July 2008
U.S. carload, intermodal traffic falls, but ton-miles hold firmRail carload traffic and intermodal movements on U.S. railroads declined in the week ending July 26, the Association of American Railroads reported Thursday. Intermodal shipments, which have suffered throughout the year, fell 3.2%, while carload traffic declined 0.9%. But the number of ton-miles for the week, 34.8 billion, was unchanged from the comparable week of 2007.
Grain shipments increased 5%, and coal rose 3.3%. But stone, clay and glass shipments dropped 35.4%, while motor vehicle shipments continued to struggle, down 33.6%.
Canadian carload traffic fell 9.8% for the week versus the comparable 2007 counterpart, but Canadian intermodal traffic advanced 4.9%.
Kansas City Southern de Mexico carload traffic was down 4.0% for the week, but its intermodal traffic also gained, up 17.3% compared with the year-ago week.
Veolia seeks to operate New Orleans transitNew Orleans' Regional Transit Authority has begun contract negotiations with Veolia Transportation for a three-year deal, estimated by some to be worth $3 million in which Veolia would operate the Big Easy's streetcar and bus system. A two-year extension option is also part of the negotitations.
Veolia has run the bus transit operations in nearby Jefferson Parish, La., since 2006. Paris-based Veolia, with U.S. headquarters in Oak Brook, Ill., beat out two other bidders, Cincinnati-based First Transit Inc. and the RTA's in-house administrators, who have overseen restoration efforts to the city's rail and bus system following the damage inflicted by Hurricane Katrina in 2005.
Trinity shares rise on strong railcar earningsThe price of Trinity Industries shares was up 3.5% in afternoon trading Thursday following the company’s announcement that it earned $1.06 per share in the second quarter of 2008, easily exceeding the 85 cents forecast by Wall Street analysts. Trinity announced that it expects third-quarter per-share earnings to be in the 91-96 cents range, compared to the Wall Street consensus estimate of 83 cents.
Continued strength in the railcar market helped Trinity to push second-quarter revenue to $945.5 million from $892.6 million for the same quarter of 2007. Net income for the second quarter increased 25% to $85.6 million from the $68.7 million profit posted a year ago.
TrinityRail® shipped 6,580 cars and received firm new orders for 7,430 cars during the second quarter. On June 30, the company's railcar order backlog was valued at $2.4 billion, representing 28,680 cars, compared to a backlog a year ago of $2.8 billion, representing 33,880 cars.
Trinity Industries Leasing Co. grew its fleet to 41,100 cars on June 30 2008 from 34,670 cars on June 30 2007l. Utilization off the lease fleet grew to 99.6% from 99.5% during the period.
During the second quarter, Trinity sold $91.3 million worth of cars to TRIP Rail Leasing LLP, in which Trinity holds a 20% equity interest. From its inception in June 2007 through June 2008, TRFIP has purchased $791.4 million worth of railcars, including both new railcar purchases from Trinity manufacturing companies and purchases from Trinity Indusries Leasing.
China readies "world's fastest" passenger rail linePresaging the opening of the 2008 Summer Olympic Games by one week, China is set to open the Beijing-Tianjin Intercity Railway Aug. 1, which Deputy Railway Minister Wang Zhiguo claimed "will be the world's only rail line on which passenger trains could run at 350 kilometers per hour" [217 mph] in regularly scheduled service.
[In fact, the line is not the first such service; Spain's 630-kilometer (391-mile) Madrid-Barcelona line, completed in February, already has a maximum operating speed of 350km/h, and is the first line in the world to operate trains in commercial service at this speed, as reported by International Railway Journal in its March issue (page 6).]
The new service, linking two Olympic Games city venues, will more than halve travel time on the 120-kilometer (75-mile) route from 70 minutes to about 30 minutes. The $3.1 billion line will be served by six CRH-3 (China Railway High-speed) trains manufactured by a domestic concern, Sifang Locomotive and Rolling Stock Co. The CRH-3 features swivel seating and rooftop solar panels, among other items.
Five cities will be served: Tianjin, Wuqing, Yongle, Yizhuang, and a new facility in the nation's capital, Beijing South Railway Station.
Railpower Technology powers Virginia terminalMontreal-based Railpower Technologies Corp. said Thursday Virginia International Terminal has acquired two multi-genset, low-emission, fuel-efficient, four-axle RP20BD locomotives and one hybrid GG20B locomotive , from the Corporation. The agreement includes a lease of three years for the units, with the terminal purchasing the units following expiration of the lease.
"This new award, combined with the success of our new six-axle model at Union Pacific, demonstrates that Railpower is the supplier of choice of locomotives that provide a return-on-investment both in economical and ecological terms" said Jose Mathieu, president and CEO of Railpower Technologies, in a statement.
KCS increases income on record second-quarter revenueKansas City Southern reported record second-quarter revenue of $486.2 million, up 13.8% over second-quarter 2007 results, on operating income of $104.6 million, up 25.9% from $83.1 million in the comparable year-ago quarter. Second-quarter net income nearly doubled to $50.6 million, or 56 cents per KCS share, compared with $25.3 million, or 30 cents per share, in the comparable period; that surpassed the average of 44 cents per share anticipated by analysts.
KCS' second-quarter operating ratio was 78.5%, a 2.0-point improvement compared with second quarter 2007.
The company attributed revenue growth to a strong pricing environment, significant growth in certain business units, and an increase in fuel surcharges. Commodities leadin the way included chemicals and petroleum sector, up 19.9%. Agriculture and minerals revenue increaed 18.4% over the year-ago period. Intermodal revenue grew 20.3%, automotive revenue increased 10.3%, and coal revenue rose 5.7%.
Second-quarter operating expenses were $381.6 million, up 10.9% over the prior-year period, primarily driven by a 38.8% increase in fuel expense, KCS said. Excluding the increase in fuel costs, operating expenses were up 4.3%.
"All the positive revenue and operational trends that highlighted KCS’ first quarter performance were even more pronounced over the prior three months resulting in a strong second quarter," stated Chairman and Chief Executive Officer Michael R. Haverty. "Record revenues, a 26% increase in operating income, and productivity measured by increased velocity, higher locomotive availability, and lower terminal dwell times, contributed to strong performance and were important factors resulting in a two-point improvement in the operating ratio to 78.5%."
Haverty added, "Also notable is that KCS recorded volume growth despite a U.S. economy that has provided a downward pressure on traffic related to building materials, appliances, and automobiles. Volume pressure in those areas was more than compensated for by double-digit volume gains in chemicals, metals and scrap, and a 44% increase in container volumes out of Lázaro Cárdenas."
Editorial Comment: USDOT Secretary's timing is curiousNow she tells us: That's the sardonic response among many rail-related observers to U.S. Transportation Secretary Mary Peter's pronouncement July 29 urging an overhaul of federal transportation policy and--perhaps most pronounced--funding for such policy. "Gee, ya think?" is not too cruel a reaction.
Indeed, the 66-page document entitled "The Transportation Infrastructure Reform Act (TIRA): FY 2010-2015 Surface Transportation Reform Proposal," is notable for its release six months before the Bush Administration leaves office. Moreover, the document earnestly notes SAFETEA-LU--"the law authorizing Federal surface transportation programs for highways, highway safety, and transit--will expire" on Sept. 30, 2009. DOT thus advocates a radical overhaul of transportation policy within a 14-month time frame, let alone split between two presidential administrations.
A copy of the DOT document can be obtained at www.fightgridlocknow.gov/ and clicking on the document icon.
Rail passenger interests, long accustomed to focusing on the short term, see little likelihood of overarching fiscal probity; instead, they note Secretary Peters' eagerness to tap transit funds to keep the nation's highway infrastructure intact, given the latter's funding shortfall due to declining automotive use, triggering a decline in the gas tax revenue such use generates. Some of that gas tax revenue goes to transit, so transit, too, has felt the impact. Long accused of being fiscal wastrels by too many administrations (regardless of party), rail transit interests, in particular, can be forgiven for fuming at being asked to be charitable to the far bigger hog at the federal trough.
"The Administration proposal is shortsighted and would mean that the mass transit account would be reduced to the point where there would not be enough money to fund the federal transit program in 2010, even at the current level," says William Millar, president of the American Public Transportation Association.
The DOT document does suggest a larger private-sector role for the nation's highways and roads, including private-road toll operations--an approach harped upon as a "solution" to Amtrak for years, and only belatedly applied to roadways now. It's an approach just as likely to be rejected by Congress and the American public--at least within the next 14 months.
We can't help but wonder whether the current administration is in fact counting on the "omigosh" factor when the report intones, "According to Administration projections, by the end of the SAFETEA-LU authorization period in 2009, the Highway Account will suffer a $3.2 billion shortfall. The Mass Transit Account (expected to remain solvent through FY 2011), will have an estimated balance of $4.4 billion by the end of 2009, leaving a net total of $1.2 billion in the combined HTF. As we look to the future, shortfalls in the HTF are projected to continue--providing further evidence of the need to re-examine how surface infrastructure is funded in this country."
Put differently, DOT's future gaze remains firmly on the highway horizon. It yawned last September when the Association of American Railroads detailed its $148 billion plan to increase the nation's freight railroad capacity--and a willingness by the freight rail industry to supply roughly 70% of the funding required. We'll repeat that: DOT got an offer by AAR to address future U.S. freight needs, with the private sector chipping in 70%; AAR was ignored.
As indifferent as it was then, DOT one-upped itself early in 2008 when, under Secretary Peters, it unilaterally excised a portion of a task force recommendation, chaired by the Secretary, that urged a renewed emphasis on passenger rail.
Those efforts--and other studies and recommendations in the past eight years--have been calling, at times pleading, for the open discussion that the current administration, now in its waning days, suddenly declares is an urgent need. Old-timers in any industry, indeed any belief system, have to resist a natural tendency to look down upon up-and-comers (or converts) to the cause. But plenty of people within the rail industry, and across the spectrum of rail interests, understandably doubt whether DOT has seen the light.
Douglas John Bowen
Managing Editor, Railway Age
Comments are welcome. Email dbowen@sbpub.com
STB denies UP motion to dismiss fuel charge complaintThe Surface Transportation Board has denied a motion by Union Pacific to dismiss an "unreasonable practice complaint" filed by Dairyland Power Cooperative, objecting to fuel surcharges between Jaunary 2006 and February 2008. "On the record before us, UP has not shown that Dairyland's complaint offers no reasonable basis for further Board consideration," STB says.
STB adds, "Dairyland states that it plans to 'present substantial evidence demonstration that UP is unlawfully utilizing its rail fuel surcharge procedures to extract substantial profits on the the issue traffic.' If so, that could in turn call into question the reasonableness of UP's fuel surcharge program, and thus we cannot find at this point that ther are no reasonable grounds for further investigation. We therefore will deny the motion to dismiss."
But STB also noted that the La Crosse, Wis.-based shipping cooperative's case "as initially presented is not properly developed," and has issued guidelines to clarify the procedure for the parties involved.
More on the STB decision can be obtained at www.stb.dot.gov/decisions and selecting Docket No. NOR 42105 0.
NITLeague questions AAR "partner" hazmat stanceThe National Industrial Transportation League has rejected a proposal advanced by the Association of American Railroads July 22 at a hearing of the Surface Transportation Board on the railroad's common carrier obligations with toxic inhalation hazards (TIX) and other hazardous cargo.
NITLeague says AAR argued to "require the shipper of TIX materials to indemnify the carrier for the full amount of any liability or exposure resulting from a release of TIH materials" for amounts above $500 million in the case of a Class I railroad.
NITLeague President Bruce Carlton, spurning AAR's stance, said STB lacked authority to issue such a "policy statement," and Congress had in fact expanded the railroads' liability for negligence by noting tht state tort laws were not pre-empted by the Federal Rail Safety Act.
Australian company purchases Americast TechnologiesBradken Ltd., an Australian steel foundries owner, has announced it will acquire the remaining portion of Americast Technologies it does not already own from its current partner, New York-based private equity firm Castle Harlan, Inc. Americast designs and manufactures large, highly engineered ferrous sand castings, machined components and assemblies for major companies in the energy, mining, railroad and mass transit industries.
Brian Hodges, managing director of Newcastle, Australia-based Bradken, said. "The acquisition of AmeriCast will significantly expand Bradken’s capabilities in large steel castings and provides a base from which to expand some of Bradken’s mining consumables product business in the North American market."
AmeriCast, based in Atchison, Kan., has manufacturing facilities in Atchison as well as St. Joseph, Mo., Tacoma and Chehalis, Wash., Amite, La., and London, Ontario. It also staffs a trading office in Xuzhou, China.
Smiths Detection supplies Amtrak security systemsAmtrak has purchased additional SABRE 4000 advanced explosives detection systems from Pine Brook, N.J.-based Smiths Detection for rapid, non-intrusive screening of passengers, as well as throughout stations and on trains. The SABRE 4000 hand-held units can also detect narcotics, chemical warfare agents, and toxic chemicals, though Amtrak is focusing on the product's explosives detections capability.
"We are delighted to extend our relationship with Amtrak through this follow-on order," said Stephen Phipson, group managing director of Smiths Detection. Adds Cherif Rizkalla, president of Smiths Detection, America, "The SABRE 4000 represents the best of detection capability where increased security doesn't have to mean inconvenienced, frustrated passengers."
Amtrak spokesman Cliff Black says use of the units is concentrated in the Northeast Corridor at present, but "will soon be deployed nationwide."
CSX's ratings outlook cut to "negative" Standard & Poor's has revised its outlook for CSX Corp. to "negative" from "stable" following CSX's seating of two board members, Gilbert H. Lamphere and Alexandre Behring, nominated by The Children's Investment Fund (TCI).
The two board members, possibly to be joined by two more nominees backed by the London-based hedge fund, makes CSX's future financial policy uncertain, the ratings service said. TCI has been critical of CSX management and in the past has called for railroads to boost their debt levels, S&P said.
S&P reaffirmed CSX's long-term corporate credit rating of "BBB-" due to its competitive strength in the eastern United States.
Economic Planning Associates: 54,000 cars in ’08Based on first-half 2008 deliveries and existing backlogs, Economic Planning Associates has raised its 2008 estimate of railcar deliveries to 54,000 units, up from 51,500 units, including intermodal equipment.
“Demand for railcars turned in an impressive performance in the second quarter,” EPA said in a quarterly report released July 29. “In spite of a fragile economy and rising equipment prices, demand for railcars held up surprisingly well. A closer inspection of second-quarter activity indicates that demand has strengthened in the covered hopper and coal car segments, while tank cars continue to attract interest from customer markets. The 12,142 cars ordered in the second quarter represented a 15.8% advance over the units ordered in the opening quarter. More important, all of the second-quarter orders were for conventional cars—no intermodal platforms in the mix. Equally impressive was the fact that there was only a minimal evaporation of orders from existing backlogs. Only 990 orders were cancelled, a mere 1.5% of the backlogs at the beginning of the second quarter. And, with assemblies running at the quarterly pace of 14,800 units, mid-year backlogs of 61,600 units represent almost 4.2 quarters of deliveries.”
EPA’s outlook for railcar demand is “cautious” for the next two to four quarters. “While we remain constructive on the long-term outlook for railcars, we are especially enthused by the continued current interest in rail equipment in light of our fragile economy and sluggish traffic flows. The diverse equipment mix of railcars is providing resiliency to overall demand for freight equipment. While demand for boxcars, intermodal platforms, and Class F flat cars are stumbling, demand for coal cars, grain cars, hi-cube covered hoppers, and tank cars continues to hold up well. In addition, backlogs for coal cars, medium-size covered hoppers, and tank cars appear relatively solid since demand for this equipment is not as economically sensitive as that of most capital equipment. While there are a number of parked new hi-cube covered hoppers for DDG service and existing backlogs could be suspect, we are noting a large number of orders for this equipment in the second quarter. At the same time, the boxcar, intermodal equipment, mill gondola, non-intermodal flat car, and small-cube covered hopper segments have low backlogs, and we are not anticipating any meaningful level of assemblies for these cars either this year or next.”
For 2009, EPA is anticipating a third year of easing as deliveries, which it projects at 47,000 cars, down from its previous projection of 49,800 units, “with only a minimal amount of intermodal platforms.” Following that, “far stronger economic activities” as well as replacements needed for older equipment will gradually boost orders. “Beginning in 2010, we look for a pickup in assemblies of coal cars, Class F flat cars, intermodal platforms, and boxcars, which will boost overall deliveries to 50,000 units in 2010 and 53,300 cars in 2011,” EPA said. “Deliveries will then move up to 56,800 units in 2012 and 60,000 cars and platforms in 2013.”
CSX taps Jacobs Engineering for services contractJacobs Engineering Group Inc. has been chosen by CSX Transportation to provide general engineering services, on a task order basis, throughout the CSX system. The value of the three-year contract has not been disclosed. Pasadena, Calif.-based Jacobs will provide railroad design engineering and construction engineering and inspection services.
"We are delighted to have been selected by CSX Transportation for this work, and we look forward to extending our relationship and helping the company achieve its goals," said Jacobs Group Vice President Kevin J. McMahon.
