January 2008
Ex-FRA Administrator John Ingram diesJohn W. Ingram, who was Federal Railroad Administrator from 1971 to 1974, died Jan. 27 at the age of 79. From the FRA, Ingram went to the troubled Chicago, Rock Island & Pacific and served as president of that railroad until it went into bankruptcy in May 1985. Ingram's first railroad job was as a brakeman with the Long Island. Trained as a transportation economist, he held marketing positions with both the New York Central and Illinois Central.
"Precedent-setting" LIRR union agreements approvedThe board of the New York Metropolitan Transportation Authority announced that it had approved new agreements reached in a "precedent-setting spirit of cooperation" with 10 unions representing MTA Long Island Rail Road employees.
The agreements extend from Jan. 1, 2007 to Jan. 15, 2010, and call for successive annual wage increases of 4%, 3.5%, and 3%. Two provisions reduce future pension costs for the railroad but improve other employee benefits. The agreements were previously ratified by union members, led by the United Transportation Union, which represents 40% of LIRR's 5,558 unionized workers.
MTA characterized the agreements as "marking a historic milestone and signaling an era of mutual respect between labor and management."
Harsco Track Technologies backlogs at new recordHarsco Corp. announced that year-end backlogs for Harsco Track Technologies were at record levels, though fourth-quarter 2007 sales were down due to the timing of deliveries. Harsco Track Technologies is part of the company's Minerals & Rail Services and Products Group.
"Recent new contract awards and healthy order backlogs should allow the companies within this group to perform well in 2008," said Harsco. These comments were made in an earnings report that said the broad-based company achieved record corporate revenue for both fourth-quarter and full-year 2007.
Congressman: Local first-responders need real-time dataRail infrastructure, particularly rail tunnels, will benefit from $3.5 billion authorized from fiscal years 2008 through 2011 by H.R. 1, the 9/11 Commission Act of 2007, Rep. Elijah E Cummings, D-Md., assured railroad industry officials at a luncheon Jan. 28 during Railway Age’s 2008 Railway Security Forum and Expo in Arlington, Va. Of that amount, $200 million is targeted to fund safety improvements to rail tunnels in Washington, D.C, New York, “and in my hometown of Baltimore.”
But Cummings called for more and more direct involvement between Class I railroads and local community authorities, whom he identified as “first responders,” to improve emergency procedures. The congressman cited the 2001 Howard Street Tunnel fire in Baltimore as a prime example, saying, “The National Transportation safety Board’s investigation of the accident found that Baltimore City first responders did not have adequate information on hazardous discharge procedures in the Tunnel or on ingress and egress pathways into and out of the Tunnel.”
Cummings said an amendment for such action was accepted for House resolution H.R. 2095, which “awaits action now by the Senate—and it is my hope that they will act quickly.”
The congressman praised CSX for its initiative in developing procedures for sharing real-time data with state officials in Maryland, New Jersey, New York, and Kentucky. “I applaud CSX for their willingness to take this step with Maryland and with several other states,” he said. "However, these agreements do not yet extend—as I believe they should—to the local level."
FRA announces updated passenger train safety requirementsThe Federal Railroad Administration Thursday announced new regulations for intercity and commuter rail equipment operating in the United States designed to increase safety and enhance rescue access.
FRA regulations mandate that passenger rail cars be equipped with two-way communications systems to aid train crews in informing passengers; all passenger cars must be so equipped by Jan. 1, 2012 (making it likely some older cars must be retired on that date). Cars also must include intercom systems accessible to passengers so that they may communicate with train crews.
Enhanced emergency exits also are stressed, including requirements for at least one "rescue access window" on each level of multilevel passenger cars, now becoming more common on various U.S. passenger railroads. Written and/or pictorial instructions for emergency window removal also are required.
Additionally, "All new passenger cars must have a minimum of two emergency roof access locations which can be particularly useful for emergency response if a passenger car rolls onto its side," an FRA statement said.
Put together, "These safety features will help rail passengers evacuate from a train more quickly and provide emergency responders additional ways to reached trapped or injured riders should the need arise," said Federal Railroad Administrator Joseph Boardman.
Boardman added that a related FRA rulemaking aimed at enhancing passenger railcar emergency lighting systems, exist path markings, and emergency signage is expected to be completed later this year.
The Final Rule announced Thursday will be published in Friday's Federal Register and also posted at www.fra.dot.gov.
Public gets more time to comment on CN/EJ&E EISThe Surface Transportation Board has given the public an additional two weeks, until Feb. 15, to file comments regarding the scope of the Environmental Impact Statement (EIS) that STB will prepare in connection with Canadian National's application to acquire the Elgin, Joliet & Eastern.
The extension reflects the intense interest the case has aroused among communities in the path of traffic that will be diverted to EJ&E lines as well as other rail operations, both freight and passenger, that may be affected by the transaction.
In an order dated Jan. 30 extending the scoping period, STB reiterated why an EIS is deemed essential: "CN's proposed acquisition of the EJ&E would shift rail traffic currently moving over CN's rail lines inside the EJ&E arc in Chicago to the EJ&E, which traverses the suburbs generally to the west and south of Chicago. Rail traffic on CN lines inside the EJ&E arc would generally decrease. The decreases in rail traffic would be offset by increases on the number of trains operating on the EJ&E rail line outside of Chicago (approximately 15-27 more trains would operate on various segments of the EJ&E). CN also proposes to construct six new rail connections and approximately 10 miles of new sidings/double tracking."
STB's Section of Environmental Analysis (SEA) held seven scoping sessions in the project area between Jan. 9 and 22, with an originally scheduled cutoff date of Feb. 1; "in response to requests," the date was extended to Feb. 15.
Chicago group conditionally backs CN/EJ&E dealChicago Metropolis 2020, a business-based civics group, has given its conditional support to CN's proposed acquisition of the Elgin, Joliet & Eastern--a transaction the group says could "ease freight congestion that frustrates commuters and endangers the region's economy."
Chicago Metropolis 2020 recommends that the Surface Transportation Board approve the CN move with five main conditions: 1. Enable other large railroad companies to connect to the EJ&E tracks to allow them to carry cross-town freight movements that would otherwise travel by truck. 2. Guarantee equal or better Amtrak service into Chicago. (The acquisition could allow CN to abandon its St. Charles Air Line, a rail link near McCormick Place now used by Amtrak.) 3. Ensure safe and expanded mass transtit service by rail and bus on routes crossing EJ&E tracks. 4. Enable the Regional Transportation Authority to implement efficient transit service in the EJ&E corridor. 5. Mitigate negative impacts on local communities where train traffic would be expected to increase due to expanded use of EJ&E tracks.
KCSM reveals $200 million capital programKansas City Southern de Mexico announced that it plans to invest more than $200 million in capital improvements in 2008. During the past 10 years, the railroad has averaged $170 million a year in capital spending. Developing an increasingly busy container route is a principal goal.
"KCSM's International Intermodal Corridor, which starts in the important port of Lazar Cardenas, is today one of the key elements in the economic development of Mexico," said José Zozaya, KCSM's president and CEO.
The 2008 program earmarks $100 million for track maintenance, capacity improvements, and commercial projects, and includes replacing 232,000 ties and 50 miles of rail. Another $100 million will be allocated to the acquisition of 35 new locomotives and 600 new freight cars and the upgrading of existing rolling stock.
Last year, said Zozaya, KCSM purchased 90 new locomotives, many of which were built in Ciudad Sahagun. It also replaced more than 230,000 ties, and made improvements to its network throughout Mexico.
"We have supported the objectives of the National Infrastructure Program presented by President Felipe Calderon since the beginning," said Zozaya. "We will continue to do our part by pursuing several railway and intermodal infrastructure projects throughout the country." Zozaya said the inauguration by President Calderon of the New Containers Terminal of Hutchison Port Holdings last Nov. 23 in Lazaro Cardenas showed the potential of this port for global shippers.
KCSM also said that press speculation to the contrary, it will not be a bidder on the proposed multibillion-dollar Punta Colonet Project in Baja California, but will instead "continue to invest in its premier corridor throughout the industrial heart of Mexico."
Amtrak studies new Virginia servicesIn a study requested by the Virginia Department of Rail and Public Transit, Amtrak has identified Washington-Lynchburg and Washington-Newport News as the two most promising routes for expanded passenger train service in Virginia.
Amtrak said one round-trip service a day along the U. S. 29 corridor from Washington through Charlottesville to Lynchburg could be added for a $1.3 million annual state subsidy, plus undetermined capital costs. A $1.7 million annual subsidy would probably pay for an extra round trip between Newport News and Washington via Richmond.
Amtrak said that new routes would add up to $8 million to startup costs to pay for new locomotives and railcars.
In the study, Amtrak looked at potential service improvements on key travel corridors along Interstates 95, 64, and 81, and U.S. 29, as well as cross-state service. Amtrak currently operates 20 rains a day in Virginia; Henrico County's Amtrak station on the edge of Richmond is the state's busiest.
Sprinter debut postponed until March 9Sprinter diesel light-railway transit (DLRT) service, originally set to commence Jan. 28, will wait until March 9, according to officials from North County Transit District.
The 22-mile line, linking the northern San Diego County communities of Escondido and Oceanside, Calif., has not yet received certification from the California Public Utilities Commission, which cites residual safety and security concerns.
"We want to begin offering service for passengers on the Sprinter as soon as possible, but safety certification of the system is our current priority," said NCTD Executive Director Karen King.
NCTD held a ceremonial opening run late last month in anticipation of a January startup.
EPA freight car forecast is mixedOrders for freight cars picked up significantly in 2007’s closing quarter, but will decline somewhat over the next fewyears before gradually regaining strength in 2012, Economic Planning Associates reported in its most recent summary, issued Jan. 29.
The 23,722 cars ordered in the fourth quarter of 2007 “represented the highest quarterly level in almost two years,” EPA’s Peter Toja noted. “Due to this strength, backlogs, which had been declining for four consecutive quarters, expanded to 75,860 cars at the end of 2007, leaving carbuilders with impressive order books as we entered 2008. While the sharp increase in orders is somewhat clouded by the inclusion of a multi-year deal that is affecting the covered hopper and tank car numbers, the infusion of demand for new equipment last quarter, even as our economy exhibited increasing signs of weakness, is formidable. Our only concern at this juncture is whether our deteriorating economic momentum will affect the backlogs and deliveries of certain railcars as we proceed through 2008 into 2009.”
Toja said that current backlogs of hi-cube covered hoppers, tank cars, and coal cars are “relatively solid” and that demand for this equipment “is not as economically sensitive as would be the case for most capital equipment. At the same time, we are noting a strong pickup in grain movements that could support medium sized covered hoppers this year and next. However, as we noted earlier, some of the cars in this backlog are part of a multi-year transaction and we are not privy to the exact timing of these deliveries.”
Boxcar, mill gondola, non-intermodal flat car, and small-cube covered hoppers have low backlogs and will not show any “meaningful level” of assemblies either this year or next, Toja said. Intermodal equipment has close to 6,000 platforms and cars in backlogs. “Given our weakening economic posture, we expect very slow growth in imports this year and possibly, early next year, which will dampen international container movements and the need for rolling stock to accommodate these movements,” Toja cautioned. “This could negatively impact the 6,000 intermodal unit deliveries we are projecting for this year and our 5,000 unit projection for 2009. However, we are not in a position to anticipate cancellations or delays and have not adjusted our current short term projections for these possibilities. Based on existing backlogs and our positive outlooks for grain, coal, ethanol, and DDG movements and equipment demand, we expect deliveries of 56,500 railcars and intermodal equipment this year and 54,500 units in 2009.”
Beginning in 2010, EPA anticipates an increase in assemblies of coal cars, Class F flat cars, intermodal platforms, and boxcars. “These will boost overall deliveries to 57,000 units in 2010 and 58,300 cars in 2011," said Toja. "Deliveries will then move up to the 60,000-61,000 range in both 2012 and 2013.”
BNSF earnings slip but exceed estimatesBurlington Northern and Santa Fe Corp. has reported fourth-quarter 2007 profits of $517 million, a slight decline from the $519 earned in the 2006 quarter. But on a per-share basis earnings in the 2007 quarter amounted to $1.46, due to fewer shares outstanding, beating per-share earnings of $1.42 in the previous year's quarter and exceeding the Wall Street estimate of $1.39. BNSF revenues increased 9.1% to $4.24 billion in the 2007 quarter, but soaring fuel costs held net results down.
