August 2007
BNSF selects SYS NeuralStar softwareSan Diego-based SYS Technologies, Inc. announced that BNSF Railway has picked the SYS NeuralStar software system "to create a unified view of its extremely complex national communications network." SYS said NeuralStar can "aggregate and consolidate in a single window any type of network event data, such as availability, performance, security, and Quality of Service pertaining to any network-connected device, application or service, including voice, video, wireless, satellite, and other technologies."
Bombardier wins new Kuala Lumpur contractBombardier Transport and local partner Hartasuma, which are building 88 new Advanced Rapid Transit (ART) MKII vehicles for the Kelana Jaya Line in Kuala Lumpur, Malaysia, have won an additional, $119 million contract to upgrade wayside and mechanical systems. Bombardier has an $81 million share of the new business. Opened in 1998 for the Commonwealth Games, the 18-mile line was built by a Bombardier-led consortium and is the longest fully automated, driverless transit system in Asia. The new contract covers upgrading automatic train control, power supply and distribution, and communications systems, as well as work on platform screen doors and workshop equipment.
EMD said to be in line for 212-unit orderSouth Africa's Transnet group is reported to be in the final stages of negotiating a contract with Electro-Motive Diesel of LaGrange, Ill., for 212 diesel-electric locomotives. Reuters quoted Transnet CEO Maria Ramos as saying the planned acquisition is part of a $10 billion program to modernize South Africa's railroad freight business. After years of losses, she said, "we're looking at volume growth in general freight business, this year." The first lot of new locomotives will be put into service hauling iron ore trains. There was no immediate confirmation of the report from EMD.
DART breaks ground for Farmers Branch Station Dallas Area Rapid Transit officials today ceremoniously launched constrcution of a light rail stop at Farmers Branch. DART held the event at the existing DART Park and Ride facility in Farmers Branch on Denton Drive, which by late 2010 will be linked to DART's Green Line as service is extended north from Pleasant Grove and downtown Dallas to the northwest suburbs of Farmers Branch and Carrollton. DART's Green Line, including 20 stations, will run northwest to southeast, linking with existing Blue Line and Red Line LRT service in downtown Dallas.
Rail employment up slightly over last yearU. S. Class I railroads employed 166,047 people in mid-July 2007, an increase of 0.27% over July 2006, according to a report by the Surface Transportation Board. The biggest percentage increase was in the category of executives, officials, and assistants, whose ranks rose 3.49% to 10,191. Transportation (other than train and engine) posted the largest percentage decrease, declining 3.95% to 7,031. The biggest single category, transportation train and engine, was down 0.36% to 68,752 employees.
Chlorine car gets away on UPUnion Pacific reported today that at approximately 10:55 a.m. CDT (11:55 a.m. EDT), there was an "uncontrolled movement" of a chlorine tank car at a UP yard near Las Vegas, Nev. UP said the car, which "did not derail, strike any other object, or release any product" and "is stopped and under control," does not pose any danger to public safety. UP said it is conducting a thorough investigation to determine what caused the runaway to occur and in accordance with its internal safety procedures "is notifying appropriate regulatory authorities."
Metronet write-off puts Bombardier in the redBombardier's $162 million write-off of its investment in Britain's Metronet Rail led to a net loss of $71 million for the quarter ended July 31 despite "solid performance" by both Bombardier Transportation, its rail unit, and Bombardier Aerospace, said Chairman and CEO Laurent Beaudoin. Bombardier reported consolidated revenue of $4 billion for the quarter, up from $3.5 billion in the corresponding quarter last year. The company reported free cash flow of $633 million, an improvement of $487 million over the same period last year, and an order backlog of $47.9 billion, a record and $7.2 billion higher than a year ago. Notwithstanding the write-off of its investment in Metrorail, the London Underground infrastructure operator, Bombardier said its $6.7 billion worth of contracts with Metronet for new trains, signaling, and other services "are progressing well."
Michigan says short line must keep AmtrakPittsburg, Kan.-based Watco Cos. Inc. has been warned by Michigan political officials to ensure Amtrak's presence in Kalamazoo and Ypsilanti, stations along Amtrak's route linking Detroit and Chicago, according to the Kalamazoo Gazette. Watco and Norfolk Southern Corp. in July agreed to a joint venture, Michigan Central Railway LLC, to operate 299 miles of track in Michigan and Indiana, including roughly 114 miles between Ypsilanti and Kalamazoo. Watco Chief Commercial Officer Ed McKechnie has said no problem is looming, noting, "We're not going to have Amtrak be at risk out there. Amtrak is too important of a customer." But Battle Creek Mayor John Godfrey countered, "There is no shortline railway in the United States that has the history of maintaining the track to Amtrak standards," and added, "If it's not maintained to 79 mph then we lose Amtrak." Watco and NS were slated to meet in Battle Creek today to discuss the matter with those concerned.
Sound Transit breaks ground for Mukilteo StationSound Transit broke ground Tuesday for Mukilteo Station, part of an effort to revitalize the Washington municipality's waterfront neighborhood and to create a transit hub that serves local Mukilteo residents as well as ferry riders. Passenger rail service is expected to commence in less than a year. The project is part of a multi-agency effort to vitalize Mukilteo's waterfront and increase transportation options. Planning partners for the project include City of Mukilteo, Burlington Northern Santa Fe, the Port of Everett, and Washington State Ferries. The two-phase station project is budgeted at $19.2 million; funding comes from Sound Transit and the Federal Transit Administration.
New traffic control for two G&W short linesGenesee & Wyoming subsidiaries Portland & Western and Illinois & Midland have signed long-term service agreements for RailComm, Inc.'s DOC (Domain Operations Controller) traffic control technology. The two short lines will access DOC through the Internet via the SaaS (Software-as-a-Service) system, in which RailComm houses information in its central office and provides dispatching, centralized traffic control, and remote control of powered turnouts and other functions. RailComm says P&W and I&M are the first customers to use SaaS, described as "a delivery model that reduces the need for local information technology support." Both carriers operate trains in dark territory under GCOR (General Code of Operating Rules) and plan to add CTC using DOC and SaaS.
Buffett increases BNSF stake to 14.8%With the acquisition of an additional 10.1 million shares at a per-share price of around $80, Warren Buffett's Berkshire Hathaway, Inc. has boosted its stake in BNSF to 14.8%. The Omaha-based company, famous for an investment policy that focuses on intrinsic worth and long-term growth prospects, now owns 52.1 million shares of BNSF. Berkshire also holds substantial positions in Union Pacific and Norfolk Southern.
Timken bearings boost mining railway's capacityTimken Co. says the Norwegian iron ore railway Rama Gruber AS has increased the load capacity of its boxcars by 20% and "significantly" lowered its operating costs by the use of Timken cartridge bearings. Timken noted that Rama Gruber is its first rail customer in Norway, "where extensive upgrading of rail freight operations is expected within the coming years." The mining company is using Timken AP-2 bearings set in adapters that permit simpler assembly and easier maintenance.
Electro-Motive buys ITS RailElectro-Motive Diesel, Inc. has acquired certain assets of ITS Rail Services, a supplier of technical services, training, and publications for the railway industry. LaGrange, Ill.-based EMD closed the acquistion on August 24. ITS will concentrate on offering training for locomotives on a global basis, undertaking international in-country locomotive rebuild projects and supporting EMD in consulting its customers.
Guangshen Railway Six-Month Profit Almost DoublesGuangshen Railway Co. Ltd., the only Chinese rail company listed on the New York Stock Exchange, today announced its six-month unaudited net profit rose 97.5% to 745.8 million renminbi (about $98 million), according to Xinhua news service. Total revenue increased 165.1% year-on-year to 612.8 million renminbi. The increase follows the company's acquisition of the operating asset and business of railways between Guangzhou and Pingshi. The board of directors has declined to declare any dividend for the six months, however. Passenger transport contributes roughly 84.6% of the company's total revenue during the six-month period. Guangshen operates passenger and freight service primarily between Guangshen and Shenzhen, but also provides passenger service to and from Hong Kong in cooperation with the Kowloon-Canton Railway Corp.
