June 2005
New FRA rule requires stronger event recordersRailroads have until Oct. 1 to harden their locomotive event recorders, according to the Federal Railroad Administration. The agency today issued a final rule requiring crash survivability improvements to prevent data loss from exposure to fire, impact shock, fluid immersion, and other potential damage resulting from train accidents.
Data on horn activation, “cruise control” functions, and train control operating directives sent to engineers' onboard displays also will have to be captured. Already included are train speed, use of automatic air brakes, throttle position, and cab signal indication, among others.
In addition, railroads must keep stored accident data for one year vs. the traditional 30 days, and improve inspection, testing, and maintenance procedures.
Finally, the rule gives the industry four years to replace older-style event recorders using magnetic tape to store data with new electronic-memory models.
“We are making sure that investigators have more and better information available when working to find the cause of an accident,” said FRA Administrator Joseph H. Boardman during the announcement. “The more we can learn from train accidents, the more we can prevent them from occurring.”
Congressional scenario plays out in Amtrak's favorAct I of the annual Congressional tragicomedy (some would say three-ring circus) that determines how much federal support Amtrak will receive for the coming fiscal year ended in Amtrak’s favor when the House of Representatives, rejecting the Bush Administration’s zero-funding attempt and the full House Appropriations Committee’s bankruptcy/shutdown-inducing $550 million, voted $1.17 billion for Fiscal Year 2006.
In Act I, Scene 1, the House Appropriations Subcommittee marked up $550 million more than the Administration and its barnstorming point man, USDOT Secretary Norman Mineta (“let’s save intercity passenger rail by killing Amtrak”), have been advocating. Act I, Scene 2 saw the full Appropriations Committee accept the subcommittee’s $550 million.
Act I, Scene 3: Enter from Stage Right and Stage Left, respectively, Reps. Steven LaTourette (R-Ohio), chair of the House Subcommittee on Railroads, and James Oberstar (D-Minn.), ranking Democrat on the full House Transportation & Infrastructure Committee. They were joined by Reps. Corinne Brown (D-Fla.), Nick Rahall (D-W.Va.), and Robert Menendez (D-N.J.) in introducing an amendment that added $626 million to the Appropriations Committee bill, boosting Amtrak’s amount to $1.17 billion. The amendment passed by a voice vote.
The House then voted 269-152 (70 Republicans among those in favor) for an amendment by Brown, Rahall, and Menendez to eliminate a spending measure drafted in committee by Rep. Joe Knollenberg (R-Mich.) that would have prevented Amtrak from using federal funds on routes that receive subsidies greater than $30 per passenger. That would have terminated 18 routes in 24 states, including all long-distance trains outside the Northeast Corridor. (Knollenberg compared Amtrak to “an overly spoiled child” that “needs discipline, boundaries, and restraint.”)
“The language this amendment deleted was mischievous for two reasons,” the National Association of Railroad Passengers said in a statement. “First, it would have ended all passenger rail service in so many states as to undercut Congress's ability to provide any funding for intercity passenger rail. Second, the language fostered the false notion that the committee-passed bill would allow some services to operate when that clearly is not the case. We are lucky to have leaders like LaTourette, Oberstar, Brown, Rahall, and Menendez, who understand both the importance of keeping Amtrak running and how close we are to losing the entire system.”
Also, the House overwhelmingly rejected by a 59-362 vote an amendment by Rep. Mark Kennedy (R-Minn.) that would have transferred $100 million from Amtrak to programs for the homeless.
As expected, Mineta responded to the House action by saying it “enables and encourages the wasteful spending and inefficient operations that have come to define Amtrak. Handing over more than a billion dollars with no reforms attached only gives Amtrak a blank check to continue misspending taxpayer money.” The Bush plan, which Mineta says is “a lifeline to a dying railroad company,” sets aside $360 million in state aid for Northeast Corridor operations (including commuter trains) if Amtrak were to shut down. Railroad industry experts (as opposed to the “ideologues” with “no practical knowledge or managerial skill” in railroading, as Amtrak President and CEO David Gunn put it), say $360 million wouldn’t even cover basic track and signal maintenance on the NEC, the nation’s busiest passenger rail corridor.
In Act II, Scene 1, scheduled for the week of July 11, the Senate Appropriations Subcommittee on Transportation and Treasury is expected to consider a counterpart Senate bill. In Act II, Scene 2, scheduled for that same week, the full Senate Appropriations Committee will act. Act II, Scene 3, Senate floor action, will follow on a date to be determined. The Senate “is inclined to give [Amtrak] the money that it needs” said Sen. Trent Lott (R-Miss.), chairman of the Surface Transportation and Merchant Marine Subcommittee of the Committee on Commerce, Science, and Transportation.
It’s not clear at this point when Act III—House/Senate Conference Committee, to determine Amtrak’s actual FY 2006 appropriation—will be staged. It’s unlikely it will take place before the month-long Congressional recess in August. It should, however, occur prior to Oct. 1, when Amtrak’s next fiscal year begins.
David Gunn said the House vote ''sends a strong message that many in Congress believe that we need to maintain a national passenger rail system.''
Greenbrier's quarterly profits on the riseThe Greenbrier Companies' financial performance for all business units was up in its third fiscal quarter, which ended May 31. This pattern is expected to continue through 2006 due to the company's railcar and marine backlog, said Senior Vice President and Treasurer Mark Rittenbaum during today's earnings announcement.
“Margin expansion was realized in both manufacturing and leasing and services, as compared to the first half of the year,” Rittenbaum added. “Now that our Mexican facility, Gunderson-Concarril, is under Greenbrier's control, we are realizing significant operating improvements, and contributions to EBITDA [earnings from operations before interest and foreign exchanges, taxes, depreciation, and amortization] and profitability.”