CN has mixed views on Draft EIS in EJ&E transaction CN President and CEO Hunter Harrison said Tuesday that CN welcomes the Surface Transportation Board's direction on reaching voluntary mitigation agreements with online communities that would be affected by CN's proposed acquisition of the Elgin, Joliet & Eastern. But Harrison said CN has reservations about certain portions of the Draft Environmental Impact Statement released by the agency July 25, "especially the road crossing analysis and approach to mitigation."
Harrison said that in some cases the Draft EIS uses "data projections which do not appear to comport with those of regional planners, do not fully take into count the nature and implications of preexisting conditions at crossings along the line, and suggests mitigation which may be unreasonable or beyond the STB’s authority."
He said CN is also disappointed that the Draft EIS did not fully identify the benefits the transaction would bring to the Chicago region. He said that shifting trains from downtown Chicago to the underutilized EJ&E line would reduce traffic and congestion for dozens of urban-core communities He said that for every community along the EJ&E line that would see increased train traffic, "nearly double that number along other lines would experience a traffic decrease."
Harrison said the Draft EIS clearly showed that the transaction would have no adverse effects on future Amtrak service in Chicago, the proposed Metra Star line or other Metra operations, and the expansion of Gary/Chicago International Airport.
"It is clear that the only significant issues remaining to be resolved in the proceeding relate to reasonable mitigation of the impact of increased train traffic communities along the EJ&E line," said Harrison. He expressed confidence that "voluntary mitigation agreements" can be reached, following the STB's direction, with communities that have opposed the transaction.
Virginia Beach LRT study signed by governorVirginia Gov. Timothy M. Kaine has signed into law a bill mandating Virginia Beach study light rail transit, likely an extension of neighboring Norfolk's 7.4-mile starter line, The Tide. The Virginia Beach proposal would add 10 miles to the starter line by running from Newtown Road at the Norfolk border to the Virginia Beach Convention Center.
The bill, HB6028, was introduced last month by Delegate Bob Tata and state Sen. Frank Wagner, Republican whose district includes Virginia Beach. The bill was approved by the General Assembly earlier this month before being signed. It directs state and regional transportation officials to launch a study of the project by early 2009. Approximately $15 million in state funds is available for purchasing right-of-way, but other costs have yet to be identified, let alone funded.
Virginia Beach voters in 1999 rejected a proposed partnership with Norfolk to launch LRT, leaving the latter to pursue the $232 million project within Norfolk city limits. The Tide, now under construction, is scheduled to commence revenue operation in 2010.
Hampton Roads Transit Vice President James Toscano said the bill helps advance "the needed discussion in Hampton Roads about the value of light rail, and potentially its expansion."
As envisioned by Tata and Wagner, Virginia Beach would seek a public/private partnership to advance the extension, with the state soliciting private-sector interest. The private company or consortium would theoretically recoup its investment and a profit by being given a contract to run the rail and charge riders a fare.
MTA Capital Construction Co. gets new presidentNew York's Metropolitan Transportation Authority Monday named Michael Horodniceanu president of MTA Capital Construction Co., succeeding Masor Nagaraja, who stepped down last January.
Horodniceanu had served as CEO of The Urbitran Group, acquired by DMJM Harris/AECOM, between 1980 and 1986 and again from 1990 until this month. Between 1986 and 1990, Horodniceanu served as Traffic Commissioner for the City of New York.
"Michael has the experience and vision to lead the MTA Capital Construction Company at a time when the need for our transportation megaprojects is clear," said MTA Executive Director Elliot G. Sander in a statement. "Our Blue-Ribbon Panel on Construction Excellence looked at how to complete construction projects on time and within budget during a time of rising commodity prices, local labor shortages and a weak dollar."
Said Horodniceanu, "I am pleased and honored to be joining the MTA at a time when attention is focused more than ever on the importance of mass transit infrastructure. Challenging times will demand innovative solutions, and I look forward to working with the excellent team at Capital Construction to get the job done."
MTA Capital Construction oversees numerous projects, including construction of the Second Avenue Subway, the extension of New York City Transit's No. 7 subway line to Manhattan's West Side, and lower Manhattan's Fulton Street Transportation Center.
North Carolina, NS address 43 at-grade crossingsThe North Carolina Department of Transportation's Rail Division (NCDOT), along with the North Carolina Railroad Co. and Norfolk Southern, are upgrading safety at 43 at-grade crossings between Selma and Moorehead City. The project, estimated at $7.6 million, will take three years to complete.
NCDOT will contribute about 56% improvement costs through Federal Crossing Safety Funds. NCRR will cover 24%, while NS will contribute 20%. The project also will evaluate public crossings that might be eliminated.
"Through the cooperative efforts of public-private partnerships like these, we continue to improve safety and modernize the railroad for increased capacity and speed," said Patrick Simmons, NCDOT rail division director.
FTA taps Washington Metro for emergency management programWashington, D.C.'s Metropolitan Area Transit Authority has been selected by the Federal Transit Administration for a pilot Transit Emergency Management program, expected to be a model for transit systems nationwide. The National Transit Institute has received a ooperative Agreement from FTA and will administer the program, which will cover rail and bus operations.
A statement by WMATA said the authority was chosen because of its "familiarity with large-scale events such as the annual Cherry Blossom Festival, the opening of Nationals Ballpark in March, and most recently July 4 events on the National Mall, and experience in responding to service-related incidents, such as bus or rail fires, derailments, and station or road closures due to police or other emergency activity."
The program also will seek to minimize response time and delays, strengthen customer communications, and improve emergency response coordination among various law enforcement and emergency response agencies.
"A strong process of emergency management will help us better protect the lives of our customers and employees, and protect Metro trains, stations, buses and infrastructure," said Metro Transit Police Chief Michael Taborn.
Support the APTF scholarship fundThis year is the American Public Transportation Foundation’s 20th anniversary, and APTF is planning an awards program and scholarship reception in conjunction with APTA's Annual Meeting and International Public Transportation Expo in San Diego in October. The APTF Scholarship Awards Celebration and Reception for 2008 scholarship recipients is scheduled for Wednesday, Oct. 8, at the San Diego Convention Center.
APTF is seeking sponsors for this event. Several levels are offered: $5,000 Platinum, $3,000 Gold, $2,000 Silver, $1,000 Bronze, and $500 Supporter. Each level offers a recognition package that includes admission to the event. For further information , contact APTF Director-Development Yvette E. Conley, (202) 496-4868; fax (202) 496-4323 fax; email yconley@apta.com. Or, visit the APTF website and donate online at http://www.aptfd.org.
FRA awards grants for grade crossings, rail-flaw detectionThe Federal Railroad Administration has awarded grants totaling $5.87 million for rail-flaw detection research and grade crossing warning systems in higher-speed territory.
Seven states with federally designated higher-speed rail corridors—California, Louisiana, Minnesota, Mississippi, North Carolina, Texas, and Wisconsin—will share $5.64 million to make safety improvements at 25 highway-rail grade crossings on freight rail corridors that host passenger trains. The funds will support the installation of grade crossing warning systems, crossing closures, and other engineering projects to help prevent motor vehicle/train collisions on these corridors, where higher-speed (110-125 mph) passenger trains may operate in the future. The grants are jointly managed by FRA and the Federal Highway Administration.
The University of California at San Diego has received a $231,802 grant to refine hardware and software for new rail-flaw technology that uses ultrasonic laser probes to detect internal rail defects. Part of the funds will be used to conduct a demonstration at the TTCI (Transportation Technology Center, Inc.) test facility in Pueblo, Colo. The improvements will permit a vehicle carrying the rail-flaw detection system to operate at speeds up to 40 mph, increasing the efficiency of track inspections as well as providing higher detection reliability than currently available. FRA previously provided funding for development of the prototype system, which has been built and tested.
Higher Performance Data Radio contract awarded to MeteorCommThe Transportation Technology Center, Inc. has awarded the contract for its Higher Performance Data Radio (HPDR) project to MeteorComm™, the wholly owned subsidiary of Burlington Northern Santa Fe Corp. that provides mobile wireless communication networks to the railroad industry.
The HPDR project focuses on the development of a railroad radio that can integrate voice and digital data, and provide the throughput to support future interoperable wireless line-of-road voice and data network communications. HPDR will have the capability to communicate voice and data at 160 MHz, and is expected to be the foundation for new industry CBTC (communications-based train control) standards and guidelines. The Association of American Railroads tasked TTCI to seek improvements in the throughput and performance of data communication links that support CBTC systems and the transition to narrow-band VHF radios. The Federal Railroad Administration funded HPDR as a part of its PTC (Positive Train Control) development initiatives.
HPDR will utilize MeteorComm's under-development MCC-6200 Software Defined Radio (SDR) and MBNet™ network protocol. “The new radio extends MeteorComm’s current MCC-6100 SDR functionality with a state-of-the-art digital Vocoder and a new Adaptive TDMA channel access scheme,” MeteorComm said. “These will optimize voice and data transmissions to work in congested areas and dark territory. The MCC-6200 will allow simultaneous reception of up to four RF channels, providing greater frequency diversity to minimize interference and improve throughput.”
TTCI will test the MCC-6200 in laboratory and railroad operating environments at its CBTC Test Bed in Pueblo, Colo., to verify that it fulfills HPDR requirements. TTCI plans to complete HPDR testing by year-end 2009.
In the past 10 years, MeteorComm has designed and manufactured several thousand digital radios for the railroad industry. The MCC-6100 SDR and MCC-6150 SDR are currently being used by BNSF Railway and the Alaska Railroad to support their CBTC, Hy-rail Limits Compliance System (HLCS), and wayside detector systems. SDR operates in three RF bands: 44 MHz for train control, 160 MHz for voice, and 900 MHz for ATCS. The present design supports data rates up to 19.2 kbps in a 25 kHz bandwidth channel. The radio also supports analog voice at 12.5 kHz. MeteorComm’s MBNet protocol enables locomotives, base stations, and wayside stations to operate in peer-to-peer and remote-to-base modes.
Norfolk Southern: NTSB report "goes against the facts"Norfolk Southern has issued a strongly worded statement vehemently disagreeing with and criticizing the National Transportation Safety Board’s report on an Oct. 20, 2006 rail-flaw-caused tank car derailment in New Brighton, Pa., that resulted in an ethanol spill and fire on a nearby river. NTSB said the derailment was caused by "an inadequate rail inspection and maintenance program."
"We take strong exception to any contention that we failed to perform a continuous search of our rail for internal defects or that our inspection and maintenance program is inadequate," said NS Vice President-Engineering Tim Drake. "In fact, many of our procedures exceed FRA standards. We used the best available track inspection technology and procedures at the time and used an expert rail defect detection contractor to inspect rails at a frequency that exceeds FRA requirements. It is highly unlikely that any changes to our technology and procedures could have uncovered the flaw that caused the derailment. Norfolk Southern has the lowest track-caused accident rate among all Class I railroads. Any suggestion that we short-cut track safety goes against the facts and is counter to our policy and practice."
Drake said Norfolk Southern's rail inspection and maintenance program "complies with all applicable regulations, and even the NTSB concedes that we tested more frequently than required by FRA regulation. We will file a formal petition for reconsideration and modification that will rely, in part, on newly available inspection data supplied to the NTSB last month, but not addressed in the accident report. Our petition will defend the adequacy of our rail inspection and maintenance program, and will seek to correct the record before the NTSB as well as any misconceptions on the part of the NTSB about our program and its consistency with the regulations."
The derailment did not cause any injuries. NS says the train’s crew and mechanical condition “were not factors,” and the railroad’s emergency response system “was deemed effective and appropriate.”
STB issues Draft EIS on disputed CN/EJ&E dealOne of the most anxiously awaited documents ever to come out of the Surface Transportation Board was made available Friday—the Draft Environmental Impact Statement prepared by STB’s Section on Environmental Analysis (SEA) on the proposed acquisition of the Elgin, Joliet & Eastern by Canadian National. CN wants to acquire EJ&E so that it can route its trains around, rather than through, Chicago, and many of the towns that lie in the path are in an uproar. That accounts for many of the 5,000 submissions made to the SEA during its preliminary investigations. The resulting document is voluminous and is available for viewing and downloading at www.stb.dot.gov/.
A 60-day public comment period will begin with publication of the Draft EIS in the Federal Register on Aug. 6. Beginning on Aug. 25, SEA will host eight open-house public meetings throughout the Chicagoland area to present findings of the Draft EIS and receive public comments. Comments may be filed electronically on the board’s website by clicking on the E-FILING link and referring to STB Finance Docket No. 35087.
Mitigation of safety, noise, pollution, traffic congestion, and other contentious issues could well be the key to whether the proposed transaction succeeds or is withdrawn. Taking note of the wide opposition his proposal has stirred in suburban and exurban Chicago, CN CEO Hunter Harrison commented recently that while he was eager for the transaction to go forward, he was not desperate, and that if the mitigation measures proved to be too onerous, CN might walk away from the plan.
The Draft EIS sets forth SEA's preliminary recommended mitigation measures and the applicants' voluntary mitigation measures, and encourages "mutually acceptable negotiated agreements to migrate adverse environmental impacts" should the board approve the proposal.
One 31-page section of the EIS is devoted to measures either pledged by CN or proposed by STB. CN's mitigation proposals cover crossing safety, grade crossing delays, emergency vehicle delays, hazmat transportation, construction (sidings, double-tracking, connections), general land use, community liaison, respect for residential properties as well as existing business and industry, state land, protection of existing utility corridors, noise and vibration, and water resources. In dealing with other rail operations, the applicants promise to preserve Amtrak's access to Chicago's Union station and provision of service to such points as Champaign and Carbondale, Ill.; to operate the interlocking at West Chicago and Barrington, Ill., as they are now operated by EJ&E, giving priority to passenger trains; explore with Metra all options for service on the proposed STAR line, including use of an EJ&E line; install all appropriate signaling; and operate under a rule which provides that a public crossing may not be blocked more than 10 minutes except under unavoidable circumstances.
SEA’s mitigation proposals cover rail operations, rail safety, a safety integration plan, freight rail safety, vehicle safety, passenger rail safety, quiet zones, hazmat transportation safety, pedestrian and bicycle safety, and transportation systems.
Grain and coal push ton-mile volume up 3.9% Railroad grain shipments in the U.S. increased 10% and coal volume was up 8.6% in the week ended July 19. As a result, total carload traffic rose to 328,634 cars, up 2.3% from the same week last year, and total volume increased to 34.5 billion ton-miles, up 3.9%. Statistically speaking, the increases in grain and coal traffic more than made up for declines in other carload commodities. Carloads of motor vehicles and parts were down 24.0%; farm products other than grain, down 23.7%; and lumber and wood produces, down 18.9%.
The latest week saw a continued decline in U.S. intermodal traffic, with loadings of trailers and containers down 2.4% from a year ago to 233,516.
Year-to-date, U.S. carloadings were up 0.4% from 2007, intermodal volume was down 3.1%, and ton-miles were up 1.7%.
In Canada, carload traffic during the week ended July 19 was off 5.1% to 72,527 cars while intermodal volume was up 3.1% to 51,791 trailers and containers. Canadian carload volume year-to-date was down 4.0% and intermodal traffic was up 4.2%.
Kansas City Southern de Mexico reported carload freight down 3.4% to 10,116 cars in the latest week, with intermodal volume up 2.2% to 4,709 units. Carloads were down 3.3% for the year with intermodal traffic up 9.4%.
Three new CSX board members seated; two hang in the balanceThree new members of CSX’s board of directors—John D. McPherson, and TCI Group nominees Gilbert H. Lamphere and Alexandre Behring—were seated today at the company’s reconvened annual meeting, which has been adjourned for a second time pending the outcome of a vote review and CSX’s appeal pending before the U.S. Court of Appeals for the Second Circuit on the status of the two remaining board seats.
The status of the two board seats, both of which have been claimed by TCI Group, “remains uncertain,” CSX said. “One of the seats is the subject of questions in the vote review, which remains too close to call. The most recent preliminary draft report of the independent inspector of elections shows that the candidates competing for the seat have a difference of votes that is now less than 1/5 of 1% of the shares entitled to vote at the meeting, and the status of a number of votes is still unclear. The preliminary vote report has already been revised several times to correct errors. The vote review process is expected to be completed soon, possibly as early as next week. . . . [We] expect that these issues will be resolved in the next 60 days.”
As for the new board members, CSX Chairman of the Board Michael J. Ward said, “We look forward to welcoming [them] and working together to continue delivering record performance for all shareholders.”
CSX’s annual meeting will re-reconvene at 10:00 a.m. EDT on Sept. 24, 2008 at the railroad’s Jacksonville, Fla., headquarters.
LA MTA approves sales tax increase for transitLos Angeles' Metropolitan Transportation Authority board Thursday approved a half-cent sales tax increase that could raise between $30 billion and $40 billion for transit and highway projects. The measure goes to the ballot for voter consideration Nov. 4, pending authorization by the California state legislature.
MTA officials believe the measure could raise $30 billion to $40 billion over a 30-year period. Roughly 65% of the revenue would be used to expand the county's bus and rail systems; 35% would be earmarked for highways, streets, bikeways, and sidewalks.
