March 2006
BNSF: 3,000 crossing closures since 2000What’s the best way to reduce highway/rail grade crossing collisions? Get rid of crossings altogether.
BNSF Railway, which currently has about 27,500 highway/rail at-grade crossings (18,000 public crossings, 9,300 private crossings, 200 pedestrian crossings) on its 32,000-mile system, just closed its 3,000th crossing, at Belle Plaine, Kan. The closure program started in 2000 “as a concerted effort to close redundant and unnecessary at-grade highway/rail crossings,” BNSF said. Since then, the railroad’s grade crossing incident rate has decreased more than 30%, from 3.34 incidents per million train-miles in 2000 to 2.33 in 2005, according to Federal Railroad Administration data.
“While this represents a major achievement, we still have more opportunities to close grade crossings as well as continue community education and awareness,” said BNSF Vice President-Safety, Training and Operations Support Mark Schulze. BNSF sayus that it annually spends nearly $90 million on programs related to grade crossing safety, including funding of education and program activities, crossing signal maintenance, and vegetation control.
Traffic control signs better than crossbucksThe traditional “Railroad Crossing” crossbuck sign installed at 60% of highway/rail grade crossings in the U.S. is inadequate and should be replaced with “Stop” or “Yield” signs, according to the Federal Highway Administration, which is now encouraging state officials to install such signs at grade crossings. Two years ago, the Association of American Railroads asked the FHWA to issue “immediate guidance” allowing states to install Yield and Stop signs. The AAR, following the FHWA’s action, is now urging the agency to go one step further and make these signs mandatory.
Only about 40% of grade crossings in the U.S. are equipped with active warning devices (gates, lights, bells). The remainder are equipped with crossbucks. “Numerous studies have shown that the majority of drivers do not understand the meaning of the crossbuck sign currently posted at most grade crossings, while yield and stop signs are universally understood,” says the AAR. “Only one in five motorists today understands that the crossbuck is a warning sign. This will provide drivers clear direction to stop or yield at railroad grade crossings, which we hope will save many lives.” The AAR cited a U.S. Department of Transportation Inspector General report that said driver error or poor judgment was responsible for 94% of public grade crossing accidents and 87% of fatalities.
There’s precedent for mandatory installation of traffic control signs at railroad crossings. In 2000, Wisconsin & Southern Railroad President Bill Gardner began asking local governments to install Stop or Yield signs at all passive crossings. Gardner’s campaign was successful, as these signs were installed at over 400 passive crossings throughout southern Wisconsin. His efforts culminated on Jan. 4, 2006, when Governor Jim Doyle signed Assembly Bill 512 into law. AB 512 mandates the installation of Yield signs at all passive crossings in the state.
ARI to acquire Custom Steel, Inc.In an $18 million deal expected to close on April 1, American Railcar Industries will purchase Custom Steel, Inc., from Steel Technologies, Inc. Custom Steel--located adjacent to ARI's Kennett, Mo., component manufacturing facility--will help ARI increase its railcar-parts manufacturing business, ARI CEO James J. Unger said in an announcement today.
"We are pleased to welcome the employees of teh Kennett facility to ARI," Unger said. "For many years, we have been a beneficiary of their good work and are very pleased to have them join us in manufacturing railcars for our customers."
ARI, a North American railcar manufacturer and repairer of covered hopper and tank cars, held an Initial Public Offering of its stock worth up to $150 million in January (See breaking news update, Dec. 13, 2005).
DOT tests commuter railcar safety technology“By smashing a few trains in the desert, we hope to find new ways to keep millions of commuters safe every day,” Secretary of Transportation Norman Y. Mineta said yesterday during a news conference in Glendale, Calif.--the site of the Jan. 26, 2005, chain-reaction crash of two Metrolink commuter trains and a parked Union Pacific freight train, which killed 11 and injured more than 200 (details, Breaking News Update, Jan. 28, 2005).
While the Federal Railroad Administration (a DOT agency) said last July that there is no greater risk of derailment when commuter agencies like Metrolink operate in push mode (cab car first) than in pull mode (locomotive first), it did recommend that certain structural modifications, like new crash energy management technology (CEMT), could make cars safer in the event of an accident (details, Breaking News Update, July 14, 2005). That's why the U.S. Department of Transportation commissioned a test of this technology, which was conducted early yesterday at the Transportation Technology Center, Inc.'s Pueblo, Colo., facility.
Running at 32 mph, a five-car, push/pull train, operating cab-car first and equipped with CEMT, crashed, head-on, into an equally weighted standing locomotive and two freight cars. (Southeastern Pennsylvania Transportation Authority and Long Island Rail Road supplied the passenger equipment; Amtrak, the locomotive.)
The passenger cars included crush zones to better protect rider and operator compartments; new shock-absorbing couplers to keep cars upright after impact; padded seats to contain and cushion riders during a crash; and worktables with crushable edges to reduce the risk of abdominal injuries. (The DOT's Research and Innovative Technology Administration, Massachusetts-based technology firm TIAX, and FRA began work on the improved seats and tables last year. See Breaking News Update, July 20, 2005.)
In addition, 425 passenger-car sensors measured crash effects and 10 test dummies, outfitted with computers, recorded the amount of force exerted on abdominal, head, and neck areas. More than 24 interior and exterior cameras, placed at strategic points, captured nearly every crash angle, including the point of impact and the effect on the dummies.
The DOT now plans to analyze the data and use it to develop new standards for cars equipped with CEMT. Preliminary results will take several weeks and final results, several months, according to FRA spokesman Steve Kulm. "However, based solely on visual observations, the new safety measures appeared to work as designed--certainly the comparison of the crash test without the improvements with the crash test with improvements is dramatic," he noted.