Global Rail acquires Alstom's Track MasterGlobal Rails Systems announced that it has acquired Alstom Transport’s Personal Traffic Master software system—"a mature and proven software platform for dispatching yards, CTC, and dark territory on both main line and transit properties." Global Rail said it would modify the Alstom system and market it as TrackMaster, complementing Global Rail's existing Yardmaster system.
FRA awards Oregon short lines nearly $5 millionThe Federal Railroad Administration has awarded the Portland & Western short line in northwestern Oregon a grant of $3,957,710, to be augmented by $989,428 in funding by the railroad, to replace a wooden bridge approach to an existing steel bridge over the Willamette River near Albany. FRA said the grant will provide safer and faster train service for 135 industrial shippers. FRA granted an additional $369,3869 to the P&W to strengthen track between Willamina and Whiteston, with the railroad providing a $92,347 match. FRA also granted $420,527 to the Sumpter Valley Railroad, an Oregon tourist operation, for a variety of purposes, including purchase of two vintage pieces of equipment--a narrow-gauge locomotive and a business car.
High speed corridors win $9 million in safety fundingImproved grade-crossing safety in corridors where high-speed trains may one day operate is the focus of $9.2 million in new grants announced by the Federal Railroad Administration in coordination with the Federal Highway Administration. The money will be shared by federally-designated high speed corridors in Alabama, Arkansas, California, Florida, Illinois, Louisiana, Michigan, Minnesota, Mississippi,, Missouri, New York, North Carolina, Ohio, South Carolina, Texas, Washington, and Wisconsin.
UP-Dow launch emergency-responder training tour Union Pacific and Dow Chemical Co. today launched a two-week TRANSCAER (Transportation Community Awareness and Emergency Response) Safety tour of California. Starting in the Colton/San Bernardino area, the tour will move on to Bakersfield, Fresno, Stockton, Sacramento, and Pittsburg, conducting interactive training for emergency responders at each stop. UP and Dow say they formalized long-standing joint commitments to chemical transportation safety and security through a memorandum of cooperation issued earlier this year. The two companies led a consortium of chemical and railroad companies that created the TRANSCAER program in 1986. The program gives emergency responders "the opportunity to learn firsthand from chemical and rail transportation experts about the safe movement of chemicals through their communities," said Lou Wagner, general director, Chemical Transportation Safety, Union Pacific.
Right-of-way suicides are subject of AAR studyThe Railroad Research Foundation, an arm of the Association of American Railroads, will seek to determine the number and frequency of suicides on railroad rights-of-way in a study funded by a $350,000 Federal Railroad Administration grant. In announcing the grant, the FRA noted that "suicides, as determined by local medical examiners, are not presently required to be reported by railroads" to the agency. The FRA hopes the research findings "will help develop prevention and mitigation strategies to discourage rail-related suicidal behavior."
Environmental concerns delay action on Utah coal lineThe Surface Transportation Board announced today that it will provide additional information on "wetlands and alternatives" for those reviewing a Draft Environmental Impact Statement for a proposed 43-mile coal railroad in Utah. The STB issued a Draft EIS on the project on June 29, with public comments due by Aug. 22. The comment period has now been extended pending issuance of supplemental information "in the near future." At issue is a proposal of the Six County Association of Governments to construct a rail line and ancillary facilities between Juab and Salina, Utah, connecting Union Pacific to a coal transfer terminal facility. STB says the project "has the potential to result in significant environmental impacts."
Denver FasTracks weighs electrification costsElectrification of planned passenger rail service between Denver's Union Station and Boulder Longmont could cost $550 million more than a comparable service using diesel-powered trains, according to comments by the Regional Transportation District reported by the Denver Post. RTD released a letter from BNSF noting numerous bridges along the 41-mile route, or "northwest corridor," would need reconstruction to accommodate overhead electric wires. BNSF owns the right of way that RTD hopes to share for its passenger service. RTD recently chose electric rail service for its the east corridor train to Denver International Airport and the Gold Line from Union Station to Arvada/Wheat Ridge.
California fiscal budget diverts transit fundingCalifornia legislators have approved a $145 billion state budget almost two months after a July 1 deadline that includes $1.9 billion for public transit, but diverts $1.25 billion from traditional sources of transit funding for other programs. State transit activists express concern that Gov. Arnold Schwarzenegger will kill remaining funding for a state high speed rail program, though the governor is not expected to veto other specific transit items. A spokesman for the governor says the administration remains committed to transit funding, noting, "When all is said and done, the year-over-year spending will increase over $700 million," from $1.2 billion in the fiscal year that just ended.
Intermodal leads U.S. rail traffic declineIntermodal volume on U.S. Class I railroads was down 4.3% in the week ended Aug. 18 compared with the corresponding week last year, carload freight was off 1.5%, and ton-mile volume was down 0.3%, the Association of American Railroads reported today. Among the sharpest commodity declines were primary forest products, down 16.6%, and lumber and wood products, off 14.5%. Metals traffic was down 15.3%. Commodities showing gains included farm products other than grain, up 20%; coke, up 12.6%, and petroleum products, up 8.4%. In Canada, intermodal volume in the latest week was up 6.0% from last year and carload traffic was down 1.9%. On Kansas City Southern de Mexico, intermodal traffic increased 17.9% an carload traffic declined 9.8%.
UP starts work on $90 million San Antonio terminalUnion Pacific officially broke ground today for a 300-acre, $90 million intermodal terminal at San Antonio, Texas. When completed late next year, it will have the potential of handling 250,000 trailers and containers annually. "We believe that Union Pacific customers will find it advantageous to locate close to his state-of-the-art intermodal facility," said Terry Darrow of First Industrial Realty Trust, which in partnership with 4R Realty has been selected to develop the site. The terminal's economic impact on the area is estimated at $2.48 billon over the next 20 years.
STB will order independent study of rail competition Responding to a request from the General Accountability Office for "a rigorous analysis of competition in the freight railroad industry," the Surface Transportation Board said it will "solicit proposals from analysts with no ties to the railroad industry or connection with any recent STB proceedings for a fixed-price contract to conduct an appropriate study." Noting that GAO also asked for a review of its fuel surcharge reporting process, the board said that prior to the GAO's request--made in a report originally issued last year and recently updated--it had already taken action to address fuel surcharge concerns.
South Dakota panel OKs railroad eminent domain rulesThe South Dakota legislature’s Rules Review Committee approved Tuesday new rules that may determine whether the Dakota, Minnesota & Eastern Railroad can use eminent domain to acquire land to build 600 miles of track to the Powder River Basin coal fields in Wyoming. The committee endorsed rules that the State Transportation Commission passed last week. Barring unforeseen circumstances, the Committee’s action means the Transportation Commission’s rules would take effect about Sept. 10, at which time the commission can restart the process of considering DM&E’s application. DM&E originally applied last December, but likely will have to file a new application for using eminent domain.
Vancouver (Wash.) warms to light railA telephone survey of 600 residents of Vancouver, Wash., shows two out of every three support extending light rail to their city from nearby Portland, Ore., according to an article in Vancouver's local newspaper, The Columbian. The finding was presented to the city council Monday, suggesting residents might be shifting their attitudes on light rail more than 12 years after Clark County voters rejected a financial package by about the same margin, almost two-to-one. The city paid Intercept Research Corp. of Tigard, Ore., $10,000 for the survey. The margin of error was 4 points in either direction. Results mirrored an earlier poll commissioned by the Columbia River Crossing project, which is laying plans to build a new Interstate 5 bridge that could carry LRT from its current northern terminus at the Portland Metropolitan Exposition Center into downtown Vancouver.
