Port Commission have agreed in principal to begin the first phase in the development of an intermodal facility in Memphis, Tenn. The Super Terminal-Memphis, which CN proposes to build and operate, will be located on 1,000 acres and has a price tag of approximately $260 million.
The terminal's initial phase, which is slated to cost $106 million and take 15 months to complete, will feature five load-out tracks varying in length from 6,600 to 7,300 feet, three 3,000-foot-long receiving tracks, approximately 2,000 trackside container parking spaces, fully-automated gates, and weigh-in-motion scales. An additional 50 to 100 acres located adjacent to the terminal is available for ancillary container yards. An information system employing radio communications will monitor terminal operations and offer real-time updates of all equipment movements. It will also allow constant inventory updates as well as the capability to plan equipment staging.
Initially, the terminal will be able to handle 319,000 lifts per year, rising to one million annual lifts when completed. The Port Commission has already invested $28 million in roads, utilities, and other infrastructure necessary for development.
| 9/18/2000 |
In an effort to reduce debt and focus on its core railroads in high growth markets, RailAmerica, Inc., has sold Minnesota Northern Railroad and St. Croix Valley Railroad for $ 4.3 million in cash and $350,000 in a secured promissory note to KBN, Inc., of Fargo, N.D. "These non-strategic rail properties were identified as potential sale candidates in connection with our strategy of increasing equity and reducing debt," says Gary O. Marino, chairman, president, and CEO of RailAmerica. "So far this year we have completed over $25 million in transactions, as we look to accomplish more than $100 million in sales by year-end."
The 241-mile Minnesota Northern, based in Crookston, Minn., has interchanges with Burlington Northern and Santa Fe and Canadian National. St. Croix Valley operates over 60 miles of line between Hinckley, Minn., and North Branch, Minn., and interchanges with BNSF.
| 9/18/2000 |
In a joint venture, UniRailNet, LLC, and The Pocket List of Railroad Officials have created RailResource.com, "a one-stop online marketplace and information Web portal" for the railroad industry. The site will allow access to The Pocket List Online, a railroad directory; UniRailNet, an international purchasing site for railroad materials; and RailSelect, a service providing short line and regional railroads with competitive quotes for parts and materials.
According to Susan C. Murray, vice president and group publisher of The Pocket List, RailResource.com provides railroaders with "a home page for the entire industry." At the outset, adds UniRailNet President David Powell, the site will "focus on providing key industry news and information as well as facilitate rail asset, parts, and material sales transactions."
| 9/18/2000 |
RailWorks' has formed RailWorks Transit Vehicle Group, Inc., (TVG) from its acquisition of AAI Corporation's Transportation System's Group. Based in Baltimore, Md., TVG assembles and rehabilitates light rail vehicles, commuter railcars, heavy railcars, and trolley buses. With a common customer base, "TVG will provide a substantial strategic growth avenue for RailWorks," said John G. Larkin, chairman and CEO of RailWorks. Currently, TVG has a backlog of more than $200 million.
| 9/18/2000 |
The railroad e-marketplace is continuing to expand with Trinity Industries' launch of IronOx (www.ironox.com), "an auction portal and online exchange for buying and selling used and surplus materials and equipment." Inventory includes front-end loaders, cranes, forklifts, concrete mixers, and other manufacturing, mining, and material handling equipment from such suppliers as Stewart & Stevenson Services, Inc., ROMCO Equipment Company, and Trinity.
IronOx, Inc.--a wholly-owned subsidiary of Trinity e-ventures, Inc., which is a wholly-owned subsidiary of Trinity Industries--was built "with the customer in mind," says R. Stephen Polley, chairman and CEO of IronOx and group vice president of Trinity e-ventures. "Backed by Trinity and other industry leaders, we are uniquely able to offer a large inventory of equipment and superior customer service start to finish." The site offers a full range of such transactional services as escrow, financing, inspection, and transportation.
| 9/18/2000 |
Customers of Norfolk Southern's Triple Crown Services Company can now arrange RoadRailerÆ shipments over the Internet at www.triplecrownsvc.com. To "improve customer efficiency, save time, and help ensure accuracy," Triple Crown will issue passwords to shippers and consignees who elect to use such services as rate quote requests, load booking, tracing, open load viewing, and bill of lading viewing online. Triple Crown established its website in 1996.
| 9/14/2000 |
Customers can now do business with Burlington Northern and Santa Fe in Spanish by way of a bilingual website providing car tracing, shipment monitoring, and links to BNSF's rail connections in Mexico, Ferrocarril Mexicana and Transportacion Ferroviaria Mexicana. BNSF said its Spanish-language site also directs customers to marketing contacts in Mexico and the U.S. who can provide rate and service packages for shipments moving to and from Mexico. The new site can be accessed directly at http://www.BNSF.com/business/spanish.
| 9/14/2000 |
Railroads paid out $98.7 million, or 0.31% of freight revenues, for loss and damage claims in 1999, down from $119.2 million, 0.37% of revenues, in 1998. Any payout for loss and damage is too high for carriers whose goal is zero-claims, but today's is small compared with that of 30 years ago when payout peaked at close to 2% of revenues. Better cars, smoother track, and improved handling have helped make the difference.
| 9/14/2000 |
In what's described as "a unique cooperative effort," three shipper organizations are holding their respective annual meetings in Ft. Lauderdale, Fla., between Nov. 11 and Nov. 15. They are the National Industrial Transportation League (NITL), the Intermodal Association of North America (IANA), and the Transportation Intermediaries Association (TIA). In addition to concurrent sessions addressing transportation and logistics issues, attendees will have the opportunity to view the League's TransComp exhibits. Registration with any of the organizations includes reciprocal admission to various events. NITL and TIA held simultaneous meetings at San Antonio, Tex., in 1999, and IANA decided to make it a three-way effort this year.
| 9/14/2000 |
Starting early in October, Union Pacific will increase its freight rates by around 3% to help compensate for soaring fuel costs. UP has more than 7,000 locomotives which consume 1.3 billion gallons of diesel fuel a year. The cost of fuel has increased to around $1 a gallon from 65 cents a gallon a year ago. Most other railroads earlier announced similar increases. An exception as of mid-September was Canadian National, which has the lowest operating ratio, a little over 68%, of any large American railroad. The operating ratio expresses the relationship of operating costs to operating revenues.
| 9/11/2000 |
Burlington Northern and Santa Fe is raising demurrage rates on freight cars used for whole grain and grain products shipped during the peak 2000 harvest season "to improve car velocity and availability." Whole grains affected by the new rules for origin loading include barley, corn, grain sorghum, oats, rye, soybeans, wheat, and durum.