It's expected that CEMT will protect operator and passenger space by reducing the crumpling of the first car to about three feet and distributing the remaining crush to the unoccupied areas of the train. A similar test conducted in 2002 using conventional equipment without CEMT resulted in 22 feet of crush to the first car, destroying the first 10 rows of passenger seats, according to DOT.
Mineta noted that the Southern California Regional Rail Authority has already ordered new Metrolink cars that incorporate CEMT (details, Breaking News Update, Feb. 27, 2006). They will be the first in the U.S. to incorporate it.
ENSCO opens new Pennsylvania facilitiesENSCO, Inc.'s Rail Technology Group has a new maintenance facility in Biglerville, Pa. The group--which supplies advanced railcar technologies and track inspection systems--is performing major maintenance and upgrades on test cars here for such East Coast customers as the Federal Railroad Administration, Amtrak, and Norfolk Southern. In addition, it now operates out of a new Gettysburg, Pa., office. Through a paid arrangement, the group is using 25 miles of Gettysburg and Northern Railroad track for testing purposes.
ENSCO is a research, development, and information technology company based in Falls Church, Va., and has major offices in Springfield, Va.; Endicott, N.Y.; Melbourne and Cocoa Beach, Fla.; and field offices throughout the U.S. and in Beijing, China.
RailAmerica line goes to Island Corridor FoundationRailAmerica, Inc., is transferring ownership of its Nanaimo, British Columbia-based E&N Railway to a non-profit organization, which plans to introduce passenger service. The Island Corridor Foundation, managed by 13 First Nations Groups and six municipalities on Vancouver Island, is giving RailAmerica $850,000 in cash and a $300,000 promissory note to purchase the contract and regulatory rights associated with operating the 181-mile line. RailAmerica expects to use about $4.3 million in tax benefits in Canada from the charitable gift donation.
The short line holding company will continue to run the railroad until operations are transferred on or before June 30, 2006. Plans for its disposal were announced in third-quarter 2004, when RailAmerica recognized a $12.6 million pre-tax (or $8.7 million after-tax) impairment charge. The transaction is said to have no material impact on RailAmerica's 2006 financial results.
Progress Rail plans IPOProgress Rail Services announced March 17 that it has filed a registration statement with the Securities and Exchange Commission for an initial public offering of an unannounced number of common shares. Proceeds will be used to redeem all preferred stock, which is held primarily by J.P. Morgan Securities affiliate One Equity Partners; to pay off up to $70 million in debt; and for working capital purposes. Progress Rail and its subsidiaries provide maintenance and repair services and related components for locomotives, cars, and track, with locations in the United States, Mexico, and Canada.
Jo Strang named to top safety post at FRAJo Strang, who at one time led accident investigations for the National Transportation Safety Board, has been named associate administrator for safety at the Federal Railroad Administration. Strang has held the position on an acting basis since last Oct. 30. She previously served at FRA as deputy associate administrator for railroad development, acting head of the Office of Research and Development, and deputy regional administrator in Chicago. At NTSB, she was associate director for the Office of Railroad, Pipeline, and Hazardous Materials.
UTU goes back to courtThe contentious negotiations and legal wrangling in which the nation’s major railroads and labor unions have been involved since Section 6 notices were served in November 2004 took another twist today when the United Transportation Union asked the U.S. District Court for the District of Columbia to prevent BNSF Railway from pulling out of national handling for purposes of negotiating employee compensation.
UTU says it filed the lawsuit “in response to BNSF inviting UTU general committees of adjustment to discuss profit sharing and to reach agreement by June 2006.” UTU contends this action is “an attempt by BNSF to pull out of national handling with respect to the issues of compensation and to handle it at the local level with UTU general committees,” bypassing the UTU National Negotiating Committee. BNSF’s actions, the union said, are in violation of the Railway Labor Act. “The issue of compensation is a matter of obligatory national handling under the RLA,” UTU said, citing national negotiations dating back to 2002, and prior federal court decisions.
“Railroads and the UTU have always negotiated compensation on a national basis,” UTU said. “Both parties have to honor the process of national handling to reach agreements in good faith. It is bad faith if one party bolts from national handling whenever it desires.” The union has asked the Court for injunctive relief.
“General committees of adjustment have jurisdiction over UTU’s agreements covering specific portions of a railroad carrier, or a predecessor carrier that was merged with or bought by another carrier,” UTU said. “Those general committees of adjustment have authority to make local or system agreements with representatives of railroads, but only the UTU National Negotiating Committee may make national agreements with the carriers. The national handling agent for BNSF is the National Carriers’ Conference Committee. National railroad unions, including the UTU, have designated national negotiating committees that engage in bargaining with the NCCC.”
The NCCC, on behalf of BNSF, CSX, Kansas City Southern, Norfolk Southern, and Union Pacific, served the November 2004 Section 6 notices proposing changes to collective bargaining agreements, including issues of compensation. Since then, UTU and NCCC have been in negotiations, and they have recently have been overseen by the National Mediation Board. Agreements are yet to be reached.
While compensation is something the UTU insists must be handled at the national level, crew-size and the Federal Employers’ Liability Act (FELA) are two items the union claims should still be handled on a railroad-by-railroad basis. In March 2005, the UTU went to court to challenge NCCC’s demand that the union negotiate crew-size and FELA (which the railroads want to amend or eliminate) at the national level. Last week, a U.S. District Court in Illinois ruled that the UTU “has no obligation to bargain nationally over crew consist and no obligation at all to bargain over the railroads’ desire to scrap FELA.”