Credit crisis brakes Brookfield bid for CPThe global credit crisis has caused Brookfield Asset Management to pull back from a move to acquire Canadian Pacific Railway in a leveraged buyout. The Toronto Globe & Mail quoted one banker as saying that "Brookfield is telling banks that it may revisit [CPR] next year, but the file is dead for now." CP shares, which reached a 52-week high of $91 on July 18, were priced at $69.68 when the market closed yesterday. Nevertheless, UBS analyst Fadi Chamoun sees "a compelling investment case" for CP, with its growth in efficiency and volume, and upgraded CP shares from neutral to buy, with a target price of $85.
Jacobs wins new Network Rail contractPasadena, Calif.-based Jacobs Engineering Group has received a new framework contract from Network Rail in the U.K. valued at up to $12 million for three years. Jacobs will perform project management, engineering, and environmental work for track switch and crossings design. Jacobs is one of five multifunctional designers under contract to Network Rail, which owns and operates the U.K.'s national railway infrastructure.
Ton-miles down, return on investment upDespite a slight decline in revenue ton-miles, Class I railroads as a group improved their rate of return on investment (ROI) to 10.24% in the 12 months ended June 30, compared to 8.91% in the 12 months ended June 30, 2006. The Class I's reported net railway operating income of $7.647 billion, up from $6.894 billion, in the 2006-2007 period, on operating revenues of $52.929 billion, up from $50.287 billion. For individual carriers, these were the year-to-year comparisons (2007-2006): BNSF Railway (10.69%-11.52%); CSX Transportation (7.76%-8.30%); CN Grand Trunk (10.31%-9.48%); Kansas City Southern (9.51%-10.27%); Norfolk Southern (13.71%-14.31%); Soo Line (12.32%-10.02%); and Union Pacific (8.26%-8.04%).
Rotem, Siemens to build 84 Sao Paolo subway carsRotem, in conjunction with Siemens, has landed a $160 million contract to provide 84 automatic electric train cars to the No. 4 subway line in Sao Paolo, Brazil. Private investor ViaQuatro also is participating. The consortium will deliver the cars between March and August of 2009, with Siemens overseeing installation of traffic and telecom devices. Sao Paulo’s No. 4 line is slated to open in March 2010. Seoul-based Rotem, a subsidiary of Hyundai Motor Group, supplied 80 electric trains to Rio de Janeiro in 2004.
Intermodal strength lifts J.B. Hunt's analyst ratingA Wachovia Capital Markets analyst believes that J.B. Hunt Transport Services’ strong intermodal partnerships with railroads makes its stock the most attractive in the trucking business in the long term. The analyst, Justin Yagerman, today boosted the company’s rating to "Out Perform" from "Market Perform." "We believe JBHT is winning intermodal market share, improving its network, and growing its container capacity," Yagerman wrote in a research note.
D.C. rail helps spur $10 billion in new developmentUrban developer MacFarlane Partners says a WMATA light rail line now under construction is a major factor in its plans for developing 42 sites in the District of Columbia and its suburbs into properties that will be worth an estimated $10 billion when completed. In an announcement today, MacFarlane said 60% of the sites are near or adjacent to stations on the three-mile Anacostia line, now under construction, as well as Washington Metro’s Red and Orange lines. "Our investment will further the development of high-density, commercial and residential space around transit hubs, which we believe will encourage the residents to use the Metro system as a primary means of transportation," said Victor B. Macfarlane, managing principal, chairman, and CEO.
Rail shares get new boost from BuffettBillionaire investor Warren Buffett's Berkshire Hathaway, Inc. disclosed that it purchased another 1.4 million shares of Burlington Northern Santa Fe Corp. last week at prices ranging from $76.50 to $78.96, increasing its stake in the railroad to nearly 12%. This followed the purchase earlier this month of 1.1 million shares at a unit price of $80.40. Berkshire now holds 42.05 million shares of BNSF. In May, Berkshire disclosed large investments in Union Pacific and Norfolk Southern. Railroad shares in general rallied on Friday after disclosure of the latest Buffett investment, and they were all up again at noon today although the Dow Jones average was down slightly.
MBTA reviews Merrimack River BridgeMBTA General Manager Daniel Grabauskas says more than 13 percent of Massachusetts' commuter rail bridges are structurally deficient. MBTA has placed a 5 mph speed restriction on the Merrimack River bridge in Haverhill, also used by Amtrak's Downeaster service, which is similar in design to the steel deck truss bridge that collapsed Aug. 1 in Minneapolis. MBTA has asked consultants to to determine if the bridge requires immediate repairs before a scheduled $8.4 million rehabilitation next year. "This is a bridge that is frail but not yet failed, and what we're trying to do is bring the resources necessary to get it back to full strength," Grabauskas told The Boston Globe.
Natural Resources Partners buys Kentucky propertiesNatural Resource Partners LP has announced the purchase of a rail load-out facility and a rail spur from Cheyenne Resources for $5.5 million. The properties, located in Perry County, Ky., consists of a four-hour fast-load, batch weigh load-out and approximately 24,500 feet of track. The rail spur connects the facility to the CSX Corp. mainline. The facility is located on surface property already owned by Houston-based Natural Resource Partners and services two active surface mines, one of which is on NRP property.
Metrolink plans $100 million crossing safety initiativeAug. 20 marks the official start of a $100 million grade crossing safety initiative for which California's Metrolink has high hopes. Modeled after North Carolina's "Sealed Corridor" program, the Metrolink initiative targets 63 crossings along 65 miles of track on the commuter agency’s Ventura county and Antelope Valley lines. Improvements will range from high-tech four-quadrant gates to longer gate arms and median separators. On a regional line in North Carolina, four-quadrant gates led to an 86% reduction in crossing violations; median separators, 72%; and longer crossing arms, 77%. Metrolink says it will be the first commuter agency in the country to apply these techniques "to a densely populated urban setting with correspondingly high volumes of street and rail traffic."
CP, IBM sign application services pactCanadian Pacific Railway did its first business with an IBM-related company more than a century ago, when it purchased equipment from IBM-predecessor International Time recording Co. Nearly four years ago, the two companies signed a seven-year, $300 million outsourcing agreement. Today, CP announced that it has entered into a new five-year agreement with IBM to provide application development and support for corporate functions, marketing and sales, including CP’s growing intermodal business and its Business and Information Technology Services (BITS) Capabilities Program.
"IBM and CP have a long and successful track record," said Kathryn McQuade, the railroad’s executive vice president and chief operating officer. "Their globally integrated delivery model, transportation experience, and extensive SAP expertise put them in the best position to support our corporate function."
HDR wins NYMTA market research contractUnder a three-year contract announced today, HDR will provide market research services for the New York Metropolitan Transportation Authority, identifying "priorities and strategies for business development, capital improvements, service planning, and policy-making decisions." HDR is one of the architectural and engineering construction firms hired earlier to help manage construction of the No. 7 subway line extension.
Ton-mile volume down fractionallyThe Association of American Railroads reported today that total rail volume, measured in ton-miles, was down 0.6% in the week ended Aug. 11, compared with the corresponding week last year. Carload freight was off 2.2% and intermodal traffic dropped 5.1%. Heavier loads and longer hauls eased the impact on ton-miles. Reflecting the housing downturn, loadings of lumber and wood products were down 15.9% in the most recent week. Grain loadings were up 9.7%. For this year’s first 32 weeks, the AAR estimates that ton-miles were down 2.5%, carload traffic dropped 3.7%, and intermodal volume was off 1.6%. Canadian carload traffic during the week ended Aug. 11 was down 2.4% from last year and intermodal loads were up 6.4%. Kansas City Southern de Mexico reported carloads down 5.6% and iintermodal volume up 26%.