Under the new rules, which go into effect Oct. 1, shippers will have 24 hours, including Sundays, to load whole grains before demurrage charges of $75 per day begin accruing. They presently have up to 48 hours to load, not including Sundays, with demurrage charges of $50 per day. Demurrage charges for grain products will also increase to $75 from $50, but shippers will still have 48 hours, plus Sundays, to load before charges begin accruing. BNSF says it will notify shippers of the estimated time of arrival for each empty unit grain train prior to its arrival date at a grain elevator "to ensure that grain customers can take advantage of the improved railcar availability."
| 9/11/2000 |
After several months of controversy following the issuance of new passenger rail equipment safety standards, the Federal Railroad Administration has decided to grant Amtrak's request to "grandfather" use of Talgo trainsets for Cascades service in the Eugene, Ore.-Blaine, Wash., Pacific Northwest Rail Corridor. The decision addresses the buff (compressive) strength of the Talgo equipment, which Amtrak had temporarily addressed through use of unoccupied end cars and conventional locomotives.
Amtrak had asked FRA to grandfather use of the passive-tilt Talgo trainsets because they were ordered before FRA issued new passenger equipment safety standards in May 1999. FRA said its approval "includes several conditions intended to ensure continued safe operation of the trains." The decision also calls on the Talgo's manufacturer, Renfe Talgo of America, to provide additional technical information that will permit FRA to complete a more-detailed engineering evaluation.
Amtrak's petition also requested approval for new routes from San Luis Obispo to San Diego, Calif., and Los Angeles to Las Vegas, Nev. FRA's decision on these routes will be issued at a later date, following "an ongoing technical analysis needed to help us resolve remaining issues with respect to future operation of the trainsets at higher speeds."
FRA had previously granted a waiver for the Cascades service permitting higher speeds on curves than would normally be allowed for conventional Amtrak passenger cars.
A copy of the full decision may be viewed on FRA's website, www.fra.dot.gov.
| 9/6/2000 |
Corporate investor Carl C. Icahn has notified Trinity Industries of his intention to buy more than $15 million of the Dallas-based company's stock but less than 10% of the total number of shares, approximately 37,410,000, outstanding. Chairman, President, and CEO Timothy Wallace said Trinity believes its stock is undervalued, "related mostly to the cyclical situation within the U.S. rail supply industry," and is continuing a stock buyback program that has seen the purchase of more than 500,000 shares in the current quarter. He said a successful cost control program has enhanced the rail group's ability to compete for new business, and it is "aggressively pursuing orders" to stabilize production lines.
| 9/6/2000 |
The AIMS Group, a division of ABC-NACO Inc., announced that the website launched in 1995 as RailwayExchange.com "has now been expanded and updated with new capabilities to foster business-to-business transactions among railroads and railroad supplies around the world."
Joseph A. Seher, ABC-NACO chief executive officer, said the updated site--www.eRailXchange.com--is staffed by "Internet experts who also have an in-depth knowledge of the global railroad industry."
The new president of the AIMS Group, John Giba, is a 35-year rail industry veteran who most recently headed ABC-NACO's Rail Products Group. He described eRailXchange.com as "a one-stop resource through which railway employees, suppliers, and others interested in this industry can do business, conduct research, and obtain the most current and complete data and news on industry developments throughout the world."
| 9/6/2000 |
The American Short Line and Regional Railroad Association announced the opening of an expanded website, www.aslrra.org. It provides, among other services, an electronic marketplace linking more than 400 member railroads with more than 350 associate member suppliers.
| 8/30/2000 |
When Burlington Northern and Santa Fe says its new fleet of 700 refrigerated boxcars will be "high-tech" and "state-of-the-art," it isn't using those terms lightly. BNSF's new cars use a two-way satellite communications system to detect temperature fluctuations and make necessary adjustments. A global positioning system (GPS) provides precise location information. Built by Trinity Industries, the steel-bodied car has a composite roof. Weight is reduced while thermal efficiency is improved.
The 72-foot car has a capacity of 8,000 cubic feet, almost double that of BNSF's existing 50-foot refrigerated boxcars. "The perishable market is one of the fastest growing in the transportation industry," says Steve Branscum, BNSF group vice president-Consumer Products business unit. "As the first railroad to place these state-of-the-art cars in service, BNSF is further illustrating its commitment to the perishable marketplace."
BNSF will begin phasing the new fleet into service late this year.
| 8/25/2000 |
Sixteen railroads have been named winners of the second annual safety awards presented by the American Short Line and Regional Railroad Association. The awards are sponsored by CANAC, Inc., and MARSH,. Inc. CANAC will present $1,000 to a charity selected by each winner.
Based on Federal Railroad Administration safety statistics in four employee categories, the following railroads won gold, silver, bronze, and copper awards, respectively:
Up to 50,000 annual man-hours worked--Texas & Northern Railway, Lone Star, Tex.; North Shore Railroad, Northumberland, Pa.; Point Comfort & Northern Railway, Lolita, Tex.; Canton Railroad, Baltimore, Md.
50,001-200,000 man-hours--Columbus & Ohio River Rail Road, Coshocton, Ohio; Ohio Central Railroad, Coshocton, Ohio; Apache Railway, Snowflake, Ariz.; Winchester & Western Railroad, Winchester, Va.
200,001-500,000 man-hours--Patapsco & Back Rivers Railroad, Baltimore, Md.; Lake Superior & Ishpeming Railroad, Marquette, Mich.; Buffalo & Pittsburgh Railroad, Punxsatawney, Pa.; Missouri & Northern Arkansas, Carthage, Mo.
500,001 and more man-hours--Belt Railway of Chicago, Bedford Park, Ill.; Montana Rail Link, Missoula, Mont.; Wheeling & Lake Erie, Brewster, Ohio.; Terminal Railroad Association of St. Louis, St. Louis, Mo.
| 8/25/2000 |
Burlington Northern and Santa Fe customers now have access to a Web-based tool, the BNSF Business-to-Business Directory, that's designed to help them find new sales opportunities by product or location. Once a registration form has been posted to BNSF's website, a customer's product or service becomes available to potential business partners through the directory's search features. "For example, a lumber salesperson in the Pacific Northwest can use the directory to identify a list of potential receivers on the BNSF in Arizona or any other geographic area," explains the railroad. "Additionally, a receiver on BNSF's system could access a list of potential suppliers from the B2B Directory."
| 8/25/2000 |
Through an agreement with Wheeling & Lake Erie, Canadian National will provide intermodal service to the five-year-old, 28-acre Neomodal Terminal at Navarre, Ohio. "This agreement brings a new Class I rail competitor to the northeast Ohio intermodal market," said WLE Chairman and CEO Larry Parsons. "With the extensive reach of CN, area shippers and receivers will have competitive access to a much wider disdtribution system from and to the Navarre terminal." WLE gained trackage rights to Toledo in the Conrail break-up. CN and WLE interchange at Toledo. The Neomodal facility was built in 1995 through a federal program.
| 8/25/2000 |
Cattron Group, Inc. of Sharpsville, Pa., announced that it's buying the German company Theimeg GmbH in a deal that combines "the powers of Cattron's strength in industrial and mining remote control equipment and Theimeg's leadership position in Europe and its strong position in locomotive remote controls." Jim Cattron, president and CEO of the U.S. company, said the combination "brings together two well-respected companies to form a new powerhouse in the business." The acquisition will allow Cattron "to move to the forefront in radio remote control for locomotives" and open the door for expansion in the European and other international markets.
| 8/25/2000 |
GFB International (formerly the Georgia Freight Bureau) is joining the Logistics Institute of the Georgia Institute of Technology in planning E-Logistics Expo, a new conference and trade show set for May 9-11, 2001 in Atlanta. The thinking behind the exposition was explained by Bill Fahrenwald, executive director of Lothair, Inc., who is serving as an advisor to the exposition: "The movement of products through the supply chain still lags somewhat behind the customer's ability to order and a manufacturer's ability to process that order. But great strides are being made in this area. Efficiencies are being realized that were unthinkable a few years ago, and the E-Logistics Expo will serve as a tremendous educational and interactive forum between companies that need to improve their efficiencies and those that have a way for them to do that."