Wabash National quitting domestic container marketBowing to competition from China and Korea, Wabash National says it will withdraw from the domestic intermodal container market by the end of this month and concentrate on its core trailer market. CEO Bill Greubel commented, “It has become increasingly clear that corrugated steel boxes from China and Korea adequately satisfy customer requirements at prices significantly lower than our container offering.” Container sales have recently accounted for less than 3.5% of the company's unit volume. New van trailer shipments in the first quarter are expected to be around 12,500, up 12% from last year.
New Hudson River tunnel wins key endorsementThe New York Metropolitan Transportation Council has added a proposed new $6 billion trans-Hudson rail tunnel to its list of major projects that need to be built during the next 25 years. It was a key endorsement for tunnel supporters; without it, the project would not be eligible for federal funding. The tunnel, a high priority of New Jersey Transit, would include two single-track tubes extending from northern New Jersey to a terminal beneath West 34th Street in Manhattan. Supplementing an existing Amtrak tunnel, it would provide a one-seat ride to mid-Manhattan for thousands of commuters from New Jersey and New York's Orange and Rockland counties.
Long term looks good, says RailpowerQuality issues, design changes, and developmental costs affected the operations of Vancouver-based Railpower Technologies Corp. in 2005, but long-term prospects for the hybrid-locomotive builder remain bright, says President and CEO Jose Mathieu. “We are installing the processes and manufacturing discipline that we believe will result in positive margins in future quarters,” said Mathieu as Railpower announced financial results for last year.
The company reported revenues of $21.54 million and a loss of $59.91 million in 2005 compared to revenues of $1.15 million and a loss of $14.95 million in 2004.
The announcement cited continuing developmental costs for the CG20B yard switcher, additional warranty costs, and losses totaling $27.8 million on initial contracts.
Thirty-two locomotives were completed during the year. The current order book contains executed contracts for 160 locomotives with three more being finalized.
On Dec. 31, 2005, Railpower had cash and cash equivalents of $476.8 million compared to $53.9 million one year earlier.
Korea/Japan consortium gets nod for SEPTA order--againA staff report has recommended that the Southeastern Pennsylvania Transportation Authority (SEPTA) award a $244 million contract to United Transit Systems, a consortium of South Korea's Rotem and Japan's Nissho Iwa Ltd., for the supply of 104 new electric MU cars over the next four years. UTS was announced as low bidder on the contract two years ago (RA, March 2004, p. 21), but another bidder, Kawasaki, contested the award. SEPTA's board is expected to approve award of the contract to UTS at its meeting on March 23.
Amtrak weighs future of long-distance trainsAmtrak Board Chairman David Laney told a Senate Appropriations Subcommittee yesterday that the national passenger railroad is making a “comprehensive review of its long-distance network, for improved financial performance or possible restructuring and configuration.” He said Amtrak is also seeking efficiencies through the closing and consolidation of some facilities and the outsourcing of some functions, and has reduced food service costs without sacrificing quality.
Laney was joined by Acting President and CEO David J. Hughes in outlining Amtrak's funding needs and reform plans for FY 2007 at the subcommittee hearing. Amtrak is seeking a total of $1.598 billion, covering “several extraordinary capital needs,” compared with operating and capital funding of $1.3 billion for the current year.
Laney and Hughes made these other points:
“Amtrak is lowering its requested level of operating support for FY07 by $42 million to $498 million, compared to this year's operating request of $540 million. The requested level of federal operating support is less than 20% of the railroad's operating budget.
“For greater reliability of its infrastructure, Amtrak is proposing an increase in the funding of capital projects by $235 million, from $495 million presently to $730 million. This will include a number of major one-time projects, including a span replacement on the Thames River Bridge in Connecticut, upgrading of centralized dispatching systems, a Northeast Corridor Master Plan to determine other long-lead infrastructure requirements, and other investments supporting the railroad's Strategic Reform Initiatives.”
Noting that Amtrak has reduced its debt by $300 million in the last three years, Laney said Amtrak is proposing no new borrowing.
Nober heads for the private sectorFollowing more than a dozen years in government service, outgoing Surface Transportation Board Chairman Roger Nober will be joining the Washington, D.C. office of international law firm Steptoe & Johnson LLP. Nober has been elected a partner and will join the firm’s Transportation Practice Group. The appointment takes effect March 27.
Steptoe’s Transportation Practice Group represents railroads, trucking companies, airlines, and ports. The firm, which describes itself as having “a national and international reputation for vigorous representation of clients before governmental agencies,” provides legal counsel to the Association of American Railroads, BNSF Railway, and two other Class I’s. Its attorneys have participated in cases involving rail mergers, rail rates, state taxation of railroads, and creation of short lines.
Nober graduated from Harvard Law School in l989 and began working on surface transportation issues for a congressional subcommittee in 1993. From 1997 through 2001, he served as chief counsel to the House of Representatives Committee on Transportation & Infrastructure. In May 2001, Nober moved to the U.S. Department of Transportation, where he served through November 2002 as counsel to the Deputy Secretary of Transportation. President Bush nominated Nober to the STB in July 2002; in November of that year the Senate confirmed his appointment and he was named Chairman.
Nober is the second consecutive STB chairman to leave the agency for a private law practice. His immediate predecessor, Linda J. Morgan, served as chairman when the agency was dealing with several Class I merger applications. Morgan is now a transportation attorney with Covington & Burling, a Washington, D.C. practice among whose clients are Union Pacific.
Railroad capital spending will rise 21% in 2006The Association of American Railroads said today that U.S. Class I railroads will spend more than $8 billion this year on capital improvements to track, equipment, and infrastructure--21% more than they spent last year. Infrastructure spending will be at a new one-year high.