Milwaukie next stop for Portland Tri-Met systemAfter more than a decade of debate, Portland, Ore.'s Tri-Met light rail system will be extended southeast to suburban Milwaukie, following approval given Thursday by the Portland Metro Council, the elected regional government body overseeing Oregon's largest metropolitan area.
The $1.4 billion project, targeted to open in 2015, would put more than 22,000 households and almost 89,000 workers within walking distance of a rail station, according to estimates by Portland's Metro Council, which approved the plan Thursday. It also incorporates a new bridge over the Willamette River, connecting the Oregon Health & Science University with the Oregon Museum of Science and Industry; each facility plans to expand its campus beside the rail stations.
Most Milwaukie-area elected officials also approve of the plan, a reversal from a decade ago when Milwaukie voters rejected efforts to extend light rail to the city, even recalling the mayor and two council members over their rail stance, among other concerns.
Puget Sound to vote on transit packageA 15-year, $17.8 billion plan backed by Sound Transit will be on the ballot in November for Seattle-area voters to consider; included is a recommendation for 34 miles of additional light rail routes.
The regional plan, debated among Sound Transit's participating counties for several months, would among other items extend light rail north along Interstate 5 to the Lynnwood Transit Center in Snohomish County, and south to South 272nd Street in the Federal Way area of King County, by 2023. An extension to the Overlake Transit Center in Redmond, Wash., is also envisioned.
Also planned is an increase in existing Sounder heavy rail train service to Pierce County and the lengthening of existing platforms to accommodate longer trains. A streetcar would link light rail in downtown Seattle to another segment planned under Capitol Hill to the University of Washington.
A 0.5% increase in the sales tax would finance much of the plan, though the cost estimate does not include longer-term financing costs such as repayment of 30-year bonds sold to finance the work.
Critics of the proposal note that Sound Transit has yet to open its initial light rail line, slated to begin operation in 2009 between downtown Seattle and Seattle-Tacoma International Airport; many suggest Sound Transit should prove its fiscal capabilities first with such operations before trying to expand.
Canada commits $697 million to Toronto subway extensionGroundbreaking for Toronto's $2 billion, 5.3-mile Spadina subway extension is expected to occur late this summer, following the federal government's pledge of $697 million for the project, anticipated for nearly two years.
"We're closer to the finish line than we were before," federal Transport Minister Lawrence Cannon said, noting final approval of the package should occur "relatively quickly."
The extension would add six stops, including York University. The Toronto Transit Commission hopes the line will commence revenue operation in 2015.
The funding is separate from $9.3 billion pledged by federal sources and Ontario's provincial government for transit improvements sought by the TTC, GO Transit, and other provincial transit agencies.
BNSF revenues rise, capex will increaseBNSF Railway's second-quarter revenues rose 16%, though damage-related costs from Midwestern floods, high fuel prices, a soft economy, and one-time charges related to an environmental matter and personal injury accruals caused earnings and income to slip below those of the prior-year period. The railroad, however, said its planned capital commitments for 2008 will be increased.
BNSF’s quarterly earnings were $1.00 per diluted share, which included a $0.31 per share charge related to environmental matters in Montana and a $0.03 per share effect from additional personal injury accruals. This compares to second-quarter 2007 earnings of $1.20 per diluted share. Freight revenues increased $613 million to $4.35 billion, 16% higher than second-quarter 2007’s $3.74 billion. The revenue increase was primarily attributable to improved yields and an increase in fuel surcharges of approximately $400 million driven by higher fuel prices. Operating income was $714 million, compared to second-quarter 2007 operating income of $841 million. BNSF said the decrease in operating income reflects a $474 million increase in fuel expense and includes a $175 million charge related to the environmental matters in Montana and $15 million for the additional personal injury accruals. As a result, operating expenses were $3.76 billion, compared with second-quarter 2007 operating expenses of $3.00 billion.
BNSF’s Agricultural Products revenues increased $218 million, or 36%, to $828 million, due primarily to strong unit volumes in ethanol, corn, soybeans and wheat combined with improved yields. Coal revenues of $902 million rose $126 million, or 16%, driven by improved yields and contractual inflation escalators, and partially offset by lower unit volumes due to weather-related issues. Industrial Products revenues increased by $96 million, or 10%, to $1.05 billion. Strong demand for construction and petroleum products was offset by a decline in building products due to weakness in the housing market. Consumer Products revenues of $1.57 billion rose $173 million, or 12%, as strong domestic intermodal unit volumes and improved yields were offset by lower international intermodal unit volumes. Each of the business units also benefited from increased fuel surcharges driven by higher fuel prices.
“We experienced a number of challenges during the second quarter, including a soft economy, rapidly increasing fuel prices, and significant damage to our network from flooding across the Midwest, said BNSF Chairman, President and CEO Matt Rose. “I am proud of the efforts of our team to rebuild our network despite significant devastation. As of mid-July, network fluidity and service to our customers had been fully restored. Despite current softness in the economy, we continue to be optimistic about the long-term given the strength of our diverse franchise, the value of our product offering, and our continued focus on yield and productivity improvement.”
BNSF’s planned capital commitments for 2008 will be about $2.85 billion, or $275 million higher than previously announced due to the acceleration of capital projects to take advantage of the Economic Stimulus Act of 2008, acquisition of additional new locomotives that will enable the railroad to take advantage of better fuel efficiency and other environmental benefits, and capital expenditures associated with significant flooding costs in the Midwest.
“We like the BNSF story longer-term as the company should be able to produce [around] 20% annual EPS growth from 2009-2012,” Morgan Stanley analyst William J. Greene noted in a report after the railroad released its second-quarter financials. “BNSF has exposure to many key parts of the secular rail story: legacy contract renewals, strength in bulk commodities, robust organic pricing, and improving returns. . . . BNSF is a railroad built for growth that can produce impressive operating leverage in positive freight environments. However, until volume growth returns, the stock will struggle to outperform peers. It still has plenty of room to run on pricing and can certainly benefit from strong export grain trends in the near-term. However, export grain can be volatile depending on global fundamentals. BNSF will need strong coal and grain volumes to continue to maximize upside. Intermodal volumes should improve later in the third quarter as it [absorbs] the loss of Maersk. However, since weak import demand should continue to weigh on volumes, new domestic intermodal services will be key for intermodal growth.”
Sacramento ponders transit service cutbacksSacramento, Calif.'s Regional Transit District has scheduled a public hearing July 28 to discuss proposed service reductions and fare increases for its light rail and bus operations, to cover an anticipated $18 million loss in state funding. The funding reduction is part of Gov. Arnold Schwarzenegger's fiscal year 2009 budget proposal, which recommends $1.4 billion be cut from funding aid to transit agencies.
In FY08, RT received $38 million less than anticipated from the state funding sources, prompting cost-containment measures and the reduction of bus service by 5%, the agency said in a statement.
“RT is at the point where we can no longer absorb this magnitude of cuts to transit funding without increasing fares or implementing > service reductions--or a combination of both," said Mike Wiley, RT's general manager and CEO.
RT said it could raise fares anywhere between 10% and 25%, and will weigh four options packages for service reductions. For light rail service, alternatives include reduced weekday frequency, shorter hours of operation (commencing later in the morning, closing earlier in the evening), and discontinuing weekend service (either on both weekend days, or on Sundays and holidays only).
Changes, if approved, would be implemented Jan. 4.
"Gas prices are at an all-time high, light rail ridership has increased by double-digits, and the Sacramento region is discovering the benefits of public transit," Wiley said. "At a critical time when there is demand for more service, the Governor and Legislature are forcing RT to do the wrong thing and ask transit riders to pay more money for less service."
For UP, four records in the second quarterIn the face of skyrocketing fuel prices that are soon expected to surpass labor as its largest cost, and Midwest flooding that impacted earnings, Union Pacific set records in four financial measurements in this year’s second quarter.
UP set second-quarter records in diluted earnings per share, which increased 24% to $1.02, compared to 82 cents in 2007, beating Wall Street’s estimate of 92 cents. Net income increased 19% to $531 million, compared to $446 million in last year’s quarter. Operating income grew 18% to $931 million, compared to $787 million. Operating revenue totaled $4.57 billion, up 13% over 2007’s $4.05 billion, beating analyst projections of $4.49 billion. UP’s second-quarter operating ratio improved about 1 point, from 80.5% in 2007 to 79.6% in 2008.
Four of UP’s six business groups—Agricultural, up 29%; Chemicals, up 14%; Energy, up 21%; and Industrial Products, up 9%—posted all-time record revenues, more than offsetting Automotive, which fell 9%. A fifth, Intermodal, rose 7%, setting a second-quarter revenue record. All five groups set records for best-ever average revenue per car (ARC). Overall ARC increased 16%, reaching an all-time record of $1,835 per car in the quarter. Strong pricing helped offset overall business volumes that dropped 3%, to 2.4 million total revenue carloads, in the quarter.
UP’s second-quarter 2008 average quarterly fuel price rose a whopping 64% to $3.60 per gallon, compared to $2.20 in 2007. But the railroad’s second-quarter fuel consumption rate, as measured by gallons per thousand gross ton-miles, was a quarterly best 1.216 vs. 1.275 in 2007. Several fuel conservation initiatives that have enabled UP to save about 90 million gallons over the past four years helped drive consumption down.
“We achieved a record second quarter in the face of rising fuel costs and an estimated 5 cents earning reduction associated with Midwest flooding,” said UP Chairman, President, and Chief Executive Officer Jim Young. “We demonstrated the resiliency of our network by quickly restoring service to our customers, which provided us with a strong finish to the quarter, driving solid revenue growth and continued productivity improvements. We expect that our diverse business mix will continue to provide us with opportunities through the year. Although high fuel prices and a soft economy present challenges, we remain committed to ongoing productivity and customer service initiatives as we look forward to achieving a record year.”
“UP is still our top pick and should continue to impress,” Morgan Stanley analyst William J. Greene noted in a report after the railroad released its second-quarter financials. “Given UP’s pricing and productivity performance, we’re raising our already-high 2009 EPS estimate from $5.35 to $5.90 and year-end price target to $95. f not for fuel and weather, its EPS may have been closer to $1.15. Moreover, management stated most of 2008’s legacy contract renewals will occur near year-end, suggesting 2009 pricing could be better than expected. We continue to believe UP offers not only the most potential, but also the potential for an operational turnaround, part of which was apparent in second-quarter results. Our revised $5.90 estimate is likely to be well above consensus for 2009, even with limited volume growth and only modest productivity. UP could easily outpace our estimates if fuel prices moderate further or we see a step change in operations. If fuel prices continue to come in or volume declines moderate, UNP could see significant operating leverage and upside to our estimates.”
Skoda eyes Toronto streetcar bid, with caveatPlzen, Czech Republic-based Skoda Transportation has expressed interest in bidding on a $1.25 billion streetcar contract with the Toronto Transit Commission, following TTC's cancellation of its Request for Proposals process last week.
But Skoda's manager of U.S. operations says the manufacturer will bid only if TTC removes its requirement for 100% low-floor vehicle. TTC Chairman Adam Giambrone has said the agency will not relent on that matter.
Skoda-designed streetcars incorporating a 70% low-floor design operate in Portland, Ore., and Tacoma, Wash., but the company declined to bid for TTC's 204-car order due to the requirement for a 100% low-floor car.
However, last May Skoda signed a contract to provide 20 ForCity 100% low-floor streetcars, with an option for 32 additional vehicles, to Rigas Satiksme, the public transit operator serving Latvia's capital city, Riga. Skoda's ForCity low-floor design is in widespread use in Prague.
Proposed fare hikes stir New Yorkers' ireBraving a firestorm of protests from riders and politicians, including Gov. David Paterson and Mayor Michael Bloomberg, the New York Metropolitan Transportation Authority moved ahead Wednesday with plans to seek two increases in fares and tolls over an 18 month period--9% to take effect in July 2009 and an additional 5% by January 2011. The planned increases in subway, bus, and commuter rail fares and in bridge and tunnel tolls, affecting millions of daily users, were formally announced as the MTA presented its preliminary 2009 fiscal year budget at a board meeting in New York City.
While ridership and usage is up on most MTA operations, the agency said new fare and toll increases were necessary because of soaring energy costs and plunging revenues from the real-estate transactions that help subsidize its trains and buses.
These increases will come on top of increases that went into effect just four months ago.
Reports of the planned 9% increase were circulating ahead of the meeting and drew sharp responses. Governor Paterson commented at a news conference: "This just cannot become the way the MTA solves problems: Every time there is an issue, pass along the increase." At his own news conference, Mayor Bloomberg delivered a businessman's verdict: "Anybody that tells me they've got a $10 billion budget and can't find ways to cut 5%, that's just poor management."
Salt Lake City adds streetcar line to transit mixAdd Salt Lake City to the growing list of western U.S. cities committing to streetcar lines. The Utah capital's city council voted 5-0 Tuesday to proceed with plans to establish a two-mile streetcar route, dubbed the Sugar House Transit Corridor. The route would provide stops every two blocks along 2300 South, Utah Transit Authority's Central Pointe TRAX light rail station with Granite Block, near Sugar House Park.
UTA, Salt Lake City, and South Salt Lake will fund the project, estimated to cost $9.8 million to construct. Included within the project is parallel right-of-way for a pedestrian and bicycle path. UTA projects daily ridership of 2,264, marginally higher than a light rail alternative and significantly higher than a bus rapid transit (BRT) option.
UP pays $102 million to settle forest fire suitIn the largest such settlement on record, Union Pacific has agreed to pay $102 million to the U.S. government to cover costs and damages resulting from a fire that ignited on Aug. 17, 2000, in the Feather River Canyon north of Storrie, Calif., on the railroad’s right-of-way within the Plumas National Forest.
In a civil lawsuit, the government alleged that the fire was caused by the failure of UP employees to take proper precautions during a track repair operation. The government said workers failed to clear the area of flammable material and failed to use spark shields with high-speed rail saws and grinders. The fire burned more than three weeks and killed wild life habitat and destroyed trees on more than 21,000 acres. Firefighters suppressed the fire without loss of life or buildings at a cost of around $22 million.
“The court ruled that the people of the United States are entitled to compensation for the unique aspects of the damaged forests, above and beyond the fair market value of the timber destroyed,” said a Department of Justice announcement issued in Sacramento, Calif., on July 22. “The remaining $80 million of the settlement compensates the United States for damages to its natural resources. The settlement monies will go directly to the Plumas and Lassen National forests to help remedy the resources devastated from the fire.”
UP said it had taken a charge of $10 million at the time of the fire and insurance would cover the remainder of the settlement.
“Dismayed” hedge funds threaten action against CSXThe Children’s Investment Fund Management and 3G Capital Partners fired off a letter to the CSX board July 22 saying they are “deeply dismayed that the company continues to go to extraordinary lengths to thwart the clear choice made by CSX shareholders to elect four of our nominees to the board of directors.”
“We urge CSX to refrain from taking further steps to delay the inevitable outcome of this election,” said the two hedge funds, which have been critical of CSX’s management and want to help institute changes to improve the rail carrier’s earnings. “The votes have been counted and the outcome is clear: The shareholders want four of our nominees on the CSX board. We don’t want to litigate the issue, but we will take all necessary actions to protect shareholders’ interests if the duly elected board is not immediately seated.”
CSX responded that “in addition to the customary review and challenge period, the voting results are subject to the outcome of pending litigation between the company and the TCI Group before the U.S. Court of Appeals for the Second Circuit.” The company pledged to “proceed quickly and continue to keep open the lines of communication,” adding: “Whatever the ultimate outcome, the CSX board will work constructively to continue providing outstanding value for shareholders.”
After a June 25 shareholders’ meeting, CSX CEO Michael Ward said results of the proxy vote on new board members were “too close to call at this time.”
In their July 22 letter, the hedge funds pointed out: “After several weeks of work conducted by the independent inspector of elections (chosen and retained by CSX), the independent inspector came to the conclusion” that “shareholders had elected four of our nominees.” The hedge funds said they had now been told that “CSX is still seeking to find up to 122,229 ‘lost votes’ despite the fact that this number of votes would not change the outcome of the election.”
Norfolk Southern net income rises 15%Norfolk Southern Tuesday reported record net income of $453 million, or $1.18 per diluted share, compared with $394 million, or $0.98 per diluted share, for the same period of 2007. Second-quarter railway operating revenue was also a record, $2.8 billion, up 16% compared with the second quarter of 2007.
Railway operating expenses increased 16% to $2 billion for the second quarter compared with a year ago, primarily due to higher fuel expense, which rose by $212 million, or 76%. But the operating ratio for the quarter was 71.1%, about even compared with the second quarter of 2007.
"Norfolk Southern delivered record financial results during the quarter, reporting continuing strength in our coal, agriculture, and metals markets," said Norfolk Southern CEO Wick Moorman. "Looking ahead, our franchise should continue to benefit from a broad and balanced customer base as well as from rail's inherent advantages over other transportation modes - safety and reliability, fuel efficiency, and environmental sustainability."
Although continued weakness in the automotive- and housing-related industries contributed to a 2% reduction in traffic volume compared with the same quarter last year, higher average revenue per unit more than offset the effect of reduced volumes, the company said.