BNSF also announced a $2.4 billion capital improvement program for 2008 that includes the lease of $200 locomotives with a cost of about $400 million, the investment of $200 million in track and facilities to increase capacity, and more than $1.8 billion "to keep our infrastructure strong by refreshing track, signal systems, structures, freight cars, and upgrading technologies." The planned investment in capacity expansion will be $350 million lower than in 2007.
BNSF Chairman, President, and CEO Matthew Rose said the company experienced a slight drop in return on invested capital in 2007, to 10.5%, but "we continue to believe in the long-term growth potential of our franchise and in our ability to improve our returns."
For the full year 2007, BNSF reported record revenues of $15.8 billion, 5% over 2006, though operating income dropped slightly to $3.49 billion and earnings per share slipped to $.10 from $5.11 in 2006.
Tax changes double Canadian Pacific profitsCanadian Pacific announced that its fourth-quarter 2007 net income more than doubled to $C342 million, compared with C$146 million in 2006, "primarily due to lower future Canadian income tax rates." CP recorded a full-year tax benefit of $C163 million.
Net income for 2007 improved 19% to $C946 million, driven by an increase in operating income and a foreign-exchange gain on long-term debts. Before special items, fourth-quarter income increased 2% to $C185 million. Earnings per share were up 4% to $1.21. Total revenues were flat at $C1.19 billion, and the operating ratio rose to 74.3 % from 73.1% a year earlier.
"We delivered earnings growth in 2007 in a year that brought us many challenges," said Fred Green, president and CEO. "Most recently, in December, our operations were hit hard by harsh weather that affected the entire supply chain, including high winds that shut down port and terminal operators for several extended periods."
CP said it expects to grow total revenue by 4% to 6% in 2009 with operating expenses growing by 3% to 5%. CP expects to invest $C885 million to $C895 million in capital improvements in 2008, essentially the same as in 2007.
For NYAB, a milestoneNew York Air Brake today marked the manufacture and delivery of its 10,000th CCB (Computer Controlled Brake), a microcomputer-based system designed to provide full automatic and independent brake control for locomotives.
“CCB II’s network-based design permits faster response, and its self-diagnostic routines and modular LRU (line-replaceable unit) approach reduce maintenance costs,” said NYAB Senior Vice President of Marketing and Sales Marshall Beck. “We designed the CCB to provide best-in-class reliability and to meet the railroad industry's demand for increased locomotive availability. We are extraordinarily pleased to see that our customers worldwide have validated our efforts.”
UP installing 1,600 more locomotive camerasMore than 4,000 of Union Pacific's fleet of over 6,000 locomotives have been equipped with cab-mounted Track Image Recorders (TIRs) in the last two years, and UP has announced that this year it will equip another 1,600 units with the digital camera equipment. UP is able to digitally record a view of the track, crossings, and signals directly in front of the train as it travels over the rails. A small camera inside the cab looks down the track with the train crew's point of view. A microphone mounted outside records the train's air horn and bell. The video image disk can record up to five days of information.
"Installation of TIR eqipment is another step in Union Pacific's commitment to employee and public safety," said Bob Grimaila, vice president-safety and environment. "The equipment is a valuable tool in assisting with the investigations of pedestrian or grade-crossing accidents."
Greenbrier buys American Allied for $83 millionThe Greenbrier Companies has agreed to purchase substantially all of the assets of American Allied Railway Equipment Co. and its subsidiaries, including two wheel facilities and a parts reconditioning business, for $83 million in cash. The acquisition will be financed from Greenbrier's existing cash balances and credit facilities and is expected to be immediately accretive to Greenbrier's annual earnings. American Allied's final financial results for calendar 2007 are expected to be about $95 million in revenues and $15 million in EBITDA. With a workforce of around 130, the company supplies new and reconditioned wheelsets to freight car shops as well as to new freight car builders. Its wheel facilities are in Washington, Ill., and Macon, Ga. American Allied also operates a parts reconditioning business in Peoria, Ill., for yokes, couplers, side frames, and bolsters.
Auto Workers, CPR avert threatened strikeThe threat of a strike that could have started this week was lifted when Canadian Pacific and the Canadian Auto Workers Union (CAW), representing mechanical services workers, reached a tentative three-year contract agreement after four months of negotiations. While details were withheld pending a ratification vote, CPR Assistant Vice President-Labour Relations Rick Wilson said the pact "effectively addresses the company's productivity and fluidity goals." The union represents approximately 2,500 CPR employees.
Harsco wins new contract from IsraelIsrael Railways has awarded a new multi-year contract to Harsco Track Technologies (HTT), a division of Harsco Corp. of Harrisburg, Pa., for a coordinated rail grinding services program that includes the supply of operating personnel, equipment, and maintenance, similar to the services HTT provides railways in the U.S. and the U.K. The program is part of Israel's plan to transform its rail system into a modern, high-productivity system capable of handling double its current volume of passengers and freight by 2010. HTT said its initial assignment under the new program will begin in April following the arrival in Israel of modern rail grinding equipment designed to re-profile railhead contours for extended rail life and smoother travel, thus reducing fuel and operating costs and easing traffic flow.
Siemens Desiros accumulate 100 million miles in UKAs of Jan. 28 a fleet of 279 Siemens Desiro trains had racked up 100 million miles of service in the UK, traveling from Southampton on the south coast of England to Glasgow in Scotland with the following operators: London Midland, One, Heathrow Express, TransPennine Express, and South West Trains. A recent $336 million order from Porterbrook for an additional 37 four-car Desiro electric trains will bring the total fleet operating in the UK to more than 300. "Achieving 200 million miles of operation is another important landmark for the UK Desiro fleet," said Steve White, director of rolling stock service at Siemens. "These units have an excellent record for ontime delivery and are proving to be very popular with passengers and operators alike. They are safe, comfortable, and very reliable, thanks to the support of our dedicated service team."
Norfolk awards contract for 4.5 miles of light railSkanska USA Southeast Inc. has won a $40 million contract from Hampton Roads Transit to build 4.5 miles of Norfolk's planned 7.4 mile, $231.1 million light rail line. The contract covers the laying of track between Norfolk State University and the eastern end of the line at Newtown Road, including a bridge over Broad Creek. Work will start in early March along the former Norfolk Southern right-of-way that roughly parallels I-264, and will take about 18 months to complete. The contract came in at about $936,000 or 2.4% over budget, though earlier contracts for light rail vehicles and bridgework came in under estimates. A second contract is expected to be awarded next month for a costlier section of the line, 2.4l miles through downtown streets across Smith Creek to Eastern Virginia Medical Center. Seven more contracts will be awarded next year for stations, operations systems park-and-ride lots, a maintenance facility, and buses.
BNSF, Southern Company get ECP rollingThe Federal Railroad Administration announced Friday that BNSF has launched its first revenue service train fully equipped with state-of-the-art electronically controlled pneumatic (ECP) brakes. BNSF becomes the second Class I railroad to employ ECP, following Norfolk Southern, which began operating an ECP-equipped coal train in Pennsylvania last October.
The BNSF ECP-equipped train will operate on a 1,500-mile run between Wyoming's Powder River Basin coal fields and a power plant near Birmingham, Ala. BNSF installed the equipment, supplied by Wabtec Corp., on its locomotives, while Atlanta-based utility Southern Company outfitted its own coal cars with ECP brakes.The NS train utilizes equipment supplied by New York Air Brake. Both suppliers' systems are interoperable.
"We expect that these brakes can make rail operations safer and provide business benefits as well," FRA Administrator Joe Boardman said, noting that BNSF and NS received FRA waiver approval last year to install and begin demonstrating ECP brake technology.
ECP technology applies the brakes uniformly and instantaneously on every railcar in a train, contributing to better train control, shorter stopping distances, fuel savings, and a lower risk of derailments. It also provides continual electronic self-diagnostic tests that inform train crews when brake maintenance is required.
A two-week winning streak for rail trafficFor the second week in a row, U.S. railroad traffic in the week ended Jan. 19 was up over the corresponding period a year ago, at least partly due to the effect of winter storms on year-to-year comparisons. Carload freight was up 5.6% to 325,415 cars, intermodal traffic climbed 3% to 230,771 containers and trailers, and total volume rose 6.7% to 33.6 billion ton-miles. The biggest improvement was in the West, where carload traffic was up 10%.
Thirteen of 19 commodity groups registered gains from last year, led by farm products other than grain, up 91.7%; motor vehicles and equipment, 26.5%; grain, 15.3%; waste and scrap material, 14.2%; and crushed stone, gravel, and sand, 109.8. Coke loads were down 25.6%, lumber and wood products dropped 14.7%, and primary forest products declined 8.5%.
In Canada, carload traffic in the week ended Jan 19 rose 1.3%, and intermodal volume rose 13.0%. Kansas City Southern de Mexico reported carload traffic up 7.4% from last year, while intermodal volume rose 10.5.
New orders beef up TrinityRail backlogTrinityRail's freight car backlog increased in fourth-quarter 2007 to 31,870 cars from 31,300 in the prior quarter. Trinity Industries said its Rail Group received firm orders in the fourth quarter for 7,310 new cars and shipped 6,740 cars. The backlog of unfilled orders on Dec. 31 was the second highest year-end backlog in the company’s history and consisted of a mix of tank cars, covered hoppers, auto racks, box cars, and coal cars.
Japan re-pitches bullet trains to CaliforniaJapan began pitching its high speed rail technology to California more than a quarter of a century ago, and despite setbacks its "bullet train" promoters haven't stopped trying.
On Jan. 30, at the Disneyland Hotel in Anaheim, the Japan Overseas Rolling Stock Association and the Institution for Transport Policy Studies will sponsor a seminar to "provide vital information to public officials, policy makers, and the public about high speed trains and their beneficial impact on Japan." In addition to transportation benefits, greenhouse gas reduction and energy independence issues will be stressed.
California's first high speed rail legislation was enacted in 1982, but funding proved to be an insurmountable problem. Today, the California High Speed Rail Authority is working on a 700-mile high speed system for the state and while planning is far advanced, funding remains a distant prospect.
CN's EL&J acquisition generates concern for AmtrakIllinois municipalities are expressing concern that Canadian National's acquisition of the Elgin, Joliet & Eastern Railway could have a negative impact on existing Amtrak intercity passenger service. Some fear CN would close an existing route, the St. Charles Air Line, which links Chicago's Union Station to other Amtrak points. Such a move could add 90 minutes to Amtrak train schedules serving Illinois points.
At least six communities are "asking that Canadian National maintain the line until an alternate route of equal utility can be used by Amtrak. That way this would not seriously delay Amtrak trains," said Mattoon Chamber of Commerce member Dean Willaredt.
Chamber officials in Kankakee, Champaign-Urbana, Mattoon, Effingham, Centralia, and Carbondale want their concerns heard by the Surface Transportation Board.
Pricing and productivity boost UP profitsDespite disruptive winter weather and all-time-high fuel prices, Union Pacific was able to post record fourth-quarter 2007 earnings of $491 million or $1.86 per share, beating the Wall Street forecast of $1.76 and sending the price of its stock up 5%. Strong pricing and improved productivity through operational efficiency made the difference, said Chairman and CEO Jim Young. For the full year, net income increased 16% to $1.86 billion and return on invested capital grew to 8.7%. “Overall, we remain optimistic that our superior franchise will enable us to overcome economic weakness and post another record year in 2008,” said Young. UP’s operating ratio dropped to 79.4% from 79.6% in the 2007 quarter; for the full year, the operating ratio improved 2.2 points to 79.3% from 81.5% in 2006.
UTU, carriers reach agreementAfter a long and bitter standoff, the United Transportation Union (UTU) and the National Carriers’ Conference Committee (NCCC), which represents U.S. Class I carriers and several smaller railroads, yesterday reached a tentative agreement on wages, work rules, and working conditions. The agreement is retroactive to Jan. 1, 2005, and will continue in force through Dec. 31, 2009. It must now be ratified by about 46,000 UTU members—conductors, brakemen, engineers, firemen, hostlers, switchmen, and yardmasters. A new UTU bargaining team, headed by recently elected UTU International President Mike Futhey, reached the tentative agreement two days into resumption of talks.
The agreement provides for a 17% general wage increase over the life of the agreement, a retention of COLA (cost-of-living adjustment), and a cap on health care contributions. The wage increases also include retroactive payments covering the period June 1, 2005, to June 1, 2007. Additionally, it provides a mechanism for resolution of the entry-rates of pay dispute, an increase in the HAHT (held-away-from-home-terminal) meal allowance, and, for the first time, contributions by the carriers to the yardmasters’ supplemental retiree medical insurance program. UTU said more specifics of the agreement will not be released until after discussion with general chairpersons.