”These massive investments by the Class I railroads will translate into jobs, increased productivity for the railroads, additional capacity, and better service for our customers,” said AAR President and CEO Edward Hamberger. He pointed out that U.S. railroads are “at or near the top” of all industry in capital intensiveness, investing an average of 17.8% of their revenues into improvements. The average for manufacturing is 3.5%.
Since 1980, when they were substantially deregulated, U.S. freight railroads have invested more than $120 billion in capital improvements. The railroads spend an additional $10-12 billion a year, charged to operating expenses, to repair and maintain their infrastructure and equipment.
CPR traffic controllers ratify agreementCanadian Pacific Railway today announced the ratification of a three-year agreement with the Traffic Controllers Union that contains provisions “designed to improve retention of current employees and to make the position more attractive for people looking for a career in the rail industry.” Darrell Arnold, chairman of the union's negotiating committee, said the agreement contains quality-of-life improvements and represents “the most inspiring round of collective bargaining that I have seen in my 25 years as a union negotiator.”
CPR also announced ratification of a new four-year agreement with the railroad's police officers that increases wages and benefits.
New earnings forecast boosts UP stockUnion Pacific stock rose more than 5% in morning trading following its announcement late yesterday of an upwardly revised earnings forecast. UP now anticipates first-quarter earnings ranging between $1 and $1.10 per share vs. an earlier forecast of 80 to 90 cents. The Wall Street consensus had been 89 cents. The company earned 48 cents a share in last year’s first quarter when a West Coast storm eroded profits.
UP said its new projects are driven by “stronger than anticipated commodity revenue growth and greater than expected operating margin improvements.” Operations also benefited from mild winter weather, network management initiatives, and capacity improvements.”
As for the longer term, UP President and CEO Jim Young commented, “We are optimistic about the ongoing strength of the economy in 2006, but remain mindful of the challenges associated with moving record volume across our system.”
Other railroad stock also rose in the wake of UP’s upbeat news combined with positive reports from railroad analysts at Merrill Lynch and UBS. At 1 p.m. today, BNSF shares were up 4.67%; CSX, 3.61%; Norfolk Southern, 3.59%; and Kansas City Southern, 4.58%.
U.S. trade with Nafta partners rises 10%The Bureau of Transportation Statistics (BTS) reported today that surface transportation trade between the U.S. and its Nafta trading partners, Canada and Mexico, rose 10% in 2005 over 2004, when a double-digit increase over the prior year was also reported. The total value of shipments reached $698 billion in 2005, with imports up 10% to $401 billion and exports up 10% to $297 billion.
U.S. Imports by rail last year increased 4.2% to $81.4 billion, with exports rising 16% to $35.1 billion. The value of truck imports rose 7% to $256 billion; truck exports were up 9% to $234.6 billion.
Imports by pipeline increased 32.4% to $48.8 billion; exports rose 75.7% to $2.9 billion.
STB will hear views on fuel surcharge controversyThe Surface Transportation board has scheduled a hearing May 11 on railroad fuel surcharges, responding to shipper complaints that recent surcharges “are designed to recover amounts over and above increased fuel costs.”
The STB emphasized that the hearing “is not intended to address the level of surcharges,” but “to provide a forum for the expression of views by rail shippers, railroads, and other interested persons, on the manner in which fuel charges are calculated and charged by railroads.”
Noting that it has “broad authority over the reasonableness of railroad rates” the STB said that “to the extent that shippers are complaining of the railroads’ practice of labeling a rate increase as a fuel surcharge when the increase is not directly and closely correlated to increases in the cost of fuel for the particular movement to which the surcharge is applied, the board arguably could consider that as a possibly unreasonable practice.”
China charts $22 billion high speed courseChina announced that it will build two high speed rail lines at a total cost of nearly $22 billion. One will be an 820-mile, 220-mph line between Beijing and Shanghai adapting various conventional high speed technologies to Chinese needs. It's estimated to cost $17.5 billion. The other line, to the surprise of many foreign observers, will be a maglev operation extending 110 miles from Shanghai to Hangzhou and costing an estimated $4.3 billion. As International Railway Journal noted, “Though a short maglev line links Shanghai's main airport with its financial district, further extensions were thought to have been rejected on cost grounds.”
Court rebuffs railroads on crew-consist and FELA bargainingThe United Transportation Union announced that a U.S. District Court in Illinois ruled March 10 that the union “has no obligation to bargain nationally over crew consist and no obligation at all to bargain over the railroads' desire to scrap the Federal Employers' Liability Act (FELA).”
In March 2005, the UTU went to court to challenge a demand by the National Carriers' Conference Committee (NCCC) that the UTU negotiate at the national level crew-size agreements that were originally negotiated on a railroad-by-railroad basis. Another carrier demand called for bargaining over a legislative proposal to amend or eliminate FELA.
The UTU posted on its website the following from Judge Patrick Murphy's decision:
“Based upon the facts presented, the long history of local negotiating of crew consist issue, and case law, UTU has no obligation to bargain with defendant carriers in national handling regarding the crew consist issues raised [in the carriers' Section 6 notices].”
As for the FELA issue, the judge ruled: “Because Congress is not a party to the agreement [being negotiated], UTU, and defendant carriers, for that matter, lack the authority to agree to the proposal's enactment. Therefore, UTU has no duty to bargain on this provision, as it is non-bargainable under the Railway Labor Act.”
RAILWAY AGE ANNOUNCES SHORT LINE AND REGIONAL RAILROADS OF THE YEARRailway Age magazine has named Americus, Ga.-based Georgia Midland Railroad as 2006 Short Line Railroad of the Year, and Rochester, N.Y.-based Buffalo & Pittsburgh Railroad as 2006 Regional Railroad of the Year. The awards will be presented at the American Short Line and Regional Railroad Association's annual meeting in Orlando, Fla., on April 24.