The company also announced it would increase its quarterly dividend by 3 cents to 32 cents per share, payable on Sept. 10 to shareholders of record as of Aug. 1.
RSI, RailFood team upRailFood™, a new, transaction-fee-free online product listing service for railway-related parts, and the Railway Supply Institute have teamed up to offer RSI member companies a discounted listing rate. Individual product listings on railfood.com normally cost $5.00 for one year. RSI members are automatically upgraded free of charge to a Professional Level listing, which normally costs $500 per year. RSI members are instructed to use the promotion code RSI318 at the RailFood’s signup page, railfood.com/signup.
DOT grants Operation Lifesaver $1 millionThe U.S. Department of Transportation has awarded a grant of $1.05 million to Operation Lifesaver Inc. (OLI) to continue ongoing education programs to reduce highway-rail grade crossing collisions and trespasser deaths, and to pursue new initiatives. The grant will generate an additional $338,332 million in matching funds or services. In addition to helping fund OLI's State Assistance program, the DOT grant will support training programs for OLI's 2,100 trainers and presenters and also help produce a training video for commercial truck and bus drivers. In announcing the grant, DOT Deputy Secretary Thomas J. Barrett noted that in 12007 there were 338 grade crossing and 473 trespasser fatalities.
AAR urges partnership with hazmat shippersAt a hearing in Washington Tuesday held by the Surface Transportation Board, Association of American Railroads President and CEO Edward R. Hamberger said the nation's shippers of highly hazardous materials or toxic inhalation hazards (TIH) should partner with the railroads in safely transporting such goods.
"Nothing is more important than the safety of our employees and the communities through which we operate," Hamberger said. "It’s only reasonable that those who make extremely hazardous materials demonstrate that they also have the same public safety commitment."
Hamberger said the rail industry does not seek to eliminate its common carrier obligation at the present time. "Rail is the safest and most secure mode of transporting TIH, many of which play an important role in the national economy," he said. "However, if there is a public interest need for the railroads to be compelled to carry TIH materials, there is a corresponding public interest imperative for the industry to do what is necessary to best ensure the public's safety."
Hamberger said freight railroads are doing their part to ensure safe delivery, but asked the STB to recognize that given the unique risks involved in transporting these dangerous chemicals, shippers share the risk and also the effort to find ways to eliminate those risks entirely.
Reiterating AAR's observation that rail is a safe mode, Hamberger noted that the transport of TIH materials account for 100,000 carloads out of 32 million, or just three-tenths of one percent of total rail volume. "We train thousands of local emergency responders and have implemented special operating procedures on trains carrying TIH. It’s only right that those who make and ship these dangerous chemicals both share in the risks we face to transport their hazardous materials and have the same incentive to eliminate those risks,” Hamberger said.
Hamberger also restated AAR's position that the only way to completely eliminate the risks inherent in moving highly toxic chemicals by rail is to replace those hazardous materials with safer chemicals and technologies. He urged shippers to devote more resources toward developing safer substitutes to replace TIH materials.
Fuel costs and floods erode CP earningsCanadian Pacific's net income dropped 40% to $155 million in this year’s second quarter and its operating ratio increased to 79.4% from 74.7% in the same period last year. Freight revenue was essentially flat at $1.22 billion, but operating costs increased 7%. Earnings per share were $1.00 vs. the $.99 Wall Street forecast.
"This was a tough quarter with the unprecedented rise [34%] in fuel prices, the North American economic downturn, and prolonged flooding on our U.S. main line," said President and CEO Fred Green. "We see the current economic situation, and CP is taking aggressive steps that should position us well for 2009. I have accelerated a rigorous process to improve our productivity, efficiency, and yield."
Chief Financial Officer Mike Lambert said CP now expects full-year earnings per share to be in the range of $4.00 to $4.20, down from previous guidance of $4.40 to $4.60. "We continue to focus on driving positive pricing gains and strengthening our fuel recovery and cost management programs," said Lambert. "However, these will not be enough to offset the challenges we are facing with the higher price of fuel and the slowing North American economy. We are updating our guidance to reflect our substantially higher fuel assumptions and the deteriorating economic conditions."
Wabtec earnings at record, exceeding estimatesWabtec Corp. reported Tuesday that its second-quarter sales increased 20% to a record $390 million compared with the same period last year, income from operations increased 22% to $56 million, and per-share earnings reached a record 69 cents, exceeding Wall Street's consensus estimate of 65 cents. On June 30 the company had a backlog of $1.2 million in unfilled orders, 3% higher than on March 31.
Based on these results and with full-year revenue expected to grow 12% to 14%, Wabtec increased its 2008 earnings guidance to about $2.65 per share from an earlier projection of $2.55.
"Our second-quarter performance was strong, with a variety of initiatives driving growth, including international and aftermarket expansion," commented Alfred J. Neupaver, Wabtec's president and CEO. "We generated strong cash from operations and finished the first half of the year with cash, net of debt, of $90 million, most of which was used to complete the acquisition of POLI, a European-based manufacturer of brake equipment, after the end of the quarter. Since 2005, we have made five acquisitions, all of which were financed with internally generated cash from operations. Although we remain cautious about the economic outlook in the U.S. and abroad, we are confident in our growth prospects for the rest of 2008 and beyond."
New York MTA ponders 8% fare hikeThroughout the year, numerous U.S. transit agencies have struggled to balance budgets as rising fuel prices and/or falling revenue strained operating capabilities. Now New York's Metropolitan Transportation Authority, the nation's largest public transit operator, faces a budget shortfall of $900 million, prompting the MTA board to ponder an average 8% increase in fares at its scheduled meeting Wednesday.
MTA raised fares on many services an average of 3.85% last March, but also anticipated a revenue surplus of $350 million for the year. That surplus has shrunk by at least 50% due to a decline in real estate tax revenue, coupled with rising fuel costs. Whatever surplus does remain is expected to be used to address the expected budget shortfall in 2009.
The proposed fare increase would take effect July 1, 2009; before then, MTA would hold hearings on the increases in December and likely vote on the measure in the spring of 2009.
No cutbacks in service or capacity are being considered publicly, in keeping with MTA's own comments at the APTA Rail Conference in San Francisco during June stating that such cutbacks were not an option for the authority. In fact, Metro-North has announced an additional weekend train is being added Aug. 3 on the Pascack Valley Line, serving Rockland County (N.Y.) points and making limited stops within New Jersey. MTA's rail ridership continues to grow on its Metro-North, Long Island Rail Road, and New York City Transit services.
CN warns EJ&E's acquisition is not an absoluteCanadian National President and CEO E. Hunter Harrison has warned that the railroad may walk away from its proposed purchase of the Elgin, Joliet & Eastern Railway Co. (EJ&E) if critics and opponents enact too many conditions.
"Would we ever walk? Absolutely. I mean, we're good business people," Mr. Harrison said Monday in a conference call.
Last September CN announced its intent to buy EJ&E for $300 million, hoping the tap the target's capability to circumvent rail bottlenecks in Chicago and speed transcontinental freight service. Since then, numerous suburban communities have voiced concern or outright opposition to the acquisition, citing fears of increased freight traffic, pollution, noise, and disruption of community activities, such as emergency service access. As just one example, representatives from three municipalities plan to meet July 23 in Naperville, Ill., to organize opposition to CN's proposed purchase.
Others have expressed concern that CN's acquisition would jeopardize plans for a 55-mile circumferential Suburban Transit Access Route (STAR) on the EJ&E, linking several Metra commuter rail lines.
"We could run this railroad without the EJ&E. We could run it a lot more efficiently with it," Harrison said. "But if it gets to the point where the mitigation costs or the timing of the issue is going to drag out for so long. ... We're very good at turning our backs and walking the other way and figuring out another way to skin the cat."
CN earnings decline in second quarterCanadian National Monday reported its second-quarter net income declined 11% versus the comparable year-ago quarter, to $459 million, on revenue of $2.1 billion. Operating income dropped 13% to $707 million, but the Class I railroad's operating ratio rose 6.3 points to 66.3%.
The company attributed part of its performance numbers to the "stronger Canadian dollar relative to the U.S. dollar, which affects the conversion of CN's U.S. dollar-denominated revenues and expenses."
"Despite the headwinds, we saw double-digit growth in intermodal revenues as a result of new container traffic over the Port of Prince Rupert and continued import strength at the Port of Vancouver, as well as higher volumes of commodities to support oil sands development in Alberta," said E. Hunter Harrison, CN president and CEO, in a statement. "CN continues to face economic uncertainties in the current environment, but we are still targeting diluted earnings per share growth in the mid-single-digit range for full-year 2008."
CN also announced a share repurchase program of up to 25 million shares, or 5.3% of its outstanding stock not held by its insiders on July 14. Approximately 473.4 million CN common shares were issued and outstanding on that date, the company said.
FRA proposes rule to improve roadway worker protectionThe Federal Railroad Administration (FRA) has issued a Notice of Proposed Rulemaking to improve protection for roadway workers from train or equipment movements on an adjacent track.
FRA's proposal would require railroads, contractors to railroads, and roadway workers to adopt and comply with additional on-track safety procedures. It would cover work groups using certain maintenance equipment, when at least one worker is on the ground and the centerline of the adjacent track is 19 feet or less from the centerline of the track being worked on.
The agency also proposes to expand requirements for job safety briefings, training, and record-keeping to ensure compliance with the new procedures. Under existing Roadway Worker Protection rules, work groups engaged in large-scale maintenance or construction must be provided with adjacent-track on-track safety by way of a train approach warning. The proposed regulation would expand upon this requirement to cover a wider range of operational conditions.
FRA says that since May 2004, four rail employee fatalities have occurred on a track adjacent to a track where a group of roadway workers had been operating on-track maintenance equipment.
A copy of the proposal can be viewed at http://www.fra.dot.gov/us/content/321 under the subheading Roadway Worker Protection. Comments on the proposed rule can be submitted until August 18.
Rail route no danger to historic battlefield, county says One New Jersey county is challenging the state's environmental stance opposing reintroduction of regional rail service on active, existing right-of-way, a position which could bode ill for other efforts nationwide. Monmouth County, in a letter to the state's Department of Environmental Protection, disputes a DEP assertion made last May that rail passenger service will threaten the character of Monmouth Battlefield State Park, site of the Revolutionary War clash in 1778. To the contrary, introduction of passenger rail service on the 150-year-old rail line, still active for freight use, would bolster public transit access to the site, the county asserts.
A route through the park is one of three being evaluated by New Jersey Transit for rail service linking Middlesex, Ocean, and Monmouth counties, generating the moniker "MOM" rail service. The route traversing the battlefield, in western Monmouth County, offers that county the biggest expanded rail reach, but opponents in neighboring Middlesex County have sought to block the "western alignment" route for more than 12 years.
"The significant history of our county did not end with the Battle of Monmouth," Monmouth County Administrator Robert M. Czech wrote to DEP Commissioner Lisa P. Jackson. "In fact, there is a rich history in the area surrounding where the three-day Revolutionary War battle was fought and along the British retreat into Middletown."
The letter continues, "The railroad predates park development by more than 100 years and would not be expanded beyond the single track in this area ... When the park's Visitor Center was built on top of historically significant Combs Hill to overlook the historic houses and fields below, the railroad was already part of the landscape. Trains are not visible from the park's Visitor Center."
DEP Acting Director of Parks and Forestry Jeanne A. Mroczko has voiced concern that use of the rail line for passenger service would negatively impact the future development of the park as a National Historic Landmark. But Monmouth officials note the Monmouth Battlefield National Landmark Planning Guide prepared by the Friends of Monmouth Battlefield cites the compatibility of passenger rail service with park development and, in fact, recommends development of the western alignment, also known as the Monmouth Junction alternative.
Other supporters of the proposed line note that rail lines traverse other battlefields, including two Civil War sites at Gettysburg, Pa., and near Frederick, Md., with little if any negative impact.
AEI tag reader gets FCC certificationSomerset, N.J.-based Short Line Technologies says the Federal Communications Commission has certified the company's SLT-100 AEI Tag Reader meets all requirements under Part 90 of the FCC Rules. The SLT-100, using microwave sensing, can determine train presence and direction without external sensors, the company says. The tag reader also offers stand-alone operation without any need to shelter it from weather, and provides a communication range of up to 30 miles. A solar power option is available.
New chief executive at US&SAnsaldo STS has appointed Dr. Alan E. Calegari as President and Chief Executive Officer of wholly owned subsidiary Union Switch & Signal, headquartered in Pittsburgh, Pa. The appointment became official July 1, 2008.
“Dr. Calegari will be responsible to realign the functional organization to accelerate effectiveness in the deployment of new solutions to support the increasing demand of innovation in the field of railroad safety and security,” said Sergio De Luca, group president and CEO of Ansaldo STS in Genoa, Italy. “We appointed Dr. Calegari for his international experience to expand our market penetration of rail and transportation security, particularly in the arenas of large-scale applications for rail and mass transit in the North and Latin America, and China.”
Calegari brings more than 25 years of experience to US&S, including his most recent position as President and CEO Americas for Dedicated Micros Inc. Previously, he held executive positions with Siemens Building Technologies, Fiat, and Johnson Controls. Calegari holds a Ph.D. in Arts and Sciences from Loyola University and a Master of Arts from Harvard University. Emmanuel Viollet, who was Acting President until the appointment was made, remains at the company as Chairman of the Board of Directors of US&S.
CP, CN join forces at Vancouver container portCanadian Pacific and Canadian National have agreed to joint operation of railcar switching at Deltaport container facility in Vancouver, British Columbia. The two railroads handle roughly 70,000 TEUs of containers each year through the port. Switching had been done by a unit of Denver-based OmniTrax Inc.
The Canadian Class I competitors already share main line access through the Frasier Canyon, used by freight traffic traveling to and from Vancouver.
Marin, Sonoma counties to vote again on 'SMART' railResidents of California's Marin and Sonoma counties, north of San Francisco, will vote this fall on a sales tax proposal to fund passenger rail service between Coversdale and Larkspur, roughly 70 miles apart.
A quarter-cent sales tax to fund the $541 million project was approved July 16 by the Sonoma-Marin Area Rail Transit (SMART) District's board of directors; the project also would include include a parallel bike and pedestrian path. The tax would be enacted in 2009 and expire in 2029 unless renewed.
The board's decision follows a survey of 1,205 people, conducted in May by Godbe Research of San Mateo, that found 77% of respondents favoring SMART rail service.
An earlier vote in 2006 generated support for the project, but not a super-majority as required. Then, 65.3% of Marin and Sonoma voters supported SMART, but the total fell short of the 66.6% mandated for passage.
"The time has never been better for SMART," said train spokesman Chris Coursey. "People are) looking for not only higher gas-mileage cars, but ways to get out of their cars entirely."
DART, TRE set ridership records in JuneDallas Area Rapid Transit (DART) light rail service and Trinity Railway Express (TRE), serving Dallas and Fort Worth, both notched their highest weekday ridership numbers during June.
DART averaged 69,861 trips per day, up 14.2% from June 2007, and notched 10.3 million trips during the month. TRE commuter rail service averaged 11,105 trips per day, up 19.8% over year-ago average ridership, and totaled 251,522 trips for June 2008.
Including bus and high-occupancy vehicle customers, DART recorded 10.3 million passenger trips for the month, its highest total ever, and up from the prior record of 10.28 million trips set in May, a DART spokesman said.
Bombardier to maintain RENFE high speed equipmentBombardier Transportation, in partnership with Madrid-based Patentes Talgo SA, has been awarded a 14-year contract with Spain's national railway operator, RENFE, to maintain 45 AVE S-130 high speed trainsets. Maintenance activities will be carried out until 2022 at RENFE's depots in Santa Catalina and Fuencarral, both in Madrid. Bombardier Transportation said its share of the contract is valued at approximately $202 million.
AVE S-130 trains, which travel up to 150 mph, are equipped with a dual-voltage propulsion system, a highly advanced onboard signaling system, and variable-gauge bogies, allowing RENFE to use equipment on Spain's standard-gauge high speed lines, tapping their 25kV power supply, and on the nation's broad-gauge conventional rail network, which uses a 3kV power supply.
RENFE previously awarded the Bombardier/Talgo tandem a maintenance contract in 2004, involving 16 AVE 102 trainsets.
Cash infusion expected for Nashville commuter rail Nashville's commuter rail service, one of the few U.S. services struggling with financial constraints due to lower-than-expected ridership, will receive $1 million from the Tennessee Department of Transportation to keep trains running.
TDOT's funding follows earlier disclosure of a $1.7 million funding shortfall by the Regional Transportation Authority, and comes with conditions attached. Primary among them: Nashville's Metropolitan Transit Authority, which oversees the city's bus operations, is to assume management oversight of the commuter rail service. TDOT anticipates administrative cost savings of $300,000 through this move. "The operation by the MTA would lead to a number of economic and operational efficiencies and will put the things into balance this fiscal year," an MTA spokesman said.
To close the remaining funding gap of $400,000, other participants, including Wilson County and the cities of Lebanon and Mt. Juliet, must each agree to contribute $100,000; Lebanon already has agreed to the deal. A $100,000 contribution from the Nashville & Eastern Railroad, which leases the right-of-way, is also anticipated.