The UTU was the sole remaining union not to have reached agreement with the carriers.
FreightCar America explores market in IndiaFreightCar America announced that it has formed a joint venture with Titagarh Wagons Ltd. of Kolkata, India, with the goal of developing freight cars based on FreightCar America designs and assessing market prospects in the subcontinent.
"If the initial stage is successful and market conditions are favorable, then it is expected that the joint venture company will begin railcar production in India in 2009 using manufacturing methods that FreightCar America has developed," said the American carbuilder.
Record earnings fuel optimism at Norfolk SouthernDefying "economic headwinds," Norfolk Southern posted record fourth-quarter 2007 earnings of $399 million, or $1.02 a share, exceeding earnings a year earlier by 4% and easily topping the Wall Street per-share forecast of 91 cents. "While the economic picture remains uncertain, we are optimistic about our prospects for 2008 and beyond," said CEO Wick Moorman.
NS shares were up as much as 7% in morning trading following the earnings announcement late yesterday. Unexpectedly strong earnings throughout the industry led Bear Stearns to upgrade the rail sector from "market weight" to "overweight."
Norfolk Southern also set a fourth-quarter record of $4.5 billion in operating revenue, despite a 3% decline in traffic volume caused by flat merchandise traffic and lower intermodal and coal volumes. Railway operating income climbed 12% to $686 million for the quarter and the operating ratio improved by 1.5 percentage points to 72.0%.
The railroad also said it set three records for the year as operating revenue rose $25 million to $9.4 billion, rail operating income increased $28 million to $2.6 billion, and earnings per share rose 3% to $3.68. For the year, the operating ratio was down slightly to 72.6%.
NS, Virginia sign deal to upgrade 50-mile routeNorfolk Southern and the Virginia Department of Rail and Public Transportation have signed a $57 million agreement with to improve 50 miles of rail right-of-way between Manassas and Front Royal, Va., to increase freight rail capacity as one way to reduce truck traffic demand on Interstate 81. NS is contributing $17 million to the deal, while the state's share is $40 million.
The project is the first in Virginia for Norfolk Southern's I-81 Crescent Corridor, a roughly $2 billion initiative to improve rail corridors stretching from Louisiana to New Jersey.
NS as pledged to use the improved capacity to increase freight rail shipments to eliminate 597,000 truck trips from Virginia's highways during the next 15 years, the state said.
Besides additional track capacity, the project includes signal modernization. Completion is scheduled for late 2008. NS could begin construction in February, pending approval of environmental permits.
Asset sales, tax adjustments boost CN revenueA strong Canadian dollar relative to its U.S. counterpart negatively affected CN's fourth-quarter net income of C$833 million, which was nonetheless bolstered by a deferred income tax recovery of C$284 million and after tax gains of C$64 million, among other items. Year-ago net income, by contrast, was C$499 million.
For the full year, CN net income was C$2.16 billion, on revenue of C$7.90 billion, compared with 2006 net income of C$2.09 billion, on revenue of C$7.93 billion.
CN said its operating expense increased 2% due to increased fuel costs and equipment rents. CN's full-year operating ratio was 63.6%, compared with 61.8% in 2006.
"CN faced strong headwinds in 2007 but we turned in a solid performance for both the quarter and the year, said E. Hunter Harrison, CN president and chief executive officer, in a statement. "The major challenges were weak housing markets in the U.S., the continuing strength of the Canadian dollar that affected our U.S. dollar-denominated revenues, a strike in the first quarter, and a
number of weather-related issues, particularly in western Canada."
New Bombardier orders total $350 millionBombardier Transportation has announced two new orders in Europe totaling $350 million. Belgium's Brussels transport company and Bombardier signed an agreement for the delivery of 102 bi-directional FLEXITY Outlook trams, including a firm order for 87 vehicles worth $285 million. The contract is part of a five-year framework agreement. Bombardier received a S65 million contract from Angel Trains for 12 two-car DMU Class 172 "Green Train" units. They will be used by London Overground Rail Operations Limited on the London Overround network and on Chiltern Railways.
Shares rise as CSX earnings exceed estimatesCSX shares were up more than 6% in midday trading Tuesday following the company's announcement that fourth-quarter 2007 net income reached $365 million, compared with $347 million in the 2006 quarter. Excluding special items, earnings rose to 85 cents per share from 57 cents, easily exceeding the Wall Street consensus estimate of 64 cents. Higher freight rates and increased productivity helped offset soaring fuel prices and weaker traffic.
CSX announced its results as the stock market generally gained strength from the Federal Reserve Board's announcement this morning that it was cutting its interest rates by three-quarters of a percent. Railroad shares as a whole were up about one-half of 1% by midday.
"We still see growth in the economy this year," CSX Chairman, President, and CEO Michael Ward told Reuters. "It will be slower growth, but I don’t think we’ll see a recession."
In its earnings report, CSX said the company’s Surface Transportation businesses posted record fourth-quarter operating income of $609 million vs. $508 million in the 2006 period. Full-year revenue topped $10 billion and the operating ratio was the best in a decade, said CSX.
In a prepared statement, Ward commented: "Once again, CSX delivered outstanding financial gains for our shareholders through strong improvements in safety, service and productivity. These improvements reflect the value we are delivering for our customers, the continued momentum in our business, and the strong fundamentals of our industry in an evolving transportation marketplace."
French eastern high speed rail line exceeds expectationsEastern France had to wait while other portions of the nation benefited first from high speed rail service, but riders between Paris and Strasbourg have taken to the rails enthusiastically since service between the two cities began on June 10, 2007, Agence France-Press reported Tuesday.
The service, linking Paris' Gare de L'Est with Strasbourg, near the German border, by October had captured a 60% market share, coming at the expense of airline competition, according to French National Railways (SNCF).
Air France-KLM unit Air France had already cut back service between the cities last summer in anticipation of the competition. Air traffic between the cities fell 25%, the Strasbourg airport said.
SNCF's LGV Est Europeen continues east from Strasbourg to serve southern Germany and Switzerland, running at speeds up to 198 mph.
Hiawatha light rail ridership keeps gainingMinneapolis residents continue to support light rail transit, as evidenced by record ridership numbers being reported for Metro Transit's Hiawatha Line. Average weekday ridership in December was 30,859, following an average November ridership of 30,877. December's total of 843,426 riders was almost 50,000 more than projected ridership of 794,075 for the month. Average Saturday ridership in December was 22,483, while average Sunday ridership was 18,973. The Hiawatha Line began operating on June 26, 2004.
Bush Administration "editors" at workA pro-rail-transit section of the National Surface Transportation Policy and Revenue Study Commission’s “Transportation for Tomorrow” report was edited out by the Bush Administration, according to the National Corridors Initiative, a passenger rail lobbying organization.
The section of the report in question is “The Case for Public Transportation,” prepared by Paul Weyrich, chairman of the conservative Free Congress Foundation, a former Amtrak board member, and a staunch supporter of passenger rail. Weyrich has prepared several position papers on behalf of APTA supporting light rail and other modes, among them, “Does Transit Work? A Conservative Reappraisal.” NCI describes him as “a leader of the American conservative movement since the days of the Reagan Administration.”
“It is disappointing that after [the section I contributed] was passed by a nine to three vote that someone without ever asking me would see to it to do away with these important policy considerations,” Weyrich said to NCI. “It is the kind of gutter politics that make people hate their government, and Washington in general.”
Following are excerpts from the section omitted from the Commission report:
“It is the view of the Commission that public transportation, especially in the form of electric railways, must and will play a significantly larger role in Americans’ mobility. Federal transportation policy should not only accommodate but encourage this development.
“Many of the factors leading to an increased role for public transportation are widely recognized. They include increasing traffic congestion, especially in urban areas; the failure of many urban areas to meet Federally-mandated air quality standards; the difficulty of constructing new urban freeways in the face of land use, right-of-way cost, and environmental obstacles; the negative impact of automobiles and especially of limited-access highways on urban vitality, which contrasts strongly with the ability of electric railways generally and streetcar systems in particular to stimulate urban redevelopment; and the rising price of gasoline, which leads commuters away from the private automobile and towards increased use of public transportation.
“To these well-known factors pointing toward greater reliance on mass transit, a highly important new consideration must be added: national security. Americans’ dependence on automobiles fueled largely with imported oil is the Achilles’ heel of our current foreign and national security policy. Rising oil prices threaten the prosperity of our economy, with dependence on oil imported from unstable regions adding the risks of actual fuel cutoffs, limited foreign policy options, and wars over oil sources and supplies. In the face of the global war on terrorism, providing Americans with mobility that is not dependent on foreign oil may be second in importance only to securing our homeland against direct terrorist attack. Just as the Cold War brought about the National Defense Interstate Highway Act, so we think it probable that the future will require a National Defense Public Transportation Act. Current and near-future national transportation policy should take this likelihood fully into account.
“As we look toward increasing reliance on public transportation, we must recognize that all public transit is not alike. In particular, public policy must acknowledge that buses and rail transit are not fungible. In addition to the obvious advantage of electrification, rail transit, including streetcars, light rail, heavy rail, and commuter rail (which should in most cases be electrified once certain densities are reached) serve different markets and perform different functions from buses. Rail transit has repeatedly demonstrated its success in drawing riders from choice, people who have a car and could drive but choose to take transit instead, while buses generally carry only the transit-dependent, those who have no other way to get around. Most Americans like riding trains and streetcars but do not like riding buses. Rail transit, but not buses, has a demonstrated ability to spur development and, importantly, redevelopment in urban cores. Streetcar systems, which can be built inexpensively, have shown a particularly strong and positive impact on urban re-development.
“Federal policy should include a clear and unambiguous endorsement of a shift away from the private automobile to public transportation for travel in urban areas. It should be the objective of the Federal government to bring all aspects of transportation policy in line to support and encourage this shift, including provision of adequate resources. As federal policy is amended to reflect its support for public transportation as the preferred approach to urban mobility, with a strong focus on electric railways, many other specific policies will change with it. In the long term, it should be the objective of Federal transportation policy to provide every American the option of mobility without an automobile.”
Citizens group forms to boost Sunset LimitedThe Sunset Marketing and Revitalization Team (SMART) held its first organizational meeting over the weekend at Union Passenger Terminal, New Orleans, calling for restoration of a transcontinental Amtrak Sunset Limited and improved marketing for the train.
The group is similar to the 10-year-old Texas Eagle Marketing and performance Organization (TEMPO) that has worked to improve Amtrak's Texas Eagle, with Amtrak participation.
"SMART came together because people across the southern tier of the United States are puzzled and dismayed that Amtrak keeps postponing decisions on the future of the Sunset Limited," said Matthew Melzer, communications associate for the National Association of Railroad Passengers (NARP), one of the founding members of SMART.
The Sunset Limited operated between Los Angeles and Orlando, Fla., making it the only U.S. transcontinental passenger train, prior to being truncated at New Orleans following the damage caused by Hurricane Katrina. CSX has restored rail right-of-way east of New Orleans, "yet Amtrak has not restored the service, leaving entire communities stranded with no easy access to alternatives and at the mercy of $3 per gallon gas prices," said Melzer.
Annual ridership on the Sunset Limited grew 22.1% for the 2007 fiscal year; prior to Katrina, the New Orleans-Orlando segment accounted for 28% of route miles, but 39% of ridership and 41% of revenue, Melzer said.
Amtrak representatives were present at the SMART meeting, also attended by John Robert Smith, mayor of Meridian, Miss., and former Amtrak board chairman.
Alcoa contracts with RailComm for derailsRailComm, Inc., will provide a solar powered wireless remote control derail system for an Alcoa, Inc. plant switching railroad in Louisville, Ky. The system includes blue strobe lights to indicate derail status and is remotely controlled from a push button control panel. Upon activation, service tracks are safely and immediately protected by the remote control of the appropriate derail device with blue strobe light indication. The system includes over-the-derail protection circuitry that prevents derail operation while a train is in the protection zone.
Buffett buys still more BNSF stock Warren Buffett's Berkshire Hathaway Inc. has once more increased its stake in BNSF, now holding 18% of company, according to documents filed with the Securities and Exchange Commission Friday. Berkshire Hathaway Inc. bought 1,246,100 more shares on Wednesday, Thursday, and Friday, according to the documents.
Berkshire Hathaway now owns 63.7 million shares of stock in BNSF. The
latest filings say Berkshire paid between $76.55 and $77.83 for the BNSF shares. BNSF's shares rose 66 cents to $76.93 Friday.