“This year's award winners epitomize short line railroading at its best,” said Robert P. DeMarco, senior vice president and group publisher of Railway Age's parent company, Simmons-Boardman Publishing Corp. “The turnarounds experienced by both carriers were more than just financial. Their impressive maintenance, operations, safety, and productivity improvements are thanks to the employees' dedication, teamwork, and perseverance. In all respects, their efforts paid off. Railway Age is honored to present these railroads with the industry's top small-road achievement awards.”
The winning entry for short line railroad of the year was submitted by Georgia Midland Railroad (GMR) President and CEO Brad Lafevers The railroad is a subsidiary of Atlantic Western Transportation, Inc.
“During the due diligence phase of our acquisition of GMR in 2003, we found a deteriorated physical plant, discouraged customers who were seeking other transportation modes, and employees who did not possess the training to perform in a safe and efficient manner,” said Lafevers. But this did not deter him. Lafevers and his staff recognized the potential of the 100-mile railroad, which operates in four central and eastern Georgia segments. In February 2004, they set out to turn it around.
Intense marketing and safety-training efforts began, and GMR took on extensive maintenance work. According to Lafevers, the first day of hi-rail inspections produced more than 20 slow orders, and in many areas, maintenance-of-way employees had to walk due to broken rails and striped rail joints. But the work was completed, and GMR re-established lost traffic and rebuilt customer relationships. “We found customers eager to utilize the railroad and willing to commit to rail shipments,” Lafevers said.
After just 10 months, GMR achieved its first profitable year, and has operated for the past two years without a personal injury or reportable train accident. In 2005, GMR saw carloads grow 39.5%, freight revenue rise 51.1%, and total revenue increase 52.7% over 2003 results. Its operating ratio improved by 40.2 percentage points, dropping to 77.8%.
“As we enter 2006, we are excited about the future,” summed up Lafevers. “Several new industrial prospects could announce facilities on the railroad this year, and our customer base continues to bring more business to our line. With a renewed vigor of the railroad, we have the resources to continue improvements to the track, and the railroad employees are committed to their superlative safety effort.”
The winning entry for regional railroad of the year was submitted by Buffalo and Pittsburgh (B&P) President and General Manager David J. Collins. B&P, which operates along 600 miles of track in western Pennsylvania and New York states, is a subsidiary of Genesee & Wyoming, Inc.
B&P faced the loss of more than $8 million in bridge traffic--one-third of its revenue--when Norfolk Southern and CSX Transportation acquired Conrail in 1998. To survive, the regional considered breaking its line in two or more segments. Though bridge traffic disappeared, the move was unnecessary. Today, bridge traffic represents less than 1% of all traffic, and more than a third of the regional's $33 million in annual revenues and 65,000-plus carloads is from to business built since the Conrail carve-up. “This growth comes thanks to an all-out marketing push, capitalizing on economic trends benefiting business in B&P's region, and support from state and local government entities that recognized the importance of the railroad to the region,” said Collins.
One project that helped lead the way was the 2005 opening of the long-dormant, 16-mile Indiana Branch. Funded in part by a grant from the Commonwealth of Pennsylvania, the $10 million project has reduced highway maintenance costs and provides B&P with direct access to a generating station at Homer City, Pa. Up to 10,000 cars are expected to roll down the line in 2006. The railroad's merchandise traffic continues to grow, bringing in more than $3 million per year from new business with small- to mid-sized on-line customers, and the recently acquired CSX P&W Subdivision and collaborations with neighboring short lines.
B&P credits its success to teamwork and cooperative labor-management relations. The regional has established terminal-based safety teams to address specific issues and the scheduling of road trains to put crews home every night, according to Collins. In 2005, the overall GWI NY/PA region had its safest year ever, with an FRA frequency index of 1.72.
For B&P, 2005 was a turning point. “We turned our fear of survival into the building blocks of a bright future,” Collins said.
The awards will be announced in the April issue of Railway Age.
BNSF to expand capacity in CaliforniaAs part of BNSF Railway's $2.4 billion capital plan for 2006 (Breaking News, Jan. 24, 2006), the railroad announced today that it will invest $100 million to increase rail capacity and maintain track, facilities, and equipment in California.
The new project includes $26 million to expand parking and stacking space at BNSF's Hobart intermodal facility in Los Angeles; $16 million to extend BNSF main line track near East Barstow; and $9 million to boost parking at BNSF's San Bernardino intermodal facility. These efforts are in addition to ongoing work on a third main line on the Cajon subdivision.
Also, as previously reported, the railroad's capital plan sets aside $600 million for 310 low-emissions locomotives--many of which will operate in the Golden State.
Rail traffic in California, and across the nation, continues to outpace available capacity, and all of these projects are expected to help expand BNSF service. The railroad's Chairman, President, and CEO Matthew K. Rose recently expressed his appreciation to California Governor Arnold Schwarzenegger for Caltrans' consideration of a $155 million third rail line and additional overpasses between Los Angeles and Fullerton (details, see Breaking News, Feb. 6).
Ad dollars boost WMATA capital budgetSince 2001, revenue derived from advertising has been steadily growing for the Washington Metropolitan Area Transit Authority. WMATA expects to bring in $33 million in Fiscal Year 2007—almost double the amount realized in FY 2001—and by 2010 expects to be bringing in as much as $40 million annually. Revenue is derived from a variety of media: Railcar and bus wraps, railcar and bus print ads, station banners, and rail tunnel ads (short, silent video commercials on tunnel walls that passengers see while the train is in motion). Two tunnel ads are scheduled to be installed in April; two others are scheduled to be installed by January 2007. In addition, video monitors on some trains and buses are scheduled to be tested within a year.