NYC area security aid tops $300 millionA new $50 million grant from the Department of Homeland Security will bring the New York City area’s 2007 funding for anti-terrorism aid to a new annual high exceeding $300 million. The previous high was $261 million in 2005. The money is designated for tightening mass transit and port security. The portion earmarked for the New York City-northern New Jersey area represents one-fourth of a new round of $200 million in funding. It responds to a new Congressional mandate requiring a higher portion of federal anti-terrorism aid to go to large metropolitan areas than previously. Big-city mayors had complained that much anti-terrorism aid was being sliced up like pork for smaller cities with less visible security problems.
NBC Universal signs monitor pact with PATHNBC Universal will pay the Port Authority of New York and New Jersey $1.5 million over the next seven years for the right to install information and advertising monitors on 340 new PATH rapid transit cars that will be put into service between 2009 and 2011 as well as on PATH station platforms in Midtown and Lower Manhattan and in the New Jersey cities of Newark, Harrison, Jersey City, and Hoboken. "The agreement provides an important service to our customers at no cost to the agency," said Port Authority Chairman Anthony Coscia. "It's a model agreement for advancing customers’ service goals by leveraging the marketing potential of one of our facilities."
Top builders compete to produce new U.K. trainAlstom, Bombardier, Siemens, and Hitachi all appear on the list of companies or consortia that have been short-listed to compete for a contract to design a new British train that will be lighter and more environmentally friendly than current long-distance trains, the U. K. Department for Transport announced today. "We are developing a flexible train that can be deployed on different lines in different lengths, and with different sources of power, so this train can operate wherever we need it in the future," said Rail Minister Tom Harris.
On the short list are three potential contractors: Alstom-Barclays Rail Group; Express Rail Alliance ( a consortium of Bombardier Transportation, Siemens, Angel Trains, and Babcock & Brown); and Hitachi Europe Ltd. Proposals are due next summer and the contract will be awarded the following winter.
The new train is the centerpiece of a new Intercity Express Programme described last month in a white paper, “Delivering a Sustainable Railway.”
Davis returns to Simmons Machine ToolDavid Wm. Davis has rejoined Simmons Machine Tool Corp. as president and chief operating officer. From 1988 to 1998, he was with Simmons Machine Tool Group, where he served as vice president-sales and marketing, vice president-operations, and president and COO.
Davis rejoins the company from Jenoptik Polymer Systems, Inc. part of Jenoptik AG, a German laser, optical components and metrology instrument manufacturer, where he was CEO from 2005 until 2007. From 1998 to 2005, Davis was president and CEO of Precitech, Inc. (Keene, N.H.), a manufacturer of precision machine tools and metrology systems. Prior to joining Precitech, he worked for Motorola, Inc.
Davis has spent his entire career in precision engineering primarily involving machine tools, starting as an assembler and service technician with Ingersoll-CM Systems while attending engineering school. He holds patents in such fields as liquid crystal display development, CBN grinding processes, and ultra precision machining processes. He is a member of the European Society for Precision Engineering and Nanotechnology (EUSPEN), Society of Manufacturing Engineers (SME), and SPIE-Society for Optical Engineering. His academic qualifications include a B.S. in Industrial & Operations Engineering and a B.A. in German Language and Literature from the University of Michigan as well as an M.B.A. from Rennselaer Polytechnic Institute.
USDOT grants $848 million to five “Urban Partners”The U.S. Department of Transportation has awarded $848.1 million to five metropolitan areas to help them reduce traffic congestion, in most cases by imposing tolls on vehicular traffic and encouraging the use of public transit. The grants, some contingent on local matches still in the works, will go to New York City, $354.5 million; San Francisco, $158.7 million; Seattle (King County), $138.7 million; Minneapolis, $133.3 million; and Miami, $62.9 million.
In announcing the results of a national competition, DOT Secretary Mary E. Peters designated these cities as “Urban Partners” and said each had developed a total transportation solution.”
“Many officials treat tolls and congestion pricing as taboo, but leaders in these communities understand that commuters want solutions that work,” said Peters.
Amtrak ridership, revenues rise in JuneAmtrak reports that its June ridership of 2.29 million was 5% over June last year and 2% over budget. Continued strong Acela Express demand helped bring June ticket revenues up 7% to $138.7 million, 1% over budget. Acela ridership was 10.7% higher than in June 2006. Amtrak said Acela improvement will be more moderate as sell-out conditions are reached on many routes.
NEC regional ridership was even with last year and 4% above budget. In other regional corridors, June saw a general improvement of 7% in ridership and revenues, due partly to increased service in the East (Keystone), the Midwest (Illinois), and the West (Capitol Corridor and Cascades). Amtrak said that on an individual route basis, FY07 demand “remains “weak” for the Texas Eagle, Cardinal, Capitol, California Zephyr and Lake Shore trains. Long-distance ridership in June was up 1% over last year, and while ontime performance was only 40%, it represented an improvement of 11 points.
Customer satisfaction with Amtrak performance also improved in June. Overall customer satisfaction was at 77%, up two points, “due generally to ontime performance improvements on Acela and some long-distance runs.”
STB rethinking cost of capital calculationsThe STB put into motion today machinery that could change the way it determines whether railroads are revenue adequate.
Responding to comments received in an Advance Notice of Proposed Rulemaking issued 11 months ago (STB Ex Parte No. 664, “Methodology to be Employed in Determining the Railroad Industry’s Cost of Capital,” Sept. 20, 2006) and to complaints from shippers and others, the Board has begun a rulemaking proceeding to revise its calculation method. The Board uses its cost of capital figure, which is adjusted annually, in evaluating an individual railroad’s revenue adequacy, as well as in various types of regulatory proceedings: determining the reasonableness of a challenged rail rate, considering a proposal to abandon a rail line, and trackage rights cases. The proposed change in calculation methodology could substantially change revenue adequacy thresholds. Comments on the proposal are due by Sept. 13, 2007. Reply comments are due by Oct. 15, 2007.
Specifically, the Board is proposing to change its method for calculating what it calls “a key component” of the cost of capital—the cost of equity. It’s proposing to use a CAPM (Capital Asset Pricing Model), rather than the DCF (Discounted Cash Flow) method it has applied since 1982. “CAPM has become the private sector norm for measuring cost of capital, although there are different methods of applying the model,” the Board said.
The STB currently calculates railroad cost of capital as the weighted average of the cost of debt and the cost of equity, with the weights determined by the capital structure (the fraction of capital from debt or equity on a market-value basis) of the railroad industry. “While the cost of debt is observable and readily available, the cost of equity (the expected return that equity investors require) can only be estimated,” the Board said. “Because the cost of equity cannot be directly observed, estimating the cost of equity requires adopting a financial model and making a variety of simplifying assumptions. . . . The Interstate Commerce Commission, our predecessor agency, settled upon the simple, original form of the DCF model to derive the cost-of-equity component. This . . . method has been challenged.”
In the STB’s 2005 cost of capital proceedings, the Western Coal Traffic League argued that there is a “mismatch” between the five-year growth rate supplied to the Board by the Association of American Railroads and the long-term growth potential of the economy as a whole. WCTL “cited finance texts for the proposition that an industry’s sustainable growth rate cannot significantly exceed the growth rate for the economy,” the Board noted. “WCTL recommended that the Board replace the DCF approach entirely with a CAPM, [which] first determines the return an investor would receive on a risk-free investment. An estimate of the risk premium associated with the particular investment is then developed. Once the risk premium is quantified, its value is added to the risk-free investment rate to obtain an estimate of the cost of equity.”
The Board ultimately concluded that it could not support “a departure from established agency precedent, and that the concerns raised by WCTL should be explored in more depth with broader public input.” That prompted the Sept. 20 ANPRM, which elicited comments from Arkansas Electric Cooperative Corporation; AAR; National Industrial Transportation League; Snavely, King, Majoros, O’Connor & Lee, Inc. (Snavely King); United Transportation Union-General Committee of Adjustment; and WCTL.
