October 2003
China order biggest ever for Harsco A $68 million, 11-machine order from China’s Ministry of Railways will be produced by the Harsco Corp.’s Track Technologies division over the next 36 months. The division is based in South Carolina. Harsco says this contract is its biggest ever for track maintenance equipment. It includes mainline and switch and crossing rail grinders as well as the Stoneblower ballast machine. Harsco, which has corporate headquarters in Harrisburg, Pa., formed Track Technologies after acquiring Pandrol Jackson in 1999.
Cubic wins disputed MARTA contractThe board of directors of the Metropolitan Atlanta Transit Authority voted 14 to 0 on Oct. 27 to award a $104 million contract to Cubic Transportation Systems for a new fare collection system. The board acted despite a legal challenge from Thales, the losing bidder. Thales claimed MARTA staff failed to follow the agency’s own procedures. Three weeks ago, the contract award to Cubic fell two votes short. Two weeks ago, a Superior Court judge lifted a preliminary injunction won by Thales. Approval of the contract, with one abstention, came three weeks ahead of a scheduled trial on the legal challenge.
RailAmerica sees good "acquisition environment"The short line/regional holding company RailAmerica, which is selling its unprofitable Freight Australia railroad, sees opportunities for expansion at home.
"The acquisition environment in North America is stronger than it has been in recent years with several Class I railroads and private rail owners looking to divest branch/short line railroad properties," said RailAmerica Chairman, President, and CEO Gary O. Marino. "We believe the anticipated sale of our international railroads positions RailAmerica to take advantage of strategic opportunities as they become available in North America."
Marino made this statement as RailAmerica reported third quarter earnings of $7.1 million from continuing operations, up from $6.2 million in the corresponding period last year. Revenues rose 7.5% to $91.2 million. Higher fuel and health insurance costs drove the operating ratio to 75.4% in the 2003 quarter from 74.5% last year.
CPR income rises on heavier volumeCanadian Pacific reported a 5% increase in third quarter freight volume and a 45% increase in net income, to C$95 million, compared with the same period in 2002. But a weakening of the U.S. dollar led to a decline in operating revenues--to C$904 million from C$917 million a year earlier. Operating income dropped 7%, and the operating ratio rose to 76.9% from 75.6%.
In reviewing the company’s third quarter performance, CPR President and CEO Rob Ritchie said: "We made a decision to accelerate our track work program in western Canada in anticipation of a strong fourth quarter. We also brought on 35 additional high-capacity locomotives in September, four months ahead of schedule, and trained more crews for our western service areas. In addition, we will by mid-November have expanded our grain car fleet with about 2,800 cars and by year-end will have changed out a large part of our intermodal car fleet for 2,000 more productive and standardized double-stack cars."
KCSR improves operating ratioKansas City Southern Railway (KSCR) posted a 5% increase in third quarter operating income and an operating ratio of 87.5% vs.
94.3% in the 2002 quarter. At the parent company, Kansas City Southern (KCS), the story was different. KCS reported third quarter net income of $4.3 million, two cents a share, down from last year’s $10.6 million, 17 cents. KCS said that while consolidated revenues increased to $146.9 million from $138.9 million, higher costs at Grupo TFM reduced its equity earnings from the Mexican company.
Norfolk Southern intermodal sets recordIntermodal revenues at Norfolk Southern reached a third quarter record of $315 million, up $5 million from the same quarter last year. The company’s net income in the quarter rose to $137 million, 35 cents per diluted share, slightly above Wall Street expectations. Third quarter net in 2002 was $126 million, 32 cents a share. Operating revenues, $1.6 billion, were even with last year’s quarter, and the operating ratio was unchanged at 80.5%. Coal revenues this year rose slightly to $372 million; general merchandise revenues declined 1% to $911 million.
Former STB Chair receives "Person of the Year" AwardLinda Morgan, former chairman of the Surface Transportation Board (1995-2002), has been named 2003 Person of the Year by the Logistics, Transportation, and Supply Chain Management Society and the Supply Chain Club of the University of Maryland's Robert H. Smith School of Business. She is the first woman to receive the annual award.
"Linda Morgan has played a key role in developing and implementing the transportation policies that drive today's logistics, transportation, and supply chain management industry," said William DeWitt, teaching professor of logistics, transportation, and supply chain management at the Robert H. Smith School of Business. "We are pleased to honor her leadership and industry contributions with this award."