All of Berkshire's BNSF stock is held by National Indemnity Co., one of Berkshire's insurance subsidiaries. Because the purchases have been made by Berkshire subsidiaries, it's not clear whether Buffett himself made the decision to buy. Berkshire officials do not typically comment on the company's stock holdings.
Last year Berkshire also invested in Norfolk Southern Corp. and Union Pacific Corp., but reduced its holdings in the two railroads in the second half of 2007.
More data sought by Canada for CN grain caseThe Canadian Transportation Agency Friday ruled Canadian National failed to provide adequate service to grain shippers in 2007, but also noted it needs more data before ruling whether recent changes went far enough.
The ruling came after five small grain companies and the Canadian Wheat Board complained a program that CN used last year for ordering rail cars gave large grain companies an unfair advantage in securing access to export ports.
"Overall, while CN has made positive changes to its tariffs, there is evidence that there are continuing service shortfalls," the agency said. It ordered CN and shippers to provide information for the August 2007-April 2008 period, which it will use to make a final ruling.
CN said the action was a "reiteration" of a ruling the
agency made in July 2007, and the company already has made the changes requested last year. The changes are designed to make it easier for shippers to order rail cars in smaller groups. A spokesman said CN would cooperate in supplying additional data.
FMCSA asked to OK pilot 'roadability' data projectSix organizations have asked the Federal Motor Carrier Safety Administration (FMCSA) to approve a pilot program that would facilitate and expedite the implementation of the final "roadability" rules upon their release by the agency, according to the Intermodal Association of North America (IANA).
Formally known as the Global Intermodal Equipment Registry (GIER), the pilot would establish a database to collect and disseminate information that correlates an Intermodal Equipment Provider (IEP) with the chassis for which it has inspection and maintenance responsibilities.
The database would be available on a real-time basis to FMCSA as well as state and local law enforcement personnel, and would utilize the existing alphanumeric identification numbers on the chassis in lieu of a new Department of Transportation number, IANA says. IANA itself will develop, manage and maintain the GIER.
Joining IANA in the request were the Association of American Railroads, the Commercial Vehicle Safety Alliance (CVSA), the Intermodal Motor Carriers Conference of the American Trucking Associations, the Ocean Carrier Equipment Management Association, and the Institute of International Container Lessors.
FMCSA’s “roadability” rules were mandated by Congress in SAFETEA-LU. The pilot application is designed to prove the efficacy of the GIER concept as a viable alternative for the identification of intermodal equipment and the parties that share responsibility for that equipment. FMCSA specifically requested industry input to optimize identification of intermodal chassis, and the GIER represents a direct response to that request, IANA said.
FMCSA plans to publish the final rules in July of this year. The timetable for the development and launching of the GIER will be driven by the release of these rules, IANA noted.
Angry Illinois legislators approve CTA fundsIllinois lawmakers Thursday narrowly approved a transit funding plan for the Chicago Transit Authority that avoids massive service cutbacks and, per request of the governor, allows senior citizens to ride buses and trains for free on the weekend.
Democratic legislators in both the state House and state Senate accused Gov. Rod R. Blagojevich of breaking a pledge to not increase state sales taxes and forcing the legislature to accept the senior discount plan.
The plan approves a a quarter-percentage-point sales tax hike in Cook County and surrounding counties, and an increased tax on Chicago real estate transactions. Had the plan been rejected, CTA and Pace route cuts and fare increases would have been implemented Jan. 20, along with thousands of layoffs.
Blagojevich defended his actions, saying, "I know some of them are angry at me, but they really ought to take a deep breath and stop and look in the mirror and frankly realize what we've gotten done here: Transit systems are solvent."
Amtrak strike is avertedAmtrak and nine of its unions have reached a tentative contract agreement, announcing the settlement today. The pending agreement negates the need by various commuter rail authorities nationwide to implement contingency plans for their own operations.
An Amtrak statement said details of the tentative pact will be sent to the affected union members for ratification during the next several weeks; the details will be withheld from public release until the ratification process has begun. Other sources have said the settlement will be based on the findings of the three-member Presidential Emergency Board, issued late last year.
In the statement, Amtrak President and CEO Alex Kummant said, "Investing in the railroad comes in many forms, and one of the best ways is to invest in its people, which we’ve done with this tentative agreement. I want to thank the leadership of the labor organizations. It has not been easy for any of us, and I know they share our sense of relief and resolve to move forward in a productive and cooperative spirit to provide excellent passenger rail service. The Amtrak Board of Directors, management and labor are now united in that single purpose. By reaching these tentative agreements, we have averted a possible strike that could have had a crippling effect on the lives of millions of Americans."
About 58% of Amtrak's work force, or 18,650 employees, have worked without a contract agreement for approximately eight years. Amtrak and the unions followed steps laid out by railroad labor law, for negotiations, mediation and fact-finding, and the unions would have been free to strike on Jan. 30.
Amtrak spokesman Cliff Black said the nine unions reaching tentative accord with Amtrak include: the Brotherhood of Maintenance of Way Employes; International Brotherhood of Electrical Workers; International Association of Machinists & Aerospace Workers; Brotherhood of Railroad Signalmen; Joint Council of Carmen, Helpers, Coach Cleaners and Apprentices; American Train Dispatchers Association; and National Conference of Firemen & Oilers/Service Employees International Union; and two bargaining units of the American Railway & Airline Supervisors Association--Maintenance of Equipment, and Maintenance of Way.
STB issues cost of capital methodology decisionThe Surface Transportation Board today issued a final decision to change the way it calculates the railroad industry’s cost of capital and its revenue adequacy. STB will replace the single-stage Discounted Cash Flow (DCF) methodology it has relied upon since 1981—the year after the Staggers Rail Act partially deregulating the industry was passed—with a Capital Asset Pricing Model (CAPM).
The decision has been issued as STB Ex Parte No. 664. In an accompanying decision, Ex Parte No. 558, STB has instructed the Class I railroads to submit the “information, calculations, and supporting workpapers” needed to estimate the cost of equity under CAPM, for 2006. “Given the limited nature of the information requested, and that the carriers have submitted testimony indicating their experts have already performed this analysis, we believe a tight procedural schedule is warranted,” STB said. Class I statements are due on Feb. 1, 2008. Reply statements of other parties are due Feb. 15. Rebuttal statements by the railroads are due Feb. 29.
“For over a year, we have been thoroughly reviewing our regulatory processes for determining the railroad industry’s cost of capital,” STB said. “That figure, which we calculate each year, is an essential component of our core regulatory responsibilities. The cost of capital is needed to determine the revenue adequacy of the individual railroads, to resolve rate and trackage right disputes, and to review feeder line and merger applications. In 2006, our cost of capital calculation came under sharp challenge by a group of interested shippers. . . . The record reveals that the time has come to replace the DCF model we have used since 1981 . . . [with] . . . more current and precise techniques, such as CAPM or multi-stage DCF models.”
STB noted that the single-stage DCF model “estimates a high cost of equity” and that the railroads “have been opposed to a change. . . given the benefits to [them] from the current high cost-of-equity estimate produced by our existing approach.” The railroads, STB added, would have preferred a multi-stage DCF model, an approach STB has rejected but may institute later on. “While we may, in the future, explore those arguments advanced by the railroads, additional delay in determining the cost of capital for 2006 would constrain the agency from addressing several important matters before us that require that figure,” STB said. “Moreover, further delay in issuing our 2006 cost-of-capital determination would cause a corresponding delay in our annual revenue adequacy determination for 2006, which in turn would prevent the agency from issuing the benchmarks needed for parties with smaller rate disputes to litigate those claims under our simplified procedures. We will not permit a significant portion of the work of the agency to grind to a halt. Further delay is unnecessary because, as this extensive record has made clear, CAPM provides an acceptable and widely used method to estimate the cost of equity. . . . CAPM produces an estimate that best reflects the state of relevant capital markets and is a better indicator of changes in financial markets. The weight of evidence in this proceeding, including the submissions from these agencies, has persuaded us that CAPM satisfies our need for a simple, transparent, current, and more precise replacement for the single stage DCF model.”
STB said it will initiate a separate proceeding aimed at gathering additional information on the cost-of-capital-estimating methodology for possible use by the agency in the future. “In particular, this new proceeding will be focused on detailed multi-stage DCF proposals that could be used in conjunction with CAPM in the future,” STB said. “If a suitable model is presented and a record developed demonstrating that using a combination of the two approaches can reduce the potential for volatility and improve the precision of our cost-of-equity estimate, we will consider further modifying our approach. If parties do not provide the necessary record to support such a decision, we will discontinue that proceeding and rely solely on CAPM.”
Traffic rises during New Year's second weekFreight traffic on U.S. railroads rose for the week ended Jan. 12 compared with the corresponding week in 2007, the Association of American Railroads reported Thursday. Carload freight rose 3.2% over last year's level, led by a 5.7% rise in the West. Intermodal volume advanced 0.3%, with container volume up 0.1% and trailer volume up 0.8%.
Total volume, at 34.0 billion ton-miles, was up 4.0% compared with the second week of 2007. Commodities leading the advance included metallic ores, up 56.)%, petroleum products, up 16.5%, and grain, up 10.8%. Declining volumes were seen in coke, down 43.7%, lumber and wood products, off 25.7%, and primary forest products, down 10.8%.
Canadian railroads reported carload traffic up 10.1% for the week ended Jan. 12, compared with year-ago levels for the comparable period. Intermodal volume for the week was up 15.8% over 2007 levels.
Carload traffic on Kansas City Southern de Mexico fell 4.3% during the week ended Jan. 12, compared with year-ago levels. KCSM intermodal volume was up 16.6% for the same week compared with the comparable 2007 week.
Cumulative volume during the first two weeks of 2008 for U.S. railroads was up 0.2% from 2007. Canadian railroads reported a cumulative volume increase of 1.3%, but KCSM reported a decline of 3.2%, during the first two weeks of 2008 compared with a year ago.
USW ratifies CN contractThe approximately 3,000 CN track maintenance employees in Canada represented by the United Steelworkers (USW) have a new four-year agreement effective Jan. 1, 2008. The agreement, which provides enhancements in wages and benefits to reflect work-rule flexibilities negotiated by both parties, was ratified earlier today.
Railway Age Shortline/Regional Railroad of the YearRailway Age is now accepting entries for its annual Short Line/Regional Railroad of the Year competition. Short lines and regionals—and there are more than 500 of them—are invited to submit entries describing outstanding achievement in one or a combination of areas.
"Short line and regional railroads adapt quickly, and we seek to recognize the attributes the best excel at," says Managing Editor Douglas John Bowen. "As in past years, such attributes include, but are not limited to: turnaround situations; consistent excellence; innovation in operations or maintenance; marketing; customer service; enhanced productivity; community relations; safety improvement; and ingenuity in dealing with the unexpected."
Small roads in Mexico, the U.S., and Canada are eligible for an award (and railroads can even nominate themselves). Our 2008 winners will be awarded specially designed plaques at the American Short Line and Regional Railroad Association Annual Convention in San Antonio, Texas, May 4-6. Articles describing their achievements will appear in Railway Age's April 2008 issue, which will be distributed at the show. We’ll work with the winners to publicize the awards in online and national media.
"Award winners have ranged from large regionals to small short lines," says Bowen, "and we’ve recognized and honored carriers ranging from 20 miles to nearly 2,000 miles. In some years, separate awards have been given for regional and short line carriers."
Submit any entries to: Douglas John Bowen, Managing Editor, Railway Age, 345 Hudson Street, 12th Floor, New York, N.Y., 100l4. E-mail: dbowen@sbpub.com. Fax: (212) 633-1863. Entries should contain the name, position, and contact information of the nominator and an approximately 500-word description of the achievement(s) of the nominated railroad. (Longer and short descriptions are admissible; 500 words is only a guideline.) Entry forms are not essential, but may be obtained from Bowen by fax or e-mail. The entry deadline is Monday, Feb. 25, 2008, so please don't delay.
FTA balks at cost of Dulles Airport rail linkFederal Transit Administration officials reportedly are not convinced that a rail link with Dulles International Airport passes muster. FTA is concerned about the project's cost, ironically noting the fallout of Boston's Big Dig highway project as an example.
The FTA skepticism over the proposed 23.5-mile extension comes despite findings from consultants that the proposal meets requirements for full funding, according to sources cited by the Washington Post. The project would give Metrorail service, provided by the Washington Metropolitan Area Transit Authority (WMATA), access to a second area airport; WMATA already serves Reagan National Airport in Arlington County, Va.