"TDOT has invested a significant amount of money in the Music City Star, and we'll do all we can to ensure it succeeds," a department spokeswoman said.
Toronto scuttles streetcar RFPThe Toronto Transit Commission late Thursday announced cancellation of its Request for Proposal process to purchase 204 new low-floor streetcars for Canada's largest city, prolonging the political turmoil surrounding the effort to re-equip the streetcar system.
TTC rejected a bid from U.K.-based Tram Power Ltd. on the basis its bid was not commercially compliant. A second bid, submitted by Montreal-based Bombardier Inc.'s transportation division, failed "a technical evaluation that required a pass/fail on key criteria related to negotiating the tight turning radii on the TTC's existing streetcar rail system," TTC said in a statement.
TTC added, "A Fairness Monitor was retained to oversee the procurement process and concurs that the TTC has followed the process as set out in the RFP and also concurs with the cancellation of the RFP."
The agency said it still hopes to proceed with an equipment order, valued at C$1.25 billion, and during the next month plans to "contact known and proven streetcar manufacturers to identify and discuss the issues that led the companies to a decision either not to bid, or to submit a bid that is not compliant." It expects to have new cars delivered on schedule, with test cars arriving in 2010 and revenue service begining in 2011 or 2012.
Among the potential carbuilders are Bombardier, Paris-based Alstom Transport, with manufacturing facilities in Hornell, N.Y., and Siemens Transportation, which has manufacturing facilities in Sacramento, Calif. Both companies had declined to pursue TTC's original RFP. Alstom cited deadline constraints, while Siemens suggested that the RFP was unfairly weighted to favor Bombardier.
Transit observers say other, smaller manufacturers are unlikely to compete successfully, given the size of the TTC order.
Bombardier spokesman David Slack said the company remained interested in winning TTC's business. "We were a bit surprised about the outcome—no question about that," he said. "We have great experience building light rail vehicles for Toronto and we're the No. 1 supplier of light rail vehicles in the world."
TCI loses $1 billion, but gains seats on CSX board
2Q results: Railroad's EPS climbs 31%In an ironic coincidence, shares of CSX rose nearly 6% in late-day trading yesterday to $60.94 on the New York Stock Exchange following the railroad’s second-quarter 2008 earnings report, one day after it was reported that TCI (Children’s Investment Fund Management LLP), leader of the dissident hedge funds that gained four seats on CSX's board of directors, took a hit of over $1 billion in June—its largest-ever monthly loss. TCI lost 12.5% of its value and plunged into the red for the year’s first six months, according to a report in the Financial Times. Why? Probably because, unlike most other hedge funds, TCI has relatively few holdings. If one or two take a hit, the loss is that much greater.
In the second quarter, CSX set all-time records in revenues and operating income, which were up 15% and 17%, respectively. Earnings per share grew 31% to a record 93 cents, based on earnings of $385 million, compared to $324 million, or 71 cents per share, in the prior-year quarter. Revenue increased in eight of the CSX's 10 market segments, resulting in quarterly revenues of $2.9 billion and operating income of $717 million. A "continued focus on productivity and cost control" helped to offset a significant increase in fuel costs, driving the operating ratio down to 75.3% for the quarter. "CSX continues to deliver significant value for shareholders and demonstrate the secular strength of our business," said Chairman, President, and CEO Michael Ward. "The strong earnings performance delivered by this team was supported by all-time records in revenue and operating income, despite the effects of a softer economy. Sustained strong demand for export coal, grain, ethanol, metals and phosphates, and fertilizers, as well as solid yield management, continued to lead significant revenue growth across our markets."
Following the earnings report, CSX announced preliminary voting results from its 2008 annual shareholders meeting on June 25. According to a report prepared by independent inspector of election IVS Associates Inc., TCI Group (TCI and 3G Capital Partners) nominees Alexandre Behring, Christopher Hohn, Gilbert H. Lamphere, and Timothy O’Toole won seats on the board. Voters also approved the TCI Group’s special meeting and nullification proposals.
CSX stressed that the shareholder’s meeting “has been adjourned until July 25, 2008,” and that “voting results are subject to a customary review and challenge period as well as the outcome of pending litigation between [CSX] and the TCI Group before the U.S. Court of Appeals for the Second Circuit.” Last month, U.S. District Judge Lewis A. Kaplan ruled that TCI Group had sidestepped SEC Schedule 13D disclosure requirements and violated securities laws using so-called “swap investments” to obtain 6.4% of its 8.7% stake in CSX, but rejected CSX’s request to prevent the hedge funds from casting votes on those shares. CSX appealed the ruling. In a conference call with analysts during CSX’s second-quarter earnings announcement, Ward said that the outcome of CSX’s appeal would determine whether some of the votes cast for TCI Group nominees would be disqualified from the tally. Those nominees reportedly are Hohn and O’Toole, who may have won only by narrow margins. The Second Circuit appeals court could disqualify 6.4% of TCI’s stake if it agrees with the District Court ruling, because that was the percentage the hedge funds owned when they were out of compliance with SEC disclosure rules.
Oral arguments in the case are scheduled for Aug. 25, which now won’t be decided until September or perhaps even later. “Until we fully work through all of that, I don’t know if we will know the final results of that election,” Ward said. It’s possible that CSX will decide not to officially seat new directors or hold its first post-election board meeting until all is said and done. If CSX’s appeal is successful and the votes are disqualified (“sanitized,” in SEC parlance), TCI Group not only stands to loose two of its four board seats, but the ability to call special meetings of the CSX board—an eventuality, one Wall Street analyst told Railway Age, that holds far more significance than how many board seats are actually controlled.
As Yogi Berra famously once said, “It ain’t over ’till it’s over.”
CSX appeals STB decision on DuPont freight ratesLate Thursday a CSX spokesman affirmed that the Class I has appealed a ruling by the Surface Transportation Board forcing CSX to cut freight rates and offer reparations to E.I. duPont de Nemours and Co. STB has ordered CSX to pay $3 million to DuPoint for overcharging on six separate shipment lanes.
CSX has asked the U.S. Court of Appeals for the District of Columbia to vacate the decision, saying the STB's decision was "not supported by substantial evidence."
STB's decision was the first taken under new rules designed to expedite disputes over relatively small freight moves, particularly for small and medium-sized companies who had complained of the financial burden involved in challenging freight rates under the old procedures.
Rail carloads up 3.3% in latest weekU.S. rail carload traffic climbed to 321,094 cars in the week ended July 12, 3.3% higher than in the corresponding week last year. Volume increased 6.4% in the West but was down 1.2% in the East. Eleven of 19 commodity groups registered gains, with metallic ores up 22.4%, grain up 6.3%, and coal up 3.9%. Declines continued in loadings of primary forest products, down 19.9%, and wood products, down 16.4%.
Intermodal volume continued to slide in the latest week, when 231,921 trailers and containers were loaded, down 2.8% from the same week in 2007. Total railroad volume for the week was 33.6 billion ton-miles, up 4.3% from the 28th week of 2007.
Year-to-date, carload traffic in the U.S. increased 0.4%, intermodal traffic was down 3.1%, and ton-miles were up 1.6%.
In Canada, carload traffic in the week ended July 12 totaled 73,467 cars, virtually flat with last year, and intermodal volume was 50,840 units, up 4.5%. Cumulative carloads for the first 28 weeks of 2008 were down 4.0% and intermodal loadings were up 1.9%.
Kansas City Southern de Mexico originated 9,293 carloads in the week ended July 12, down 13.4% from last year, and 3,962 trailers and containers, down 0.6%. Cumulative volume for 28 weeks was 294,147 carloads, down 3.3%, and 132,142 intermodal units, up 9.7%.
Brookville CoGeneration™ locomotive testing on CSXFollowing a three-month test in Roanoke, Va., with Norfolk Southern, Brookville Equipment Corp.'s BMEX 259 CoGeneration™ triple-engine genset switcher locomotive has begun its second Class I demonstration at CSX Transportation's Hagerstown Yard in Hagerstown, Md.
The NS demo, BMEX 259's first on a Class I, "confirmed that the locomotive's combination of three diesel engines and powerful regenerative brakes could perform with a higher fuel efficiency and lower emissions than a standard switcher locomotive," Brookville Sales and Marketing Specialist Michael White said. "It was rigorously tested. Fuel burn, tractive effort, and regenerative brake testing was performed by NS crews during the demonstration. According to NS, testing of the regenerative brakes showed that nearly 90% of the mechanical energy exerted on the locomotive by the trailing load was recouped into electrical energy."
Prior to the NS test, short line Buffalo & Pittsburgh utilized BMEX 259 for two days of switching at its DuBois Yard, where, according to White, its high tractive effort and individually controlled traction motors enabled it to outperform the railroad's GP40s.
BMEX 259 utilizes Cummins QSK19L engines to provide a combined 2,100 hp in a "Power-on-Demand" configuration. "Brookville's multi-engine building-blocks have proven to railroad crews that a single 700-hp engine will provide sufficient power to operate the locomotive," said White. "Working a single engine reduces fuel consumption and emissions by keeping the other engines idle during off-peak operation. This significantly lowers the railroad’s operating costs. Higher tractive effort, recycled braking energies, and better fuel economy all highlight the first 90 days of the CoGeneration™ locomotive tour."
BMEX 259 has been scheduled for short demonstrations on other railroads and transit properties in the next few months, and will begin making its way west after completing its test with CSXT.
Northern Virginia MPO delays VRE, other rail upgradesNorthern Virginia's National Capital Region Transportation Planning Board has voted to delay improvements targeted to bolster passenger rail capacity for the Virginia Railway Express, citing the inability of state lawmakers to provide adequate funding support.
The metropolitan planning organization, approving a six-year rolling transportation plan, indefinitely postponed plans for VRE to acquire seven additional railcars in 2010. It also postponed, by two years, the projected introduction of streetcar service along Columbia Pike in Arlington, Va.; the revised plan would introduce the service in 2016.
"The people who will suffer most are those in Prince William and Loudoun counties," said NCRTP Director of Transportation Ronald Kirby. "That’s where the congestion, the pain, is going to be felt more than in the other jurisdictions."
Numerous road construction and road widening projects were also postponed by the MPO.
Texas county picks URS Corp. to design rail lineSan Francisco-based URS Corp. has been chosen by Denton County Transportation Authority (DCTA) to provide final design services for the county's proposed $310 million, 21-mile regional passenger rail line. The diesel light rail transit operation would link downtown Denton and nearby Lewisville, Texas, with Dallas Area Rapid Transit (DART) light rail at a transfer point in Carrollton.
URS previously had conducted the alternatives analysis, environmental impact analysis and preliminary engineering studies, station design, and ridership forecasting for the proposed rail line. The project is intended to open in conjunction with the extension of DART's Northwest Line to Carrollton in late 2010.
DCTA ceased pursuing federal New Starts funding for the project in 2007, citing the length of time and potential competition involved in the process. The authority is tapping regional funding sources for the project, which if opened on schedule would become the second DLRT operation in Texas, after Austin's expected DLRT debut late this year.
Alstom sales rise in first fiscal quarterAlstom Wednesday reported an 11% increase in overall sales during its first fiscal quarter of 2008/2009 (April 1 to June 30), to $7.1 billion. The company also reported first-quarter orders totaling $10.4 billion.
Sales generated by its transport division in the quarter, at about $3.3 billion, were up just 1%, "or 4% on an organic basis," the company said. Alstom attributed the modest gain to "the exceptional order of 2.2 billion euros recorded during the first quarter of 2007/08 for very high speed trains in France."
Sales increased by 22% in Alstom's Power Systems segment and by 8% in its Power Service over year-ago levels.
"Alstom continues to benefit from its good positioning on the growing markets of power generation and rail transportation: The level of orders recorded during the first quarter is strong and the prospects continue to be very positive with both the upcoming booking of the awarded projects and many new opportunities," said Patrick Kron, Alstom chairman and CEO, in a statement.
In Paris, shares of Alstom Wednesday closed up 8.49%, or 5.61 euros, at 71.71 euros.
LA Metro to install first fare gatesThe Los Angeles County Metropolitan Transportation Authority has awarded Cubic Transportation Systems, Inc., contracts valued at $68 million to add an advanced gating system and related services to Metro's automated Universal Fare System, which employs Cubic-designed TAP™ smart card technology. The first contract, for $48 million, is a 10-year arrangement for Cubic to deliver more than 420 fare gates as well as upgrading ticket vending machines to distribute Limited Use smart cards to all subway and selected light rail stations. Two related contracts valued at $22 million are for associated civil engineering works and system maintenance.
"The addition of gating on the Metro Red and Purple lines and selected light rail stations will support Metro’s goals to prevent fare evasion, improve system security, and capture invaluable ridership data to enable Metro to enhance is service to the public," said the Cubic announcement. "Significantly, the addition of gating to the TAP™ system provides the key infrastructure required to enable additional threat detection and security features. Metro and Cubic are working together with appropriate government agencies on the subject."
Detroit MPO backs light rail planDetroit's metropolitan planning organization (MPO), the Southeast Michigan Council of Governments, has approved a Detroit Department of Transportation plan to construct and operate an eight-mile light rail service in Detroit.
The route would run along Woodward Avenue between the Michigan State Fairgrounds, near Eight Mile, to downtown, with 13-to-15 station stops, and carry a projected 22,200 daily riders, SEMCOG said. Federal matching funds would provide 50% of the estimated $371 million cost of the project. Construction could begin in 2011, the MPO said.
SEMCOG also foresees the proposed line serving "as a distributor and feeder" to an Ann Arbor-to-Detroit commuter rail line the council is studying.
"This is an important step toward the establishment of a reliable rail transportation system that will assist Detroiters in getting to and from their destinations," Mayor Kwame Kilpatrick said in a statement. "This approval of DDOT's rail project will also multiply economical opportunities for business growth."
Lovevett Williams, interim director of DDOT, said in a statement, "I am pleased that DDOT is moving in the right direction on the Woodward Avenue Light Rail Transit (LRT) initiative by putting the customer first, as gas prices continue to soar."
Jason H. Seidl joins Dahlman Rose & Co.Wall Street transportation analyst and Railway Age Contributing Editor Jason H. Seidl has joined Dahlman Rose & Co. LLC, an investment bank specializing in natural resource supply chain sectors, as a Director in the company's Equity Research department. Seidl will focus on the Airfreight and Surface Transportation sector.
Seidl, 37, brings more than 14 years of industry experience to Dahlman Rose. He has been ranked numerous times over his career as a top stock picker and earnings estimator in national surveys including the Financial Times 2008 World's Top Analyst Survey. Prior to joining the firm, Seidl was a Vice President and Senior Analyst at Credit Suisse Group, where he covered airfreight and surface transportation sectors. He previously held similar positions at Avondale Partners and Furman Selz LLC. Before beginning his Wall Street career, he served five years in the transportation public and private sectors.
"Our expansion into airfreight and surface transportation sectors enables Dahlman Rose to better understand and articulate the dynamic global transportation market and continue to provide a comprehensive research product for institutional investors," said Dahlman Rose CEO Simon Rose. "We are delighted to welcome an analyst of Jason's considerable expertise. His extensive experience in and passion for his coverage sector will be a great asset to our firm."
Seidl received his Masters in Business Administration from Rutgers University in 1998. He also received a Bachelor of Science in Transportation Distribution Management and a Bachelor of Science in Marketing from Syracuse University in 1993. He is a member of the North East Association of Railroad Shippers and serves on the Franklin Advisory Board at Syracuse University's School of Supply Chain Management.
Kerry bill will seek $1 billion for Acela, NECSen. John F. Kerry, D-Mass., said Tuesday he intends to introduce a bill providing $1 billion to upgrade deficient infrastructure on Amtrak's Northeast Corridor between Boston and Washington, D.C.
The one-time presidential candidate noted Amtrak's current Acela service on the NEC is limited to only brief stretches of 150-mph running, making travel times between cities longer than between comparable points in Europe and elsewhere. "The point is, it could be significantly shorter," Kerry said.
Kerry's bill would give power to either a state or a compact of states to improve the rails, so decisions on possible land acquisition through eminent domain would be made at the state or local level.
The senator's approach would in large measure upgrade existing NEC infrastructure, with Amtrak a primary participant, as opposed to recent provisions in the Amtrak reauthorization bill, spearheaded by Rep. John Mica (R-Fla.), which call for exploring the creation of a brand-new right-of-way linking Boston and Washington, D.C., involving private-sector participation.
J.B. Hunt shifts more truckloads to railWith the price of a gallon of diesel fuel ranging between $4.75 and $5.00, truckers are shifting more of their loads to rail for the long haul. This is reflected in the second-quarter earnings statement of J. B. Hunt Transport Services, Inc. (JBHT), which said that a 28% increase in intermodal revenue, to $496 million, was a major factor in a 17% increase in total revenue to $977 million, compared to the same quarter last year.
"Sharply higher" fuel surcharge revenue also helped, said Lowell, Ark.-based JBHT.