Currently, Morgan is a partner at the Covington & Burling law firm, where she leads the Transportation Practice Group. Prior to her STB service, she worked for 15 years as counsel with the Senate Committee on Commerce, Science, and Transportation, including seven years as general counsel.
Past award recipients include Michael J. Ward, chairman, president, and CEO of CSX Corp.; Don Schneider, president of Schneider National Inc.; Herb Johnson, past president of the Council of Logistics Management; and Edward Emmett, president of the National Industrial Transportation League.
New York MTA projects big deficitsThe New York Metropolitan Transportation Authority says it expects to maintain a balanced budget in 2004 but is projecting that rising debt-service costs will produce an $840 million operating deficit in 2005, rising to $1.45 billion in 2007. In unveiling MTA’s first four-year financial plan, Chairman Peter Kalikow said "our strategy is not to touch the $2 base fare through 2007." City, state, and federal sources will be asked to find funds to bridge the budget gap. After putting through a controversial 33% increase in its base fare last spring, the agency was accused by critics of misleading the public about the state of its finances. MTA promised to keep the public more fully informed, and has honored that pledge with monthly financial and operating reports on subway, commuter rail, and bus operations, and now with its four-year plan.
Global Railway revenues growCalgary-based Global Railway Industries Ltd. (GBI) announced that its third-quarter revenues grew 134% to $C8.92 million. GBI said the quarterly growth was driven by a 22% increase in revenues from older subsidiaries Rafna Industries, Bach Simpson, and Prime Steel, plus revenues related to its acquisition last May of G&B Specialties.
WMATA says it needs extra $1.5 billionCiting the pressure of growing ridership on an aging infrastructure, the Washington Metropolitan Area Transit Authority says it needs $1.5 billion more than has already been committed over the next six years "to protect and secure the $9.4 billion it took to build the Metrorail system." Metro CEO Richard A. White said this would bring the six-year program to $515 million annually for basic capital programs.
Bombardier wins monorail extension contract Transit Systems Development LLC has awarded a $336-million design-build-equip contract to a Bombardier Transportation-Granite Construction consortium for a 2.25-mile extension to the 4-mile Las Vegas resort Corridor Monorail that the consortium is now building. Bombardier’s share of the contract is $136 million. An additional operations/maintenance contract awarded to Bombardier is valued at $87 million.
Florida selects JetTrain with Disney World stopFlorida has picked Bombardier’s 150-mph JetTrain--"game-changing technology," in the words of the manufacturer--for the Tampa-Orlando first phase of a planned high speed rail network. The Florida High Speed Rail Authority announced selection of the Fluor-Bombardier team to design, build, operate, maintain, and finance the line following a board meeting on Oct. 27. The vote was 6-2. By a 7-1 vote, the authority also decided that the line would run directly to Walt Disney World from the Orlando International Airport. This bypasses the Orange County Convention Center, which has been the subject of some controversy. The Disney World stop reportedly could send more than two million passengers a year to the new train service.
The future of the high speed program remains uncertain. Claiming that its cost would be excessive, Gov. Jeb Bush is among those who strongly oppose the plan, which voters approved in a constitutional amendment in 2000.
Bush picks CSX’s Havens for Treasury postAnother CSX officer appears to be headed to the U.S. Treasury Department. President George W. Bush announced Oct. 27 that he would nominate Arnold I. Havens, CSX senior vice president for government affairs, to become general counsel at the department. Earlier this year, the Senate confirmed former CSX Corp. Chairman and CEO John Snow as Treasury Secretary. Havens worked at the George H.W. Bush White House as special assistant to the president for legislative affairs.
VIA Rail's new funding packageTransport Canada Minister David Collenette has unveiled a new $692.5 million funding package for VIA Rail to "revitalize intercity passenger rail services in Canada."
The funds will be allocated over five years, beginning in FY 2004/2005, for locomotive acquisition, fleet renewal, strategic infrastructure improvements (to eliminate bottleneck in the Quebec City-Windsor corridor), and station refurbishment. Completion of VIA Rail's fleet renewal will also contribute to "improving the company's environmental performance through increased fuel efficiency and reduced greenhouse gas emissions."