GFB International's John Youngbeck is serving as CEO of E-Logistics Expo. GFB has considerable expo experience. The Georgia Freight Bureau founded the International Intermodal Expo and nurtured it into the world's largest exhibition of intermodal products and services. Now co-sponsored by the Intermodal Association of North America, it's being held every other year. The next Intermodal Expo is scheduled for 2002.
| 8/25/2000 |
Up to two hours will be shaved off rail transit times now that Kansas City's new $74 million flyover bridge project is complete. The Sheffield Junction Flyover Rail Bridge was finished recently in cooperation with Kansas City Terminal Railway (KCT), KCT Intermodal Transportation Corp. (KCTI)--a joint venture of Burlington Northern and Santa Fe, Union Pacific, Norfolk Southern, Kansas City Southern, Gateway Western, and I&M Rail Link--and the Missouri Highways and Transportation Corp. The bridge bypasses four at-grade rail intersections so that traffic speed can increase from 15 mph to 50 mph, eliminating chronic bottleneck.
The project was a "complex" one, according to Bill Somervell, president of KCT. It required "the teamwork of six railroad companies that are normally very active competitors," he said. KCTI financed the project, issuing industrial revenue bonds to KCT and the Missouri Highways and Transportation Corp. Flyover users will pay annual bridge fees to help pay off the bonds. The bridge was designed by TranSystems Corp.
| 8/25/2000 |
Massachusetts Central Railroad, which calls itself "America's intermodal short line," has established a trucking division to service its warehouse, reload, and intermodal customers. The DOT-FMCSA recently gave MassCentral Transportation Services a certificate to operate as a motor common carrier.
The 25-mile short line between Palmer and South Barre, Mass., has connections with Canadian National, Canadian Pacific, CSX Transportation, and New England Central. In 1984 Massachusetts Central set up an "inland port" intermodal facility in Palmer to handle international container traffic. It also operates two bulk terminal yards that have 100 car spots for transloading, as well as a warehouse and reload facility.
| 8/25/2000 |
A New York Harbor freight rail tunnel linking Brooklyn with Staten Island or New Jersey would revitalize the Brooklyn waterfront and reduce the number of truck trips into New York City by one million a year, according to a study by the New York City Economic Development Corp. The agency determined that such a tunnel would cost $2.3 billion. New York Congressman Jerrold Nadler and Mayor Rudolph Guiliani have been actively promoting the tunnel, but Gov. George Pataki has so far withheld his support.
| 8/25/2000 |
"Overall, right now relations between short lines and Class I's are strained a little bit," says American Short Line and Regional Railroad Association President Frank Turner. "This goes back to when Union Pacific acquired Southern Pacific. We'd just about gotten over that when the Conrail split caused a lot of pain with our members, primarily service issues that resulted in a lot of lost traffic that these folks will probably never get back. Having said that, the people in the field have worked very closely, for the most part, with our members. They have really tried to upright the ship."
Turner points to current issues affecting the relationship. "There's the 286,000-pound car issue," he says. "Also, we've proposed legislation to take the 4.3 cent fuel tax that's not going to be repealed this year and put it in a trust fund for use in infrastructure funding for our segment of the industry so we can handle these cars. The Class I's oppose that. They want the tax repealed, as do we, but it's obvious to us that it's not going to be repealed. So we feel it should go into a trust fund for our infrastructure. The 286 issue was brought about by the Class I's. It's a technological change that's good for the industry, except for track unable to handle 286,000-pound cars. The fact that they have lobbied very hard against our position doesn't help the relationship."
"Another issue on which we differ with Class I's is paper barriers," says Turner. "We feel that the time has come for paper barriers to be looked at very closely to find a fair and equitable way to remove them. With mergers, a lot of routes and gateways have changed, but the paper barriers remain intact. Every time I address a rail shipper group, they tell me they want the railroad industry to act more like a big network."
"I don't want to give the impression that we have a bad relationship with Class I's," Turner says. "We don't. I can point to many instances where Class I's have worked with smaller railroads to gain traffic that benefited the short line. We all try to work together in the field. I have all the confidence in the world that we'll improve the relationship and, more important, improve service."
ASLRRA has more than 400 members operating almost 50,000 miles of track. Short line and regional railroads operate 29% of the nation's track, generate 9% of total railroad revenue, and handle about 20% of all the rail traffic in the country. "We've seen through these mergers and splits that capacity can be a issue," Turner says. "The only excess railroad capacity we have in this country rests with the short lines. Class I's will tell you, particularly NS and CSXT, that some of the short lines really helped them out and worked well with them in taking some of the traffic from fairly congested areas. I would hope that we could do more of this. We can better utilize the capacity that we have."
| 8/25/2000 |
Union Pacific says customers clicking on uprr.com/yardsale will find "periodic transportation specials for shipments within specified UP lanes and for specified products." As explained by Jack Koraleski, executive vice president-marketing and sales, "UP Yard Sale is a new-age product, targeted primarily at non-traditional rail shippers. We've packaged a range of components together for the first time, all designed to create a quick and easy way of doing business for customers. This essentially eliminates any process barriers for those non-rail-served customers so they can really take advantages of the economies of shipping by rail." UP said the first Yard Sale was for the shipment of consumer goods and packaged chemicals from the Chicago area to Washington or Oregon for $1,500 per 50-foot boxcar, including the transloading service.
| 8/22/2000 |
Mortimer L. Downey, Deputy Secretary of the U.S. Department of Transportation, is the winner of the 2000 W. Graham Claytor, Jr., Award for Distinguished Service to Passenger Transportation. Presented annually by
Railway Age,the award honors the memory of the late president of Amtrak.
In announcing the award,
Railway AgePublisher Robert P. DeMarco commented: "A number of years ago, Mortimer Downey helped pioneer innovative financing mechanisms that contributed to a dramatic revitalization of New York City's rail transportation system. He brought to Washington the same leadership qualities and the dedication to sound transportation policies that he so ably demonstrated at the New York Metropolitan Transportation Authority. These policies have greatly benefited passenger rail at all levels--intercity, regional, and urban. Public servants like Mort Downey ensure that the American public is not short-changed when it comes to quality transportation."