“Cost of capital plays a significant role in the regulation of railroads, and it is therefore important that [it] be measured as accurately and practically as possible,” the Board said. “The record presents compelling evidence that our current DCF approach can be improved upon using more modern techniques to estimate the cost-of-equity component of the cost of capital. The DCF method adopted in the 1980s was at the time the most common method used by regulatory agencies to estimate the cost of equity. This simple DCF method required few inputs and few judgment calls, permitting the agency to promptly develop an estimate of the cost-of-equity component of the cost of capital. The simplicity of this DCF model, however, is the result of an assumption that the five-year growth rate provided by the AAR will remain constant forever. But the growth rate of a particular industry can not substantially exceed the long-term growth rate of the economy indefinitely. [An AAR] expert acknowledged that the current high projected five-year growth rates cannot be sustained Thus, when the five-year growth rate is high, this model will overstate the cost of equity because it assumes that the growth rate will continue forever. Similarly, if the railroads experience a downturn and the predicted five-year growth rate is very low, the model will understate the cost of equity, as the model assumes the growth rate of the railroads will forever remain below the growth rate for the national economy.”
“Modern finance practices have changed since the last time the agency reviewed its cost of capital methodology,” the Board said. “We believe the time has come to modernize our approach to address the valid concern over the use of a single five-year growth rate in the DCF model.”
One proposed approach would be to replace the existing method with a “2-Stage DCF” method, which “would permit an industry’s growth rate to exceed the long-term growth rate of the economy initially, but would use the long-term growth forecast for the economy as a better predictor of long-term growth,” the Board said. However, “CAPM provides an alternative to DCF that commands greater respect in the regulatory and academic community and dominates the private sector. . . . We acknowledge that moving from a DCF method to a CAPM method would be a departure from agency precedent, but such a change appears to be appropriate now.”
To illustrate the potential impact of this proposal, The STB recalculated its figures from 1997 through 2005 under both the proposed CAPM approach and a 2-stage DCF approach. For example, for a cost-of-equity comparison, for 2005, the current DCF approach yields 15.2%. A 2-stage DCF yields 7.2%. A CAPM yields 7.5%. For a cost-of-capital comparison, for 2005, the current DCF approach yields 12.2%. A 2-stage DCF yields 6.7%. A CAPM yields 6.8%.
To calculate the cost of equity, STB proposes using the “single-Beta” version of the CAPM model. To calculate the annual risk-free rate, it proposes to use the 10-year Treasury Bond rate. To calculate the annual market-wide risk premium, it proposes to use monthly New York Stock Exchange (NYSE) data over a 50-year time period.
Wabtec lands British maintenance contractWabtec Rail, a U.K.-based unit of Wabtec Corp., has signed a $40 million, five-year contract to maintain 31 125-mph Class 91 electric passenger locomotives for HSBC Rail (U.K.) Ltd., a rail equipment lessor in the U.K. The locomotives run on the East Coast Main Line. Wabtec Rail will be responsible for all maintenance and running repairs, and for improving equipment reliability.
HSBC Rail (U.K.) Ltd. owns approximately one-third of the U.K.’s rolling stock and provides rolling stock and management services for the rail passenger and freight markets. It is a wholly owned subsidiary of HSBC Bank plc, a wholly owned subsidiary of HSBC Holdings plc, headquartered in the UK and a member of the HSBC Group. The Class 91 contract is Wabtec Rail’s second with HSBC Rail. In 2006, the company signed a 10-year, $140 million contract to overhaul transit vehicle bogies.
$457 million China order goes to SiemensSiemens will supply $457 million worth of parts for 500 electric locomotives to be manufactured by China's CSR Zhuzhou Electric Locomotive company under a contract announced today. Siemens said the new units will be the world’s most powerful with output ratings of 9.6 megawatts. Components supplied by Siemens will be developed and manufactured at sites in Erlangen and Nuremberg, Germany.
USDOT pledges $350 million for NYC congestion pricingThe U.S. Department of Transportation was ready today to pledge $350 million to help New York City carry out a plan to impose tolls ranging from $8 to $12 on cars and trucks entering Manhattan south of 86th Street. The DOT’s offer was less than the $536 million the city wanted but well above the minimum of $200 million that the state legislature had set as a federal commitment to keep the plan alive. The congestion-pricing plan still must be approved by a 17-member special commission. At one time the plan appeared to be stalled in Albany but the legislature reconsidered under pressure from New York City Mayor Michael Bloomberg and Gov. Eliot Spitzer.
P&W reports second quarter profitProvidence & Worcester has reported a second quarter profit of $347,000, up from $259,000 for the prior-year quarter. A $187,000 drop in operating expenses and a $234,000 increase in other income made the profit possible. For this year’s first six months, the company had a net loss of $1.2 million versus a loss of $10,000 in the 2006 period.
American Railcar: Profits up, shares down American Railcar Industries reported today that it earned $11 million in the second quarter, 52 cents a share, slightly higher than the $10.8 million or 52 cents per share earned in the corresponding quarter of 2006 but below the 64 cents consensus forecast of Wall Street analysts. While revenues were up 28% to $209 million, exceeding analysts’ expectations, costs soared 40% to $172.7 million. The company’s shares were down around 17% in early afternoon trading.
STB tightens fuel-surcharge monitoringThe Surface Transportation Board announced a decision today ordering Class I railroads to submit quarterly reports on fuel cost, consumption, and surcharge revenues, beginning with this year’s fourth quarter. The board had originally proposed to require monthly reports but switched to a quarterly basis to “decrease the reporting burden on the carriers while retaining the utility of the reports.” The board also tightened reporting requirements in response to shipper concerns that the original proposal would not elicit sufficient information to monitor the fairness of fuel-cost recovery practices. Additional data now requested includes “fuel consumption per the same unit (whether mile, ton-mile, car-mile, etc. used by the carrier to assess the fuel surcharge; total ton-miles and/or car-miles); total recovery of fuel costs, whether by fuel surcharge or any other means; commodity-specific data; and data that distinguishes between freight that is subject to fuel surcharges and [unregulated] freight that is not.”
UTU elects 2008 SMART officersThe Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation (SMART) Workers, created by a merger of the United Transportation Union and the Sheet Metal Workers International Association, has officers in place for 2008.
Malcolm B. (Mike) Futhey Jr. was elected president, and Arty Martin assistant president. Their appointments are effective Jan. 1, 2008, when the merged union officially starts up. Kim N. Thompson (no relation to current UTU International President Paul Thompson, who is retiring at the end of this year) was elected general secretary and treasurer of the UTU, effective Sept. 1, succeeding Dan Johnson, who is also retiring. Thompson will become general secretary and treasurer of the SMART Transportation Division Jan. 1.
Still to be elected at the UTU’s 10th quadrennial convention are national legislative director, International vice presidents, alternates, members of the executive board and board of appeals, and a combined Canadian vice president/legislative director. Those elections will take place later this week. Delegates sustained a the UTU Executive Board decision denying appeals of former general chairpersons and full-time vice general chairpersons on CN in Canada who had been suspended from office by the UTU Board of Directors through resolutions dated Feb. 19 and March 21.
LS&I completes dispatch system cutoverTesting and cutover of the Lake Superior & Ishpeming Railroad’s new RailComm-supplied dispatch system has been completed. LS&I is using RailComm’s DOC® (Domain Operations Controller) system, which includes CTC, Track Warrant Control, and SCADA applications to control trains in both signaled and dark territory, as well as monitor and control snow blowers. A wireless data communications network was established utilizing RailComm’s wireless RADiANT™ Data Radio technology, linking various field locations to the dispatch center. The RADiANT™ network made it possible for LS&I to eliminate the physical wiring between locations and retire costly leased line services. The system controls 40 miles of track.