In April 2000, the Canadian government confirmed VIA Rail's base subsidy of $171 million per year and provided an additional $401.9 million over five years to address capital rolling stock, infrastructure, and health and safety needs. The funding has allowed VIA Rail to purchase 139 new Renaissance cars and 21 new high speed, General Electric Genesis locomotives; upgrade numerous passenger stations and build four new ones (in London, Ontario; Campbellton, New Brunswick; Prince Rupert, B.C.; and the Ottawa suburb of Barrhaven); install waste retention tanks on the Quebec City-Windsor fleet (the remainder of the fleet will have such systems in place over the next two years); and refurbish diesel cars used in regional and remote service in northern Ontario and on Vancouver Island.
CN and UP earnings top analysts’ forecastsIn a generally tough third quarter, Canadian National and Union Pacific were among railroads that were able to post earnings exceeding Wall Street’s consensus forecasts.
Despite reduced revenues and “operational challenges,” CN through cost-cutting maintained its third-quarter operating ratio at an essentially flat 67.9%, the industry’s best. CN’s net income rose 10% to $C294 million compared with the same period last year. That came out to $C1.53 a share, 20 cents higher than Wall Street expectations. Revenues in this year’s quarter were down 6% to $C1.4 billion. A strong Canadian dollar reduced revenues by $C100 million though it helped expenses by $C60 million.
Union Pacific’s third quarter net income was $317 million, or $1.21 per share, topping analysts’ forecasts by six cents. Last year’s per-share profit of $1.63 included 44 cents from a property sale and tax settlements. UP reported record revenues of $3 billion for this year’s quarter, but operating income from continuing operations dropped to $592 million from $619 million in the 2002 period. A $50 million increase in fuel expenses and “operational challenges” helped drive the operating ratio to 80.0% from 78.3% a year earlier.
Burlington Northern and Santa Fe posted a third-quarter operating ratio of 81.8% vs. 81.6% in the 2002 quarter. Freight revenues rose 4% to a record $2.37 billion, including a $22 million increase in fuel charges compared with the prior year. Operating expenses were also up 4%, primarily because of a $45 million, or 21%, increase in fuel prices. Net income rose to $203 million this year from $192 million in last year’s third quarter. Per-share earnings of 55 cents were exactly in line with the estimate of analysts.
At CSX Corp., a number of special charges helped produce a net loss of $103 million. Excluding those items, CSX earned $109 million or 51 cents a share, two cents lower than Wall Street’s estimate and down from $127 million or 60 cents a share in the same quarter last year. Rail and intermodal revenues increased 2% to $1.8 billion, but “operating inefficiencies continued to keep our expenses too high,” said Chairman and CEO Michael J. Ward. “As we move forward, a more disciplined approach is beginning to improve the fluidity of our network. I am confident that as we improve our service, we will drive productivity significantly and deliver more to the bottom line.”
KCS wins status quo injunctionKansas City Southern announced Oct. 22 that the Delaware Court of Chancery had stated its intention to grant an injunction preserving the status quo pending resolution of KCS’s dispute with Grupo TMM of Mexico over the U.S. railroad’s proposed purchase of the Mexican company’s interest in Mexico’s largest railroad, TFM. Under an agreement reached last spring but later rejected by Grupo TMM’s shareholders, TFM would become part of a KCC-controlled NAFTA Railway that would also include the Texas Mexican. Under terms set forth in the acquisition agreement, a 60-day informal negotiation period to resolve the dispute began Aug. 29, to be followed by arbitration.
Aggregates add up for FECFlorida East Coast Railway’s carload revenues grew 6.8% in the third quarter, driven by a 17.6% increase in aggregate revenues that helped offset a 19.8% decline in automotive business. Intermodal revenues were up 3.2% from the same period a year ago. Total revenues were $44.7 million, 11.9% higher than in the 2002 quarter. This year’s figure included $2.7 million from drayage operations managed by the railway following discontinuance of the Florida East Coast Industries trucking division late in 2002. FEC said its operating ratio--75.9% this year vs. 75.6% in the prior year quarter--was impacted by the addition of the lower-margin drayage operations.
Freight-car orders declineConcern about "the quantity and quality" of castings components may account for a recent cooling of the freight car market, says the Railway Supply Institute’s Tom Simpson. Orders were placed in the third quarter for 6,726 new cars, compared with 16,693 in the second quarter and 11,767 in the first quarter. Simpson believes new orders could reach nearly 40,000 and new freight car deliveries may reach almost 30,000 by the end of the year, if supply constraints abate.