Before being named by President Clinton as Deputy Secretary of the U.S. DOT, Downey served as executive director and chief financial officer of the New York MTA. During his 12 years at MTA, more than $20 billion of capital investment was programmed into New York's regional transportation facilities.
Downey's first stint at the U.S. DOT came during the Carter Administration. He served as assistant secretary for budget and programs from 1977 to 1981. He was also the first transportation program analyst for the U.S. House of Representatives Committee on the Budget. Early in his career, he held a number of positions with the Port Authority of New York and New Jersey.
A magna cum laude graduate of Yale University (1958), Downey holds a master's degree in public administration from New York University (1966) and attended the Harvard Business School Advanced Management Program (1988). He attained the rank of lieutenant commander in the U.S. Coast Guard Reserve.
Downey will accept the W. Graham Claytor award at
Railway Age'sseventh annual Passenger Trains on Freight Railroads Conference in Washington, D.C., Oct. 18.
| 8/18/2000 |
Gary M. Spiegel, one of three ex-Conrail officers who moved to CSX Transportation and abruptly left that railroad in May, has joined RailAmerica as executive vice president and chief operating officer. CSXT's former senior vice president-operations is now responsible for the management and operations of 42 RailAmerica short lines and regionals that operate 7,100 over miles of line in 24 states and six Canadian provinces.
| 8/14/2000 |
Railway Agehas selected the Arkansas Midland Railroad Company as 2000 Short Line Railroad of the Year and the Bessemer & Lake Erie Railroad Company as 2000 Regional Railroad of the Year. Publisher Robert P. DeMarco will present the awards at the annual meeting of the American Short Line and Regional Railroad Association in Chicago, Ill., Oct. 2.
"If you had to pick three words to describe successful short line and regional railroads, they would be innovation, ingenuity, and service," said DeMarco. "You can find each of these, in abundance, in the extraordinarily strong entries submitted to
Railway Agethis year."
Arkansas Midland Railroad Company (AKMD), based in Jones Mill, Ark., is being honored for its superb relationship with its customers, delivering the quality service they expect. Customers representing 98.9% of the short line's carloads personally nominated AKMD for
Railway Age'saward. "AKMD is the most responsive and consistent transportation carrier we have, including truck lines," said Bill Cribbs, quality assurance manager and materials manager for Reynolds Metals (part of Alcoa). Not only is the short line customer focused, it maintains a good relationship with its Class I partners. "Union Pacific's relationship with AKMD has been one of working together to grow the traffic to and from AKMD as well as improving service to our mutual customers," said Warren Wilson, senior manager-rail line planning for UP. "The AKMD-UP relationship has been one of our short line success stories." Ingenuity is another AKMD trait: After service improved on UP lines following its merger with Southern Pacific, UP and AKMD ran a special train with a catered dinner to thank customers for their loyalty during the service crisis. "I am still telling my friends about it," said Bill Zablan of Norac Chemical. Norac, which has since expanded its Helena, Ark., plant, Zablan said, "will increase rail usage as a key part of our expansion."
The Bessemer & Lake Erie Railroad Company (B&LE), based in Monroeville, Pa., is recognized by
Railway Agefor its strategic Class I alliances, innovative marketing practices, and strong safety record. B&LE was instrumental in helping CSX Transportation relieve congestion on its western Pennsylvania and eastern Ohio branches by initiating an agreement with the Class I to move loaded and empty trains from its Shenango, Pa., interchange to Conneaut, OH. The regional's partnership with CSXT for the movement and transshipment of former Conrail-origin coal has helped increase coal volume in 2000 and resulted in the reopening of a portion of a coal handling facility in Conneaut. Safety is a priority for B&LE: The regional received the Gold Harriman award in 1999. Customer satisfaction is another top concern: A survey conducted as part of the railroad's certification in the ISO 9002 program found that 94% of B&LE customers are satisfied with the levels of expected service in all areas.
The awards will be announced in the September issue of
Railway Age.
For more information, contact Marybeth Luczak, Associate Editor,
Railway Age,(212) 620-7236; E-mail: marybeth_luczak@sbpub.com.
| 8/11/2000 |
Metra and the Chicago Transit Authority recently unveiled an $18 million transit center in Oak Park, Ill., about 10 miles from downtown Chicago. The center links the services of Metra's UP West Line suburban trains, the CTA Green Line elevated trains, and Pace suburban buses.
A new pedestrian tunnel provides easy, enclosed transfer between transit modes. Before the tunnel was built, changing from one mode to another involved a block-long walk outside. Metra's improvements include new concrete platforms and ramps, an enclosed warming house, new stairways, a ticket office, canopies and shelters, as well as lighting, landscaping, and site improvements.
The Federal Transit Administration, Illinois Department of Transportation, and Metra funded the project.
| 8/11/2000 |
A New York Harbor freight rail tunnel linking Brooklyn with Staten Island or New Jersey would revitalize the Brooklyn waterfront and reduce the number of truck trips into New York City by one million a year, according to a study by the New York City Economic Development Corp. The agency determined that such a tunnel would cost $2.3 billion. New York Congressman Jerrold Nadler and Mayor Rudolph Guiliani have been actively promoting the tunnel, but Gov. George Pataki has so far withheld his support.
| 8/10/2000 |
At a ceremony Aug. 10, U.S. Army Secretary Louis Caldera transferred ownership of the Joliet Arsenal at Elwood, Ill., to CenterPoint Properties Trust for development into the 2,200-acre Deer Run Industrial Park. The park, one of the nation's largest, will include a multi-modal transportation facility operated by Burlington Northern and Santa Fe. State officials say the project will create 8,000 to 12,000 permanent jobs and 20,000 construction jobs.
| 8/10/2000 |
Railroad Retirement reform legislation that would eventually save the railroads around $350 million a year is expected to be approved by Congress this month. It had appeared headed for passage in midsummer until the House Ways and Means Committee attached a provision eliminating the 4.3 cents a gallon deficit reduction fuel tax paid by the railroads. This was opposed by the Association of American Railroads, which wants the tax repealed but feared that it would jeopardize passage of the retirement reform legislation.