Weaker economy dents intermodal trafficThe Intermodal Association of North America says intermodal volume in this year’s second quarter posted its first quarterly decline in more than five years, with international traffic down 1.9% to 2.2 million units and domestic volume off 1% to 1.42 million. “Given the weaker economy, the traffic decline isn’t unexpected, especially in comparison with the second quarter of 2006, which was the second best quarter ever for intermodal,” said Robert Malloy, IANA’s vice president for business development.
AFL-CIO blasts BLET on crew-size issueThe AFL-CIO issued a statement today urged the Teamsters-affiliated Brotherhood of Locomotive Enginemen and Trainmen (BLET) to “stop pursuing collective bargaining agreements that would eliminate UTU members’ jobs and end the practice of raiding the UTU membership through a reduced or free dues program.” The statement accused the BLET in recently-negotiated agreements of “pursuing bargaining positions that would undermine and destroy the crew-size provisions and other key contractual protections embodied in the collective bargaining agreements of the UTU. Worst of all, the BLET agreements have failed to achieve any protections such as buyouts, continuation of health care, retirement credos, or other benefits for the workers whose jobs their agreements would eliminate.”
RSI supports consolidated trade showsThe Railway Supply Institute is taking preliminary steps to address an issue that concerns many in the railway industry: too many trade association exhibits to attend.
According to a statement issued by RSI Board Chairman Paul Wilson, the RSI Governing Board “has been discussing the future of the biennial RSI trade show held in conjunction with the Coordinated Mechanical Association meetings in Chicago.” He referred to a letter from NACE (North American Chief Engineers) to REMSA (Railway Engineering-Maintenance Suppliers Association) and RSSI (Railway Systems Suppliers, Inc) that “expresses [NACE members’] concerns regarding the number of trade shows they are asked to support” and “strongly advocates those two organizations join AREMA (American Railway Engineering Maintenance-Of-Way Association) in a joint trade show as soon as practicably possible.” Wilson said that “subsequent conversations between RSI Board members and representatives from NACE and other senior railroad officials resulted in their urging RSI to join RSSI, REMSA, and AREMA in Minneapolis in 2010.” Following this, the RSI Board “voted unanimously to support a joint trade show.”
“As Chairman of the RSI Board, I have instructed [RSI Executive Director-Washington] Tom Simpson and [RSI Executive Director-Chicago] Howard Tonn to begin planning RSI’s participation in the 2010 Minneapolis event. The railroad industry has indicated to us its strong support of the Minneapolis venue and the combined shows. We think the strong railroad support and involvement in this decision combined with the economies of scale and marketing potential of such a joint show will benefit all RSI members. This decision will not impact the 2008 indoor/outdoor exhibits or the 2009 table top exhibits, both scheduled for Chicago.”
Prior to this, Wilson said, the RSI Board had reached a consensus to move the biennial RSI/CMA show out of the Chicago area and was considering Nashville, Kansas City, or Omaha as possible venues for 2010 or 2012.
China orders ERTMS signaling from BombardierBombardier Transportation announced that it has won a $91 million contract to supply ERTMS (European Rail Traffic Management System) Level 2 onboard and wayside signaling equipment for the 186-mph high speed railline scheduled to go into operation in 2010 on a route of approximately 600 miles between Wuhan and Guangzou. ERTMS is already widely deployed in Europe. China Railway Signaling and Communications Corp. order the system from Bombardier for its customer, the Chinese Ministry of Railways.
CSX covers Oneida, N.Y., cleanup costsCSX Transportation says it will pay $114,000 to Oneida, N.Y., to cover the full cost of cleanup efforts following a derailment last March, which prompted thousands to evacuate. The accident caused 28 cars in an 80-car consist to derail, and at least five to catch fire or explode. Both the National Transportation Safety Board and the Federal Railroad Administration continue to investigate the incident. Railroad union officials have said it's likely that track conditions contributed to the derailment.
Mexico moves to keep rail route runningThe Mexican government said Thursday it has awarded Ferrocarril del Istmo de Tehuantepec (FIT) temporary rights to operate a railroad in southern Mexico, Dow Jones reported. FIT succeeds Genesee & Wyoming Inc., which announced in June it would give up a 30-year concession and sell local assets due to lack of government fiscal support in repairing the line. Mexico's Communications and Transport Ministry said that FIT would begin providing local service today , and would grant operating rights to other railway operators. The ministry said its action was an interim measure until the government completes repairs to a stretch of the rails damaged in 2005 by Hurricane Stan.
Auckland revives light rail plansAuckland, New Zealand Mayor Dick Hubbard unveiled a waterfront master plan Wednesday that includes light rail along Quay Street, possibly extending up Queen Street to Karangahape Road. The proposal comes three years after the defeated an LRT proposal by then-Mayor Christine Fletcher to run service up Queen Street. As an interim measure, the city council seeks to add bus lanes to Queen Street, leaving only one lane open to automobiles. The LRT proposal apparently surprised the Auckland Regional Council, the transport-planning agency which has advanced a regional heavy rail loop.
Total rail volume up, ending a long slideU.S. railroad traffic added up to 35.4 billion ton-miles in the week ended Aug. 4, up 2.3% from the same week last year. The increase ended a long weekly downturn. Carload freight for the latest week was 1.2% higher than last year, although intermodal volume was down 1.6%. Eight of 19 carload commodity groups showed increases, including coke, up 24.3%, motor vehicles, up 15.4%, and petroleum products, up 11.3%. On Canadian railroads, the week ended Aug. 4 saw carload traffic drop 2.9% from last year and intermodal volume rise 8.1%. Kansas City Southern de Mexico reported carload traffic down 1.4$ and intermodal volume up 35.2%.
Walter Rich, Delaware Otsego CEO, dies at 61Walter Rich, president of the Delaware Otsego Corp. since 1971 and CEO of subsidiary New York, Susquehanna & Western Railway since 1980, died today. He was 61. Starting with a 2 1/2-mile tourist train operation in upstate New York, Rich helped the D&O evolve into a 550-mile regional railroad covering New York, New Jersey, and Pensylvania. Rich led the effort to save the bankrupt Delaware & Hudson Railway in 1988, with NYS&W operating the line for 18 months under emergency orders from the Interstate Commerce Commission until the property was sold to Canadian Pacific. In 1999 Rich was named chairman of the American Short Line and Regional Railroad Association, serving in that position until 2004.
Spitzer demands MTA produce flood planNew York Gov. Eliot Spitzer has given the Metropolitan Transportation Authority (MTA) 30 days to produce an updated plan to better address severe flooding problems, such as those which disrupted New York City subway service and Long Island Rail Road operations Wednesday. Spitzer and others charge that MTA faced a similar disruption, under similar circumstances, on Sept. 8, 2004, with sudden water surges overwhelming drainage and pumping systems within the subway system. Critics say MTA's response following the 2004 incident was insufficient, has failed to perform regular maintenance of pipes and valves that drain water, and also has failed to employ crews efficiently to deal with potential problems expeditiously. Beyond infrastructure issues, system riders yesterday lamented the lack of information provided by MTA employees, as well as an inability to access information through MTA's website. MTA chief executive Eliot Sander said the agency would enact changes to better deal with future incidents.
Trinity expands Railcar Leasing financing facilityIn a move that will give it access to expanded and more favorable financing, Trinity Industries announced that Trinity Industries Leasing Co. (TILC) has increased its non-recourse warehouse facility from $375 million to $400 million and extended the availability period to August 2009. "This facility has supported the growth of our internal lease fleet and will continue to provide TILC with the capital needed to sustain that growth," said William A. McWhirter, Trinity's senior vice president and chief financial officer. "The new terms give us additional flexibility, which enhances our ability to offer highly attractive financing to our customers."