CN acquiring two Class II U.S. railroadsCN announced Oct. 20 that it had reached an agreement with The Blackstone Group to buy Great Lakes Transportation LLC for $380 million. The transaction will bring to the Canadian railroad two Class II U.S. rail carriers--the 212-mile Duluth, Missabe & Iron Range and the 355-mile Bessemer & Lake Erie--as well as the Pittsburgh & Conneaut Dock Co., a Class III switching railroad, and an eight-vessel Great Lakes shipping fleet.
CN said the acquisitions will improve its NAFTA rail link between Western Canada and Chicago and expand its role in hauling bulk commodities for the U.S. steel industry. DM&IR is a common carrier of pelletized iron ore. B&LE primarily hauls coal, iron ore, and limestone between the Lake Erie port of Conneaut, Ohio, and Pittsburgh-area steel mills. P&C Dock performs ship-to-rail and rail-to-ship transfers for the B&LE at three docks in Conneaut.
CN President & CEO E. Hunter Harrison expects the transaction to "drive new efficiencies in our network, improve customer service, preserve competition, and expand our participation in the steel industry's bulk-materials supply chain."
RSI announces ’04 officersThe Railway Supply Institute has announced the following as officers of its board of directors for 2004: John Gable, president, Gable Enterprises is chairman; William P. O’Donnell, vice president-marketing, sales and product development, ASF Keystone North America, is vice chairman; Richard A. Mathes, chairman and CEO, Standard Car Truck Company, is secretary/treasurer.
James J. Unger, vice chairman, ACF Industries, and Marshall Beck, senior vice president-marketing and sales, New York Air Brake Corporation, become RSI board members. George Kline, president, Safetran Systems and current chairman of the RSI board remains on the board in his capacity as immediate past chairman. Martin Graham, president, Trinity Rail Operations, Trinity Rail Group LLC, chose not to stand for reelection.
Amtrak ridership at record high in FY ’03In the fiscal year that ended Sept. 30, Amtrak carried 24,028,119 passengers, the highest number in its 31-year history. FY ’03 ridership topped the previous record of 23.5 million set in 2001 and was 2.7% above last year’s 23.4 million.
Amtrak said long-distance trains were strong performers, with ridership up 3.8% in the Eastern Region and 6.6% in the Western Region. Ridership was up 20% on the Texas Eagle, 15.2% on the Silver Meteor, and 14.5% on the City of New Orleans.
Shorter distance routes in the West posted a ridership gain of 11.7%, led by Southern California’s Pacific Surfliner, up 26.3% to 2,18 million. In the East, shorter distance ridership was down 1.6%. Acela/Metroliner patronage dropped 8.6% to 2.93 million.
Ridership on regional trains throughout the country rose 3.7%, to 5.97 million.
Ned Breathitt, former governor and railroader, diesEdward T. "Ned" Breathitt, 78, former Kentucky governor and long-time Norfolk Southern Corp. public affairs chief, died Oct. 14.
"Ned's contributions to civil rights, government, and railroading provide a lasting legacy," said David R. Goode, NS chairman, president, and CEO. "The nation has lost a leader, and Norfolk Southern has lost a trusted advisor and friend."
Breathitt joined NS in 1972 as vice president, public affairs and retired in 1992 as senior vice president, public affairs. He was a key figure in NS's initial efforts to acquire Conrail in the mid-1980s.
Montreal will host Research CongressAn international organizing committee has selected Montreal as the host city for the 2006 World Congress on Railway Research. The choice was announced at the conclusion of the 2003 Congress in Edinburgh Oct. 1. Co-chairs of the organizing committee for the Montreal sessions are Mike Lowenger, vice president of operations and regulatory affairs for the Railway Association of Canada, and Jim Lundgren, assistant vice president of the Transportation Technology Center, Inc., a subsidiary of the Association of American Railroads. Also represented on the international committee are the U.K., France, Germany, Italy, and Japan. Around 700 people attended the Edinburgh sessions. Paris, Colorado Springs, Florence, Tokyo, and Cologne have also hosted past conferences.