Supported by most railroad unions as well as the carriers, the Railroad Retirement and Survivors Improvement Act of 2000 would liberalize the rules for the investment of retirement funds, reduce the retirement age from 62 to 60 for 30-year employees, reduce the vesting period from 10 years to five, and increase survivors' benefits. House Speaker Dennis J. Hastert promised fast action on the stalled legislation with the return of Congress in September from its August holiday.
| 8/10/2000 |
Amtrak issued a statement recently hailing as "an historic first" the inclusion of the following statement in the Republican Party's new platform: "Republicans support a healthy intercity passenger system and, where economically viable, the development of a national high-speed passenger railroad system as an instrument of economic development and enhanced mobility." Amtrak failed to take note of another "historic first": The chairman of the Republican platform committee, Wisconsin Gov. Tommy Thompson, is also chairman of the board of Amtrak.
| 8/10/2000 |
Stephen T. Roberts, who successfully promoted a passenger rail program in Virginia and has headed Virginia Railway Express (VRE) since 1993, is moving to Atlanta to become project director of Georgia Railway Consultants. That group, a joint venture of Moreland Altabelli, Parsons Brinckerhoff, and SYSTRA Consulting, has conxtracted to help implement a 793-mile, $1.5 billion statewide passenger rail program over the next decade. Replacing Roberts as director of operations for VRE is Pete Slannik, who has been with the Long Island Rail Road since 1990, most recently as director of market development.
| 8/10/2000 |
Toyota's North American Parts Logistics Division has named Burlington Northern and Santa Fe Rail Carrier of the Year for 1999. It's the second year in a row the honor has gone to BNSF. "Toyota holds suppliers to a process standard called 'Heijunka,' which is defined as a repetitive cycle of regular inventory flow without variance," said Steve Branscum, BNSF group vice president-Consumer Products business unit. "We've worked hard to meet Toyota's stringent on-time standards."
| 8/4/2000 |
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One of the biggest passenger railcar manufacturers in the world is getting even bigger. Bombardier, Inc., has signed a sale and purchase agreement with DaimlerChrysler AG to acquire Adtranz (DaimlerChrysler Rail Systems GmbH) for $725 million in cash. Proceeds from the sale of Adtranz's fixed installations and signaling divisions--currently in the process of being sold to other parties--will reduce Bombardier's net purchase price. The transaction is subject to approval by regulatory authorities and DaimlerChrysler's supervisory board.
"This acquisition would complement our transportation activities in terms of geographical markets, products and services, broader capabilities, expertise, and assets," said Bombardier President and CEO Robert E. Brown. The joining of the two companies, added Bombardier Transportation President and Chief Operating Officer Jean-Yves Leblanc, "will benefit customers as it will allow us to offer a full range of state-of-the-art products and services." Leblanc said that access to such complementary technologies as propulsion systems, train control and communications systems, and electric locomotives "will enhance our ability to compete vigorously in all markets."
According to DaimlerChrysler Chairman of the Board of Management Jurgen Schrempp, the sale comes after "having progressively increased Adtranz's performance to a break-even point." In 1999, Adtranz's revenues increased 7% to $3.4 billion. In this year's first half, Adtranz's revenues were up 17% to $1.7 billion over the comparable period in 1999. Incoming orders for the first half were up 26% to $1.8 billion.
| 7/28/2000 |
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Six major railroads announced July 26 that they are taking steps to create "an open electronic exchange to link buyers and sellers with goods and services across the North American railroad industry." What they have in mind is "one-stop cyber shopping," with suppliers having "fast open access to an e-marketplace for their goods and services." The railroads--Burlington Northern and Santa Fe, Canadian National, Canadian Pacific, CSX Transportation, Norfolk Southern, and Union Pacific--said they plan to form a new company to own and operate the exchange. They believe suppliers will benefit from "an increased customer base as well as the opportunity to reduce costs of both sales and order management." So far, the initial phase of a development study has been completed. As plans progress, other companies will be invited to join the website marketplace.
| 7/28/2000 |
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Relentless cost control, combined with steady or slightly rising revenues, continues to chip away at operating ratios.
Canadian National says it improved its "industry-leading" operating ratio by 1.3 points in the second quarter to a record 68.6%. Operating expenses increased by less than 1%, to $915 million (C), while revenue grew by 3% to $1.3 billion. Second quarter net income was $230 million, up 18% over 1999. Operating income rose 7% to $418 million.
Burlington Northern Santa Fe Corp. was able to maintain an operating ratio of 76.5% in the second quarter, up just three-tenths of a percentage point from 1999, despite a $50 million increase in fuel costs. Revenues were up 2% to $2.24 billion. Net earnings were 60 cents a share, adjusted to exclude special items, up 11% from 1999's adjusted 54 cents.
Canadian Pacific trimmed its second-quarter operating ratio to 77.4%, down 3.6 percentage points from a year ago. CPR posted operating income of $204 million (C), up 29% from 1999's first quarter, and net income of $22 million, up 30%, on revenues of $904 million, up 9%.
Norfolk Southern, once a pace-setter in efficiency, continues to feel the effects of a difficult absorption of more than half of Conrail. But in the second quarter, NS cut its operating ratio to a respectable 82.4%, compared with 83.4% in the year-ago quarter. On second-quarter revenues of $1.6 billion, up 32% from last year, NS reported operating income of $278 million, up 40%, and net income of $116 million, up 51%.
Union Pacific cut its first-quarter operating ratio to 80.5%, down 2.5% from a year ago and a "quarterly best" for the merged company. Operating income rose 23% to $526 million. A 5% increase in revenues plus productivity improvements more than compensated for a 50% increase in fuel prices.
CSX Corporation's second-quarter earnings statement, released July 27, did not include an operating ratio, but it said that operating income for its rail and intermodal businesses dropped to $158 million from $224 million in the prior year's quarter, on revenues of $1.84 billion, up from $1.54 billion. CSX Chairman and CEO John W. Snow said rail earnings reflected higher fuel costs and "additional resources applied to regain network fluidity."
| 7/28/2000 |
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Paul Funkhouser, a former president of CSX Corp., has died at age 77 in Richmond, Va., from complications associated with Alzheimer's disease. Funkhouser was recruited from the law department at Norfolk & Western in 1963 to head parent company Pennsylvania Railroad's sales and marketing department. After PRR's merger with New York Central, Funkhouser joined Seaboard Coast Line, succeeding Tom Rice as chairman in 1977. He became president of CSX in 1980 when that company was formed by the merger of SCL and Chessie System.
| 7/28/2000 |
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Regulations will become effective Sept. 5 for the dispensation of $3.5 billion in low-interest federal loans and loan guarantees for a broad spectrum of railroad improvement projects. At least $1 billion is earmarked for improving non-Class I railroads. One small-road priority will be strengthening track to handle 286,000-pound loads.
The Railroad Rehabilitation and Improvement Financing (RRIF) Program was authorized in the Transportation Equity Act for the 21st Century, passed by Congress in 1998. The government dragged its feet on implementing the program, which never had the full support of the White House. A notice of preliminary rulemaking was published in the Federal Register on May 20, 1999. It won unfavorable notices from needy railroads because it identified the federal government as a "lender of last resort," suggesting that eligible applicants would need to take a pauper's oath. That has been taken care of in the final rule, which was published in the Federal Register of July 6. Applicants now need only establish that they cannot privately obtain a loan at requested rates.
The interest rates in the RRIF program will cover the government's cost of borrowing but will be lower than commercial rates. Eligible projects are identified as "(1) acquisition, improvement, or rehabilitation of intermodal or rail equipment or facilities (including tracks, components of tracks, bridges, yards, buildings, and shops), (2) refinancing outstanding debt incurred for these purposes, or (3) development or establishment of new intermodal or railroad facilities."
The loans and loan guarantees may go directly to railroads or to state and local governments and government sponsored authorities for railroad projects.
How do railroads go about applying for a loan?