Virginia state and local officials, as well as other project advocates, say they are ready to meet any requests by the federal government. Officials last September slashed $300 million from the project's budget. Virginia has requested $900 million in federal funds to advance the link.
The extension's initial phase would extend from the East Falls Church Metro station on the Orange Line in Arlington County, Va., to Wiehle Avenue in Reston, with completion in 2012. A second phase, targeted for a 2015 completion date, would extend the line beyond the airport into Loudoun County. The total for both phases is estimated to be above $5 billion.
American Motive Power acquired by MISCOR GroupMISCOR Group, Ltd., of South Bend, Ind., a provider of industrial services, has acquired Dansville, N.Y.-based American Motive Power, Inc. (AMP), which will become part of MISCOR’s RRM (Repair, Remanufacturing and Manufacturing) division. MISCOR said the acquisition expands its capabilities in locomotives and diesel engine repair and remanufacturing, in particular, reconditioning, remanufacturing, and manufacturing of power assemblies for EMD 710, 645 and 547 diesel engines. MISCOR subsidiaries Magnetech Industrial Services and HK Engine Components are currently AMP’s largest suppliers.
Pierre Desrosiers will become vice president-operations of AMP. He previously served as director of Alstom Transport Canada’s Locomotive Division. Joseph Fearon will become vice president-business development and engineering. He founded Morrison Knudsen Corp.-Rail Systems Group, and served as its president. Gary Walsh will become vice president-sales and marketing. His background is in locomotive sales and marketing management with General Electric and Alstom. MISCOR Executive Vice President and COO Richard Tamborski will become President of AMP.
Wells Fargo provided a $15 million financing package that will be used for the acquisition and working capital requirements.
MISCOR Group provides electrical and mechanical services to industrial, commercial, and institutional customers through two divisions: RRM, which provides maintenance and repair services for industrial motors, generators, and lifting magnets, and diesel engine component manufacturing, remanufacturing, and repair services; and CES (Construction and Engineering Services), which provides a wide range of electrical and mechanical contracting services and engineering and repair services for electrical power distribution systems.
MTA panel makes workforce development recommendationsA workforce development program devised by a blue ribbon panel for the New York Metropolitan Transportation Authority's 68,000 employees was released Wednesday. It proposes five programs--embodying 61 specific recommendations--for forging “a stronger, more respectful partnership between management and labor.”
A key recommendation would create "a formal monitoring program within each agency, establishing an MTA-wide leadership and development academy, and creating individualized development plans for each employee that could be monitored and tracked.”
A related program on succession planning would “create a process to develop candidates for senior-level positions” in light of the looming retirement of baby-boomer generation managers. This program includes “working collaboratively with management to explore the development of apprenticeship programs; and, among management staff, teaming up veteran employees with less experienced ones.”
Both union and management leaders embraced the panel's recommendations. “This is an opportunity for the first time in many years to turn the corner and improve labor-management relations at the MTA, and TWU Local 100 fully supports the initiative,” said Local 100 President Roger Toussaint.
“We will begin work immediately on an implementation plan,” pledged MTA Executive Director and CEO Eliot G. Sander, who formed the eight-member panel last May. “I believe when put in place these recommendations will have a truly transformative effect on this organization and its talented workforce.”
The panel interviewed employees throughout the MTA, along with union representatives, and added data analyses, field visits, and other research into leading industry practices in forming its recommendation. The eight-member panel was co-chaired by Richard Ravitch, former MTA chairman, and Hezekiah Brown, mediator and arbitrator, who presented the findings Wednesday.
The Western Hemisphere's first high speed rail systemThe government of Argentina has awarded a contract worth more than $1.48 billion to a consortium led by Alstom Transport to build a high speed rail system, the French Finance Ministry announced today.
The 435-mile line will be the first dedicated high speed system in the Western Hemisphere. It will link the cities of Buenos Aires, Rosario, and Cordoba and use TGV technology. The Alstom-led Veloxia consortium was the sole bidder on the project.
The system, which will operate at speeds from 160 to 186 mph, will be built in two phases and involve upgrading and electrifying existing rights-of-way. Phase 1 covers the double-track Buenos Aires-Rosario line. Phase 2 covers the single-track Rosario-Cordoba line.
Meanwhile, the Argentine government has reportedly approved a $124 million plan to purchase Chinese-built passenger trains for Buenos Aires commuter services. The government will procure 24 multiple units and 160 locomotive-hauled coaches through Shanghai Golden Source International Economic and Trade Company, although the manufacturer of the vehicles has not been named. The first trains could be delivered as early as the end of this year.
AAR "pleased" with "Transport for Tomorrow" recommendationsThe Association of American Railroads late Tuesday released a statement supportive of "Transportation for Tomorrow," a report released earlier in the day by the National Surface Transportation Policy and Revenue Study Commission.
AAR President and CEO Ed Hamberger said: "The nation's freight railroads are pleased that this comprehensive, two-year study by the commission very clearly sets out the need for a robust freight rail industry, and recognizes the opportunity for freight railroads to play a major role in alleviating traffic congestion, increasing highway safety, reducing pollution and saving energy.
"The report also recognizes the dramatic need for investment in our nation’s transportation infrastructure. The report echoes concerns from business leaders around the country, who warn that the anticipated increase in freight traffic could overwhelm our nation’s transportation infrastructure and threaten the competitiveness of our nation and the mobility of our citizens.
"Privately-owned railroad companies currently invest 18 percent of their revenue for infrastructure and equipment, more than any other industry and five times the average for all manufacturing. If freight railroads are to grow and continue to take freight off the highways, it is important that federal policies do not interfere with the present level of private investment, and in fact encourages even greater levels of infrastructure investment," Hamberger concluded.
Analyst: Commission's tax credit recommendation spurs rail stocksStock prices for most Class I railroads rose in trading Wednesday, one day after the National Surface Transportation Policy and Revenue Study Commission released its "Transportation for Tomorrow" study. Stifel Nicolaus analyst John G. Larkin credited the study recommendation of tax credits to expand freight rail capacity for the boost.
Larkin said that while the recommendations of the commission's majority (nine members) did not recommend a precise amount for the credit, it appeared to support one to make gradual infrastructure improvements.
The analyst, however, expressed doubt that the commission's recommendations will be implemented. Others, similarly doubtful, have noted the commission's chair, Secretary of Transportation Mary Peters, was not present at the press conference Tuesday unveiling the report, instead filing a minority report with two other dissenting members.
New labor contracts could prompt Amtrak budget shortfallAmtrak, threatened with a potential strike Jan. 30, could face a funding shortfall approaching $150 million if it reaches contract agreements amenable to its unions, The Wall Street Journal reported Wednesday.
Amtrak spokesman Cliff Black says the passenger railroad hopes to avoid a strike and is considering various options to fund a settlement, including possible cost cuts and additional funding from Congress. Talks between Amtrak and the unions are ongoing.
A panel appointed by President Bush last month recommended that Amtrak raise wages about 35% and provide full retroactive back pay to 2000 for about 10,000 Amtrak employees. Amtrak has said it can afford to pay the wage increases, which total about $166 million a year. But it can afford to pay only about $100 million of the back pay stretching back eight years, or 40% of $252 million.
Amtrak said the proposed settlement would generate a shortfall of $150 million in its fiscal year 2009 budget that begins Oct. 1.
Morgan Stanley: Railroads a "solid defensive play"At their current prices, especially with recent sell-off activity in a bear market, railroad stocks are still attractive and "the solid defensive play in transportation," say Morgan Stanley analysts William J. Greene and Adam Longson in a report issued today. "Cautious 2008 guidance on upcoming earnings calls may offer a nice entry point for investors worried they are late to the story. Railroads offer growth outside the normal Gross Domestic Product cycle through pricing power, growing share buybacks, and improving productivity."
Though a mild recession is predicted for the first half of this year, Greene and Longson expect railroads to post 10% to 25% earnings per share this year, and rising returns and free cash flow, even in a U.S. recession. Why? "Railroad pricing is solid, a key pillar to earnings growth," they say. "2007 was a freight recession, so 2008 volumes should hold up better. Rail management is adding debt and buying back shares to boost returns."
Long term, "improving returns and expectations of a 2009 economic recovery hint at possible multiple expansion," Greene and Longson say. "Assuming more normal U.S. GDP growth in 2009, we see 15% to 40% upside by year-end 2008 in our base case. Increased volatility over macro concerns offers potential buying opportunities, in our view."
Greene and Longson's top pick for a slower growth scenario is Union Pacific, with its "diversified portfolio and substantial EPS growth from legacy contract repricing and improving operations." They also favor CN "as low-risk way to play the group," and are swapping CN (overweight) for Norfolk Southern (now equal weight). "Both look cheap, but we see few near-term [growth] catalysts for NS, while CN can potentially post better volume growth in 2008 than any other railroad."
"With today's economic uncertainty, we expect railroads to be conservative with their 2008 guidance," the analysts conclude. "We don't see any catalyst prior to fourth-quarter earnings. Rail traffic will be monitored closely in 2008 for any indication of macro trends, and holidays and weather will continue to obscure underlying traffic trends for the next few weeks."
Spending, cost savings touted for "Transportation for Tomorrow"More spending, combined with expedited scheduling for cost savings, emerged as the tandem theme recommended by "Transportation for Tomorrow," the report by the National Surface Transportation Policy and Revenue Study Commission, announced in Washington Tuesday. The nine majority members of the 12-member panel stressed that investment was a requirement, since the current U.S. transportation network, once holding excess capacity, is now "bursting at the seams."
Three members of the 12-member panel, including U.S. Secretary of Transportation Mary Peters, who chaired the group, did not attend the press conference, instead issuing a minority report that among other items rejected the idea of increased motor fuels taxation and an increased federal role in national transportation.
But Vice Chair Jack Schenendorf, of counsel, Covington and Burling, LLP, countered at the press conference, "The federal government needs to be a full partner. The job is too big for the state and local governments, and the private sector, to do by themselves." The job's size, the panel said, was $225 billion to $340 billion per year for infrastructure repair and expansion, and "we currently are spending less than 40% of that," Schenendorf said. "We have to increase our investment and close this gap."
Schenendorf listed the panel's implementation strategy, which includes 10 new programs, modally neutral, that "are genuinely focused on programs that are in the national interest," addressing repair, congestion, freight capacity, safety, and environmental issues, and also including intercity passenger rail for 13-to-15 "world-class, high speed rail" corridors.
Complementing spending was a recommendation for "significant project delivery reform ... we can't afford to have projects sticking around for 10, 12, 14 years in the planning phase" and the costs involved with such delay, Schenendorf said. Tom Skancke, CEO, The Skancke Co., added that by "shaving the time off the delivery process" of a project, the cost savings also would be economically sound and "more environmentally responsible."
The panel recommended removing restrictions on various options state and local governments might consider, including congestion pricing for Interstate highways and/or a vehicle-miles-traveled tax, for long-term options. In the short run, the majority recommended methodical increases in the motor fuels tax each year for five years amounting to an increase of 25-to-40 cents per gallon. "We think we shouldn't rely on just the motor fuels tax," Schenendorf cautioned.
Two panel members stressed passenger rail needs and potential. Wisconsin DOT Secretary Frank Busalacchi cited increasing demand for Amtrak intercity service during the commission's two years of existence. "The landscape has changed dramatically," he said. "We need to move to mass transit in this country. It will not be a quick fix [but] more and more people in this country want intercity passenger rail; they want more mass transit. It's not just about roads," and all surface transport modes should be treated and funded in similar fashion.
Paul Weyrich, chairman and CEO of the Free Congress Foundation, added that the nation "will increasingly be dependent on electrified rail. That is not fungible, as this administration claims it is. In other words, we can't talk about light rail and Bus Rapid Transit as equal; they're not."
Schenendorf noted both freight and passenger rail required room for growth in a complementary fashion; "we can't have them competing" for scarce track space, he said, in response to a question.
Schenendorf said the price tag for each American was 41-to-66 cents per day, "less than a candy bar."
Asked if Congress was likely to accept the panel's recommendations, he noted, "Congress formed the commission, and the commission is willing to walk through [its recommendations]." Asked if the American public, which has rejected gas tax hikes in the past, would accept one now, he replied, We believe it can be raised if you go to the people with a clear mission of what it will be used for." President Dwight Eisenhower "quadrupled" the gas tax to pay for construction of the Interstate highway system, he said, adding that today's transport funding programs lack a focus. "The money goes out in various categories, but there's no real sense of mission," he observed.