WMATA has been using some of the revenue derived from advertising and other “non-passenger” sources to make security- and passenger information-related capital improvements. In FY 2006, the agency allocated $1.4 million toward purchase of bomb-resistant rail station trash cans, addition of Spanish translation to its Trip Planner, upgrade of its customer service telephone system, and installation of remote health monitoring devices on platform passenger information displays. In FY 2007, WMATA plans to spend $2 million on trash cans, a new sales and service center at L'Enfant Plaza, and such Trip Planner improvements as information about delays, elevator and escalator outages, and emergencies. Among other programs are a pilot project to install electronic message boards outside of two rail stations that would display real-time information about train arrival and service disruptions before riders pay to enter the system.
UP kicks off track maintenance programsUnion Pacific is spending $53.3 million on track improvements in the St. Louis-Kansas City, Mo., and Los Angeles Basin regions. Last month, the railroad began installing 182,000 new ties, spreading more than 258,000 tons of ballast, and replacing the surfaces at 173 grade crossings and rail in curves in the Missouri area, which sees some 50 freight and four Amtrak trains daily. The work, valued at $32 million, is slated for completion by November.
Through April, UP's $21.3 million track renewal project in Los Angeles will replace 43.3 miles of rail between East Los Angeles and Riverside, and resurface many public crossings along that route. Wooden ties, which are found along most of the line, will be replaced with 110,000 concrete ones. Using UP's new TRT 909 track machine, the ties will be installed at a rate of up to 3,000 ties per eight-hour day.
The projects are expected to cause delays and disrupt Amtrak and Metrolink service, respectively. As a result, Amtrak has developed an alternate service plan and MetroLink is offering limited bus service in those areas.
For ARI, a strong 2005 report cardNorth American railcar manufacturer and repairer American Railcar Industries reported a “strong financial performance” and “substantial” backlog in 2005 during today's earnings announcement. The year closed with a 92% increase in unfilled orders to 14,510 cars vs. 2004's 7,547. This will provide “a platform for future growth,” said James J. Unger, president and CEO.
ARI--which held an Initial Public Offering of its stock worth up to $150 million in January (See breaking news update, Dec. 13, 2005)--shipped 6,875 cars last year, nearly 57% more than full-year 2004. Those shipments were comprised of 4,240 covered hoppers, 785 centerbeam platform cars, and 1,850 tank cars.
For the last three months of 2005, ARI sales were $166 million and the net loss attributable to common stock was $1.8 million. Those results include charges of $2.1 million in preferred stock dividends and $1.3 million in interest expense on outstanding debt. According to ARI, the preferred stock and “substantially all” the debt were retired in first-quarter 2006 in connection with the IPO. The results are also said to include non-recurring expenses of $10.9 million from a retirement benefit plan separation agreement with an affiliate that was executed in December 2005 in anticipation of the IPO.
Full-year 2005 sales reached $608.2 million and net earnings contributable to common stock were $1.5 million. In comparison, 2004 saw sales of $355.1 million and a net loss attributable to common stock of $11.3 million.
ARI also declared a cash dividend of $0.03 per share of common stock.
UP reports Powder River Line progressUnion Pacific updated its customers today on the state of its coal operations, asserting that “we should deliver record volumes of SPRB [Southern Powder River Basin] coal in 2006.” “In conjunction with BNSF, we are expanding the Joint Line,” said Doug Blass, UP’s vice president and general manager-energy. “Work is already under way on the new third main line between Nacco Junction and Reno Junction. Plans for adding a fourth track on Logan Hill are under consideration.”
UP described other investments it is making to support the coal business: “For example, the Marysville Bypass is now open, reducing delays on our key corridor to Kansas City. We are also installing a third run-through track in North Platte for coal train processing, extending sidings, and adding staging capacity for coal moving to river terminals, as well as improving line capacity by adding centralized traffic control across Iowa.”
Meanwhile, UP said three teams continue to evaluate methods to reduce the amount of coal dust deposited in the Joint Line roadbed. UP described one effort that shows particular promise: “Through a collaborative effort with the National Coal Transportation Association, the mines, and BNSF, an improved coal-loading chute has been designed. The new chute distributes coal more evenly and produces a load with a lower profile above the side sills of the railcar. Preliminary test results have demonstrated a 30-60% reduction in coal dust blowing off the top of the car during the early portion of the route. The results are so encouraging that all of the mines have agreed to adopt the new design.”
Metrolink initiates “sealed corridor” programSouthern California’s Metrolink says it will become the nation’s first commuter rail agency to apply the “sealed corridor” approach to grade crossing safety. Metrolink plans to install such improvements as four-quadrant gates, “Z” pedestrian crossings, median separators, locked gates, and fencing at 57 crossings along 65 miles of track on its Ventura county and Antelope Valley lines. The agency is seeking federal funding to help pay for the program. It already has a $250,000 federal study grant and $3 million dollars in crossing funding for FY 06.
Metrolink’s program will be modeled after the “sealed corridor” program that North Carolina initiated between Charlotte and Raleigh in 1995. In announcing its own program on March 6, Metrolink noted that “North Carolina saw an 86% reduction in grade crossing violations when they installed quad gates, a 77% reduction with median separators, and an 84% reduction with longer crossing arms.”
Since it went into business in 1992, Metrolink has invested more than $70 million in crossing improvements, including the closing of seven public and 22 private crossings.
OCTA: $30 million available for transit improvementsThe Orange County Transportation Authority has allocated $30 million in local funding to help convert the area's 11 Metrolink commuter rail stations into multimodal transportation hubs. The City-Initiated Rapid Transit Program “encourages Orange County's 34 cities to take the lead in creating rapid transit extensions from existing Metrolink stations to major employment, residential, and activity centers,” according to OCTA. Extensions could include bus circulators, shuttles, light rail, monorail, or other transit technologies.