Smaller roads get Pennsylvania aidThe Pennsylvania Department of Transportation has announced grants totaling $10 million for improvements to short line and regional railroads. The recipients are Buffalo & Pittsburgh, $2.83 million; Delaware & Hudson, $1.76 million; Keystone Railroad (Philadelphia, Bethlehem & New England), $1.3 million; RJ Corman Railroad, $1 million; Bessemer & Lake Erie, $750,000; Reading, Blue Mountain & Northern, $750,000; the Philadelphia Girard Point rail facility, $533,125; SEDA-COG Joint Rail Authority, $438,000; Livonia, Avon & Lakeville, $340,000; and Luzerne & Susquehanna, $300,000.
Crossing and trespasser fatalities continue to dropThe Federal Railroad Administration’s latest accident report, released Oct. 15, shows a continuing strong decline in grade crossing and trespasser fatalities. In this year’s first seven months, crossing fatalities dropped 15.2% to 178 compared to the same period last year. Trespasser fatalities were down 17.1% to 267. There were 1,637 train accidents in this year’s January-July period, up 6.2% from the corresponding period last year, but total reported casualties were down 30.45% to 5,374 (463 fatal) from 7,737 (567 fatal) in 2002. The employee casualty rate declined 10.6% to 2.61 per 200,000 manhours. Statistics for both 2002 and 2003 are still preliminary and subject to modification.
Improved freight car market spurs Wabtec earnings growthWabtec Corp. has reported improved earnings for third-quarter 2003, expects to improve on that mark for the fourth quarter, and is predicting continued growth for 2004, with freight car-related orders accounting for most of that growth. At the same time, it announced that its Transit Group received an order potentially worth $150 million for components for MTA New York City Transit R160 cars, though earnings from that contract won’t be seen until late 2005. Until then, the company expects transit-related sales to remain "essentially flat."
In this year’s third quarter, Wabtec had earnings per diluted share of 13 cents, compared to 9 cents in the year-ago quarter, primarily due to lower interest expense. Overall sales increased 4%, with Freight Group sales increasing 16%, mainly from increased orders for freight car components and commuter locomotives. Sales in the Transit Group decreased 21%, mainly due to lower aftermarket sales. The company’s gross margin was 26%, compared to 26.8% in the prior-year quarter, primarily due to what Wabtec says is "normal seasonality and the unfavorable effects of foreign exchange rates on the company’s Canadian operations." Engineering expenses decreased, as Wabtec was able to capitalize design engineering costs associated with NYCT orders. During the quarter, Wabtec generated cash from operations of $9 million and EBITDA of $18 million. On Sept. 30, 2003, the company had debt, net of cash, of $164 million (42% of total capital), compared to $194 million (50% of total capital) on the same 2002 date.
For the fourth quarter, Wabtec said it to expects earnings per diluted share from continuing operations of between 13 cents and 16 cents, based on its current backlog and "the expected timing of new business."
For 2004, "We are refining our operating plan and expect to forecast continued earnings growth, based on preliminary market indications," said President and CEO Gregory T.H. Davies "In the Freight Group, for example, we expect industry freight car deliveries to be as much as 20% higher than 2003, which should finish around 30,000 units. And we’re forecasting even stronger growth in the new-locomotive market, with deliveries expected to exceed 1,000 next year, compared to about 700 in 2003. Our aftermarket freight business will depend on general economic conditions and on freight rail traffic, which continues to be flat."
As for the transit market, Wabtec says it expects it "to be essentially flat in 2004, with very modest growth in the original equipment segment and continued weakness in the aftermarket due to local funding issues. Looking further into the future, we expect solid growth in the transit business in late 2005 and beyond, as we ramp up component production for New York City’s [R160] subway car order." WABCO Transit has signed a contract to supply brakes, couplers and current collectors for the R160 cars, which will be built by Alstom and Kawasaki. The contract is worth about $60 million for the base order of 660 cars. If NYCT exercises options for an additional 1,040 cars, the total value of the order would be about $150 million. Design work on the components has begun, with prototypes to be delivered in 2004. In addition, Wabtec is negotiating to supply door assemblies for the cars.
Alliance castings foundry will reopenThe castings foundry at Alliance, Ohio, that closed in 2002 for lack of business will go back into production in December as a wholly owned subsidiary of Ohio Castings Co., LLC.