Economic reality will force some of the change and provide urgency as well, said Frank McArdle, senior advisor of the General Contractors Association of New York. "Right now, our transportation system is 97% dependent on petroleum; [transportation uses] two-thirds of all the petroleum used in the United States, 16% of the world's oil production. That's what we do now and it is simply not sustainable." The panel recommended money and incentives for alternative fuels research, including incentives "to encourage fleet turnover" to best adapt to expanding options.
CSX employs Railcomm remote control derailsCSX's Willard Car Shop in Willard, Ohio, now utilizes a wireless remote control derail system from RailComm Inc. The system includes blue strobe lights to indicate derail status and is controlled from a centrally located push button control panel.
Upon activation, service tracks are immediately protected by the remote control of the appropriate derail device with blue strobe light indication. The system includes over-the-derail protection circuitry that prevents derail operation while a train is in the protection zone.
RailComm's DOC® (Domain Operations Controller) software logs the name and trade of each craft controlling the derail, along with the date and time of derail control activity. Railcomm says the information can be used in FRA reporting and eliminates the need for a manual logging process.
Closing grain-rate study, STB remains open to changeIn a decision announced Jan. 14, the Surface Transportation Board announced that it had discontinued its grain-rate proceeding, having (1) acted to make it cheaper and faster for grain shippers to challenge the rates of railroads where competition is lacking, and (2) put in motion an independent study on "the current state of competition in the freight railroad industry of the United States."
The freight competition study is being conducted by Christiansen Associates and is to be completed in the fall of 2008. The STB says "it could lead to changes in our regulatory approach if appropriate."
Meanwhile, shippers have access to two new procedures in rate disputes. One is the "three-benchmark" approach under which shippers may obtain an award up to $1 million with an expedited procedural schedule calling for a decision within eight months of filing a complaint. Under the "simplified Stand-Alone cost" process, shippers can obtain an award of up to $5 million within 17 months of filing a complaint.
STB noted that its its grain-rate proceeding was triggered by a General Accountability Office (GAO) finding that "grain rates have diverged from the industry trend toward lower rates and that the amount of grain rates with relatively high R/VC [rate/variable cost] ratios has increased markedly--particularly troublesome, because it is the producer, not the ultimate consumer that bears the cost, at least initially."
"It is clear that a highly competitive global marketplace controls the price paid for U.S. grown grain," said the board. "The cost to transport grain to market is borne in large part by the producer and reduces the amount he actually receives for his grain at the elevator."
Minnesota bond issue could aid Central Corridor LRTMinnesota Gov. Tim Pawlenty has proposed that roughly $400 million of a proposed $1 billion bond issue be directed toward transportation needs. About $70 million would be directed toward the proposed St. Paul Central Corridor light rail project.
The governor noted he was approving only half the $140 million the state plans to spend on the project, whose overall cost currently is pegged at $990 million, as a signal to squabbling developers along the route to "get their act together." Disputes have yet to be settled over the exact routing and station locations of the 11-mile line, as well as whether portions of the LRT route should remain at grade or go underground. Construction is set to commence in 2010.
Up to 600 deteriorating local road bridges across the state also would be replaced under the proposal, in response to the recent bridge collapse on I-35 West in Minneapolis.
The proposal requires state legislative approval.
Union says CP repair shop workers ready to strikeThe Canadian Auto Workers union said workers at Canadian Pacific repair shops have given it a mandate to strike if no settlement is reached by Jan. 29. The union represents about 2,500 skilled trade CP workers. The union said it still seeks a negotiated settlement and noted workers would remain on the job until the deadline. Issues include work rule changes sought by CP to increase productivity.
Virginia authority OKs streetcar fundingThe Northern Virginia Transportation Authority has approved almost $40 million in funding for a proposed Columbia Pike Streetcar project, linking Pentagon City and Skyline, Va., along the Columbia Pike.
The 4.7 mile project, estimated to cost $120 million, is being advanced by the authority in conjunction with Arlington and Fairfax counties, located just south of Washington, D.C.
"I think the streetcars will bring forward a lot of the development that we want to have happen in the area," said Arlington County Board Member Chris Zimmerman. "It matches what we're trying to create, which is a walkable main street."
Current bus service along the route handles approximately 15,000 riders per day. Arlington County transportation officials estimate that a streetcar system could increase ridership by 25% to 50%, Zimmerman said.
Buffett buys more BNSF stockWarren Buffett's Berkshire Hathaway has purchased an additional 29,600 shares of BNSF Railway common stock, bringing its stake in BNSF to 17.2%. A filing with the Securities and Exchange Commission said Berkshire paid $76.55 per share on Monday, Jan. 7. BNSF shares closed at $80.06 on Thursday, Jan. 10.
As always, Berkshire declined to comment on its most recent purchase, but Buffet has said in the past that his investgment philosophy is to buy into companies with intrinsic value and growth potential.
Intermodal traffic takes double-digit dipRail intermodal traffic in the U.S. got off to a weak start in this year's first week, with combined container/trailer loads down 13.1% from the corresponding week last year. Carload traffic fared a little better, with loads down 3.5% nationwide.
Weather was a factor, as well as a weakening economy; carloads were actually up 15.1% in the West, where coal traffic has remained strong, but down 15.% in the East, where the Association of American railroads said severe winter storms affected loadings.
In Canada, intermodal traffic was up in this year's first week though carload traffic was off by 7.3%. Kansas City Southern de Mexico reported intermodal volume was up 0.1% and carload traffic down 1.9%.
eyes tram-trains for airport accessMontreal's Agence Metropolitain de Transport (AMT), along with other agencies, is investigating the use of providing rail service to Trudeau International Airport using "tram-trains," capable of operation as a streetcar and on traditional rail right-of-way.
The tram-trains would connect downtown Montreal with the airport and West Island, sharing track with existing AMT commuter rail service for part of the route. The proposed airport link is one of several tram-train operations the agency is considering, with numerous feasibility studies expected to commence beginning later this year.
WMATA proposes $1.75 billion FY 2009 budgetA Fiscal Year 2009 proposed budget of $1.75 billion for the Washington Metropolitan Area Transit Authority is now in the hands of the agency’s board of directors. The proposal comes a few days after WMATA raised fares to help cover a projected $142 million gap for FY 2009, which begins in July. The operating portion of the budget is $1.3 billion, $167 million more than in last year’s plan.
The budget proposed by General Manager John Catoe includes $19 million in service improvements spread across rail, bus, and the MetroAccess paratransit service. It sets aside money to provide additional six-and eight-car trains, improve bus ontime performance, and rehabilitate escalators. It funds improvements for safety and MetroAccess, including adding up to 100 vehicles and door-to-door service. The agency says it has hired a new safety chief “and is focused on cutting accidents in half within five years.”
Catoe, defending the budget, cited higher operating costs, including fuel, electric traction power, supplies, and labor, partly attributed to providing additional services demanded by customers. WMATA analysts have projected that ridership will grow by 2.5% for rail, 1% for bus, and 16% for MetroAccess. Though increased fares and ridership are expected to generate $789 million in revenue, a $134 million increase over last year, local governments served by WMATA are being asked to contribute an additional 6.5%, or $33 million, to close the budget gap. Officials said they “have avoided passing on an additional $63 million in costs due to layoffs and other internal cuts and new initiatives to raise additional revenue.”
WMATA’s capital improvement budget is about $445 million, with most of the money going toward purchasing trains and buses, overhauling escalators, and making improvements to bus and rail facilities. All of the agency’s 184 6000 Series railcars and 203 new buses are expected to be in service by June 2009; 7000 Series railcars are in design.
The WMATA board is expected to approve a FY 2009 budget in June.
For NREC, another successful GenSet trialPlastics and chemicals producer NOVA Chemicals of Joffre, Alberta (Canada), has just completed operational testing of a National Railway Equipment Co. N-ViroMotive GenSet locomotive, and the results are excellent, consistent with GenSet performance in numerous other applications.
The locomotive, a three-engine, 2,100-hp 3GS-21B four-axle unit, delivered “surprising performance with its remarkable fuel savings, ultra-low emissions, low noise, and outstanding tractive effort,” said Fred Owens, rail-maintenance coordinator, Nova Chemicals.
“We continually receive feedback from customers about the low emissions and fuel efficiency of these fuel-efficient road switcher locomotives,” said NREC Vice President-Marketing and Sales Jim Wurtz. “Already proven in service, these efficient GenSet locomotives are over five years ahead of future anticipated EPA emissions regulations for new switching locomotives.” Wurtz cited “an 80%-plus reduction in nitrous oxide (NOx) and particulate matter (PM) emissions, 50% to 65%-plus improved tractive effort and adhesion efficiency, over 50% fuel savings capability in switching and road switching service, and NREC’s N-Force microprocessor-based electronic controls and modularized mechanical platforms, which decrease maintenance requirements by 35% or more.” The 3GS-21B is EPA certified and CARB (California Air Resources Board)-recognized as an ultra-low emitting locomotive.
NOVA Chemicals is the largest ethylene and polyethylene complex in the world and also has one of the largest industrial rail yards in Canada.
Wabtec expects a strong 2007 and 2008Wabtec Corp., which had earlier provided guidance for 2007 of 22-24% revenue growth and earnings per diluted share of about $2.20, has affirmed those figures and also said it expects a strong 2008. The company issued 2008 earnings guidance of about $2.50 per diluted share, based on a revenue growth percentage in the mid-single-digits. Wabtec expects to report 2007 results in late February.
“As expected, we will finish 2007 with a strong performance,” said Wabtec President and CEO Albert J. Neupaver. “For 2008, we have positioned the company to post another strong performance, our sixth consecutive year of revenue and earnings growth. We expect to achieve our goals because of the company’s diversified business model, which makes us more resistant to a decline in the U.S. railcar cycle; solid execution of our growth strategies; and higher operating margins from ongoing application of the Wabtec Performance System. We remain optimistic about the future of Wabtec and our growth opportunities in the worldwide railway industry.”
Denver ends talks with UP over yard saleOfficials from Denver's Regional Transportation District said Wednesday they've broken off discussions with Union Pacific over a proposed sale of a UP rail maintenance facility, along with portions of a right-of-way alignment. RTD believes UP's asking price is too high, but would not disclose the cost involved.
RTD said the decision will affect the routing of its planned line to Denver International Airport, but would not significantly affect other planned FasTracks routes. "The basic corridors will remain the same," said RTD spokesman Scott Reed. "This has more to do with the maintenance and internal operation functions than with the route of passenger lines."
RTD will continue discussions with UP on other matters, said RTD General Manager Cal Marsella, who characterized overall negotiations as "positive and constructive."
Watco acquires Reload, Inc. operationsWatco Cos. Inc., which operates 17 small railroads in 15 states, announced that that is has acquired the operations of Reload, Inc., which currently has five locations for its transloading and other businesses and will open another this year. Reload will continue to operate under the day-to-day management of Chris Salek, vice resident of sales, and Phil Penner, vice president of operations.
"Reload will provide Watco customers with more rail options and the opportunity to expand their markets," said Kevin Goins, Watco's vice president of distribution services. "This acquisition will also be a growth platform for Watco as the need to trainload and forward-position products by rail continues to grow."
In addition to transloading, Reloads services include warehousing trucking, inventory management, and single bill rail logistics. Its current sites in Glendale/Phoenix, Ariz., St. Louis, La Crosse Wis., Rockton, Ill., and Mobile, Ala., will soon be augmented by a new location in Oklahoma City.
Fuel cell switcher locomotive headed for testField tests are scheduled later this year for an experimental hydrogen fuel cell switching locomotive under development by BNSF Railway and Vehicle Projects LLC, the two companies announced today. They said the locomotive "has the potential to reduce air pollution, is not dependent on oil for fuel, and could serve as a mobile backup power source for military and civilian disaster relief efforts."
"While it’s not a proven technology and the project is still in its infancy, we believe investments like the fuel cell switch locomotive are important for the advance of new technology," said Craig Hill, vice president, BNSF mechanical and value engineering.
The project has broad-based support. Republican Sen. Sam Brownback of Kansas said he has worked for the past two years to secure funding for the experimental locomotive. Arnold Miller, president of Vehicle Projects LLC, commented: "Along with our principal partners, BNSF Railway and the U. S. Army, we at Vehicle Projects are developing proof- of-concept hydrogen fuel cell vehicles that are leading the way to this new technology."