Greenbrier's third-quarter net earnings of $9 million, or 58 cents a share, rose 41% from $6.4 million, or 42 cents a share, during the same period last year. Excluding $1.7 million in debt-prepayment charges, adjusted earnings amounted to $10.7 million or 69 cents a share--5 cents a share higher than expected by analysts polled by Thomson Financial. Revenues came in 27% higher, reaching $286 million vs. $225.3 million a year earlier--just beating the analysts' target of $284.9 million. While the quarter's backlog of 11,500 railcars (worth $650 million) grew from 9,700 cars (valued at $600 million) during the first five months of last year, its new car deliveries held steady at 3,600.
Remembering Tom SullivanLong-time Railway Age Contributing Editor Thomas D. Sullivan, president of Oakland, Calif.-based Transportation Systems Design, Inc., and one of the best-known, highly respected engineers and consultants in the railway communications and signals field, died early Tuesday morning, June 28, after a long battle with cancer. He was 57.
Sullivan specialized in the design, specification, test, and integration of real-time process control systems for the railway industry and was actively involved with several efforts that promote the use of open interoperable and consensus-based standards. As Chief Signal Engineer for the San Francisco Municipal Railway in the 1980s, he led specification development and procurement of Muni's CBTC (communications-based train control) system. In the early 1990s, as MTA New York City Transit’s Director of New Technology Train Control, Sullivan led the agency’s multi-billion-dollar, ongoing effort to upgrade to CBTC technology, which is credited with helping stimulate signal and train control suppliers worldwide to accelerate development of next-generation technology.
Sullivan was a co-founder and secretary of the IEEE’s Rail Transit Vehicle Interface Standards Committee. He was also a member of the Board of Transit Standards Consortium and co-chaired with NYCT LonMark International’s Transportation Task Group, which is developing open-interface profiles for networked railcar systems. He was also active with APTA’s Rolling Stock Equipment Technical Forum.
As a Contributing Editor to Railway Age magazine, Sullivan wrote numerous articles on advanced technology for rail transportation. He presented many technical papers at TRB, APTA, and IEEE conferences on advanced train control systems and standards and was a regular presenter at the semi-annual Railway Age/Parsons Transportation Group International Conference on CBTC. In the late 1990s, Sullivan began teaching the industry’s first courses in CBTC and Advanced CBTC at The George Washington University Center for Professional Development in Washington, D.C.
Through TSD, Inc., Tom Sullivan provided consulting services and training to international high speed rail consortia, state regulating agencies, international rail research institutions, transportation and communications firms, network and advanced radio communications suppliers, railcar builders, train control system suppliers, transit agencies, and standards development organizations. He received his B.S. in Electrical Engineering and Computer Science from the University of California-Berkeley in 1970.
NS finalizes CP&L settlementNorfolk Southern’s coal transportation rate reasonableness settlement with Carolina Power & Light Co. has been finalized. The agreement resolves a case pending before the Surface Transportation Board. Settlement terms are confidential.
On June 27, NS announced a settlement with Duke Energy Corp. and a tentative settlement with CP&L. The two major coal customers had each filed a rate reasonableness case in 2002; in October 2004 the STB found rates for both shippers to be reasonable but directed each to initiate proceedings to determine whether phasing constraints (a phasing-in of rate increases) should apply.
NS said that, as a result of both settlements, it expects to increase second-quarter net income by $24 million, or 6 cents per diluted share.
A setback for NYCT's Fulton Street Transit Center Budget constraints at the Metropolitan Transportation Authority of New York have forced New York City Transit to modify its Fulton Street Transit Center plans. Dubbed “the most complicated maze” in the city by NYCT President Lawrence G. Reuter, the authority announced last year that the Fulton Street area would undergo a $750 million renovation. It would offer easier access to the 12 subway lines now situated in six separate stations downtown through a main transit center designed by ARUP and British Architect Grimshaw Partners. The design included a modern glass dome structure to allow sunlight to reach the platform level. In reports this week, the size of that dome will be scaled down. Also smaller: the underground walkway connecting the station to the World Trade Center site. Plans have been canceled for a link between the Cortland Street station on the R and W lines and the World Trade Center site on the E. Originally slated for completion in 2007, the project is now scheduled to come to a close at year-end 2008 and cost millions more than expected.
CSX and Duke Energy settle differencesCSX Transportation and Duke Energy reached a settlement in a coal transportation rate dispute that started December 2001. While specific details remain confidential, the agreement includes a multi-year contract for coal at rates comparable to tariff rates that Duke Power has been paying since 2002, according to the electric utility company's announcement late yesterday. It also provides for “beneficial access for rail transportation from new coal suppliers.”
“We are pleased to have resolved the CSX case, which has been pending before the Surface Transportation Board,” said Paul Newton, vice president and general counsel for Duke Power. “The contract will help keep our rail rates stable and provide economical options for purchases of coal from new sources. Like the recent settlement with Norfolk Southern regarding rail rates, these benefits will be passed on to customers annually in our fuel clause adjustment.”
Bombardier to establish high-speed train shop in ChinaBombardier, which in recent months has won more than $1 billion in contracts to supply high speed trains to China, has now entered into an agreement with the Ministry of Railways to establish a maintenance center for those trains in the southern city of Guangzhou. A 20-year contract calls for Bombardier Transportation to supply equipment and maintenance management for the shop, which will occupy a building provided by the Ministry of Railways. Scheduled to go into operation in 2007, the center will have the capacity to maintain 250 trains.
The new agreement, announced June 27, also calls for an unspecified number of additional trains to be supplied by the joint venture Bombardier Sifang Power (Qingdao) Transportation Ltd.
In addition to the high speed train operation, Bombardier participates in two other joint ventures in China: Changchun Bombardier Railway Vehicles Co. Ltd., which produces metro cars, and Bombardier-CPC Propulsion systems co. Ltd., which builds propulsion components.