The trucking company reported that its Interemodal segment fleet increased by nearly 10% and its tractor fleet declined by about the same magnitude during the quarter: "Containers and trailers grew from 55,886 to 60,920. The growth in the fleet of trailers and containers was primarily to support additional intermodal business. The combined tractor fleet declined from 11,760 in the second quarter of 2007 to 10,545 in the second quarter of 2008, primarily due to our actions to reduce the size of the truck segmented fleet."
Capitol Corridor to employ Oracle automated ticketing systemOracle Corp. Tuesday said California's Capitol Corridor Joint Powers Authority (CCJPA), overseeing Amtrak passenger service on the 170-mile Capitol Corridor, has chosen its product line to inplement automated ticket validation services.
The six-member Joint Powers Authority expects to implement the real-time ticket sales and validation system in 2009. The system will be powered by Oracle software including Oracle SOA Suite, Oracle Database, and Oracle Real Application Clusters on Linux.
Using the system, conductors on the Capitol Corridor will use hand-held scanners to validate and sell tickets to customers on the train, improving security with the ability to track when passengers board and exit the train. The scanners will utilize Web and business process execution language (BPEL) based services to link CCJPA and Amtrak's IT systems.
Bombardier touts trio of people mover ordersBombardier Transportation Tuesday announced three new contracts worth a combined $98 million automated people-moving systems at airports in Beijing, Houston, and Sacramento.
"These recent contracts demonstrate the global appeal of our CX-100 technology," Raymond Betler, president of Bombardier's automatic people mover unit. "As a solid platform in our APM portfolio, the CX-100 system is recognized worldwide for its high performance and exceptional reliability."
Bombardier said Beijing Capital International Airport will acquire seven new CX-100 cars to its two-kilometer operation. George Bush International Airport in Houston will add four CX-100 cars to its existing fleet of 12, and Sacramento International Airport is installing a two-car system.
Editorial Comment: The New York Times got it rightThe New York Times is about the only newspaper more influential than The Wall Street Journal. We are encouraged by an editorial that appeared in today’s Times that forcefully puts passenger rail in a context based on its real value, rather than ideology.
Commenting on the Amtrak reauthorization bill passed by both houses of Congress that must now be reconciled in House/Senate conference, the Times, in “Give Amtrak a Fighting Chance,” points out that “where passenger rail works best, as it does in Europe, it is treated like the critical service it is and is publicly financed, like the highways.”
As for the measure in the House version of the bill requiring the federal government to seek proposals from private companies to construct a dedicated high speed rail line between New York and Washington—a measure the WSJ heartily endorsed last week (Railway Age Breaking News Editorial Comment, July 8)—The Times editorial wisely recommends tossing it out: “Diverting money to a pointless experiment in privatization . . . is counterproductive. It would all but ensure that Amtrak remained inefficient and ill equipped to meet increasing demands for service. Its intercity routes this year may carry as many as 27 million passengers, 2 million more than last year. . . . Conferees from the two chambers should throw that privatization provision out as they reconcile the bills. Amtrak deserves this chance, without dilution, after years of being shamefully shortchanged. Its current funding is a woefully inadequate $1.2 billion. The bills would roughly double that, and sustain it for five years. That would allow long-term planning, instead of Amtrak's yearly fight for life. . . . Even with a relative windfall, Amtrak will not be able to deliver a French-style bullet train that can hit speeds of 200 mph. But the only sensible way to get there is by starting now, with the critical investment that Amtrak needs to keep the nation moving.”
How true. The French, many do not realize, didn’t build the TGV without a foundation. Following World War II, SNCF (French National Railways) spent years improving its existing service, increasing speeds, upgrading rolling stock, and building ridership. The Mistral, for example, was a fast passenger train that linked Paris with Nice from 1950 until the commissioning of the TGV Southeast in 1982. The Mistral was upgraded in 1956 with new equipment (France’s first air-conditioned cars), was integrated into the Trans-Europe-Express network in 1965, and in 1969 received new, luxurious cars and a top-speed upgrade to 100 mph.
In contrast, Amtrak is still running Amfleet cars designed in the 1960s. They’ve served us well, but their replacements are years overdue. That’s nothing a substantial, well-managed long-term capital program can’t address.
“Lawmakers can no longer get away with shortchanging passenger rail,” The Times stated. “Rising gas prices and dependency on foreign oil are front and center in Americans’ minds, as are pollutants that contribute to climate change and respiratory illnesses. Airlines are responding to rising fuel prices by paring schedules, raising fares, and charging for checked baggage. It’s no wonder that May was a record month for Amtrak.”
We’ve seen many editorials like this appear in newspapers across the country. When a publication as highly respected and broadly read as The New York Times takes a position supporting Amtrak, it’s good news for passenger rail. Whether the Wall Street Journal continues to miss the train remains to be seen—but don’t hold your breath waiting.
William C. Vantuono
Editor, Railway Age
Comments are welcome. Email wvantuono@sbpub.com.
Utah Supreme Court affirms TRAX route through DraperUtah Transit Authority's TRAX light rail operations can be routed along ex-Union Pacific right-of-way, through the city of Draper's east-side residential neighborhoods, the Utah Supreme Court has ruled.
Opponents of that route, Citizens for Responsible Transportation, sought a referendum on the alignment, but the court said a decision on the route was administrative, not legislative, and thus not subject to the ballot box.
The citizens group sought to move the train route to an alternate route serving Draper's commercial centers near Interstate 15; The group cited concerns of increased noise, increased crime, obstruction of scenic views, and declining property values as reasons to oppose the preferred route, which UTA acquired from UP in 1993.
Draper officials also favor the ex-UP route for LRT service, which would extend the existing north-south Salt Lake City/Sandy TRAX LRT line south from its current southern terminus in Sandy.
GO Transit set to hold fares level despite fuel costsGO Transit officials expect to avoid any fare increases or service cutbacks to train and bus schedules despite increased fuel costs, which has added roughly $10 million in costs to the agency's budget. GO says fiscal support from the Ontario provincial government, coupled with roughly $6 million in additional revenue from a 6.5% ridership increase system-wide, should cover the additional cost.
"There has been no pressure whatsoever on fare increases or cuts in service," said GO Transit Chairman Peter Smith. "We all recognize that we're in an environment now where gas and diesel fuel prices have gone up."
Ansaldo STS lands major Brazilian contractBrazilian commuter rail operator Companhia Paulista de Trens Metropolitanos (CPTM), Sao Paulo, has awarded a $120 million contract to a consortium of Ansaldo STS company Union Switch & Signal International Co. (USSI) and Portugal's EFACEC (Energia, Maquinas e Equipamentos Electricos) Group for a new, microprocessor-based signaling and train control system, operational control center, traction power supply, and telecommunications for CPTM's Line 7 (formerly Line A) and Line 12 (formerly Line F). Brazilian engineering company Trends will also participate.
USSI's portion of the contract is approximately $36 million, or 30%, and involves the signaling system and operational control center. Among the USSI technologies to be used are the MicroLok II Wayside Control System, which consolidates vital and non-vital control logic, data transmission, and coded track circuits into a single package; and switch machines. The operational objective is to reduce train headways from eight minutes on Line 7 and nine minutes on Line 12 to three minutes on each, resulting in more than a 50% increase in daily passengers, from 430,000 to 660,000.
The project is estimated to take 32 months to complete: 24 months for installation with an additional six months for commissioning.
FRA issues Rail Relocation and Improvement program Final RuleThe Federal Railroad Administration has issued a Final Rule detailing eligibility requirements and selection criteria for capital grants under the Rail Line Relocation and Improvement program in the SAFETEA-LU legislation. "In order to be eligible for grant funding, a project must mitigate the adverse effects of rail traffic on safety, motor vehicle traffic flow, community quality of life, or involve a lateral or vertical relocation of any portion of the rail line," FRA said.
Half of all available grant funds are reserved for projects costing no more than $20 million. A state or other eligible entity will be required to pay at least 10% of the shared costs of the project.
Congress appropriated $20 million for this program for FY2008 with $5.24 million directed to nine non-competing projects. FRA intends to issue a Notice of Funding Availability later this year, following which applications will be accepted for a competitive selection process for the remaining program funds. To obtain a copy of the Final Rule, go to http://www.fra.dot.gov/us/content/2008.
PATCO looking for railcar rebuilderThe Delaware River Port Authority (DRPA) is looking for a carbuilder to overhaul its 120-unit fleet of PATCO Speedline rapid transit cars, many of which date back to 1968. DRPA intends to release a request for proposals with a final specification in late 2008 or early 2009. The program will be partially funded by the Federal Transit Administration.
As a first step, DRPA has prepared a 60% specification for industry review and comment; interested rebuilders have been asked to respond by July 31, 2008. An introductory meeting for the program was held yesterday at DRPA’s Camden, N.J., headquarters. The companies invited to participate were Alstom Transportation, Bombardier Transportation, Brookville Equipment Corp., CAF USA, Kawasaki Rail Car, Railplan International, Siemens Transportation Systems, Sumitomo Corp. of America, United Transit Systems-A Consortium of Sojitz Corp. of America and Rotem, Wabtec Passenger Transportation, Colorado Railcar Manufacturing, Delaware Car Corp., KinkiSharyo International LLC, Mitsui & Co. (USA) Inc., Nippon-Sharyo USA Inc., and Tokyu Car Corp.
PATCO acquired its railcar fleet in two separate orders. The original 75 PATCO I cars were designed and manufactured by The Budd Company in 1968 and entered service at PATCO’s startup in 1969. Forty-six PATCO II cars manufactured by Vickers Canada under license from Budd were delivered in 1980.
JP Morgan upgrades Norfolk SouthernJP Morgan Securities has taken a new look at Norfolk Southern’s second-quarter prospects and likes what it sees—so it has upgraded NS stock from “neutral” to “overweight.” Rising export coal volumes as well as loads shifted from trucks are expected to help produce strong results for the railroad, said the investment company. Export coal is a high-profit item, and JP Morgan expects it will account for 12% of all NS coal shipments this year. NS stock was up around 3% in trading Thursday.
Hoffa weighs in against bigger trucksCongress is taking a new look at truck weight and size limits, and Teamsters President James Hoffa was among the first to weigh in on the issue. “Bigger trucks are more dangerous trucks,” Hoffa said as a House subcommittee opened hearings July 9. “Lifting truck weight and size limits would turn big rigs into time bombs.” Hoffa’s union represents 140,000 truck drivers, some of whom are already operating double- or triple-trailer rigs in states where they are permitted.
In a background paper prepared for the House hearing, the safety issue was prominent. “In 2006, nearly 5,000 people were killed in crashes involving large trucks, and an additional 106,000 were injured,” said the paper, which was prepared by the Subcommittee on Highways and Transit staff. “Truck size and weight laws impact safety on roads. . . . [M]ultiple factors contribute to truck crashes [but] truck weights and lengths affect stopping distances, braking, and vehicle stability and control.”
In an opening statement, Rep. Peter A. DeFazio (D-Ore.) appeared open to the idea of increasing allowable truck sizes on all national highways. “I don’t think anybody could say the current system makes sense,” he said. “We have a total failure and we have to look toward the near future.”
The American Trucking Associations, represented by President and CEO Michael Sid of YRC North American Transportation, said changes that will increase trucking productivity will reduce congestion, save fuel, and improve safety and air quality.
The Association of American Railroads disagreed. “According to the U.S. DOT, trucks weighing over 80,000 pounds pay only about half of their highway cost responsibility,” said AAR President Edward R. Hamberger. “Longer and heavier trucks—unless accompanied by sharp increases in taxes—would exacerbate this inequity and based on a DOT study divert between 100 million and 225 million tons of freight annually from rail to highways.”
Rail traffic up slightly as second half beginsThe beginning of the second half of 2008 was marked by a slight increase in U.S. rail freight volume. Carload traffic totaled 286,242 cars in the week ended July 5, up 1.1% from the same week last year. Both weeks included the July 4th holiday. Intermodal volume in the latest week was up 0.8% from a year ago to 194,136 trailers and containers. Total volume for the week ended July 5 was estimated at 30.0 billion ton-miles, up 2.0% from the 27th week of 2007.
Cumulative traffic for the first 27 weeks of 2008 was 8,377,978 carloads, up 0.3% from 2007; 5,955,153 intermodal units, up 1.9%; and 903.8 billion ton-miles, an increase of 1.5%.
Canadian railroads during the week ended July 5 originated 67,848 carloads, down 4.1% from last year, and 44,624 trailers and containers, up 4.2%. For the first 27 weeks of the year, originations totaled 2,006,063 carloads, down 4.1% from last year, and 1,271,131 intermodal units, up 4.2%.
Traffic on Kansas City Southern de Mexico for the week ended July 5 totaled 11,198 cars, up 7.3%; and 4,443 trailers and containers, up 10.6%. Cumulative volume for 27 weeks was 284,854 carloads, down 1.9%; and 128,180 intermodal units, up 10.0%.
Mexico City Line 12 contract awarded to Alstom-led consortiumMexico City’s Transport Secretariat has awarded a $1.74 billion contract to a joint venture of Alstom and Mexican partners ICA (Ingenieros Civiles Asociados, S.A. de C.V.) and CICSA (Carso Infraestructura Y Construccion, S.A.B. De C.V.) for construction of the new Line 12 of the capital city’s 125-mile metro system. Alstom, whose contract share is $521 million, will be responsible for supplying and installing all electromechanical equipment on the 14.9-mile. 22-station line linking the districts of Tlahuac and Mixcoac. Alstom’s scope of work includes electrification, substations, an operations control center, signaling and telecommunications, ticketing systems, and rolling stock testing. (Rolling stock will be procured through a separate contract). ICA and CICSA will be in charge of civil engineering. Construction is expected to be under way this month; the project is expected to be finished by late 2011.
Wabtec lands U.K. refurbishment contractHSBC Rail, a major lessor of passenger and freight rail equipment in the United Kingdom, has awarded Wabtec Corp U.K. subsidiary Wabtec Rail a $52 million, three-year contract to refurbish 308 Class 321 electric-multiple-unit transit cars operated by National Express-East Anglia between London and the East Anglia region. Wabtec Rail will be responsible for overhauling the cars, including a range of specified enhancements designed to optimize life cycle costs and performance.
The contract is Wabtec Rail’s third with HSBC Rail. In 2006, HSBC awarded Wabtec Rail a 10-year, $140 million contract to overhaul transit vehicle bogies. This was followed by in 2007 by a $40 million contract to maintain high speed locomotives. “This contract represents a significant breakthrough for Wabtec Rail into the refurbishment of transit cars fitted with electric traction, and it demonstrates our continuing successful relationship with HSBC Rail,” said Wabtec President and CEO Albert J. Neupaver.
HSBC Rail (UK) Ltd. owns approximately one-third of the U.K.’s rolling stock and provides a rolling stock and management services for the rail passenger and freight markets. It is a wholly owned subsidiary of HSBC Bank plc, which is a wholly owned subsidiary of HSBC Holdings plc, headquartered in the U.K. and a member of the HSBC Group.
Jacobs team wins Sound Transit contractSound Transit has selected the Seattle Tunnel and Rail Team (START), a joint venture of Jacobs Engineering Group Inc. and CH2M Hill, to receive a construction management services contract for extending light rail services to connect three densely populated urban centers: downtown Seattle, Capitol Hill/First Hill, and the University District. The project involves 3.15 miles of new lines and will cost an estimated $1.6 billion. Two parallel tunnels will be constructed running northward from downtown Seattle to the University of Washington. The extension is expected to go into operation in 2016 and add 70,000 daily riders to the regional light rail system.
Miami-Dade orders Cubic’s contactless card systemMiami-Dade Transit has awarded a $45 million contract to San Diego-based Cubic Transportation Systems, Inc. to replace a 25-year-old Cubic fare collection system with a contactless smartcard system. Miami’s new ticketing system will be based on Cubic technology most recently employed in a system delivered to the Metropolitan Atlanta Regional Transit Authority (MARTA), a Cubic customer since 1978.
“As the first transit agency in Florida to adopt contactless technology, Miami-Dade County will lead the way toward future interoperability with other agencies in the South Florida region, including the South Florida Regional Transportation Authority Tri-Rail,” said Cubic in an announcement Wednesday. “To achieve this objective, the system will be compliant with the Contactless Fare Media Standard ratified and published by the American Public Transportation Association in 2007. Cubic’s recent smartcard system launches for the Port Authority Trans-Hudson Corporation (PATH) in New York-New Jersey and the Port Authority Transit Corporation (PATCO) in Philadelphia are the nation’s first, and only, CFMS-compliant fare collection systems since the standard was adopted.”
NJ Transit sets FY2009 operating and capital budgetsNew Jersey Transit today adopted a $2.99 billion fiscal year 2009 budget the agency says is designed to support growing ridership by increasing seat capacity, modernizing its rail and bus fleets, and maintaining the system in a state of good repair. The budget allocates $1.7 billion for operations and $1.29 billion for capital. The capital plan advances major capacity-enhancing projects, funds improvements at rail and bus facilities, and supports vehicle purchases to replace aging equipment.
NJT Executive Director Richard Sarles said the budget “relies on more state support and continued cuts in back-office expenses to keep our core rail and bus system running efficiently and meet record demand for service.” New Jersey Governor Jon Corzine’s FY 2009 state budget provides a $60 million increase in operating support for NJT. The agency’s fiscal year runs from July 1 through June 30.