Higher rail sales boost Koppers profitsKoppers Holdings, Inc. reported today that higher sales to railroads helped push its earnings for the qurater ended June 20 to $22.3 million from $5 million in the corresponding period last year. Other factors were higher chemical pricing and the integration of coal tar assets acquired from Reilly Industries, Inc. in a transaction last year. Koppers President and CEO Walter W. Turner said that "based on second quarter results and the outlook for the remainder of 2007," the company now expects sales for the year to increase in the 13% to 16% range, up from earlier guidance of 10% to 13%.
State legislatures conference rejects rail reregulationThe National Conference of State Legislatures (NCSL), meeting in Boston on Wednesday, defeated a resolution calling for the reregulation of the rail industry. NCSL, a bipartisan group including legislators from all 50 states, rejected the proposal which originated in its Committee on Agriculture, Environment and Energy during a Spring Policy Forum. Association of American Railroads President Edward R. Hamberger praised NCSL's vote, saying it "demonstrated leadership and vision in resisting an attempt to turn back the clock on the impressive gains achieved since the passage of the Staggers Act in 1980."
$115 millon contract awarded for Santa Fe commuter lineA joint venture of Twin Mountain Construction II Co. of Albuquerque, N.M., and Herzog Cos. of St. Joseph, Mo., has been awarded a $115 million contract to build 18 miles of new track from a point near La Bajada northward to the edge of Santa Fe as part of a plan to extend Rail Runner Express commuter service to the New Mexico capital. Extending the line into downtown Santa Fe will be part of another contract. Herzog has an arrangement with the state to operate and maintain the commuter service, which now operates between Belen and Bernalillo.
UTU members ratify SMART mergerThe United Transportation Union is now set to merge next Jan. 1 with the Sheet Metal Workers International Association (SMWIA), creating the 230,000 member International Association of Sheet Metal, Air, Rail and Transportation (SMART) Workers. UTU announced today that 71% of its voting members had approved the merger, which was approved earlier by the Sheet Metal Workers. The ratification was announced amid new charges by the UTU that a rival union, the Brotherhood of Locomotive Engineers and Trainmen, was negotiating contracts to "grab" jobs belonging to UTU members. The SMART affiliation, said UTU International President Paul Thompson, "will bolster substantially the UTU's strengths in fighting off attempts by other organizations and carriers to take our jobs."
Transport Canada tightens oversight of CNTransport Canada has served Canadian National with six conditions related to the collision and derailment of two trains last Saturday on track in British Columbia. The Prince George Citizen reports the items include: limiting the maximum number of cars to 30 loads (or 40 cars with 10 empties); visually confirming track clearance, effectively providing slow orders; stationing a rail employee on the head end of equipment when the view ahead is unclear from switching activity; ensuring a "sufficient number of cars handled must have operative air brakes which will permit control of the movement"; and retaining various data related to braking, inspection, and repairs for 30 days for review. CN reported said it already is complying with Transport Canada's list.
Buffett boosts BNSF stakeWarren Buffett's Berkshire Hathaway Inc. has increased its stake in Burlington Northern Santa Fe Corp. to 11.5 percent, or about 40.6 million shares, as disclosed in a regulatory filing on Tuesday, Reuters reports. Berkshire purchased 1.62 million shares of BNSF between August 3 and August 7, BNSF said in a filing with the Securities and Exchange Commission. Bershire Hathaway had held roughly 39 million shares, or an 11 percent stake, prior to the most recent purchase.
Bay Area plans "Grand Central of the West"A joint venture of Twin Mountain Construction II Co. of Albuquerque, N.M., and Herzog Cos. of St. Joseph, Mo., has been awarded a $115 million contract to build 18 miles of new track from a point near La Bajada northward to the edge of Santa Fe as part of a plan to extend Rail Runner Express commuter service to the New Mexico capital. Extending the line into downtown Santa Fe will be part of another contract. Herzog has an arrangement with the state to operate and maintain the commuter service, which now operates between Belen and Bernalillo.
EPA certifies MTU low-emission engineMTU Detroit Diesel, Inc. has received certification from the U.S. Environmental Protection Agency for its low-emission 12V4000 R33 high speed rail engine. MTU says the engine meets EPA's Tier 2 emission standard (40 CFR 92), provides 2,250 horsepower at 1,800 rpm and has the latest in common rail fuel injection systems, advanced turbocharging, and Advanced Diesel Engine Controls (ADEC) electronics for cleaner, more efficient operations. "This is the first time EPA has certified to Tier 2 emission limits a stand-alone, high-speed engine for use in locomotive applications," said Doug Berry, MTU Detroit Diesel Rail Sales Manager. "Certifying the engine itself, instead of the locomotive as a whole, provides OEMs and operators the flexibility to use this engine in any locomotive application, whether for re-powers or new construction."
Norfolk Southern, BLET reach accordNorfolk Southern Railway Co. and the Brotherhood of Locomotive Engineers and Trainmen have reached a tentative new agreement, extending through 2014, that continues to link engineers' compensation to company performance. The agreement, subject to employee ratification, covers about 5,100 locomotive engineers; it provides an annual bonus opportunity based on the same performance criteria used to determine management bonuses. The BLET has participated in Norfolk Southern's bonus program since 1996. The agreement also covers general wage increases, improved incentive pay for weekend and holiday work, increased 401(k) matching contributions, and improvements to vacation arrangements that are coupled with new qualifying requirements that will improve engineers' availability for work. NS also notes work rule changes defining engineers's job responsibilities and rules that will permit more efficient operations.
Station stop announcements mandatory, Ontario saysToronto Transit Commission bus and streetcar operators must announce each stop on a given service by month's end, the Ontario Human Rights Tribunal has declared. Two years ago the tribunal applied the same mandate to TTC's subway operation. The case is seen as a likely precedent for transit systems across Canada. TTC Chairman Adam Giambrone said the agency already was advancing a C$6.6 million project on all Toronto surface routes, to be completed by year's end, that would comply with the order. Canadian public transit properties have lagged behind their U.S. counterparts in installing automatic announcement systems, one Vancouver-based consumer advocate says.
Advanced Eurostar ticket sales doubleEurostar Group Ltd. has had more than 110,000 passengers reserve travel between Nov. 14 and Christmas on High Speed 1, when high speed service begins serving London's St Pancras International Station. Web site Transport Briefing says demand is more than double that of last year's comparable period, generasted by both business travelers and leisure passengers wanting to travel on High Speed 1, Britain's first rail service capable of 186 mph speeds common on the Continent. Tickets for High Speed 1 went on sale July 24; "first-day" train service to Paris and Brussels are sold out. High Speed 1 will offer non-stop London-Paris service of 2 hours, 15 minutes; London-Brussels runs will operate on a schedule of 1 hour, 51 minutes.
West Coast woes dog CNCanadian National Railway reported Sunday it had extinguished a fire in Prince George, British Columbia, resulting from a collision and derailment of two trains on Saturday, and that track along the Fraser River was to be repaired shortly. CN said it would investigate a Global TV report claiming that, prior to the accident, crews were told to increase train lengths significantly. The mishap follows two federal and three provincial charges filed against CN Thursday relating to the Aug. 5, 2005 Cheakamus River canyon accident that spilled caustic soda into the river, killing an estimated 500,000 fish. The charges stem from a Canadian Transport Safety Board report in July citing human error, poor supervision, and long train lengths for the 2005 incident, which occurred on right-of-way acquired by CN in its purchase of BC Rail from the provincial government in 2004.
AAR's Hamberger rebuffs Midwest shipper gripesMidwest shippers, and their representatives, who blame railroads for increased costs are "flat wrong" on numerous counts, AAR President Edward R. Hamberger wrote in an Aug. 4 opinion appearing in the Kansas City Star. "Rail coal rates in 2005 were more than 30 percent less than they were in 1981 ... [e]lectric rates over than same period went up 38 percent," Hamberger said. "It's not just coal rates that have gone down either. So have rates for grain, automotive products, chemicals, lumber and just about everything else that moves by rail." Hamberger added that almost $400 billion in rail infrastructure improvements were made during the same time period, proving that railroad deregulation has succeeded, not failed as critics suggest.