Cities can apply for $100,000 grants--paid for by Orange County's half-cent sales tax for local transportation improvements--to conduct assessments and develop initial project concepts. OCTA will then issue a “competitive call for projects” and distribute the remaining funding based on “project readiness and expected benefits.”
Raritan Express Corridor ramps up for service To reduce dockside congestion and speed container throughput, the Raritan Central Railway (N.J.) is developing a new rail shuttle service with New Jersey transportation officials, railroads, and shippers. The daily Raritan Express Corridor will run from the Port Authority of New York and New Jersey's Newark and Elizabeth, N.J., terminals south to the Raritan Center Industrial Park (Edison, N.J.), and offer warehousing, transloading, and distribution services. It is slated to come on line within the next 18 to 24 months.
“Patterned after the highly successful Alameda Corridor in Los Angeles, the Raritan Express Corridor will combine the best features of New Jersey's established port system with the extensive infrastructure (21 million square feet of warehousing and distribution space), room for growth (over 3,000 acres), and services available at the Raritan Center and Heller Industrial Parks,” said Raritan Central.
The new service will help eliminate more than 300 daily truck trips, according to the railroad company.
Transport Canada looking for low-cost grade crossing technologiesTransport Canada is soliciting input from North American suppliers of highway/rail grade crossing warning systems and ITS (Intelligent Transportation Systems) to participate in study of technologies that would improve safety at crossings not protected by conventional automatic warning systems.
“Improved safety at level crossings without automatic warning systems is of growing interest in today’s rapidly changing environment,” Transport Canada said in announcing the study. “For example, the characteristics of vehicles and equipment, such as weight, length and width, have changed considerably in recent years. Moreover, some trains now travel at speeds of up to 100 mph, which places new demands on warning systems. Crossing design must place a different emphasis on sight lines for drivers to be able to see oncoming trains. Similarly, the soundproofing of vehicles has been greatly improved, which may reduce the effectiveness of train horns. At private level crossings, trains are not required to sound their horns. In the latter case, drivers have to rely solely on their field of vision, which can be significantly reduced if it is snowing, raining, or foggy.”
Transport Canada says it is most interested in “efficient, affordable technologies already available that could be further developed to help to improve safety at level crossings.” Such devices must 1) cost less than a traditional warning device (“possible purchase price between C$10,000 and C$30,000”); 2) operate “independently of railway infrastructure” by not requiring installation of additional equipment on board locomotives or on the wayside; 3) can be installed and maintained by a railroad or highway authority; 4) has an independent electrical power system; and 5) provides train crews with an indication of whether the system is functioning so a train can be slowed or stopped in the event of a malfunction.
Interested suppliers are asked to submit technical specifications in writing to the Transportation Development Centre (TDC) of Transport Canada by June 1, 2006:
Paul Lemay, Eng, MBA
Senior Project Manager
Transport Canada
Transportation Development Centre
800 René Lévesque Blvd West, Suite 600
Montreal, QC H3B 1X9
Tel: (514) 283-0028
Fax: (514) 283-7158
E-mail: lemayp@tc.gc.ca
A status report will be posted regularly on the TDC website at www.tc.gc.ca/cdt/menu.htm.
New business helps NS post a record year2005 was a banner year for Norfolk Southern, with the railroad posting record net income of $1.3 billion, a 39% gain over 2004. Part of that had to do with NS’s ability to capitalize on a strong U.S. economy by participating in the location of 78 new industries and providing support for the expansion of 43 additional industries along its rail lines. NS says the new plants and expansions represent a customer investment of approximately $2 billion, and are expected to create an estimated 7,700 jobs in the railroad’s territory and eventually generate more than 88,000 annual carloads of new rail traffic.
A $600 million expansion of a Mercedes-Benz automobile assembly plant at Vance, Ala., was the largest such project. Plastics-related plants alone accounted for 17 new or expanded projects. Other industries locating on NS lines during 2005 included grain elevators, cement plants, lumber and paper facilities, chemical plants, steel and food processors, and distribution warehouses. During the past 10 years, NS’s industrial development department has participated in the location or expansion of 1,098 industries, which invested $24.5 billion and created nearly 63,000 jobs in the territory served by the railroad.
Washington Metro looking to build dedicated test trackWith 952 rapid transit cars on line and another 184 on the way for delivery by 2007, Washington Metro is conducting an internal study of a new 10,000- to 15,000-foot-long railcar test track. Officials are said to be eyeing locations along the Orange Line between the New Carrollton and Landover rail stations in Maryland and the Green Line between Maryland's Greenbelt and College Park stations.
New and overhauled trains are currently tested when the system is closed and during non-rush hours, which requires sharing a single track.
“A dedicated track would mean fewer delays for passengers and is more efficient for employees to conduct testing and training,” said Dan Hanlon, Metro's chief vehicles engineer.
Results of the cost and location analyses are expected by the end of May.
In reversal, ATA backs bigger, heavier trucksThe board of directors of the American Trucking Associations has voted to support legislation in Congress that would open highways to heavier and longer truck-trailer combinations. This reverses a position taken in 2003 when the ATA entered into an agreement with the Association of American Railroads that apparently expired with passage last year of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act—a Legacy for Users (SAFTEA-LU). ATA had agreed not to seek increased size and weight limits in that legislation in return for a pledge by the AAR to cease supporting legislation to ban existing double and triple trailers.
In opposing bigger trucks, the railroads cite a U.S. DOT study which found that trucks weighing 80,000 to 100,000 pounds fail to pay their share of highway costs by 50%. A large number of other interests have opposed bigger trucks on the basis of safety. Trucking companies with a vested interest in fleets that adhere to existing limits have also opposed a change. The ATA says its own position in the past has been one of “benign neglect.”