New York adopts stop-gap capital programStill awaiting Albany's approval of a new five-year capital program, the Metropolitan Transportation Authority of New York on June 27 approved a stop-gap plan covering commitment of $323.2 million in the July-September period. The MTA boad approved similar stop-gap plans in January and March. While agreement was announced in April on the financing of a $21.1 billion program, including $3.8 billion this year, a few issues remain to be worked out, including a controversial proposal to triple-track a portion of the Long Island Rail Road main line between Bellerose and Hicksville.
NS settles with coal customersNorfolk Southern has reached a settlement with Duke Energy Corp. and a tentative settlement with Carolina Power & Light Co. to resolve coal transportation rate reasonableness cases that have been pending before the Surface Transportation Board. The two major coal customers had each filed a rate reasonableness case in 2002; in October 2004 the STB found rates for both shippers to be reasonable but directed each to initiate proceedings to determine whether phasing constraints (a phasing-in of rate increases) should apply.
Settlement terms are confidential. NS said that, as a result of both settlements, it expects to increase second-quarter net income by $24 million, or 6 cents per diluted share.
Rail safety research gets $6.6 million boost The Federal Railroad Administration has awarded more than $6.6 million in grants to three railroad safety projects. The Railroad Research Foundation has received $6.4 billion to help complete Positive Train Control field testing along a 120-mile stretch of track between Springfield, Ill., and St. Louis, Mo. This funding supports the ongoing North American Joint PTC program started in 1998 by the FRA, the State of Illinois, Union Pacific, Amtrak, and the Association of American Railroads. The purpose of the program is to “verify the proper and complete transmission of electronic data between equipment onboard locomotives, along the track, and from the dispatch center to safely and automatically control the movements of trains.”
Meanwhile, the agency has presented universities in Alabama and Illinois with research grants amounting to just over $250,000. Tuskegee University's $96,192 award will be used to study the effect of fatigue on different types of rail steel and identify how rail fractures develop and spread. The University of Illinois at Chicago will design software that can study derailments, three-dimensional wheel/rail contact, and railcar dynamics in high operating speeds with its $166,610 grant.
The grants fall under FRA's National Rail Safety Action Plan, which was introduced in late May as “an aggressive new approach” to improving railroad safety. It's slated to “target the most frequent, highest-risk causes of accidents, focus federal oversight and inspection resources, and accelerate research into new technologies.”
Two longs, a short, and a longIn the interests of safety, railroads all across America just got a bit louder as the Federal Railroad Administration's rule requiring trains to sound horns at all public highway/rail grade crossings unless the crossing is designated as a “quiet zone” went into effect today. And so, the traditional “blowing for the crossing”-two longs, a short, and a long-long silenced in some communities, has returned in a big way.
FRA's rule allows horns to blow for 20 seconds at a time at a maximum 110 decibels, “a noise level somewhere between a pneumatic hammer and a rock concert,” reported the St. Louis Post-Dispatch. Trains can sound their horns at any time in an emergency and when m/w equipment and crews are on the tracks.
To qualify as quiet zones, crossings are required to include such warning and safety equipment as flashing lights, bells, and gates. Areas with existing local quiet zones in place since October 1996 have at least five years to make any necessary safety upgrades. Communities with horn bans established after that and before Dec. 18, 2003, have one year. The penalty for sounding a train horn at a grade crossing within a quiet zone is $5,000.
A 2000 FRA study concluded that so-called “whistle bans” increase the risk of railroad crossing injuries and deaths. It showed that there were 66% more collisions where horns were banned. FRA expects the rule to prevent 123 collisions, 13 deaths, and 60 injuries during the next 20 years.
Railroads “on track to earn their cost of capital” says UBSA recent quarterly survey of railroad customers conducted by UBS Investment Research concludes that the railroads “have entered a period of sustained pricing improvement” that “could have very positive implications for the sector's earning growth, free cash flow, and return on investment.”
“For the first time since deregulation (1980),” UBS says, “railroads appear to be on track to earn their cost of capital.” UBS cites several factors, among which are demand, where “strong industrial production growth within NAFTA countries and growing international trade, driven by a secular shift of manufacturing to China, support ongoing demand for railroad capacity,” and pricing, where “an improving supply/demand balance is keeping an upward pressure on pricing.”
However, says UBS, volume and pricing growth is strong “not because the railroads have reasserted their presence in the supply chain as a value-creating partner, but because the alternative (trucks) is less attractive [and] more expensive. This is not likely to be a successful recipe in the long term. . . . Almost all [shippers polled in the UBS survey] characterized the price increases by railroads as unfair, as they have not come with improved supply-chain efficiency or service reliability. To the contrary, shippers believe that they are paying more for less. We believe this trend has to reverse if the railroads are to develop a value-enhancing business for their shareholders and customers.”
The survey results included a North American Railroad Scorecard for 2005, which asked respondents to rank railroads on a scale of 1 to 5 based on reliability and dependability, price, ease of doing business, and value for the money. Norfolk Southern topped the rankings (as it did for 2004) with a 3.13, followed by CN and BNSF (tied for second at 3.06), CP (2.93), CSX (2.81), and UP (2.27).
BP Amoco, NS reach mediated settlement In the first case filed under the Surface Transportation Board's small rate case guidelines (STB Docket No. 42093), complainant BP Amoco and Norfolk Southern have reached a mediated settlement. BP Amoco has requested that its complaint be dismissed.
The settlement, STB Chairman Roger Nober said, “demonstrates that our small rate case guidelines can provide an effective process for resolving disputes."
Houston: Buses first, then railA $2 billion transit plan for Houston, Tex., unveiled Monday includes 20 miles of BRT (bus rapid transit) that the Harris County MTA says will be a good interim step to expansion of the city's starter light rail system. Rail infrastructure (but no traction system) would be built in new, dedicated BRT guideways as well as in existing railroad rights-of-way the MTA will purchase, paved over, and operated with buses until ridership growth justifies tearing up the pavement, installing catenary, signals, etc., and purchasing LRVs. Only one of four proposed LRT lines will actually be built and started-up with rail. The plan also includes a commuter rail line.