Mysore Nagaraja resigns from MTA post Mysore Nagaraja, president of New York's Metropolitan Transportation Authority's Capital Construction, is resigning his post effective at month's end, after more than two decades with the MTA. Nagaraja reportedly will enter the private sector as a consultant.
Nagaraja has spearheaded MTA's $15 billion construction and expansion efforts for subways and commuter railroads, overseeing projects such as the $6.3 billion East Side Access to Grand Central Terminal, the $4 billion construction of the Second Avenue Subway, and the $2.1 billion extension of the No. 7 (Flushing) Line to west Midtown.
In the December 2007 issue of Railway Age, Nagaraja expressed confidence that MTA's capital construction program was well-designed and well-timed. "In the next 10 to 15 years, the projection is for 1.5 million more people living" in New York City, he noted. "So we need Second Avenue, and teh extension to the West Side of Manhattan. And we need East Side Access, because the capacity for the LIRR is limited by the East River Tunnels."
For FEC, an electronic milestoneThe Florida East Coast Railway has become the first railroad to electronically deliver most of its track and time authorities for engineering personnel—the majority of authorities in 2007 and nearly two-thirds of the total in recent weeks. FEC's technology is eAX™ (Electronic Authority Exchange), developed and deployed by Digital Concepts.
Described by DigiCon as “a shift in maintenance operations that has brought a huge improvement in productivity and safety for the railway’s engineering forces,” eAX allows FEC field personnel to see where trains are operating across its territory, which stretches from Jacksonville to Miami and includes 351 route-miles and 541 track-miles. “This helps our people better prioritize their work schedules and maximize on-track time,” said FEC Vice President and Chief Engineer Wayne Russell. “Not only does this package help the field personnel, it cuts down the calls and waiting time to and from the control operators.” FEC’s train dispatching system is Digital Traffic Control, also from DigiCon®, and originally installed in 1997.
FEC’s eAX system automates the request/issue/release process for work authorities, and has been applied in both CTC and TWC (Track Warrant Control) territories, eliminating radio language exchange errors. It provides work planning tools to mobile maintenance workers and instant messaging capabilities in on-track vehicles, as well as predictive GPS-based limit checking that gives advance warning when an m/w vehicle is approaching the end of its authority limits too quickly, enabling the operator to safely stop and avoid a potential limit violation.
New capacity helps BNSF move record coal tonnageBNSF Railway hauled a record 291.1 million tons of coal in 2007, an increase of 1.4% over the previous record of 287.0 million tons set in 2006. This amounted to 2.5 million carloads, up 0.5% from the 2006 record. BNSF coal train loadings in the Powder River Basin in 2007 averaged 50.2 a day, up 1% from the average of 49.7 trains a cay loaded in 2006.
Credit for this achievement, said Steve Bobb, BNSF’s group vice president, coal, goes to a successful effort by the railroad, the mines it serves, and its utility customers "to maintain velocity of the coal train network despite some challenges from flooding and winter weather," and to the railroad’s continuing investment in capacity expansion.
Expansion projects completed in 2007 include 40 miles of third main track and 48 miles of second main track in Wyoming and Nebraska. Work continues on 21 miles of fourth main track on the Southern Powder River Basin Joint Line and an additional 18 miles of second main.
A record year for two New York commuter railroadsBoth of New York MTA’s commuter railroads—Metro-North and the Long Island—set new records in 2007 in ridership and on-time performance, respectively.
Metro-North ridership exceeded 80 million in 2007 for the first time in its 25-year history. When it was created in 1983, the railroad carried 41.3 million riders. That nearly doubled last year to 80.1 million, a 4.3% increase from 2006. When two connecting services are included, ridership last year was 80.7 million. Metro-North achieved system-wide on-time performance of 97.7% in 2007, just a fraction below 2006’s record setting 97.8%.
Meanwhile, the LIRR, North America’s busiest commuter rail operation, did achieve a new high in on-time performance of 94.07% last year, an improvement of almost 1% over 2006 and the best since modern recordkeeping started in 1979. NYMTA noted that LIRR achieved its 2007 on-time record while operating 5% more trains (245,565) than it did in 2002 (233,301), when it achieved its previous record of 93.3%.
BMWED-Teamsters organizes Oklahoma short lineMaintenance of way workers on Oklahoma’s 275-mile Stillwater Central Railroad voted Jan. 4 to join the Brotherhood of Maintenance of Way Employes Division (BMWED) of the Teamsters Rail conference. Tim McCall, BMWED director of organizing, said Stillwater Central employees contacted the union this past summer “and we began the organizing program in October. All along the way we had a great deal of enthusiasm, and now they are Rail Conference Teamsters.” BMWED President Fred Simpson commented, “More and more employees of short line railroads like Stillwater Central are looking to the Teamsters for strong representation to help them negotiate fair workplace contracts, and we are glad to help.”
CTC for Commonwealth RailwayVirginia short line Commonwealth Railway, a Genesee & Wyoming property, has selected RailComm, Inc., to provide a CTC system that will be remotely dispatched by G&W’s Portland & Western Railroad in Oregon. RailComm’s DOC® (Domain Operations Controller) traffic control system will be accessed through the web-enabled Software-as-a-Service (SaaS) “pay-as-you-go” delivery model. The DOC® control application resides on servers within RailComm’s managed data center in Rochester, N.Y.
Delhi Metro awarded UN carbon creditIndia's Delhi Metro Rail Corp. has become the first railway project in the world to earn carbon credit from the United Nations under the UN's Clean Development Mechanism (CDM), the Economic Times reports. DMRC is earning Certified Emission Reductions for its use of regenerative braking system on its trains.
"This is also the first Japan Bank for International Cooperation (JBIC)-funded official development assistance (ODA) loan project in the mass rapid transit sector to be able to claim carbon credits," DMRC chief Anuj Dayal said. DMRC can claim 400,000 CERs for a 10-year crediting period beginning last December.
Delhi Metro Rail Corp. currently operates over approximately 40 route miles, with plans to expand to 75 route miles.
Greenbrier Cos. reports rise in first-quarter earningsFiscal first-quarter earnings for the Greenbrier Cos. rose to $2.64 million, or 16 cents a share, from $1.87 million, or 12 cents a share, for the year-ago period. The company's earnings rose despite being hampered by special charges related to its Canadian facility, foreign exchange losses, and a higher tax rate, the company said today.
Revenue climbed 16% to $286.4 million for the three months ended Nov. 30 from $246.6 million in the prior year's first quarter. The company's new railcar manufacturing backlog was 22,200 units valued at $1.73 billion at Nov. 30, 2007, up from 12,100 units valued at $830 million at Aug. 31, 2007.
Greenbrier forecasts lower 2008 earnings before special charges due to lower overall new railcar deliveries, lower gains on equipment sales, and a higher tax rate than in 2007.
FCA appoints new operating vice presidentNicholas J. Matthews, who spent 14 years at Trinity Industries, will join FreightCar America, Inc. as vice president-operations later this month, and will succeed Ken Bridges as senior vice president-operations upon Bridges’ retirement this spring. Matthews will be based at FCA’s Chicago headquarters.
At Trinity, Matthews served in various technical and operations positions. In his most recent role, he served as Trinity’s senior vice president-operations for the company’s freight car business. He also served Trinity as senior vice president-Component Sales and Distribution, and vice president and general manager of the boxcar business. Earlier in his career, he held roles in business planning, manufacturing engineering, quality assurance, and site operations.
“We are pleased that Nick Matthews has agreed to join FreightCar America,” said FCA President and CEO Chris Ragot. “He has considerable industry experience that will allow us to build on our reputation for operational excellence. We expect that Nick will be instrumental in continuing our drive for world-class cost competitiveness while still producing products of the highest quality. We would also like to take this opportunity to thank Ken Bridges for his years of dedicated service to FreightCar America. Ken has played a key role in the growth of FreightCar America. In particular, he provided the operations leadership and vision that guided the growth of our Danville, Ill., and Roanoke, Va., manufacturing facilities.”
Following his retirement, Bridges will continue with FCA as a consultant.
Strike looming for Amtrak?About half of Amtrak’s unionized workforce has been without a contract since 1999, and union leaders now say they’re ready to strike.
Amtrak and the unions representing the railroad’s electricians, dispatchers, and machinists—about 7,000 workers—are jockeying for position over non-binding recommendations a Presidential Emergency Board issued late last week, a little over a month after talks in the long-running contract dispute broke off. The unions—The Amtrak Shopcraft Coalition consisting of the Machinists Union, Transportation Communications Union-Carmen Division, International Brotherhood of Electrical Workers and the Transport Workers Union; and the TCU ARASA Division—are encouraged by the PEB’s recommendations, which basically state that the parties should agree to a contract along the lines of one forged by the freight carriers and their unions (not including the UTU) in April 2007.
PEB 242, appointed Dec. 1, 2007 following more than eight years’ of unsuccessful negotiations, agreed with labor that the National Freight Agreement should serve as a model for resolving the Amtrak dispute. The PEB recommendations include Amtrak workers receiving the wage increases proposed by the unions, full retroactive pay, and no work rule changes involving scheduling and crew assignments.
The unions, however, want more: “While the report significantly validates the arguments labor has made for more than eight years, not all the recommendations are favorable. For example, while endorsing full retroactive pay for employees, the PEB recommends it be paid in two installments, 40% within 60 days of ratification and the remaining 60% on or before the anniversary date of the first installment. Further, it recommends that retroactive pay be restricted only to employees on the payroll as of Dec. 1, 2007, the day the PEB was created, excluding workers who retired since the current agreements became amendable. The Amtrak Shopcraft Coalition and ARASA disagree with this particular recommendation.”
Amtrak’s labor costs would rise by about one-third under this scenario.
The unions say that if no agreement is reached by 12:01 a.m. on Jan. 30, 2008, they will strike—a situation of grave concern to transit agencies operating commuter trains on Amtrak’s Northeast Corridor (NJ Transit, Long Island Railroad, Metro-North, SEPTA, MBTA) and in several other metropolitan areas. Commuter trains on the NEC, which is owned, maintaind, and dispatched by Amtrak, would be shut down. The possibility still exists that Congress may intervene in the dispute and impose an agreement, so the unions are saying that they are preparing for three possible scenarios: a negotiated settlement, Congressional intervention, or a strike.
“Amtrak is carefully reviewing the recommendations of the PEB regarding the issues brought before the PEB by Amtrak and nine unions representing a portion of Amtrak’s employees,” Amtrak said in a prepared statement. “Amtrak’s concern has always been the railroad’s ability to make pay increases retroactive and to achieve efficiencies through work rule reform, and we’ll be looking closely at the recommendations particularly as they relate to these issues. Amtrak will have further comment on the PEB recommendations later.”
One industry observer characterized the PEB’s recommendations as “a last-ditch attempt by the Bush Administration to kill Amtrak or at least get rid of all long-distance trains.”
Amtrak reports on Quad Cities-Chicago studyAn Amtrak study has found that 110,000 riders a year would use a proposed state-supported , two-round-trips daily passenger train service between Illinois Quad Cities (including Moline and Rock Island) and Chicago, a distance of around 180 miles. Amtrak performed the study at the request of the State of Illinois following a town meeting in Rock Island in January 2007. Amtrak said the projected ridership is based on upgrading infrastructure at a cost of $14 million to $23 million to permit 79-mph passenger train speeds over the shortest, fastest, and least costly of the potential routes. Not included in this cost estimate are any capital outlays for stations, railcars, and locomotives.
The state operating cost would be around $6 million. “Quad Cities-Chicago travel times of about 3½ hours are possible and would be competitive with automobile driving, dependent on the choice of routes, agreements with host railroads and required infrastructure improvements,” said Amtrak.
Amtrak noted that it has never operated scheduled trains to the Quad Cities, which lost its Rock Island Railroad passenger service in 1978. The feasibility report said the preferred route would be over a portion of the former Rock Island now owned by the Iowa Interstate Railroad from the Quad Cities to a proposed connection to the BNSF Railway near Wyanet, Ill.
“We look forward to taking the next step, which would involve negotiations with host railroads, development of detailed capital plans, and funding requests,” said Amtrak President and CEO Alex Kummant.
Maggie Jacobsen, former NMB member, dies Maggie Jacobsen, a former member of the National Mediation Board who is credited with being a strong advocate of improved labor-management relations and an early proponent of “interest-based bargaining,” has died.