The American Short Line and Regional Railroad Association pointed out to its members that the FRA encourages the use of third party consultants in preparing loan applications. ASLRRA also said it would provide "some assistance and support" for members in the application process. The association reminded its members that it is sponsoring the development by Zeta-Tech Associates of a computer-based model for the determination of the overall economics of heavy axle loads (HAL). "This may be useful in development of RRIF loan applications for projects involving upgrade of small railroad infrastructure to handle HAL," said the association.
The final rule may be found on the Web at http://www.fra.dot.gov.
| 7/28/2000 |
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Union Pacific has installed an "early warning system" on 150 locomotives hauling unit coal trains in the Midwest. The system, from GE Transportation Systems, is called Expert On-Boardô, and it's designed to remotely monitor locomotive health, "providing predictive, proactive recommendations that prevent failures and speed repairs by regularly assessing real-time operations," according to GE.
Expert On-Board works like this: An intelligent, onboard system collects, analyses, and stores data on locomotive condition. The locomotive is programmed to send data that suggests a pending problem to GE's 70-person-strong Technology Service Center in Erie, Pa., via satellite and other communications media. Automated analysis tools "interrogate" the data, and GE Technology Service Center analysts evaluate it and transmit a recommendation to UP's Harriman control center. "All of this happens without any intervention from the train crew," says GETS.
"Time is of the essence for railroads in preventing failures," says GETS Manager-Remote Monitoring and Diagnostic Services Aiman Abdel-Malek. "With Expert On-Board, we can provide our customers with valuable recommendations that keep their trains running without delay and ensure that goods and services are delivered on time."
Satellite services for Expert On-Board are provided by Motient Corp.
| 7/28/2000 |
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Amtrak's
Acela Expresseswere running more than six months late last month, which is to say they weren't running at all except in tests. That was an embarrassment for Amtrak, and diverting attention from it may have been one reason for the introduction of the "satisfaction guaranteed" marketing initiative on July 6 and the simultaneous unveiling of a new corporate logo to replace the "pointless arrow."
But even without the
Acela Expresses,which are supposed to save Amtrak from a pauper's grave, and even before the performance pledge was announced, and with that arrow still pointing nowhere, Amtrak riders were paying record dollars to board Amtrak trains in near-record numbers. Some said this was only because gas prices were climbing out of sight. Only? Amtrak's argument all along has been that it exists to give traveling Americans an alternative.
In any event, Amtrak announced recently that it rang up $102 million in ticket sales in June, the highest monthly take in its 29-year history. June ridership was more than two million, the most in nine years. For the April-June quarter, Amtrak posted gains of 8% in ridership and 13% in revenue compared with the same quarter a year ago. In July, ridership continued to rise.
All of this shows that "Amtrak's business plan and superior guest service is paying off," said Wisconsin Gov. Tommy Thompson, who is chairman of Amtrak's board of directors. He predicted that the satisfaction guarantee initiative, first tried on the Seattle-Los Angeles
Coast Starlight,will draw more customers.
That program got off to a respectable start: In the first two weeks after it was announced, Amtrak recorded $12 million in passenger reservations, a 22% increase over the same period last year. In late July, requests for vouchers from unsatisfied customers were running about two per thousand.
Those vouchers are good for that portion of a trip where a passenger's needs have not been satisfied through regular channels, like appealing to a crew member.
It's a shrewdly-designed program because it not only presents to the public a company ready to stand behind its product, but it also brings that customer back to the railroad, because the voucher is good only for service, not cash; and it helps Amtrak identify trouble spots.
As for the
Acela Expresses,problems have continued to crop up. One that got a lot of publicity last month, having to do with stabilizer bar bolts, was an assembly problem, not a design flaw. Amtrak is adamant that it won't accept the 150-mph trains until they are problem-free. One educated guess is that there's a 50-50 chance of these trains going into service this year. When they do, though, Amtrak is confident they'll bring in the customers. The
Acela Regionals,conventional equipment hauled by electric locomotives on the newly-electrified portion of the Northeast Corridor, have increased Amtrak ridership between New York and Boston by 40%.
| 7/28/2000 |
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Proposed regulations requiring the sounding of locomotive horns at grade crossings have raised hackles in communities that don't want their sleep disturbed. This is particularly true in that area called Chicagoland where grade crossings are as thick as politicians. Last month the Association of American Railroads suggested a possible way around the whistle mandate for those crossings that have historically been quiet.
AAR President Edward H. Hamberger put this possible solution to the House Ground Transportation Subcommittee hearing recently: All public crossings within historic quiet zones should be equipped with gates and lights, with signs warning of the existing of the quite zone at each approach. Notices of quiet zones should be published in the Federal Register. Only states should be permitted to apply for quiet-zone status. That status should be granted only where it can be shown, through sound statistical methodology, that the sounding of a horn is not essential to safety. Diagnostic teams should analyze crossing issues before any quiet zone is instituted.
Not a simple process but an essential one in the railroads' view. The AAR took note of Federal Railroad Administration studies showing that whistle bans could increase collisions by 62% at crossings with active warning devices.
| 7/28/2000 |
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Orders were placed for 26,146 new freight cars in this year's first six months, up from 17,508 in the comparable 1999 period. In the second quarter, 11,595 new cars were ordered compared with 6,658 in the year-ago period. While orders have been above 1999 levels, production has continued to decline from last year's unusually high levels. In second-quarter 2000, 14,179 new cars were delivered compared with 18,882 in the corresponding 1999 period. The undelivered backlog was 28,176 on July 1, down from 43,456 on July 1, 1999.
| 7/24/2000 |
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Two powerful labor organizations--the United Transportation Union, representing 135,000 workers, and the Brotherhood of Locomotive Engineers, with 58,000 members--have joined forces to try to "limit the use of remote control to those operations already existing." The unions fear the loss of jobs if the remote control of yard locomotives, which Canada has demonstrated to be both safe and productive, spreads to the U.S. The practice has so far been discouraged by the Federal Railroad Administration, but FRA's scheduling of a conference on remote control set off alarms at the operating unions. In a July 18 announcement, they pledged to share their resources in developing a joint position to present to the industry and the government.
| 7/21/2000 |
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Canadian National and Canadian Pacific have entered into two agreements to share track in Ontario, the Midwest, and the Northeast they say "will increase the efficiency of our rail corridors in eastern North America." CN and CP say they will mutually benefit from the agreements through "wider geographic coverage, increased capacity with minimal investment, higher service levels with shorter and more reliable transit times, and increased efficiencies through train consolidation."
The first of the so-called "co-production" agreements is a five-year deal giving CN access to CP's northeastern U.S. network in New York, New Jersey, and Pennsylvania. CP will move CN forest products to distribution centers in New York City, Albany, N.Y., and Philadelphia and Scranton, Pa. The two railroads said they will jointly target the large volume of Quebec forest products moving to the Northeast by truck. CP will interchange CN traffic with Norfolk Southern and CSX Transportation in the Albany area and Pennsylvania, as well as with the New York & Atlantic Railroad in Long Island, N.Y. The agreement could be expanded to other commodities, with CP receiving reciprocal haulage from CN into Ontario, Quebec, and the Maritimes.