Ohio Castings is a joint venture of The Greenbrier Companies, ACF Industries Holding Corp., and ASF-Keystone. In an agreement announced Oct. 13, Ohio Castings is acquiring the foundry from ASF. It will operate the facility as Alliance Castings Company, LLC. Alliance will manufacture side frames and bolsters for ASF-Keystone, which will market them to the industry, including ACF and Greenbrier.
Earlier this year, Ohio Castings acquired Meridian Rail’s Cicero, Ill., castings plant and now operates it as Chicago Castings Co., LLC.
William A. Furman, president and CEO of Greenbrier, commented: "This acquisition brings some badly needed structural stability to our industry. The castings supply base was literally facing collapse a year ago and the consequences of that for the railcar industry would have been disastrous."
With the reopening of Alliance, there will be three suppliers of freight car castings in the U.S. The third is Columbus Steel Castings, formerly Buckeye, which went into bankruptcy late last year.
Pennsylvania announces transit grantsPennsylvania Governor Edward G. Rendell on Oct. 10 announced the release of $125 million in capital budget funding for the state’s rail and bus transit agencies. Recipients include the Southeastern Pennsylvania Transportation Authority, $83.6 million; the Port Authority of Allegheny County (Pittsburgh), $29.8 million; and Amtrak’s Keystone Corridor between Philadelphia and Harrisburg, $3 million. Rendell said the state grants will provide the required match for the Pennsylvania systems to obtain nearly $233 million in federal funds.
Bombardier lands Leipzig contractThe transport authority of Leipzig, Germany, has ordered 12 low-floor trams valued at around $45 million from Bombardier Transportation. The contract carries an option for 12 more units.
BART renovation 95% completeBay Area Rapid Transit informed its board of directors on Oct. 9 that a $1.2 billion renovation program is 95% complete. The program’s 150 completed projects include the recent installation of advanced new fare gates that will make it easier to enter and exit the system. Paid for largely by fare box revenues, the comprehensive refurbishing of the system began in 1995.
Timken supplies bearings for Delhi MetroThe Rotem Co., a Hyundai Motor Group affiliate that supplies rail passenger cars, has selected the Timken Co. to furnish roller bearings for the Delhi (India) Metro system. The Delhi Metro Rail Corp. picked Rotem to launch the system. Timken, which is based in Canton, Ohio, said its teams in Korea, India, the U.K., and the U.S. are working on the project.
CSXT installs auto-handling systemCSX Technology and Embarcadero Systems Corp. announced the installation of Embarcadero’s VinIntelligent™ system at the first of 20 inbound vehicle distribution centers on the CSX Transportation network. A statement issued at Alameda, Calif., on Oct. 9 described the system as a "Web-based application that optimizes automobile handling at all points along the supply chain." Embarcadero’s vice president-software solutions, Chuck Schneider, said VinIntelligent™ helps carriers respond to demands of auto manufacturers for "new real-time supply chain integration and visibility."
Chicago riders face fare hikeThe Chicago Transit Authority’s train and bus riders haven’t had a fare increase since 1991, but those good old days may be over. CTA President Frank Kruesi will ask his board to raise the standard one-way fare by 25 cents, to $1.75, effective Jan. 1. Because of a drop in state tax revenues and declining ridership, CTA is facing an $88 million shortfall in a budget of nearly $1 billion.
Carriers and BLE reach tentative accordThe National Railway Labor Conference, bargaining agent for 32 railroads, announced Oct. 9 that it had reached a tentative agreement with the Brotherhood of Locomotive Engineers. NRLC said the carriers have now reached agreements with unions representing nearly 90% of their workers. Details of the BLE agreement won’t be officially announced until union members have ratified it.
RailAmerica celebrates completion of Cross Valley Rail Corridor projectThe completion of RailAmerica's $14.2 million Cross Valley Rail Corridor project will be celebrated today at a dedication ceremony in Visalia, Calif. The project restored and upgraded 45 miles of track between Huron and Visalia to accommodate 286,000-pound cars and help grow industrial development in the area. The Joint Powers Authority--a partnership of the cities of Lemoore, Huron, and Visalia, the San Joaquin Valley Railroad (a RA property), and 11 other funding agencies--led the project.