“You may consider this politically incorrect, but since women seized control of two of the most consequential federal agencies with which railroads deal, a new era of conciliation and productive dialogue has broken out among the men still in charge of railroads and their labor unions,” Frank N. Wilner wrote in Railway Age’s June 1998 issue. “Maggie Jacobsen at the National Mediation Board and Jolene Molitoris at the Federal Railroad Administration have made abundantly clear that beating of chests, pounding of tables, stomping of feet, and threatening voices are fatal to productive problem solving.”
“Railroads are captive to a lot of old practices and rules that don’t fit modern society,” Jacobsen told Railway Age in March 2001. Wilner described her then as “excoriating railroads and their employees to be more civil in their relationships.”
Interest-based bargaining, as promoted by Jacobsen, involves roundtable discussions with a neutral facilitator participating in talks at the outset. The United Transportation Union says it “encourages both sides to confront each other’s problems and suggest a range of trade-offs that jell into mutually acceptable solutions.”
Jacobsen, who was nicknamed “the iron lady,” was the daughter of a New York tugboat captain. She earned a certificate in labor studies from the AFL-CIO Labor Studies Program in 1971, completed the Trade Union Program at Harvard in 1973, earned an undergraduate degree in organizational behavior from San Francisco University in 1987, and a master’s degree in human resource management from Golden Gate University in 1989. From 1965 to 1972, she was a Continental Airlines flight attendant, where she staffed many Military Airlift Command troop flights to Vietnam. She was also a union representative. She later was elected secretary-treasurer of the Flight Attendants Department of the Air Line Pilots Association. In 1972, she became a labor relations manager for Continental, and in 1976 became a mediator with the Federal Mediation and Conciliation Service, a National Labor Relations Act agency. President Bill Clinton appointed her to the NMB in 1993. She served three terms, from December 1993 to August 2002. Since leaving the NMB, Jacobsen worked as an independent arbitrator and mediator based at her home near Seattle, where she resided with her husband.
RRIF loan awarded to northwestern short lineThe Federal Railroad Administration has awarded a $3 million RRIF (Railroad Rehabilitation and Improvement Financing) loan to the Columbia Basin Railroad Company, Inc. CBRC will use the funds to purchase 73 miles of track it currently leases from BNSF Railway between Connell and Moses Lake in eastern Washington State and upgrade the right-of-way to handle heavy axle loads. The CBRC primarily hauls agricultural products—potatoes, wheat, soybean oil—as well as frozen and packaged foods and chemicals and fertilizer components used in agriculture. The railroad serves the communities of McDonald, Grow, Sieler, Wheeler, Bassett Junction, Schrag, Warden, Warden Junction, Othello, Bruce, and Shano.
UTU: Dissension in the boardroomOnly a few days after taking office, newly elected United Transportation Union International President Mike Futhey is facing his first major crisis. He’s battling with several UTU directors on whether the UTU should merge with the Sheet Metal Workers’ union to form SMART (Sheet Metal, Air, Rail and Transportation Workers). On Jan. 3, seven board members, among them National Legislative Director James “Broken Rail” Brunkenhoefer, demanded that Futhey support the merger and instruct the UTU Law Department to seek to overturn a federal district court’s temporary restraining order halting it. The Akron, Ohio, court’s ruling has been extended until Feb. 8.
Futhey came out against the merger on Jan. 1, a few days after the court had issued the restraining order. Complainants had argued that, among other issues, the UTU membership, which ratified the SMART merger in early August, had not been provided sufficient information. Futhey agreed with the court’s opinion, saying, “Regardless of what was said or done in previous months, the fact is that . . . some of the representations made to the membership were incorrect or distorted.”
“The court’s ruling was supported by declarations from a majority of the previous board of directors who had voted to put the merger to a membership vote,” Futhey said in a Jan. 4 letter to the UTU membership. “Now, seven current board members support the shotgun wedding of the UTU with the SMWIA that was boxed in secrecy and wrapped in a deception that would disenfranchise the craft and general-committee autonomy so cherished by our members.” Futhey named the seven, and asked them “to explain why they don’t want to provide the membership with full and honest disclosure before seeking a vote on a merger with another organization.” He accused them of playing politics, and also refuted what he said were “rumors” that the UTU is facing financial collapse unless it merges with the Sheet Metal Workers.
In the midst of this mess, the UTU—the only rail labor union that has not settled on a national agreement with the carriers—is set to resume negotiations with the National Carrier’s Conference Committee on Jan.22. There have been no negotiations since January 2006, and this round between the UTU and NCCC is now in its 38th month since Section 6 notices were exchanged in November 2004.
Sprinter revenue service could be delayedNorth County Transit District's Sprinter diesel light-rail service, linking Oceanside and Escondido, Calif., may not open on its target date of Jan. 13 due to ongoing concerns over safety. NCTD Executive Director Karen King will decide Jan. 6 if the start-up date will be pushed back. "We don't want people standing at the stations if the train isn't going to run," King said.
California's Public Utilities Commission was scheduled to review documents covering safety and security issues for the $478 million project, but were pulled from the PUC's agenda.
King said district officials have spent more than a year preparing two documents for the PUC. One deals with a safety plan and the other with security. They are scheduled to be heard by the commission Thursday at the panel's meeting in San Francisco.
But the documents were originally scheduled to be considered at the PUC's Dec. 20 meeting, and King said she doesn't know why they were pulled off the agenda. King said she is not sure if the PUC staff will sign off on the documents next week.
Among other concerns, PUC reportedly seeks to ensure the platform guard rail at the Oceanside Transit Center allows passengers full access to the Sprinter's doors. During a test run, Sprinter car doors failed to align properly with gaps in the guard rail.
NCTD officials hosted a ceremonial first run of the 22-mile line Dec. 28, 2007.
New England Railroad Club offers scholarship awardsThe New England Railroad Club is calling for applications for scholarship funding from high school seniors, and those already attending accredited colleges, that "are the children, grandchildren and spouses of New England Railroad Club members in good standing."
Applications must be submitted no later than Apr. 15, 2008 to the club at P.O. Box 82, Lowell, Mass. 01853; supporting materials, such as SAT test scores, academic transcripts, or letters of recommendation, must be received at the same address no later than April 20. Applicants also must submit a brief essay describing career goals and personal history.
Winners, chosen by the club's executive committee, will receive funding upon receipt of proof of registration for the fall 2008 academic semester. Previous applicants, and even previous award winners, are encouraged to re-apply.
Traffic down, but still second-highest everThe year 2007 saw across-the-board declines in U. S. railroad traffic—carloads were down 2.55%, intermodal volume was off 2.1%, and total ton-miles slipped by 1%—but the year will still go down as the second busiest ever for freight railroads.
"It's not surprising that U. S. rail traffic in 2007 was down from the record-setting level of 2006, given the well-documented problems the U.S. economy has been facing," said Craig Rockey, vice president of the Association of American Railroads. "Based on combined carloads and interposal units, though, 2007 was actually the second-highest volume year in history for U.S. railroads, behind only 2006."
Coal was again king, accounting for 43% of all rail carload traffic. For the year, coal loadings were off only 0.9% from 2006 levels though in December coal traffic was running 2.5% below year-ago levels. Chemicals accounted for 9% of all carload traffic in 2007l, second only to coal, and in December chemical carloadings were up 4.2%.
Employment still trails year-ago levelClass I railroads employed 165,803 workers in mid-November 2007, 1.65% below the November 2006 level but a gain of 0.3% over October 2007. The biggest numerical decline during the 12-month period was among transportation (train and engine) employees, whose numbers dwindled 3.91% to 69,147, reflecting a decline of around 3% in traffic. The biggest percentage decline was among transportation (other than train and engine) workers, where employment was off 5.31% to 6,871. There were modest increases, all of less than 1%, in the executive, professional, and maintenance categories.
Tri-Rail sets new high mark in ridershipThe South Florida Regional Transportation Agency's Tri-rail commuter line carried a record 3,501,701 riders in the Miami-Palm Beach corridor in 2007, a 10.2% increase over the previous high mark set last year, when Tri-Rail led the nation in commuter rail ridership growth. Since its Double Track Corridor Improvement Program was completed in March 2006, ridership has increased by more than 31%. Tri-Rail now operates 50 trains each weekday and 16 a day on weekends and holidays.
Patriot Rail buys Utah Central short linePatriot Rail Corp., a holding company based in Boca Raton, Fla., announced that it has acquired the Utah Central Railway (UCRY), a short line that operates 34 miles of owned and leased track in and around Ogden, Utah. The acquisition is Patriot's third, and brings its total operations to 246 miles. Patriot also owns the Tennessee Southern in Tennessee and Alabama and the Butte, Anaconda & Pacific in Montana.
The Utah Central is a former Union Pacific line that interchanges traffic with both UP and BNSF Railway. With 17 non-union employees and five locomotives, UCRY handled approximately 8,500 carloads in 2007. Under a long-term lease, it provides exclusive rail switching services at Business Depot Ogden, an industrial park.
PATH fare hikes may be scaled backThe Port Authority of New York & New Jersey may scale back its proposed PATH fare hike when it votes Friday on raising transit fares and bridge and tunnel tolls. The PA apparently still plans to raise road crossings during peak hours from $6.00 to $8.00, but has been criticized by public transit advocates noting its proposed PATH single-fare increase, from $1.50 to $2.00, would be an equivalent percentage rise at a time when rising oil prices, increased traffic congestion, and concerns about global warming might suggest a different approach.
Among high-ranking officials, both U.S. Sen. Robert Menendez and New Jersey Gov. Jon Corzine have also expressed dissatisfaction with the proposed PATH hikes. Gov. Corzine has the power to veto the minutes of any Port Authority meeting, effectively blocking any fare or toll increase.
The increases have been justified in order to advance the Port Authority's 2008 budget and 10-year, $29.5 billion capital plan, which includes spending $4 billion toward rehabilitating Port Authority bridges and tunnels and $3.3 billion for modernizing the PATH system and increase its capacity by 25%.
Train accidents down 13% in 10 months of 2007U. S. railroads reported 2,146 train accidents in January-October 2007, 13.0% fewer than the 2,468 accidents reported in the first 10 months of 2006. Train collisions declined 8.7% to 158, derailments were down 12.6% to 1,576, and the number of yard accidents dropped 16.1% to 1,097.
Rail fatalities in the first 10 months of 2007 totaled 735, and were due mostly to grade crossing collisions and trespassing. There were 289 grade crossing deaths, down 1.0% from the 292 reported in the corresponding period in 2006, and 408 trespassing fatalities, down 8.3% from 2006.
The Federal Railroad Administration’s latest safety report, posted on the agency’s website Dec. 28, lists a total of 10,514 accidents/incidents reported by 708 railroads in January-October 2007, down 7.2% from the 11,328 in the prior-year period.
UTU’s Futhey shoots down “shotgun wedding”The United Transportation Union most likely won’t become SMART after all as its new leadership has announced that the planned UTU-Sheet Metal Workers International Association merger—originally scheduled to occur Jan. 1 to create the Sheet Metal, Air, Rail and Transportation Workers—was “a shotgun wedding.”
In a Jan. 1 letter to UTU membership, newly elected International President Mike Futhey stated, “Regardless of what was said or done in previous months, the fact is—as validated by a federal court—that members did not have sufficient information to make an informed decision. In fact, it was revealed that some of the representations made to the membership were incorrect or distorted.”
Futhey’s declaration came only a few days after a federal district court in Akron, Ohio, temporarily halted the planned merger after complainants argued that, among other issues, the UTU membership, which ratified the SMART merger in early August, had not been provided sufficient information. The court has scheduled a second hearing for Jan. 4 to consider whether to lift the temporary injunction and permit the merger to proceed, or make the injunction permanent. Now it appears that hearing won’t be necessary.
“Shotgun weddings make for good movie comedy, but have no place in the real world of union mergers,” Futhey said. “As Dear Abby has always counseled, ‘If a marriage is right for the right reasons, and is one that can and will endure, the marriage can wait until next week, next month or next year.’ It is time for the UTU membership to determine if we want and need a merger. Any merger proposed should be governed by conditions acceptable and beneficial to our members, as well as to the other union and its members.”
In shooting down the shotgun wedding, Futhey said the appropriate way to conduct a merger is “to hold old-fashioned shoot-outs that bring the principals of all potential partners to various locations and allow the membership to question them. A union merger should not be negotiated in secret and sprung on the membership with a ballot attached.”
On Jan. 20, the UTU is scheduled to resume long-stalled national contract negotiations with the National Carriers Conference Committee, which represents Class I railroads. The UTU is the only rail labor union out of about a dozen that has not settled with the carriers.