The second agreement is a three-year deal giving CP access to CN's Toronto-Chicago main line. CP will route a minimum of 14 merchandise and/or intermodal trains per week over CN's line between Canpa Junction in West Toronto, or Komoka, west of London, Ont., and Chicago. Currently, CN runs about 175 freight trains per week between Toronto and Chicago.
CP and CN say the agreements "will significantly improve infrastructure utilization and provide customers with new, efficient routing options and extended market reach in key north-south and east-west trade corridors. By jointly increasing capacity and access on key sections of our track, we are not only gaining productivity from existing infrastructure, but we're also providing non-rail shippers with new transportation options and increasing competition with other modes of transportation." They also said that jobs will not be impacted, and that competition between the two railroads "will remain strong."
The arrangement supplements a directional running agreement the railways launched this year in British Columbia covering movements over a 155-mile line through Fraser Canyon, west of Kamloops. Under this agreement, westbound CN, CP, and VIA Rail Canada trains travel on CN's gently-graded main line between Basque/Nepa and Matsqui/Mission, east of Vancouver, while all eastbound trains use CP's main line. Earlier this year, CP and CN consolidated track in Winnipeg, Edmonton, Ottawa, and Toronto.
CN and CP also said they are "exploring other potential co-production ventures to maximize the use of existing rail infrastructure and improve customer service."
| 7/20/2000 |
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North American Railways, the proposed 50,000-mile Class I formed by the merger of Burlington Northern and Santa Fe and Canadian National, will not come to pass, according to a joint statement released today. The announcement closely followed a July 14 decision from the U.S. Circuit Court of Appeals for the District of Columbia that the Surface Transportation Board acted in the public interest when it imposed a 15-month moratorium on railroad mergers.
BNSF and CN said that their boards of directors "have both voted to approve an immediate, mutual termination of the combination agreement that would have created North American Railways, Inc., after carefully considering the implications for customers, employees and shareholders."
Paul M. Tellier, president and chief executive officer of CN, and Robert D. Krebs, chairman and chief executive officer of BNSF, said: "CN and BNSF are both shareholder-driven organizations, and we have concluded it is not in the interests of our shareholders to assume the risks involved in waiting up to two years for a decision on our transaction by the regulator in the U.S." STB's moratorium prevents BNSF and CN from filing a common control application until mid-June 2001 at the earliest. As a result, a regulatory decision on the combination would be "unlikely" before late 2002.
"We had looked forward to creating a company that could have been the leader in every aspect of the rail industry," Tellier said. "But the delay and uncertainty caused by the STB's moratorium and proposed rulemaking made it impossible for us to continue with our combination efforts.
"It is with regret that we give up on our efforts to create North American Railways," said Krebs. "The service we would have provided our customers across a 50,000-mile network would have been unparalleled, and the $800 million per year of synergies we identified as we prepared our combination case could have provided significant benefits to both companies."
CN and BNSF said they "intend to continue to strengthen the ties that have been established between the two companies, and to capture, to the extent that they can be realized by separate entities, the improvements and efficiencies that were identified as part of the combination preparation." They also said that no break-up fees will arise from the termination of the merger agreement (announced Dec. 20, 1999) "because the companies have mutually agreed to unwind their transaction."
| 7/10/2000 |
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Burlington Northern and Santa Fe says it will eliminate the positions of approximately 200 material handlers, conductors, and engineers by the end of the first quarter of 2001. The railroad is also redeploying approximately 60 dispatching employees from Fort Worth to operate a new joint dispatching center at BNSF's Argentine Yard in Kansas City, Kan., in coordination with the Union Pacific and Kansas City Terminal Railway, following the success of similar joint BNSF/UP dispatching centers in Spring, Tex., and San Bernardino, Calif. BNSF planned to take a special charge of $40-50 million in the second quarter related to the employee reduction and redeployment programs, which are expected to yield savings of $10 million a year.
| 7/10/2000 |
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A final rule will become effective Sept. 5 for the dispensation of $3.5 billion in low-interest federal loans and loan guarantees for a broad spectrum of railroad improvement projects. At least $1 billion is earmarked for non-Class I railroads. One small-road priority will be strengthening track to handle 286,000-pound loads.
The Railroad Rehabilitation and Improvement Financing Program was authorized in the Transportation Equity Act for the 21st Century, passed by Congress in 1998. The government dragged its feet on implementing the program, which never had the full support of the White House. A notice of preliminary rulemaking was published in the Federal Register on May 20, 1999. It won unfavorable notices from needy railroads because it identified the federal government as a "lender of last resort," reducing the ranks of eligible applicants to mendicants. That has been taken care of in the final rule, which was published in the Federal Register of July 6. Applicants now need only establish that they cannot privately obtain a loan at the rate offered by the government. Interest rates will cover the government's cost of borrowing but will be lower than commercial rates.
Eligible projects are identified as "(1) acquisition, improvement, or rehabilitation of intermodal or rail equipment or facilities (including tracks, components of tracks, bridges, yards, buildings, and shops), (2) refinancing outstanding debt incurred for these purposes, or (3) development or establishment of new intermodal or railroad facilities."
FRA says an electronic copy of the final rule may be downloaded using a modem and suitable communication software from the Government Printing Office Electronic Bulletin Board Service at (202) 512-1661. The Federal Register's home page is at: http://www.nara.gov/fedreg.
| 7/7/2000 |
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Amtrak's new Acela Express high speed trainset has resumed testing on the Northeast Corridor following
modifications to the locomotive undercarriages. Broken and missing traction motor mounting bolts were discovered in mid-June; testing was suspended until the cause of the problem could be determined by the Bombardier/Alstom consortium supplying the train.
In a statement issued July 7, Amtrak said that "new, longer bolts were installed in the truck assemblies. The use of longer bolts was proposed by the manufacturers, and safety engineers for the Federal Railroad
Administration approved the resumption of testing."
| 6/29/2000 |
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Delays and technical problems continue to dog Amtrak's Acela Express high speed trainset, pushing revenue service introduction of the 150-mph Boston-New York-Washington premium service train back to September or possibly later. Amtrak and its supplier, the consortium of Bombardier and Alstom, appeared to be headed toward a court confrontation.
The most recent problem, discovered during high speed testing on the Northeast Corridor, is broken and missing traction motor mounting bolts. Test engineers reported excessive lateral motion on one of the power cars during a high speed run. Upon inspection, one bolt was found to be missing, the other broken. Inspection of the other power cars in the test fleet revealed similar problems. Several bolts that hadn't already broken off showed signs of stress.
The Federal Railroad Administration, which has been closely monitoring the program, suspended further testing until the bolt problem could be diagnosed and repaired. The truck in which the defect had been discovered was removed and shipped back to the supplier for diagnosis. By late June, that problem appeared to have been solved, but continued wheel wear problems and a tilt system that isn't performing up to specifications threaten to further delay the trainsets' introduction.