The transit plan has the support of Texas Congressmen Tom DeLay and John Culbertson, who pledged to obtain $1 billion in FTA full funding grants for the program. DeLay is best known in transit circles for attempting to block construction of Houston's initial LRT. He capitulated when voters, in a November 2003 referendum, approved an all-rail buildout of the starter system.
Why the change in plans? MTA head Frank Wilson says that obtaining $1 billion from the federal government for an all-rail system is questionable, due to an unfavorable cost-benefit analysis. BRT, at a lower cost (even with the underlying rail infrastructure) has a better chance of getting funded—especially if it's supported by the anti-rail DeLay and Culbertson, political observers say.
Amtrak: House figure remains at $550 million, for nowThe full House Appropriations Committee voted yesterday to ratify its transportation/treasury subcommittee's decision to fund Amtrak at $550 million, a level that Amtrak and its supporters say will force the railroad into bankruptcy and shut-down.
The National Association of Railroad Passengers issued a strong statement attempting to dispel the myths and misconceptions that many observers believe Congress is perpetuating about Amtrak and U.S. intercity passenger rail in general.
“Knowledgeable observers agree that $550 million is far below the minimum needed to run any trains,” said NARP Executive Director Ross B. Capon. “Although Amtrak has taken on no new debt since 2002, an estimated $278 million is needed next year just to service old debt. David Gunn has said a Northeast Corridor-only system would require about $1.2 billion. Amtrak Chairman David Laney and DOT Inspector General Ken Mead both testified that dropping all long-distance trains would save only $300 million a year, and that only after several years of severance payments.
“Even level funding of $1.2 billion would leave Amtrak unable to install long-lead-time capital items already purchased. Due to the pressing needs of Amtrak's capital program, Amtrak, which ended Fiscal 2004 with over $200 million in cash, has been spending at a $1.4 billion rate. The Bush-appointed Amtrak board of directors requested a FY06 federal grant of $1.8 billion to continue movement towards a state of good repair. DOT Inspector General Ken Mead testified that $1.4-1.5 billion, plus state funding continuing at present levels, is needed just to maintain the status quo. Nonetheless, House Subcommittee Chairman Joseph Knollenberg (R-Mich.) claimed that $550 million (55% below current federal funding) would let most short-distance routes continue.
“The same bill that kills intercity passenger rail would increase federal-aid highway spending to $37 billion—$2.7 billion above the current level and $1.6 billion above President Bush's request and increase Federal Aviation Administration spending to $14.4 billion—$877 million above the current level and $1.7 billion above President Bush's request.
“Although the bill would force a systemwide Amtrak shutdown, and would raise costs of providing commuter rail in many markets, the bill identifies 18 routes for which federal funding could not be used: the long-distance trains plus Chicago-Detroit-Pontiac, Chicago-Indianapolis and New York-Charlotte. Report language claims these trains lose over $30 a passenger.
“Given the skeletal nature of Amtrak's route network, we believe any route ranking should be used to see what lessons from best performers could guide improvement of weaker ones. But, no matter how many trains Amtrak eliminates (and two significant ones were dropped in the past eight months), critics will call for more cuts. The committee's $30-dollar-a-passenger sledgehammer approach cries out for clarification that an economically sound ranking would reflect.”
The bill may go to the Rules Committee Monday, and the House floor later next week. Amtrak's survival could depend on a successful floor amendment, which may depend on finding offsets (spending reductions, revenue increases) elsewhere in the bill. This will be followed by a House/Senate conference. The process is expected to take a long time, possibly even beyond expiration of Amtrak’s fiscal year on Sept. 30.
More trailers for Thoroughbred DirectNorfolk Southern intermodal logistics subsidiary Thoroughbred Direct Intermodal has completed acquisition of 300 53-foot railroad-ready truck trailers through a lease with the Vermont Railway Company. The acquisition marks the company's entry into trailer fleet control. Thoroughbred Direct General Manager Joe Dryburgh says acquiring and managing a trailer fleet “is the logical progression in Thoroughbred Direct's evolution, and we hope to triple the size of our trailer fleet by the end of 2005."
UP recognized as “healthy lifestyle” leaderThe National Business Group on Health today presented Union Pacific with a “Best Employers for Healthy Lifestyles” platinum award for its HealthTrack program. The program is designed to reduce obesity in and encourage the healthier living of UP employees. The railroad was one of 22 winning companies that “recognize the urgent need to improve their workers' health, productivity, and quality of life,” according to NBGH, a non-profit group.
UP's leaders “know how critical it is that they support their employees' efforts to choose healthier lifestyles,” said Helen Darling, president of NBGH, in announcing the winners during the Obesity Leadership Summit.
Commented UP Director-Health and Safety Marcy Zauha: “Creating a culture of health and wellness for employees helps UP fulfill its corporate vision--a railroad where our customers want to do business, employees are proud to work, and shareholder value is created, and public and employee safety is our top priority.”
Santa Clara Valley TA awards $1.5 million security contractSanta Clara Valley Transportation Authority has selected the Viscom Division of Diversified Security Solutions, Inc., to provide and install video surveillance systems on 80 light rail vehicles. As part of the $1.5 million contract, Viscom also will maintain the equipment for three years.
VTA decided to include the surveillance systems on its new low-floor Kinkisharyo LRVs after the “large success” of its five-year-old, on-board surveillance program on buses, according to VTA Project Manager Robert Gave.
Viscom will equip the cars with Mobile Digital Video Recorders and March Network's Enterprise Management Suite software. A 802.11g network will be used for communications between the onboard recorders and VTA's central monitoring station.
Viscom was one of seven vendors that responded to VTA's RFP and one of three that was selected to participate in a three-month equipment trial prior to being awarded the contract.