"By working together, we are bringing significant public and economic benefits to the communities along the corridor," said Thomas Schlosser, RailAmerica's senior vice president, Western Corridor. "In addition to the increased opportunities for industrial development and employment, we are improving the air quality and safety of the streets and highways of these communities by reducing truck traffic."
UP will hire 3,000 operating workers in ‘04With business picking up and operating crew numbers trending down, Union Pacific is in a hiring mood. The railroad confirmed on Oct. 9 that it plans to hire up to 3,000 operating workers in 2004. And that will be on top of 1,000 who will have been hired by year-end ’03 and another 1,000 added earlier this year, for a two-year grand total of 5,000. The reasons cited for crew shortages range from the usual (attrition, family leaves, etc.) to the unusual: 40 UP workers remain on reserve duty in Iraq, down from an original 100.
Also on Oct. 9, the Association of American Railroads reported that carload traffic handled by all U.S. freight railroads in the week ended Oct. 4 was up 1.2% over the same week last year; total volume, measured in revenue ton-miles, was up 3.7%. Intermodal loadings reached their second highest level ever, down just 342 units from the record set the previous week. Compared with last year, intermodal traffic for the week ended Oct. 4 rose 57%, but that was mainly because a year ago a strike halted traffic at West Coast ports.
Inventory drop viewed as turnaround signAn unexpected 0.2% decline in wholesale inventories in August, announced by the Department of Commerce on Oct. 9, is viewed by some economists as a sign of increased industrial production in the fourth quarter. Inventories of such durable goods as autos and auto parts dropped 0.5%. The median forecast of 37 economists surveyed earlier by Bloomberg News was for a 0.1% increase in August inventories.
Germany gives Munich maglev a liftThe German government is reportedly ready to increase its commitment to a Transrapid maglev line in Bavaria from $646 million to $987 million. The 19-mile line is to connect the Munich airport with the city center. It will be built by the Transrapid consortium of ThyssenKrupp AG and Siemens AG at a total cost of $1.9 billion.
France welcomes Bombardier regional trainsMontreal-based Bombardier Transportation formally presented the Autorail Grande Capacite (AGC) regional Express Train (TER) to its French buyers on Oct. 9. On hand for the occasion, and a turn at the controls during test drives, were French National Railways (SNCF) President Louis Gallois and Daniel Percheron, president of the Nord-Pas-de-Calais Region. The train was designed and built at Bombardier’s Crespin plant in the region. Bombardier Transportation President and COO Pierre Lortie said 279 AGC trainsets, capable of 100-mph speeds, will be delivered to 18 French administrative regions starting in early 2004 and continuing through December 2007. The global contract signed with SNCF two years go involves delivery of 500 AGC trains intended for TER services.
STB suspends KCS's control application proceedingThe Surface Transportation Board has suspended the procedural schedule involving Kansas City Southern's request to gain regulatory approval of the control of the Texas Mexican Railway Co., a wholly owned subsidiary of Mexrail, Inc.
"The Board will reinstate the procedural schedule at such time as KCS demonstrates that there is a reasonable likelihood that it will be able to acquire control of Tex Mex," the STB noted in its decision.
"It is a reasonable course for STB to take given the circumstances," said KCS Chairman, President, and CEO Michael R. Haverty of the decision. "It is fair and equitable to KCS and all other interested parties. KCS looks forward to returning to the STB to complete the Tex Mex transaction at a future date."
On May 9, 2003, KCS announced that it had purchased 51% of Mexrail from TFM, S.A. de C.V. and immediately placed the stock into an Independent Voting Trust as it sought regulatory approval to control Tex Mex. On Sept. 30, 2003, TFM exercised its right under the acquisition agreement to repurchase from KCS the 51% of Mexrail stock. KCS will continue to have indirect ownership of Mexrail through its 37% ownership of TFM.
Crew negligence and lack of PTC cited by NTSBThe freight train crew’s "inattentiveness to the signal system" has been blamed for the head-on collision of a Burlington Northern and Santa Fe freight and a regional passenger train at Placentia, Calif., on April 23, 2002. A report released Oct. 7 by the National Transportation Safety Board also said: "Had a fully implemented positive train control system been in place...the system would have intervened to stop the freight train before it could enter the track area occupied by Metrolink 809 and the collision would not have occurred." NTSB has often called for implementation of PTC by the railroads. Industry sources say it would cost several billion dollars to install a still-unperfected technology.