Bombardier spokesman Gilles Page told Railway Age that the consortium fully expected to have the trainset ready for conditional acceptance by Amtrak by mid- to late-July, and that there were no serious defects or design flaws that would require a complete redesign of the trucks or suspension system.
Amtrak has been trying to, at least publicly, downplay the problems its highly-touted Acela Express has been experiencing. But by late June, its patience was wearing thin. At a conference sponsored by the National Corridors Initiative in Washington, D.C., on June 26, Amtrak Board Chairman Tommy Thompson said that the board "was very upset," and that "it looks like it will be September before we get delivery of the first trainset."
When asked about whether Amtrak would be seeking financial compensation for the delays, Thompson said "absolutely." He said that Amtrak was negotiating with Bombardier/Alstom, and that "we have lawyers involved." Whether the dispute will be resolved through negotiation or litigation remains to be seen; according to its performance-based contract, Bombardier/Alstom can be fined up to $13,500 per day per trainset for each day delivery is delayed.
Amtrak is partially depending upon Acela Express service to meet Congressionally-mandated operational self-sufficiency by 2002, or face liquidation. Sen. Frank Lautenberg (D-N.J.), one of Amtrak's staunchest supporters, agrees with this assessment, calling high speed Northeast Corridor service "make or break" for the beleaguered carrier.
"I don't spend much time in church," Lautenberg told the Star Ledger, a New Jersey newspaper. "But I'm lighting candles for this one."
| 06/29/00 |
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RailAmerica, now the world's largest operator of short line and regional railroads, is pursuing revenue-growth and debt-reduction programs that were described to shareholders at the company's annual meeting in Boca Raton, Fla., last month.
"We have already successfully integrated our 1999 acquisitions, including Freight Australia, RailLink, and Toledo, Peoria & Western," said Chairman, President, and CEO Gary O. Marino. "To date we have realized $10.8 million in cost savings from the acquisition of RailTex, and our goal is to achieve up to $15 million in annual cost savings. Our asset rationalization plan is moving forward. The overall goal is to reduce debt by more than $100 million through the sale of up to ten of our smaller, non-strategic rail properties, excess rolling stock, other non-operating real estate, and our specialty truck trailer manufacturing business, Kalyn/Siebert."
| 06/29/00 |
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Corporate investor Carl Icahn--flush with $600 million earned on his 10% stake in Nabisco Group Holdings, whose sale he reportedly forced--announced on June 27 that he planned to acquire 15% of CSX Corp. He told CSX Chairman and CEO John Snow that he had no particular plans for the company, which he considered to be "undervalued" and a good buy. On June 27, a share of CSX common was selling for a little over $20.50, 60% below its year-ago price. The CSX board reacted by amending its shareholder rights plan designed to ward off unwanted advances. An investor now need acquire only a 10% stake in the company to trigger the mechanism permitting existing shareholders to buy additional stock. The threshold was previously 20%.
| 06/26/00 |
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A team led by Lockheed Martin Corp. and including Wabtec, Union Switch & Signal, and Parsons Brinckerhoff has won a $74 million contract to install a positive train control system on a 120-mile segment of Union Pacific line between Chicago and St. Louis, a federally-designated high speed rail corridor. The contract award is being made through the North American Joint Positive Train Control Program, which is funded by the Federal Railroad Administration, the Illinois Department of Transportation, and the Association of American Railroads.
| 06/26/00 |
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Union Pacific has gathered its three information technology companies--UP Technologies, AMCI, and PS Technologies--under a new subsidiary, Fenix. UP Technologies offers shipment monitoring, item level tracking, inventory management, operations management and electronic gateway messaging. AMCI develops wireless software products, and PS Technologies offers workforce management software. Fenix itself will be forming a fourth company to develop telecommunications products for the wireless access and broadband network markets.
| 06/26/00 |
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The railroad industry's composite after-tax cost of capital figure for 1999 is 10.8%, as determined by the Surface Transportation Board. This figure is based on a current cost of debt of 7.2%, a cost of common equity capital of 12.9%, a cost of preferred equity capital of 6.3%, and a capital structure mix comprised of 35.5% debt, 62.7% common equity, and 1.8% preferred equity. STB's full decision is available on its website, www.stb.dot.gov.
| 06/26/00 |
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Union Pacific crews installed 7,750 concrete ties on June 13, beating the railroad's previous single day's record of 6,803. This happened during UP's fifth annual track maintenance "blitz" in southeastern Wyoming and central Nebraska, a ten-day, $16.1-million project that ended June 21. No trains were allowed to operate over the corridor during 12-hour work days as nearly 400 UP workers installed 25,102 concrete ties and 5,500 wood ties, replaced 37 miles of rail, smoothed and leveled 204 miles of track, welded 943 joints, and replaced 28 grade crossing surfaces. UP President Ike Evans pronounced the project "a huge success." He said a maintenance effort of this size would normally take up to two months.
| 06/26/00 |
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Transportation Technology Center, Inc., (TTCI) has come up with a new switch point/stock rail design it says will lower life-cycle costs and improve safety and reliability for AREMA No. 20 switch geometry.
The new design, developed under an AAR research program, has a 40% larger cross-sectional area at the switch point than the conventional AREMA design. "The larger cross section and stock rail contact areas are intended to lower stresses in the critical transfer areas, thereby lengthening switch point life," says TTCI. "Stock rail life may be decreased as a result of reducing its cross section; however, the average life of the switch point/stock rail pair should be longer."
Besides lowering stresses and lengthening life, anticipated benefits of this new design include better resistance to chipping due to a larger head section, greater stability in the switch point from a larger, flat base, and less chance of accidents from splitting the switch. TTCI says its design will be interchangeable with existing AREMA designs, retaining the AREMA switch point lead length.
TTCI plans to test the new design in an AREMA-geometry No. 20 turnout at FAST (Facility for Accelerated Service Testing) at TTCI's Pueblo, Colo., research center.
| 06/26/00 |
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Curtis D. Buford, who played a major role in the development of intermodal transportation as president of Trailer Train (now TTX) from 1969 to 1983, died on March 30 at Rancho Mirage, Calif. He was 79. Buford began his railroad career with the New York Central, served as vice president of the Association of American Railroads from 1959 to 1964, and then as president of the Pittsburgh & Lake Erie for four years before moving to Trailer Train.
| 6/15/2000 |
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Railway Ageis now accepting nominations for its 2000 Short Line Railroad of the Year and Regional Railroad of the Year awards. All Class II and III railroads are eligible. The awards recognize outstanding achievement in any of several areas: safety; business turnaround situations; marketing; maintenance; operations; customer service; productivity; community relations and problem-solving of any kind.
Railway AgePublisher Robert P. DeMarco will present the awards at the annual meeting of the American Short Line and Regional Railroad Association in Chicago, Oct. 1-3.
Nominations must be in
Railway Age'sNew York office by August 1.
Entry forms are available from:
Marybeth Luczak
Associate Editor
Railway Age
345 Hudson St.
12th Floor
New York, NY 10014
Phone: (212) 620-7236
Fax: (212) 633-1863
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