Biden bill targets “high-risk” hazmat corridorsLegislation introduced by U.S. Senator Joseph Biden (D-Del) would tackle the railroad hazmat security problem by designating high-risk corridors that railroads would be required mostly to avoid in the movement of materials specifically classified as extremely hazardous. Biden's bill addressed the concern raised by the Washington, D.C., City Council with its controversial and court-challenged ban on the rail transport of hazmat within two and one-half miles of the U.S. Capitol. While some argue that such a ban would merely shift the risk rather than eliminate it, Biden and others take the position that the members of Congress make more attractive terrorist targets than ordinary citizens. The New York Times, which won a Pulitzer Prize this year for its coverage of perceived railroad safety lapses, gave a strong editorial endorsement to the Biden legislation on June 20, declaring that “the railroad industry, concerned with saving money, has blocked reasonable rules for the transport of extremely hazardous materials.”
One-person crews on Canarsie LineEight-car trains with an operator but no conductor are running on weekends and during the night on weekdays from midnight to 6:00 a.m. on New York City Transit’s 24-station Canarsie (L) Line. Closed-circuit TV cameras have been installed on the line’s Kawasaki R143 cars to assist operators with door closings. Operator/conductor crews continue to run trains at all other times.
Though OPTO (one-person train operation) is expected to be used when NYCT’s pilot communications-based train control system enters service on the Canarsie Line, the current OPTO service uses the existing track-circuit-based automatic block signal system and manually controlled trains. ATPM (automatic train protection-manual) mode, the precursor as well as fallback to ATO (automatic train operation) under CBTC, is not expected to enter revenue service until August or September, about a year behind schedule, due to continued software development. ATO will operate in “shadow mode” during the ATPM phase; full CBTC operation is now expected to commence in August or September 2006.
Coal traffic slowing in the Powder River Basin Track stability problems caused by long-term coal dust buildup, heavy rains, and related excess moisture absorption are expected to impact BNSF and Union Pacific capacity for unit coal trains moving on the joint line out of the Powder River Basin. The problem, which was discovered in mid-May after two derailments within a 12 hour period, will be corrected with an undercutting program that will reduce train throughput during the maintenance season. This year’s coal tonnage will be lower than expected, with joint line capacity reduced by about a half-dozen trains per day (throughput was a 65 earlier this year). As a result, MorganStanley has lowered its second-quarter and full-year 2005 EPS estimates slightly for both railroads, according to a report releases this morning by railroad analyst Jim Valentine. But this is only temporary. “There is secular upside potential from better PRB tonnage and pricing over the next two to three years,” he said. “We estimate at a minimum that the western railroads can re-price their coal contracts by at least 15%, which would lead to 16% higher EPS for BNSF and 28% for UP, although it will take a few years for this to occur, as only 15-20% of a railroad’s coal contracts roll over in any given year.”
Are railroads ready for fall peak? STB seeks assurancesThe seven Class I's have 30 days to submit their operational plans for handling fall peak demand and capital plans for relieving bottlenecks to Surface Transportation Board Chairman Roger Nober. It is the second consecutive year that Nober has made such a request, and this time, he also included the American Short Line and Regional Railroad Association.
“This year, as last, the demand for rail service continues to grow, and is straining the ability of our railroads to meet that growing demand,” Nober said in an announcement of the request, which he sent to the industry via mail on June 15. “At the same time, the shipping community and our economy as a whole depends on reliable and efficient freight rail service.” Having the railroad plans in hand will help the agency, rail shippers, and railroad stakeholders “understand how the railroads plan to meet demand,” he pointed out.
“The Congressional Budget Office praised our efforts in monitoring the fall peak last year and said that it 'may have prompted the railroads to enhance their efforts to meet demand,'” Nober added. “I believe it did just that, which is a good reason to seek these plans again.”
The railroads have been asked to outline the steps they'll take to ascertain demand for, and to prepare for, the fall peak, and their performance goals for at least the next 120 days, with a view toward meeting fall peak service demands. They also must submit their plans for achieving those goals. Because many service issues are related to insufficient capacity, the railroads have been asked to report their capital plans for increasing capacity this year as well as critical capacity-related infrastructure needs. In addition, they must include their plans for addressing such capacity-enhancing infrastructure needs and their expectations for timely completion of improvements. Finally, each railroad must provide details on how it intends to keep its customers informed. All responses are expected to be made public.
A fix for Acela Express brakes?Testing of a new-design passenger coach disc brake rotor hub continues on Amtrak's out-of-service Acela Express trainsets as engineers work to determine what caused spokes on some 300 hubs to develop cracks that could have eventually led to a component failure resulting in a derailment. All 20 trainsets were removed from Northeast Corridor service in April after the cracks were discovered during a routine inspection.
While the actual cause has not been definitively nailed down, preliminary findings indicate that the spokes cracked after being subjected long-term to lateral stresses resulting from vibrations encountered during brake application. In the original design, the spokes were configured in a non-eliptical pattern that was not aligned with the disc rotation. The new design developed by Knorr (the braking system supplier) now being tested on one trainset with instrumented wheelsets incorporates reoriented spokes that are perpendicular to the point of rotation. The new design will hopefully be able to withstand higher lateral stresses. Acela Express brake rotors were supposed to last one million service miles and undergoing several re-truings before requiring replacement; the cracks were found after approximately 500,000 service miles.
Amtrak CMO William Crosbie is optimistic that the new design will work. Amtrak says it cannot commit at this point to a specific return-to-service date, but is hopeful that it will occur sometime next month. Meanwhile, Amfleet-equipped, AEM7- and HHP8-hauled Metroliner trains are operating as a substitute for Acela Express service, albeit with lower fares.
UTU looks for potential merger partnersCalling for “an appropriate merger partner to offset the power the Teamsters are exerting over some in rail labor,” the United Transportation Union says it is in merger talks with other unions.