The operating budget provides for large increases in the cost of fuel, power, parts, and materials. NJT said that, since FY 2005, the cost to maintain stations has risen 48%, the cost of vehicle parts has increased 63% and fuel costs have more than doubled. The state’s increase in operating support will be used to partially offset these increases.
The capital budget supports NJT’s ongoing fleet modernization program, which includes 1,365 new buses, 326 new Bombardier Multilevel railcars, 110 electric multiple-unit railcars currently in design, 27 new Bombardier ALP46A electric locomotives, and 26 Bombardier dual-powered (diesel-electric/a.c. catenary) locomotives, a contract awarded today. State-of-good-repair projects include infrastructure renewal, preventative maintenance of equipment, and rail station improvements. Among the capacity expansion projects are the Access to the Region’s Core Trans-Hudson Express Tunnel project to double rail capacity under the Hudson River, and the extension of Hudson-Bergen Light Rail to 8th Street in Bayonne.
Alberta creates $2 billion “Green Transit” fundNew and expanded commuter and light rail systems will be eligible for funding under a $2 billion “Green Transit” initiative announced July 8 by the Canadian province of Alberta. As part of a frontal attack on greenhouse emissions, the Alberta government is also establishing a $2 billion fund for carbon capture and storage—for example, at coal-fired power stations and oil sands extraction sites.
Alberta is rich in oil and has been under pressure to use some of these riches to reduce oil’s impact on the environment. In announcing the two new initiatives of its Climate Change Strategy program, Alberta Premier Ed Stelmach commented, “We’re tackling both sides of the emissions challenge on behalf of Albertans and all Canadians. We’re reducing the impact of industrial emissions with carbon capture and storage and investing in public transit to reduce the impact from our tailpipes.”
Initial funding will come from this year’s government budget surplus, which was initially projected at $1.6 billion but is now expected to be “significantly higher than predicted due to higher-than-forecast oil and gas prices.”
Alberta expects its Climate Change program to cut greenhouse emissions in half by 2056.
As examples of projects eligible for funding from the Green Transit initiative, the government listed the following: light rail transit and intercity commuter rail systems; purchase of transit vehicles (hybrid, diesel, natural, gas, fuel cells); regional transit to reduce commuter traffic; acquisition of new transit or commuter rail corridors; and park and ride facilities.
Midwest short lines getting back to normalThe American Short Line and Regional Railroad Association reports that many of its member railroads affected by the severe flooding of the last few weeks in the Midwest are gradually resuming normal operations.
Iowa’s Burlington Junction Railway resumed Burlington operations yesterday and expected to resume Quincy operations today or tomorrow. The Cedar Rapids & Iowa City has resumed operations with the exception of Iowa City Yard, but the yard is expected to be clear of water later this week. CRANDIC cannot presently interchange with CN or Iowa Northern due to the bridge across the Cedar River at Waterloo having washed away, but is serving “all rail customers who are operating.” A timeline is being developed to rebuild the bridge, which the Iowa Northern leases from owner Union Pacific. IANR’s main line is “near normal operation,” and repairs to washouts on other lines should be complete within the next few days. IANR continues to use temporary office quarters, but hopes to return to its Cedar Rapids offices within the next few days as the city’s utilities are repaired.
Iowa, Chicago & Eastern’s Beloit to Janesville main line remains out of service, but “operations are proceeding according to plan and significant improvements have been made in moving the backlog of traffic. The Mason City terminal area remains heavy and extra focus is being placed on that area.” Iowa Interstate reports that all lines are back in operation and it’s working to clear the backlog of traffic, though some final repair work remains. Iowa River Railroad’s line just north of Gifford to Marshalltown, 28 miles, remains out of service, with repairs continuing. Wisconsin & Southern’s Reedburg Subdivision shold resume operation by this weekend; the railroad hopes to have its Prairie Subdivision back in service by mid-month.
Finally, all operations on the Indiana Rail Road resumed as of June 15.
Bombardier, Knorr-Bremse finalize supply agreementBombardier Transportation and Knorr-Bremse have concluded a long-term supply agreement for braking systems. Knorr-Bremse is now Bombardier’s “preferred partner for braking systems” and “will bear a considerable proportion of the supply,” the companies said in a joint statement. “A unified, streamlined process will be defined for future supply contracts. It is [also our] intention to implement common technical standard solutions in order to be able to offer competitive systems to the marketplace.” The three-year agreement includes an option to extend it.
New logistics center planned for Patriot CorridorA new intermodal and automotive rail logistics center is in the works for the Patriot Corridor on Pan Am Southern, the joint venture of Norfolk Southern and Pan Am Railways. The center will be constructed at a former rail yard located within the towns of Halfmoon, Mechanicville, and Stillwater, in southern Saratoga County, N.Y. It will anchor the western end the Patriot Corridor, a 155-mile main line linking the Capitol Region at Mechanicville with the Boston area at Ayer, Mass. The corridor is undergoing track and signal improvements. Construction of the $40 million center is expected to begin in the first quarter 2009 and be complete by April 2010. Wick Moorman, Norfolk Southern’s chief executive officer, said the new facility “will serve as the premier distribution hub for consumer products and finished automobiles for upstate New York and western New England.”
New York State Senator Joseph Bruno (R-43rd Senate District) has committed $3 million in state funding toward the project.
Pan Am Railways and Norfolk Southern announced the Pan Am Southern joint venture in May. Pan Am Southern also includes 281 miles of secondary and branch lines, including trackage rights, in Connecticut, Massachusetts, New Hampshire, New York, and Vermont. The joint venture is subject to the approval of the U.S. Surface Transportation Board, which is expected to issue a decision on the transaction in October 2008.
Editorial Comment: The Wall Street Journal missed the trainWith gas prices at $4.00 a gallon and airlines imploding under soaring costs and long delays that make flying a generally unpleasant experience, American travelers are returning to passenger trains in volumes not seen in years. Yet, here’s The Wall Street Journal with yet another misinformed, wrong-headed editorial criticizing Amtrak for operating slow, “money-losing service.” This particular editorial, “The Need for Speed,” which was posted July 7 on the WSJ’s website, takes aim at Amtrak’s Acela Express service in the Northeast Corridor.
The editorial praises a proposal by Rep. John Mica (R-Fla.), ranking Republican on the U.S. House Transportation and Infrastructure Committee, to reduce rail travel time between New York and Washington, D.C. to two hours or less. Mica’s lofty proposal is part of the $14.4 billion Amtrak reauthorization bill the House recently passed.
“Mica has a radical idea,” said the WSJ. “He wants to develop high-speed rail service. . . . We know what you’re thinking: Isn’t there already a high-speed train between New York and Washington? Unfortunately, nobody who's taken the Amtrak Acela train would suffer from this confusion. The Acela service, much hyped before its launch, currently shaves only about 30 minutes off Amtrak’s regular service between the capital and the Big Apple, taking two hours and 48 minutes—when it’s on time. The high-speed [TGV-based Thalys] train that connects Paris and Brussels covers approximately the same distance in one hour, 22 minutes.”
Enough is enough. Let’s look at the WSJ’s simplistic arguments, point-by-point.
Let’s start with the comparison of Acela and Thalys (and for that matter, all high-speed trains in Europe, Japan, Korea, Taiwan, etc.). Acela, whose top speed between New York and Washington is 135 mph and average speed, with several intermediate stops, is 83 mph, operates on a shared right-of-way designed and built by the Pennsylvania Railroad that dates back to 1910. Over the years, the infrastructure has had several upgrades—chiefly, welded rail and concrete ties. The catenary system is variable-tension—state-of-the-art when it was completed in the late 1930s. Acela shares track time with numerous commuter trains, Amtrak regional services, and some freight trains. Large numbers of passengers do not travel endpoint-to endpoint. New York and Philadelphia, for example, are a “city pair.” So are Philadelphia and Baltimore, and so on. On-time performance (including the New York-Boston leg) averaged 83.5% in the 12 months from May 2007 to May 2008—not bad, considering all the variables. By comparison, high-speed trains in Europe and elsewhere can run at 200 mph or better because they operate express, on dedicated rights-of-way equipped with constant-tension catenary and signaling and train control technology a bit more sophisticated than the (albeit reliable and safe) cab signals and wayside position lights we use here. In summary, the Northeast Corridor is multi-purpose. Europe’s high-speed corridors are single-purpose. The comparison is apples-to-oranges—illogical.
Amtrak’s “suffering” Northeast Corridor passengers? Last count, they were suffering to the tune of nearly 60% market share (vs. air) between New York and Washington and nearly 50% between New York and Boston, with both percentages on the rise.
The WSJ says the House version of the Amtrak reauthorization bill is “larded with union giveaways and grants for expanding money-losing service around the country.” Aside from saying that there is probably room for some work-rules reform, I’m not going to get into an argument about the merits of adequate compensation and benefits for railroad employees whose prime responsibility is the safety and security of Amtrak’s 25-million-plus annual passengers. Money-losing service? Show me a passenger rail system anywhere in the world that—all costs considered, above and below the rail, including the initial costs of designing and building infrastructure and acquiring rolling stock—turns a profit. (Airlines wouldn’t make any money either, if they had to pay for the air traffic control system and build their own terminals and runways. And what would highway travel be like if motorists had to pay for the full costs of building and maintaining them through higher tolls and other user fees?)
So how do we get this ultra-high-speed rail system between New York and Washington built? Noted the WSJ of Mica’s plan: “The Department of Transportation would solicit proposals from the private sector for building dedicated high-speed tracks within the right-of-way between the two cities.”
Great idea. One problem: Where are you going to put the tracks? On top? Underneath? There’s literally no room on either side, unless you displace and move millions of people. (There’s a limit to eminent domain.)
Another problem: The private sector. Said the WSJ: “Amtrak could participate in the bidding, if it chose to. But the real benefit would be in seeing whether private rail companies can come up with a plan to do what Amtrak couldn’t—build a high-speed service that is competitive in cost and time with the airline shuttles that ply that route today. . . . Mica’s provision doesn’t privatize anything; it merely asks the private sector to offer proposals for doing something Amtrak couldn’t do, despite spending billions trying.”
Give me a break! First, Amtrak’s Northeast Corridor service is already cost- and time- competitive with the airline shuttles, not to mention far more convenient and comfortable. That’s its real value to passengers. As far as high-speed rail being “something Amtrak couldn't do, despite spending billions trying” is concerned, Amtrak has indeed invested billions over the past 30-plus years in the Northeast Corridor. Most of those billions, however, have been the minimum required to maintain a state of good repair. Many planned upgrades to tracks and signals and equipment have been postponed or done in piecemeal fashion because of capital funding shortfalls. Don’t blame Amtrak for that. Blame the U.S. government, which—unlike its French or German or Spanish counterparts—has never had a true federal transportation policy with a comprehensive federal rail development program.
Finally, says the WSJ, “It might well be that entrepreneurs can’t come up with an economically viable plan for such a train, but even then we will have learned something about high-speed train travel in the U.S., and at minimal cost to the taxpayer. On the other hand, if someone like Richard Branson, who’s building private high-speed train service in Britain, thinks he can make a go of it in one of the most heavily trafficked corridors in the world, there’s no harm in letting him try. It can hardly be worse than Amtrak.”
Really? Let’s see. Just prior to privatization in 1996, the British government was subsidizing British Rail annually to the tune of about $3.5 billion. Last year, this “private” system (whose infrastructure, by the way, is owned and maintained by the government) was subsidized to the tune of about $7 billion. There’s nothing wrong with that. By the way, the British, and most of the world’s developed and developing countries, don’t call government funding of high-speed passenger rail a subsidy. The word they prefer is “investment.” Richard Branson? He may be willing to give it a go here—if our government was willing to commit some real dollars. He’s not stupid.
The Wall Street Journal knows mostly how to talk about dollars and cents, not dollars and sense—the cost of everything, and the value of nothing.
—William C. Vantuono, Editor, Railway Age
Comments are welcome. Email wvantuono@sbpub.com
RailComm lands South African contractSouth Africa’s Transnet has contracted with RailComm for a Yard Automation System at its Ermelo Yard, Mpumalanga Province. The automation system is comprised of a DOC® central office and an associated outdoor-rated control panel. It utilizes RailComm RADiANT™ data radios to communicate between the office system, the control panel, and a network of ladder-track power switches, which are controlled by RailComm’s Universal Switch Controller. Per Transnet requirements, the system operator is in charge of selecting the appropriate control mode based on desired operating conditions. RailComm says this system will “dramatically increase yard safety and measurably improve yard dwell times and switching productivity.”
Greenbrier earnings and backlog declineThe Greenbrier Companies reported net earnings of $8.1 million on revenues of $382.1 million for the fiscal third quarter ended May 31, compared to earnings of $13.0 million on revenues of $386.6 million in the corresponding quarter last year. The company said its new railcar manufacturing backlog declined to 17,500 units valued at $1.55 billion on May 31, compared to a backlog of 18,800 units valued at $1.64 billion on Feb. 29.
Refurbishment and parts revenues in the third quarter were $152.4 million, up 29% from the third quarter of 2007. Greenbrier also reported an increase in its marine barge backlog to $158 million on May 31 from $114 million Feb. 29.
William A. Furman, president and CEO, commented: “Our strategy to diversify and expand our less cyclical, more stable marine manufacturing, refurbishment and parts, and leasing and services businesses continue to benefit the company. Refurbishment and parts produced record results for the quarter. In combination with leasing and services and marine, these businesses will generate over $770 million of annual revenues, at current run rates. In addition to providing stability to revenue and earnings, these businesses provide a natural hedge to weaker demand for new railcars, as well as rising raw material costs including high steel prices and scrap surcharges, which are adversely affecting our new railcar operations.”
Investor’s Business Daily remains bullish on rails Investors Business Daily (IBD) says that at the end of this year’s first half, railroad stocks ranked No. 14 among the 197 industry groups it follows. “The rail boom that began five yeas ago shows no signs of derailing with most railroads racking up double-digit earnings growth," said IBD in a July 3 report. It quoted Norfolk Southern CEO Wick Moorman as characterizing the railroad story as “a tale of two economies.” While shipments of consumer goods, motor vehicles, and construction materials continue to decline, demand for coal, corn, grain, and soybeans “keeps soaring,” and “railroads haul much of it.”
Moorman dated the beginning of the rail renaissance to passage of the Staggers Rail Act of 1980, which substantially deregulated the industry. “Even with the economy where it is today, we’re operating much closer to capacity than we did from 1980 to 2000,” said Moorman.
“What's more, the industry has pricing power, while the ailing trucking industry continues to reel from high fuel costs, labor shortages and highway congestion—all factors that play to railroad's strengths,” IBD noted. “Analysts expect railroads to enjoy strong pricing power for the foreseeable future.” IBD cautioned, however, that “regulatory changes—especially the possibility of re-regulation—might take some of the steam out of railroads' growth engine.”
Obama reaffirms passenger rail supportIn a letter to United Transportation Union President Mike Futhey, presumptive Democratic presidential nominee Senator Barack Obama (D-Ill.) has pledged to “push for Amtrak, commuter rail, and public transit system funding, ensuring strong employment levels well into the future.” He also promised to “preserve the sanctity of the Railroad Retirement and Federal Employers Liability Act (FELA),” The UTU, which originally backed Senator Hillary Clinton (D-N.Y.) for the nomination, was quick to make its peace with Obama and earn the prized “personal letter,” which is dated July 5.
In the letter, Obama reaffirms his previously stated support for Amtrak—he is a co-sponsor of the Passenger Rail Investment and Innovation Act of 2007—and adds transit rail funding to the list. His broader statement on railroads, part of a background paper called “Strengthening America’s Transportation,” also supports the development of high-speed passenger rail and a strengthening of rail freight capacity “because our demand for rail transportation has never been greater, leaving many transportation hubs stretched to capacity.”
Pennsylvania increases freight rail fundingPennsylvania Gov. Edward G. Rendell has signed a FY 2008-09 budget that increases funding for the commonwealth’s Rail Transportation Assistance Program by $10 million to $30 million. The budge earmarks $3 million for railroad bridge rehabilitation. The governor’s office said the remaining funds will be spent to build new and preserve existing rail lines and to improve safety. The announcement noted that the governor has tripled rail funding since he took office because “rail freight investment entices economic development and promotes an environmentally and fuel-friendly alternative to moving goods through the commonwealth.”
Bombardier lands NJ Transit dual-power locomotive contractAfter a long development process, New Jersey Transit is expected to award a $325.42 million contract ($309.92 million plus 5% for contingencies) to Bombardier Transportation for 26 dual-power (diesel/a.c. catenary, also known as “electric-diesel”) locomotives at its July 9 board meeting. The contract includes spare parts and is “subject to the availability of funds,” according to NJT’s board agenda.
The new-technology locomotives fall under NJT’s $1.29 billion Fiscal Year 2009 capital program. They will replace the oldest units in the agency’s fleet, some of which are 40 years old. The procurement is part of NJT’s ongoing rolling stock modernization program, which also includes 326 Bombardier MultiLevel commuter railcars, 27 Bombardier ALP-46 electric locomotives, 110 electric multiple-units, and 1,365 new buses.