SAFETEA-LU extension could benefit maglevA House bill extending a SAFETEA-LU deadline could bolster U.S. maglev activity, Bond Buyer reports. A July 1 deadline to explore financing alternatives has been set back to Dec. 31, allowing Congress to make a technical corrections to SAFETEA-LU. The Senate is expected to approve the bill. Among other changes, SAFETEA-LU language would be changed so that $90 million for four magnetic levitation rail projects would not be subject to the appropriations process, freeing maglev from competing for funding against other priorities, including highway construction. Of the $90 million, $45 million has been earmarked to build the first phase of a maglev train project between Las Vegas and Anaheim, Calif.
Editorial cites rail to 'save bridges'In an apparent response to the highway bridge collapse last week in Minneapolis, an Aug. 5 editorial in the Albany, Ore., Democrat-Herald newspaper suggests putting more freight traffic on railroads to lessen the stress on roads and bridges. "Many of the highway bridges now rated as insufficient or obsolete are only about 50 years old," writer Hasso Hering says. "Railroad bridges in some cases are more than 100 years old. They can handle the much heavier loads because they were designed and built in an age when they had to support giant steam locomotives." Hering acknowledges that "even if a shift of freight to rail could be accomplished, it would not answer our problem for long. Many railroad trestles and bridges, especially on the short lines, while stil carrying larger loads, also are getting too old and need to be replaced." Overall, the writer notes, "we have to face the fact that much of the infrastrcture supporting our economy is older than its design life."
SPRB loads 78 trains in one day, a recordUnion Pacific reports that the Southern Powder River Basin Joint Line, which it shares with BNSF Railway, achieved a new daily record on July 29 with 78 trains loaded, 42 by UP. UP loaded a total of 1,047 PRB trains in July, the most since January's 1,092. There were 143 missed loading opportunities in July, 108 attributable to the mines, 34 primarily related to bad weather on the UP, and one to utility plants. This was partially offset with 37 extra loadings. In its latest monthly report, UP also noted that the railroad's success in servicing empty trains at North Platte, Neb., added 1.4 cars on each loaded train this year, the equivalent of 145 additional trainloads a year.
Railpower Technologies reports quarterly lossMontreal-based Railpower Technologies Corp. said a C$15 million charge related to the recall of its Green Goat locomotives led to a second-quarter loss of C$33.7 million, compared with a loss of C$15.2 million for the comparable 2006 period. Second-quarter revenue of C$37.3 million increased from the C$2.7 million in the year-ago period. In June, 65 Green Goat locomotives, including six demonstrators, were recalled after a fire occurred in one unit. Railpower estimated the cost of refitting 25 locomotives belonging to its third generation of Green Goats at approximately C$2 million, while preliminary estimates for the Green Goat Generation I and II and Green Kids series could cost C$13 million.
CSX advances Buffalo, N.Y.-area intermodal hubCSX Inc. has targeted $8.5 million revamp Seneca Yard in Lackawanna, N.Y., for intermodal use, the Buffalo News reported. The yard should be operation this fall. CSX plans to run trains between Lackawanna and Elizabeth, N.J., providing more direct on-dock service to and from Elizabethport and avoiding stops at intermediate points. "It's going to significantly increase our presence in Buffalo," CSX spokesman Bob Sullivan said.
Will GDP growth beef up traffic? Carload traffic on U.S. railroads in July was down 3.0% from July 2006, and intermodal volume was off 2.6%, the Association of American Railroads reported today. But a new report on national economic growth provided a glimmer of hope for a long-awaited recovery. Housing and coal have been among the weakest sectors in the commodity picture, the AAR noted, and each may be in for a change. "The most recent data from the Department of Energy show that coal stockpiles at electric utilities are higher than they've been for years," said Craig Rockey, said Craig Rockey, AAR's vice president of policy and economics. "Given high stockpile levels, some problems at mines, and flooding early in the month, it is not surprising that rail coal traffic was down in July. Despite a lagging construction sector, last week the Bureau of Economic Analysis announced that preliminary GDP growth in the second quarter of 2007 was 3.4%, up from 0.6% in the first quarter. This is a hopeful signal of a return to more solid growth and a corresponding increase in demand for rail service."
Cubic's sales and earnings riseImproved results from its Transportation Systems segment, which makes automatic fare collection systems, helped Cubic Corp. earn net income of $11.23 million in its third fiscal quarter, an 87% increase over earnings in the prior-year period. This was accomplished on sales that increased 9% to $233.7 million. For the nine months ended June 30, sales increased 8% to $866. million from the comparable period last year, and net income grew to $30.7 million from last years $17.2 million.
Portec rides the Rail Renaissance trainIn an announcement reporting increased sales and earnings for the year so far, Portec Rail Products President and CEO Richard Jarosinski cited "the overall health of our customer base" as the reason for optimism. "We are well positioned to ride what some people are calling a Rail Renaissance period," said Jarosinski. "Our backlog is at record levels, reflecting strong order bookings and our product development efforts are paying dividends." Portec reported a 24% increase in net income in the second quarter ended June 30, to $1.887 million, and a 21% increase in earnings for his year's first six months, to $3.092 million. These results included the establishment of a $760,000 pre-tax warranty reserve for one of its product lines. "We believe we have identified the scope of the deficiencies which have developed within our insulated rail joints and are committed to addressing the issue promptly," Jarosinski said.
Trinity Industries earnings rise in second quarterTrinity Industries, Inc. Wednesday reported second-quarter earnings from continuing operations of $69.0 million, up from $64.3 million in the year-ago quarter. Earnings were enhanced by an initial sale of railcars from Trinity's leasing portfolio to TRIP Rail Holdings LLC. Net income for the second quarter of 2007 was $68.7 million compared with $85.8 million for the same quarter a year ago. Revenue for the second quarter of 2007 was $892.6 million, up from $849.1 million for the year-ago period.
FRA unveils updated passenger car safety standardsRail passengers and train crewmembers would be better protected under proposed federal safety standards enhancing structural component strength, Federal Railroad Administrator Joseph H. Boardman announced today in a statement. The proposal targets cab cars and multiple-unit (MU) locomotives which provide both passenger seating and crew space for train operations in the same car. Forward corner posts would have to withstand 300,000 pounds of force before failing, doubling the current federal requirement. Forward corner and collision posts would have to satisfy new federal standards to absorb a minimum level of energy and bend a specific distance without breaking. The new standards would apply to cab cars and MU locomotives ordered beginning in October 2009, FRA said.
Genesee & Wyoming earnings fall sharplyGenesee & Wyoming Inc. said today that its second-quarter earnings plummeted 91%, to $10.7 million, mostly due to a hefty gain in the comparable 2006 quarter of $117.7 million. Fallout from the company's hurricane-damaged Mexican business contributed to the decline. Earnings for the year-ago period include $2.41 per share in gains related to the sale of the company's Western Australian operations. Revenue increased to $132.1 million, up 16% from $113.6 million in the prior-year period. The regional railroad's operating ratio for the second quarter was The 86.8%, compared with 85.6% in the second quarter of 2006.
CP seeks to sell Windsor Station Canadian Pacific Railway plans to market Windsor Station, Montreal, and associated real estate assets through a Request For Proposals process. CP is advancing the sale to maximize returns to the company and reduce ongoing operating costs. Included in the RFP package are the Windsor Station office building and courtyard, the Windsor Tower Parcel (former Accounting Building), and CP's interest in the Bell Centre parking garage. CP recently has been approached by private-equity interests, led by Toronto-based Brookfield Asset Management
Inc., seeking to acquire the company, a move CP has rebuffed.