In remarks sharply criticizing the Brotherhood of Locomotive Engineers and Trainmen and Brotherhood of Maintenance of Way Employes (both affiliated with the Teamsters), UTU International President Paul Thompson said that “having a truck drivers' union control rail labor begets long-term disaster because trucks and rail compete. The Teamsters have demanded and won from trucking companies a limit on how much traffic can move by rail. Carriers have been merging for decades, and the balance of power between labor and the carriers has been affected. . . The Teamsters are dominated on their executive council by truck drivers. Not a single officer of the BLET or BMWE sits on that council. Who do you think those truck drivers in charge of the Teamsters and its subsidiary rail unions will support when the issue is truck jobs versus rail jobs?”
UTU says one of “many unions” with which it has spoken is the Sheet Metal Workers International Association. “If we find a fit that benefits our membership, and which preserves our culture of craft autonomy, we will act,” Thompson said. He did not specifically mention any other potential merger partner.
Thompson also talked about the last year's federal prosecution of four former UTU officers, who wound up pleading guilty to federal crimes. He said the UTU is taking steps to recover, from a bonding company and also through a lawsuit, “monies improperly spent by federal prisoner number 29120179, Byron A Boyd Jr.” He said that “internal accounting changes have been made to assure nothing like that ever occurs again.”
Thompson's remarks were delivered in a speech before a UTU regional meeting in Anchorage, Alaska, yesterday.
BRS strikes Norfolk SouthernThe Brotherhood of Railroad Signalmen initiated a strike action earlier today against Norfolk Southern. BRS says the strike “was a response to NS's use of outside contractors to outsource signal work.”
“We are left with no alternative,” said said BRS President Dan Pickett. “We have made every effort to resolve our differences with NS peacefully, but NS refuses to keep its commitments.” Both parties, he said, are required to maintain the “status quo” during the bargaining period mandated by the Railway Labor Act. BRS Vice President Floyd Mason said NS “has chosen to implement its plan to unnecessarily outsource our members' work, while seeking protection from strike in federal court. This is a pattern that has been repeated by NS over the past six years.”
“The ideologues do not understand what we do”The circuitous, drawn-out saga that is the annual Congressional process to determine Amtrak funding took another twist yesterday as the House Appropriations Subcommittee on Transportation, Treasury, and Housing and Urban Development, The Judiciary, District of Columbia and Independent Agencies marked up a Fiscal Year 2006 funding bill that provides $550 million for Amtrak, an amount the railroad says will force it to declare bankruptcy and shut down. Amtrak's fiscal year begins Oct. 1.
Amtrak (whose board members are all appointed by President Bush) had requested funding of $1.8 billion; its FY 2005 amount is $1.2 billion. DOT Inspector General Ken Meade has testified that Amtrak “needs Federal funding between $1.4 billion and $1.5 billion, plus [a continuation of] existing state contributions, in order to maintain the status quo,” but even this would not be enough “to move the system to a state-of-good-repair.” Amtrak President and CEO David Gunn has said that funding at the current $1.2 billion level would actually mean a reduction of $200 million in Amtrak's spending, since Amtrak ended FY 2004 with $200 million in cash. He has also said that, at $1.2 billion, approximately $300 million worth of “long-lead-time materials” for capital maintenance projects would go unused because Amtrak would not have the funds to install them.
In a press release, the House subcommittee said the $550 million would pay to keep the Northeast Corridor and other corridor-type services around the country (such as Los Angeles-San Diego Pacific Surfliner trains) operating. Long-distance routes could keep running, but only if the states step in to subsidize them: “The bill prohibits federal funding for any Amtrak route that requires a subsidy of $30 or more per passenger-most of which are long-distance trains. The mark allows Amtrak to use non-federal resources to support other routes, and does not mandate that any routes be shut down or truncated.”
The release sharply criticized Amtrak management: “In a time of flat budgets and large deficits, taxpayers cannot continue to subsidize poor management and unprofitable services. . . . For too long, Amtrak has played a Chicken Little game with Congress over its funding levels. Officials would declare a crisis, threatening immediate shutdowns of service because of supposed inadequate funding. Further analysis reveals that Amtrak alone is to blame for the bulk of their problems-most notably taking on nearly $4 billion in debt, much of which occurred in the mid- to late-1990s, yet failing to make the infrastructure investments along the Northeast Corridor that are so critically needed to maintain efficient operations. Instead, important maintenance was deferred to pursue money-losing ventures, which in turn increased operational costs. In addition, Amtrak points to increased ridership as a sign that the railroad is on its way to financial health and as a justification that Congress continue to inject vast sums of taxpayer resources in passenger rail service. "
The release goes on to say that the bill “fully supports rail service for 80% percent of Amtrak's ridership” and that “the proliferation of low cost airfares makes national railroad service less necessary.” It also accuses Amtrak of “charging ticket prices that are well below costs,” cutting some fares by 90%. In reality, the 90% discount the subcommittee attacks applies in the NEC to the third through sixth members of a small group whose first two members have paid full fare, according to the National Association of Railroad Passengers.
David Gunn responded by characterizing the subcommittee's statements as distorted nonsense created by a collection of ideologues, “policy wonks and politicians” who have no understanding of railroads and how to run them and who also have no notion of economic reality. “You have people who have an ideological position; they have no practical knowledge or managerial skill,” he told Knight-Ridder newspapers. “The ideologues do not understand what we do. . . . It is a very risky game they are playing. . . . It is amazing to me that the people who create the environment we operate in don't understand it.”
Gunn pointed to the labor protection costs-estimated at $1.4 billion over three years-that would have to paid in the event of a shutdown, as well as Amtrak's current annual debt service of some $275 million. More important, he said, hundreds of millions in additional funding are needed for critical projects just to bring the NEC to a state of good repair. Annual capital maintenance on the NEC amounts to $400 million alone. Taking all this into account, no service is protected, as the subcommittee claims.
The full House Appropriations Committee will be meeting June 21 to mark up the FY 2006 DOT Appropriations bill. Following that, the bill goes to the House floor. Whatever finally passes must then be worked out in conference with what the Senate marks up. Industry observers say the House subcommittee's action is just one step in what promises to be a very long process.