“The purchase of dual-powered locomotives is a cost-effective solution for operating in both electrified and non-electrified territory,” NJT’s board agenda item states. “Dual-powered locomotives will provide the flexibility to operate throughout the entire system as needed” and “will also allow NJT to develop operational experience with dual-power capability in anticipation of the Access to the Region’s Core project (Trans-Hudson Express Tunnel), which is designed to provide one-seat, direct rail service to New York City.”
Traditional dual-mode (diesel/third-rail-electric) propulsion has been around for quite some time in North America, but dual-power rolling stock that combines a.c. catenary with diesel propulsion has, until now, never been seriously attempted here. For at least the past two years, NJT and Montreal's AMT (Agence Metropolitaine de Transport) have been collaborating on workable, cost-effective dual-power equipment to provide passengers with one-seat rides between electrified and non-electrified territory. NJT already operates services where a transfer is required; AMT plans to construct new lines that feed into an existing electrified line.
STV, Inc. provided engineering assistance to NJT and AMT on the dual-power locomotives. These locomotives, which will cost about $12 million each, are designed to satisfy several of NJT's operating constraints. Among these are Amtrak’s Northeast Corridor tunnel clearances (the locked-down-pantograph height in the Hudson River tunnels is 14 feet 7 inches), carbody space (no more than 75 feet long), noise levels, EPA emissions compliance (Tier II, with Tier III coming up in 2010), performance, and—most problematic—weight. Amtrak's maximum locomotive weight on the Northeast Corridor is 288,000 pounds gross rail load for speeds above 79 mph.
The challenge has been to fit a diesel power plant and electrical transformer into one carbody within those parameters. How do you distribute weight on four axles (NJT's preference), provide good adhesion on grades, and not be off the charts on curving forces? One way is to reduce unsprung mass by suspending the traction motors on the trucks, not the axles (this is done with the Alstom Transport PL42AC diesel and Bombardier ALP46 electric). As for the diesel engine, a traditional 16- or 12-cylinder low-speed (900 rpm) diesel is too heavy. A high-speed (1,800 rpm) diesel is much lighter yet just as powerful, but its components will have a much higher wear rate. The solution is utilizing not one but two engine/generator sets, with computerized engine management that equalizes engine service hours.
AMT expects to order as many as 20 dual-power locomotives in its five-year capital plan. This agency has the same operating constraints as NJT, namely, the three-mile-long tunnel on the 25Kv-electrified Deux Montagnes Line, which serves Montreal's Central Station. AMT plans to connect the non-electrified Blainville Line to the Deux Montagnes Line just outside the tunnel, and construct the new, non-electrified Repentigny-Mascouche Line, which will feed into the Deux Montages at Mont-Royal.
Freight traffic declines in June, gains for first halfFreight traffic on U.S. railroads was off during June in comparison with June 2007, the Association of American Railroads (AAR) reported, though traffic for the first half of 2008 notched an increase.
Carload traffic fell 3.6% in June versus the comparable month in 2007, while intermodal traffic fell 4.0%. For the first half of 2008, total U.S. freight carloads were up 0.2%, though intermodal traffic was down 3.2%. Total volume for the first six months was estimated at 873.8 billion ton-miles, up 1.5% from the January-June period of 2007.
AAR cited Midwest flooding woes as the culprit affecting June freight traffic levels. "Rail volumes were already under pressure because of the continuing weakness in the economy, but the massive recent flooding in the Midwest made things much worse," said AAR Senior Vice President John T. Gray. "Railroads are extremely resilient, though. Many of the affected areas have already been returned to service, and railroads expect to return to normal operations quickly,"
Grain (up 5%) and chemicals (up 2.7%) paced traffic gains during June, but they were offset by motor vehicles (down 19.1%) and coke (down 28.8%), among other commodity categories.
Canadian rail carload traffic was down 5.3% in June 2008 versus a year ago. Canadian intermodal traffic was up 3.2 percent% for the month.
Carloads carried on Kansas City Southern dé Mexico, a major Mexican railroad, were down 0.8% in June 2008 versus the comparable 2007 month, while intermodal traffic rose 2.2%. For the first half of 2008, KCSM carloads carried were down 3.3%, while intermodal units rose 10%.
Deutsche Bahn taps Alstom for 180 Coradia LINT trainsDeutsche Bahn AG Thursday announced it had chosen Alstom to design and manufacture of a maximum of 180 Coradia LINT-model regional trains, for commercial operation on numerous regional German operations.
The trains are designed to operate as a single car or in two- and three-car consists, at speeds up to 120 km/h (75 mph), and accommodate 70 to 200 passengers. Alstom will design and manufacture the units at its plant in Salzgitter, Germany; the company says the equipment will be 95% recyclable, equipped with environmentally friendly diesel engines complying with the European "Level 3A" regulation, and sport a filter reducing the emissions of soot particles by 95%.
Alstom said the contracts with DB could be worth 425 million euros ($667 million). Delivery will be completed in 2011.
Bombardier poised to dominate Ontario LRT marketMontreal-based Bombardier Inc. and its subsidiary, Bombardier Transportation, already is a prominent presence within its Canadian home turf, but observers say that dominance may grow still stronger since Siemens AG withdrew from bidding on a $1.2 billion order for 204 streetcars sought by the Toronto Transit Commission.
But the impact of Siemens' apparent retreat extends beyond Canada's largest city. Other cities in Ontario province, including Hamilton, Mississauga, and Kitchener-Waterloo, are seriously weighing establishment of light rail and/or streetcar operations, providing fertile marketing territory for Bombardier, as well as potential economies of scale from any combination of Ontario municipalities placing combined orders for Bombardier LRT equipment.
Bombardier's primary light rail manufacturing facility is in Thunder Bay, Ontario, giving the company even more political leverage within the province, which holds roughly 33% of the nation's population.
Group questions security (over)emphasis on rail transitU.S. security philosophy places unbalanced and burdensome emphasis and requirements on rail transit operations, according to a web posting by Light Rail Now!, an advocacy group sponsored by the nonprofit Texas Association for Public Transportation.
"In recent years, many public transport professionals and advocates have been troubled by what they perceive to be a growing climate of hysteria and repressive practices that has been engulfing the public transport industry, with federal Transportation Security Administration (TSA) and Homeland Security authorities apparently trying to lead public transport agencies in the direction of screening virtually all passengers (particularly in rail systems)," the group says.
In tallying data on terrorist incidents worldwide involving various transport modes, the group states, "It is clear from these data that the proportion of rail-related incidents is extremely small and that most terrorist attacks involve either motor vehicles or air transport, with a smaller percentage involving buses/facilities or watercraft/facilities. Indeed, as a whole, all forms of surface public transport together account for just 16% of total incidents.
Light Rail Now! also asks: "With rail services and facilities implicated in only about 3% of total incidents, why are rail passenger services being singled out for special security crackdowns--when nearly 3/4 of all incidents involve private motor vehicles, which nowhere are being subjected to such measures? Why does the TSA seem to be on a policy mission to create as difficult an environment as possible for public transport passengers, especially while virtually ignoring the private motor vehicle travel that clearly accounts for the overwhelming majority of transportation terrorism incidents?"
New York MTA marks milestone for ESA tunnel workNew York's Metropolitan Transportation Authority said the first of two 200-ton tunnel boring machines had completed its tunneling under Manhattan, a prerequisite for channeling Long Island Rail Road service to Grand Central Terminal. The machine gouged out more than one mile of tunnel stretching from 63rd Street and Second Avenue, on Manhattan's East Side, to a location underneath Grand Central. That work links to an existing, unused tunnel stretching under the East River to Sunnyside Yard in Queens and LIRR operations.
A second machine, boring a parallel tunnel, is expected to complete its work this summer.
"It is terrific that the progress on the East Side Access project is moving forward steadily," said MTA Executive Director Elliot G. Sander. "We look forward to inaugurating Long Island Rail Road service at Grand Central Terminal–a dream many have shared for generations."
Additional work will begin on what will become a cavern underneath Park Avenue between 49th and 51st Streets that will connect the newly built tunnel with parallel tunnels which will allow the future Long Island Rail Road flexibility in accessing all eight tracks in the new station under Grand Central.
MTA Capital Construction is overseeing the operation in conjunction with a private joint-venture team comprised of Dragados, S.A. and Judlau Contracting. The agency anticipates that the new route will serve 160,000 LIRR customers per day. LIRR will continue to serve its current Manhattan terminus, Penn Station, once East Side Access is completed.
GE-Transportation lands Brazilian C&S contractGE-Transportation said Wednesday it has been awarded a $60 million contract from Vale Railway to overhaul the signaling and communication system along approximately 600 kilometers (370 miles) of the Vitoria-Minas rail route and in the rail yard of the Tubarao port. The project is expected to be completed by 2010.
The rail operation is a subsidiary of Brazilian mining company Companhia Vale do Rio Doce SA, and is used to transport iron ore and related materials to Tubarao for export.
GE says the new cost-effective system will upgrade relay-based equipment that is up to 30 years old, and will increase transport capacity by 23% through diminishing the distance needed between trains while ensuring continued safe operation. The project will utilize GE's ElectroLogIXS* signaling platform that provides control of power switch machines and lighting of signal lamps, replacing relays at railroad crossings. The ElectroLogIXS system will allow Vale to simplify the continued upgrade of its rail network interlocking control systems over time to increase network velocity and capacity.
The project also includes orders for GE's Electrocode* track circuits that detects the presence or absence of a train on a section of track, and Cab-X* cab signaling products that will act as the onboard rail communications hub.
"This partnership is of paramount importance to guarantee that we continue to transport our loads in a safe and efficient way, in addition to supporting the increase in the future demand for Railroad Vitória to Minas," said Luiz Fernando Landeiro, Vale's general manager for Development and Technical Railroad Services.
GE says the contract is its largest rail signaling project in South America. "We are extremely pleased to have the opportunity to work with Vale to upgrade their signaling systems," said Pierre Comte, president of GE–Transportation Global Signaling. "Our recent success around the globe is due to the breadth and technological capabilities of our signaling portfolio for a variety of rail environments."
Siemens withdraws from Toronto streetcar biddingSiemens AG has ended its effort to secure a contract with the Toronto Transit Commission to provide up to 600 new streetcars. The company withdrawal leaves the field to Montreal-based Bombardier Inc. and Bootle, U.K.-based manufacturer TRAM Power Ltd., both of whom submitted bids to TTC for an initial-phase order of 204 streetcars, expected to be worth roughly $1.2 billion.
Siemens earlier had insisted that it could have provided the subway cars at significantly lower cost had it been allowed to bid, generating enough public and political sway to force TTC to revamp its bidding process for the streetcar order.
A spokesman for Siemens said the company decided not to try for the streetcar project two weeks ago, but wouldn't elaborate on why Siemens had chosen to pass up its chance the large bid.
Canadian observers believe that Bombardier, already dominant in its home market, likely will win the order, pointing out that TRAM Power, a smaller competitor, has less global experience and less local political clout.
Wabtec completes acquisition of POLI S.p.A.Wabtec Corp. says it has completed its acquisition of POLI S.p.A., a European-based manufacturer of rail braking equipment, for roughly $80 million in cash. POLI has annual sales or about $80 million, primarily in the European marketplace.
"We will begin immediately to integrate our existing products and technological expertise with POLI's European-approved components," said Wabtec President and CEO Albert J. Neupaver. "We believe this combination positions us for future growth in key international markets and expect POLI to be a strong strategic fit."
Camisano, Italy-based POLI, founded in 1816, has manufactured a variety of braking related components for the passenger rail and freight rail markets since 1952. The company's products include brake discs for high-speed applications, as well as tread brake units and pneumatic brake valves that meet International Union of Railways (UIC) standards. POLI has about 500 employees at production facilities in Italy and Macedonia.
CSX loses small-shipments rate caseThe Surface Transportation has ruled that CSX charged the E.I. du Pont de Nemours Co. "unreasonably high" transportation prices for small chemical shipments and ordered the railroad to reduce rates and pay reparations on six of seven movements challenged by the company. The cost to CSX in reparations and reduced rates could total up to $3 million during the next five years.
STB reached its ruling, announced Monday, in three cases filed under the new small-rate-dispute resolution process adopted by the agency in 2007.
"The board's decisions will mandate reduced rates charged by CSX to DuPont for rail shipments along six specific routes," said STB in a statement. "The rate reductions vary by route, but range from approximately 5% to 40% of the challenged rates."
JP Morgan analyst Thomas R. Wadewitz estimated that the kind of small, captive shipments that could be affected by the ruling comprise 8% to 16% of total U.S. rail carloads.
NJ Transit: Rail links not on the horizonNew Jersey Transit, often accused of focusing too intently on the Garden State's rail travel needs driven by New York City, says three proposed rail improvement projects for southern New Jersey remain under consideration, though reports suggesting accelerated implementation are "premature."
One project would increase capacity on NJT's Atlantic City Line, a predominantly single-track line linking the seashore resort/gambling city with Philadelphia. A second project would provide a transfer station allowing access between the Atlantic City Line and NJT's diesel light railway operation, the River Line, where the two lines cross in Pennsauken, N.J., just east of the Delaware River.
Reactivation of NJT's Cape May Branch, which leaves the Atlantic City Line at Hammonton to reach Cape May City, could tap potential summer seashore and tourist travelers.
The state is still struggling to refinance its Transportation Trust Fund, due to expire by fiscal year 2011, amidst severe budget constraints. NJ Transit at present has also scaled back off-peak weekday service on some existing routes, with more cuts expected in August.
An NJ Transit spokesman said that while the projects were in "early discussion," and remain under active consideration, at present they are "not going anywhere any time soon."
EJ&E aquisition adversaries float commuter rail optionHouse Rep. Peter Roskam (R-Ill.) will introduce legislation next week tagging 36 miles of the Elgin, Joliet & Eastern Railway as a "Corridor for Inter-Suburban Commuter Rail." The bill seeks to jump-start a decades-old vision for Chicago's suburbs, the Suburban Transit Access Route (STAR), which would link numerous communities with Metra rail services via a circumferential route.
Canadian National seeks to acquire the EJ&E to expedite North American rail freight traffic through the Chicago area, avoiding or reducing numerous bottlenecks. Part of Roskam's bill mandates that, if portions of the STAR route meet criteria for commuter rail services, the federal Department of Transportation would limit the route's use to commuter rail.
"At a time when gasoline is four and a half dollars a gallon ... we need to do everything we can to make sure there is efficient rail, there is commuter rail and that it makes sense," Roskam said.
In response, CN said the proposed legislation "is going counter" to the railroad's efforts to foster regional economic growth, but also said CN is willing to work with Metra on issues involving the STAR Line, including current and future capacity issues. "We've given assurance we will work with Metra if and when the STAR line goes forward to find a way," a CN spokesman said.
As crossing deaths drop, trespasser fatalities riseFatalities at highway/rail grade crossings dropped sharply in this year's first four months, but trespasser deaths continued to rise. There were 72 crossing fatalities on U. S. railroads in January-April 2008, down 29.4% from 102 in the corresponding 2007 period. Trespassing fatalities increased 14.6% to 149, compared to 130 in he first our months of 2007.
Preliminary statistics posted on the Federal Railroad Administration's Office of Safety Analysis website Tuesday showed that total railroad accidents and incidents declined 9.2% to 3,868 in this year's January-April period. Train accidents were down 5.5% to 804, with derailments down 9.6% to 576, collisions up 11.9% to 665, and yard accidents down 0.5% to 440.
Track causes were blamed for 29 train accidents in this year's period, down 11.7%; human factors for 272, down 9.3%; signal causes for 15, up 36.4%;; and miscellaneous factors, 1229, up 17.3%.
PATH World Trade Center rail station plans revisedAdd PATH's World Trade Center station to the list of New York City-area rail projects being scaled back due to budgetary constraints. The Port Authority of New York & New Jersey announced July 1 that the station's construction, featuring a "winged roof" architectural element designed by Santiago Calatrava, will no longer be built to allow the roof to open.
PA Executive Director Chris Ward said the roof's overall appearance would remain even though the wings and roof will no longer open. "This is a tough choice, but it is the right choice," said Ward in a prepared statement "It's reflective of the kinds of choices we simply must make in the coming weeks and months if we are to establish priorities and milestones, to which we can be held accountable." Ward offered no estimate of cost savings.
The adjustment to plans for the station are part of a larger re-evaluation of cost overruns at the entire World Trade Center site in lower Manhattan. The PA hopes to offer a revised plan for the area by Sept. 30.
Wi-Tronix gear installed on CN locomotive orderWi-Tronix®, LLC said Monday its Wi-Tracker gear will be factory installed by Electro-Motive Diesel, Inc. on 25 new SD70M-2 locomotives being delivered to Canadian National, in order "to maximize both locomotive asset utilization and fuel savings."
Wi-Tracker provides statistics on utilization, engine shut down and duty cycle, fuel monitoring using geo-fencing, locomotive fault and exception-based alerting, and geo-mapping, among other capabilities. Wi-Tracker also interfaces with Wi-DownloaderER to remotely access and download CN locomotive data from any locomotive, Wi-Tronix said.