Los Angeles awards Exposition Line contractWork on the 8.5-mile Exposition Light Rail Transit Line in Los Angeles is expected to begin this summer following the award of a $420.3 million design/build contract to the joint venture of FCI/Fluor/Parsons. The Exposition Line Construction Authority approved the contract March 3.
The line will share two stations—Seventh Street/Metro Center and Pico/Chick Hearn—with the existing Metro Blue Line. Just south of downtown, it will proceed west on Exposition Boulevard to a terminus at Washington/National in Culver City. Total cost of the project is estimated at $640 million. A proposed second stage would extend the line to Santa Monica.
Trinity railcar shipments at five-year highTrinity Industries reports that it shipped 5,918 new railcars in the fourth quarter of 2005 and 22,934 for the full year, “the highest total since 1999,” according to Chairman, President, and CEO Timothy R. Wallace. “In addition, Trinity made a significant investment in the railcar leasing business during 2005, adding more than 5,250 cars to its lease fleet, which brings the total number of cars in our lease fleet to 24,875 at year-end,” said Wallace. Trinity earned $25.4 million in last year’s fourth quarter compared with $3.0 million the prior-year period, and $86.3 million for all of 2005, compared with a net loss of $93 million in 2004, which included $57 million in pretax charges for increases in the cost of steel and other materials.
LRIW offers college scholarshipsThe League of Railway Industry Women is offering two $3,000 college scholarships for the 2007-2008 academic year. Association members and member-company employees in good standing, and their dependents are encouraged to apply.
To qualify, applicants must be participating in a four- or five-year program leading to a bachelor's or master's degree, and entering at least their sophomore year. In addition, member applicants must be enrolled as part-time students; dependent applicants, full-time students. The curriculum chosen need not be transportation or railroad related. Please note that 2006-2007 scholarship winners are ineligible.
Applications are due by July 1, and may be obtained by contacting Scholarship Chair Kelly Z. Case, Control Chief Corp., 200 Williams Street, Bradford, Pa. 16701, Tel.: (814) 362-6811.
LRIW reserves the right to not distribute funds if there are no suitable scholarship applicants.
FRA: New reg to reduce human factor-caused train accidents due this fallThis September, the Federal Railroad Administration will issue a new regulation to address human error, which is said to cause 38% of train accidents (see related update item below, “Collisions mar otherwise good safety record”). It will be the first significant update of federal regulations governing railroad employee adherence to operating rules.
The rule will focus on reducing such errors as improperly lined track switches, shoving or pushing railcars without properly monitoring for safe conditions, and leaving cars in a position that obstructs an adjacent track.
This “is one of many aggressive steps we are taking to prevent train accidents from occurring in the first place,” Federal Railroad Administrator Joseph H. Boardman said today, during a tour of CSX Transportation's Railroad Education & Development Institute.
FRA is also at work on a pilot project to study close calls (events that do not result in an accident but could have) and research to address railroad worker fatigue to improve train crew scheduling practices.
APTA appoints new chairThe American Public Transportation Association has named Howard Silver of Golden Empire Transit District (Bakersfield, Calif.) chair, succeeding Ronald L. Barnes, resigned. Silver is a member of the board of directors at GETD and previously served as APTA first vice chair.
Under APTA bylaws, Barnes was forced to step down as chair after leaving his high-ranking position at a transit agency and joining the private sector. He recently signed on with MV Transportation, Inc., following a stint as deputy director of operations at Miami-Dade Transit.
Silver will hold the chair position until October. He will then be eligible to hold a full, one-year term for 2007.
For Amsted, another wheel plant in ChinaIn a joint venture, Amsted Rail and China's Ministry of Railways will open a wheel production facility in Xinyang City (Henan Province). The plant, Amsted's second in China, will manufacture cast wheels for the Chinese domestic and export markets. It could open as early as year-end 2007.
Amsted also announced a $50 million capital plan to increase capacity and improve production efficiency at its North American wheel operations.
Umler EMIS: New implementation date announcedThe AAR Universal Machine Language Equipment Register (Umler®) Committee is hard at work updating the Umler system--which stores nearly all North American railcar fleet data, including dimensions, features, and weights, as well as inspection information. The first phase of the project laid the groundwork for a new system called Umler EMIS (Equipment Management Information System). Completed in May 2004, it created a new website (http://emis.railinc.com), and upgraded transportation-pool and pool-assignment management. The second phase, originally due for implementation on Feb. 26, will now take effect on March 19.
According to the committee, the revised date “will allow for the inclusion of additional functionality, which will give EMIS TRAIN II message users the ability to refresh data in their internal databases.”
The committee reminds users that on March 19, the reporting of Air Brake Tests and other inspections will need to be reported via the Umler EMIS system (http://emis.railinc.com).
For more details, visit www.railinc.com.
Collisions mar otherwise good safety recordThe Federal Railroad Administration today released railroad safety statistics for calendar year 2005, and they were generally positive. Railroads reported a total of 13,388 s and incidents, down 6.7% from 2004. Train s were down 7.89% to 3,077, and the number of derailments dropped 8.4% to 2,201. But train collisions, which have recently been a focus of FRA concern, increased 8.4% to 257.
Railroads reported 903 ities last year, five more than the year before. Train s caused 33 ities, compared with 13 in 2004. Grade crossing ities dropped 3.5% to 355, while trespasser s increased 0.6% to 485.
In an unrelated announcement today, the FRA said Administrator Joseph H. Boardman would be in Atlanta tomorrow to visit a CSX Transportation employee training facility and provide a progress report on the National Rail Safety Action Plan.