Trinity ups second-quarter earnings guidanceRevenues will exceed $700 million for Trinity Industries during second-quarter 2005, according to Chairman, President, and CEO Timothy R. Wallace. The company has revised its guidance for the first six months of the year to 35-42 cents a share--a 10-cents a share boost from an earlier guidance. Annual guidance also has increased by 10 cents to a new range of between $1.00 and $1.20 earnings a share. Wallace attributes the changes to performance improvements in Trinity's North American operations and “progress we have made in our production efficiencies.” Weather conditions, in particular, have “helped provide strong results” in Trinity's construction business, he noted.
Tren Urbano fully up and running…finally After months of weekend-only service, Puerto Rico's Tren Urbano opened for full revenue service on June 6. The San Juan-based heavy rail system has carried more than 1 million riders since start-up last December, according to James F. O'Leary, principal of Alternate Concepts, Inc., which is operating the 11-mile line under a five-year contract. Ontime performance has been 98%, O'Leary told attendees of the American Public Transportation Association's Rail Transit Conference, held in Pittsburgh this week. Service on the $2.25 billion system was originally scheduled to open on July 1, 2001.
FRA reports remote-control research resultsKey safety issues have emerged from the Federal Railroad Administration's root cause analysis of train accidents/incidents involving RCL operations. Last year, FRA hired Foster-Miller to collect descriptive railroad data on FRA-reportable RCL accident/incidents for a six-month period. A total of 67 were reported from May to October 2004, including 29 collisions, 25 derailments, and 13 employee injuries. Almost half occurred between midnight and 8 a.m.
Because multiple factors play a role in every accident/incident, noted FRA in its research results, a human-factors root cause analysis was performed on three collisions, two derailments, and one injury to examine them in greater detail. Researchers traveled to each of the six accident/incident sites within one to two days of notification. Separately, the point-of-contact from the union that represented the crewmembers involved in the accident/incident was contacted to help arrange private crewmember interviews. (Railroad officers were not present during interviews.) The researchers spent two to three days on-site collecting interview data and railroad-provided records, logs, and reports. According to FRA, accident/incident information used in the study were “de-identified to protect the identities of the individuals and railroads that participated.”
Loss of remote control operator situational awareness was identified as a factor in five of the six accidents/incidents analyzed. In addition, “insufficient” remote control operator training was “directly implicated” among them, according to FRA, which stressed that improved training “may be able to mitigate some of the skill-based and decision errors that were identified.” Inadequate staffing and pairing of inexperienced crewmembers were identified as contributing factors to only one of six of the accidents/incidents. However, FRA pointed out that “given the current industry shortage of switchmen and engineers, these may be significant safety issues in the future, especially combined with insufficient training.” The analysis also found inadequate practices and procedures governing RCL operations and the use of the RCL technology, including the pullback protection system. These were contributing factors in several RCL accidents/incidents. Since operating rules and practices “govern most of railroading,” inadequate practices and procedures can have “significant consequences,” noted FRA.
BNSF on target for strong growth in 2005Despite the recent loss of coal traffic due to a Powder River Basin derailment and bad weather, BNSF Railway remains well positioned for a strong performance this year, the railroad's chairman, president, and CEO, Matt Rose, told a Merrill Lynch conference in New York June 9. Current projections call for revenue growth of 12% to 15%, with earnings per share increasing more than 30% and return on invested capital exceeding 9%. The railroad is expected to end the year with an operating ratio below 78%. Free cash flow of $600 million after dividends is projected.
Fred C. Miles, a former Railway Age editor, dies at 89Fred C. Miles, who served successively as news editor, managing editor, and executive editor of Railway Age beginning in 1946, died June 7 at his home in Englewood, N.J. He was 89. A graduate of Columbia University, Miles began his career in business journalism with Barrons and was a financial reporter for the New York Sun before joining Railway Age. He is survived by his wife of 64 years, Dr. Virginia Grey Miles, and their daughter, Erica.
MARTA adopts FY06 budget The Metropolitan Rapid Transit Authority's board of directors has passed a $770.7 million operating and capital budget for FY2006, which begins July 1. Also approved: a requirement that an amount equivalent to 10% of the prior year's operating budget be maintained in an operating reserve account.
“This budget was perhaps the most challenging we have faced in the past five years,” said MARTA General Manager/CEL Nathaniel Ford. “While our ultimate goal is to achieve a budget that no longer depends on reserves, we want to move forward in a way that has the least amount of negative impact on our customers. This budget achieves an important balance between those two priorities.”
The $323.5 million operating budget includes funding for additional customer service and safety initiatives, including the opening of the new Armour Yard Rail Services Facility. It also includes changes to a number of MARTA's existing fare programs as well as modifications to bus, rail, and paratransit service. MARTA will implement peak and off-peak rail service and make changes to 21 bus routes (without eliminating service).
Changes in base fares will be tied to MARTA's implementation of a new smartcard-based fare collection system, which will come online by mid-2006. An ad hoc committee will be formed, the transit agency says, to study future fare policy and bring further recommendations to the board.
The $447.2 million capital budget includes funds for the continuation of such improvement programs as the new automated fare collection system, renovation of all 48 miles of track, and rehabilitation of 228 railcars.
BNSF exec receives career achievement awardThe Association of American Railroads presented Mark Stehly of BNSF Railway with the 2005 Holden Proferock Award for career achievement in hazardous materials excellence. Stehly, who is assistant vice president-environment and research and development, has more than 29 years of rail industry experience in the areas of energy, environment, hazardous materials, and risk analysis. He was cited for his leadership on AAR's Risk Management Working Committee, where his work led to new safety standards for tank cars carrying hazardous materials weighing more than 263,000 pounds. Stehly also sponsored the development of three-dimensional plume modeling, which became an industry standard, and has been involved in AAR's research program at the University of Illinois.
Stehly's dedicated efforts have helped make rail “the safest way to transport hazardous materials,” said AAR President and CEO Edward R. Hamberger during the announcement.
APTA announces Rail Rodeo winnersThirty-one operating and 38 maintenance employees from 18 rail transit systems competed in the Annual Rail Rodeo, held in conjunction with the American Public Transportation Association's Rail Transit Conference in Pittsburgh, Pa., this week.
For the 13th year, a separate operators competition measured such professional skills as train operation, and knowledge of safety regulations, train equipment, and track right-of-way rules and procedures. Santa Clara Valley Transportation Authority earned the first place award. Southeastern Pennsylvania Transportation Authority and Los Angeles County Metropolitan Transportation Authority won the second and third place awards, respectively.
The maintainers competition judged troubleshooting ability. Winning the first place award: Maryland Transit Authority. Second and third place awards went to LACMTA and MTA New York City Transit, respectively.
SEPTA also took home the top award for rail transit achievement since it received the highest operating and maintainer team scores.
Georgia Southwestern inks trackage dealGeorgia Southwestern Railroad, Inc., has acquired a 43-mile line from Central of Georgia Railroad, a Norfolk Southern subsidiary. The new line will expand the Dawson, Ga.-based railroad's network to more than 270 miles of owned and leased track, and 70-plus miles of track under access agreements in Georgia and Alabama. In addition, it will serve Hamilton, Pine Mountain, Durand, and Greenville, Ga., and provide service to the Georgia Pacific facility at Durand.
Hovey Industries management spinoffHovey Industries (2005) Inc. , a new company formed by the senior management of Hovey Industries Ltd., has purchased the rail products and metal fabrication divisions of Hovey Industries Ltd. from Railworks Corp. of Canada. The change in ownership is effective immediately. The new company will operate Hovey’s two Ottawa-area manufacturing plants, and continue to employ all the employees at the two divisions. Management will remain in place. Railworks will maintain signals and communications contracting, including the installation of Hovey products on railway property. Meanwhile, Hovey Industries (2005) will continue to commission, maintain, and service its own products. The company says it “ has worked to ensure that the transition to new ownership will be seamless for all of our valued suppliers.”
Standard Car Truck, Cooper Standard form allianceFreight car component supplier Standard Car Truck Company and automotive industry supplier Cooper Standard have signed a collaborative agreement to design and manufacture dynamic control parts for freight cars.
Cooper Standard, headquartered in Novi, Mich., specializes in the design, manufacture, and marketing of systems and components for the global automotive industry. Its products include NVH (noise, vibration, and harshness) control systems, sealing systems, trim, and fluid handling systems. Standard Car Truck Company, headquartered in Park Ridge, Ill. supplies freight car stabilization systems. SCT’s Barber stabilization designs are available for every major freight car type manufactured in North America and throughout the world. Its Barber product line includes Anchor Brake Shoes, Barber Springs, Durox seals and gaskets, Triangle air compressors, and REA rebuilt engine components.
Alstom to sell Australian, New Zealand operationsAlstom has agreed to sell its Australian and New Zealand transport operations to Australia-based United Group Ltd., which specializes in maintenance, facilities management, manufacturing, fabrication, engineering, construction, and business outsourcing. The deal, which is not yet finalized, could pay Alstom $201.4 million plus an additional $22.6 million based on future financial performance. It is expected to close in July.
The operations on the block employee 2,000 in engineering and maintenance support, road and rail infrastructure projects, and the provision of professional services and systems.
PANY/NJ launches “extra care” programAs part of a $6 million initiative to take “extra care” of its customers, the Port Authority of New York and New Jersey is hiring additional customer service representatives, providing more real-time travel information, and offering cleaner facilities.
Another 27 customer service reps will be employed at PANY/NJ's airports and 22 more will serve at PATH. All reps in direct customer contact will be “branded” under the iHelp program, which includes standard uniforms and training. The program also includes the installation of a permanent GPS bus tracking system at Newark Liberty International Airport. A pilot program using New Jersey Transit buses at the Port Authority Bus Terminal will provide customers with real-time information on bus location. Customer interactive information kiosks will be implemented at the Port Authority Bus Terminal. Plus, an enhanced restroom-cleaning program will be initiated at PATH, Port Authority Bus Terminal, and PA airports.
“Each year, more than 450 million people use the Port Authority's airports, tunnels, bridges, bus stations, and PATH systems in their daily travels,” said New York Governor George E. Pataki during the announcement of the program's launch. “This new customer service campaign will help make sure that we are providing the best possible service to millions of travelers who use Port Authority facilities. We hope that this new program will make for more comfortable and convenient traveling.”
Surprise! Another extension for TEA-21TEA-21 has been extended for the sixth time--to June 30. The bill was slated to expire May 31. The House and Senate have appointed conference committee members to resolve differences between their separate reauthorization bills. The Senate version guarantees $293.4 billion in funding, including $53.8 billion for transit over six years. The House version authorizes $283.9 billion for the six-year period, with $52.3 billion in guaranteed transit funding. One sticking point: The Senate's version exceeds the $284 billion ceiling set by the White House. President Bush has threatened to veto anything above it.
CP inks wind turbine dealCanadian Pacific Logistics Solutions has signed a multi-million contract with Vestas Canadian Wind Technology to transport 125-foot-long blades and generators that will be used in a new wind farm. Vestas, a North American wind turbine manufacturer, is building the farm for power generation at Rush Lake, Saskatchewan.
Over the next six months, seven 67-car Canadian Pacific Railway trains will carry the equipment needed to build 12 turbines. The trains will run from the Port of Houston to Hak, Saskatchewan.
Once the turbines are combined with Saskatoon-manufactured towers, an 84-structure farm will be erected.
FRA's Boardman on the jobJoseph H. Boardman began work as the new Federal Railroad Administrator this morning. Immediately after his confirmation by the U.S. Senate, Railway Age conducted an exclusive interview with Boardman for the July issue of the magazine. Excerpts from Frank N. Wilner's feature story are on this website in the "In this Issue"section.