MBTA plans "Fix it First" station rehabThe Massachusetts Bay Transportation Authority on Oct. 7 officially launched a $67 million project to rehabilitate or replace three Red Line stations in the Dorchester community. The Savin Hill and Shawmut stations will be extensively renovated; the Fields Center station will be replaced, with Red Line service elevated above a planned busway. "At a time when Governor Romney is looking to infuse funding into our existing transportation infrastructure through his ‘Fix it First’ initiative, this project is viewed as a priority for the MBTA," said Massachusetts Transportation Secretary Daniel A. Grabausikas.
Intermodal overtakes coal as No. 1 Intermodal traffic on U.S. railroads was up 5.1% (353,646 trailers and containers) in this year’s first nine months compared with the same period last year. Carload traffic trailed last year’s levels by 0.3% (35,769 carloads). In Canada, intermodal traffic in this year’s first three quarters rose 7.3% (109,781 units} from last year, and carload traffic dropped 1.2% (28,662 carloads). "Today, intermodal has overtaken coal as the top source of revenue for major U.S. and Canadian railroads combined, and it is expected to continue to grow steadily in the years ahead," commented Association of American Railroads Vice President Craig F. Rockey.
DM&E's expansion project requires further reviewA federal appeals court vacated and partially remanded the Surface Transportation Board's decision to approve the Dakota, Minnesota and Eastern Railroad's $2 billion expansion project, pending further review.
In January 2002, the STB signed off on DM&E's plan to extend its rail line by 280 miles to Wyoming's Powder River Basin and upgrade 600 miles of existing track in Minnesota and South Dakota. Shortly thereafter, several communities, environmental groups, landowners, and the Mayo Clinic in Rochester, Minn., filed an appeal.
The three-judge panel of the 8th U.S. Circuit Court of Appeals commended the STB on its evaluation of an "enormously complex proposal," but noted that "although we conclude that the Board should prevail on almost all of the issues raised by the petitioners, our ruling on a few issues require us to vacate the Board's decision and to remand for further proceedings not inconsistent with this opinion."
According to the ruling, the STB was "deficient" in its explanation on the combined effect of noise and vibration in houses near the tracks in Rochester and why the mitigation of horn noise was "unwarranted" in this area. The court added that the STB's decision "failed to address the reasonably foreseeable increase in coal consumption and should be addressed on remand, and the Board should incorporate new findings on construction costs in its financial analysis." In addition, "the Board must resolve issues relating to historic preservation before issuing its final decision."
The court concluded that it was "confident" that the STB "will quickly address those few matters that we have identified as requiring a second look, and will come to a well-informed and reasonable conclusion."
While STB Chairman Roger Nober said in a statement that he appreciated the court's "praise for the STB's environmental review of this large and complex proposal," he is "concerned about the ramifications of certain aspects of the decision, and our agency is evaluating how it should proceed."
DM&E is also reviewing the ruling, Vice President of Marketing Lynn Anderson told Railway Age. "We're considering our options," he added, declining further comment.
BNSF named Carrier of the YearFedEx Supply Chain Services presented Burlington Northern and Santa Fe with its Carrier of the Year award for the second year in a row. The Class I was the only railroad selected out of eight transportation companies receiving the honor in 2003. Criteria for the award include ontime service, safety, claims/damages, communication, and freight bill accuracy.
"BNSF is honored to be recognized again," said Steve Branscum, group vice president, Consumer Products. "We are proud of our ability to meet high FedEx service requirements with consistent, reliable intermodal solutions that give FedEx Supply Chain services an additional option for their transportation needs."
JetTrain kicks off Florida tourAs part of a Florida tour starting Oct. 7, state residents were introduced to JetTrain--the first North American non-electric high speed locomotive to meet FRA Tier II (125 mph and above) passenger equipment safety standards. The builder, Bombardier Transportation, and partner Fluor Corp. were short-listed in April by the Florida High Speed Rail Authority (FHSRA) to design, build, operate, and maintain the state's high speed rail system, which is slated to link Miami, Orlando, and Tampa. The Fluor-Bombardier proposal features JetTrain technology and includes the purchase of six trainsets at a cost of about $210-220 million, according to Lecia Stewart, vice president, High Speed Rail, North America for Bombardier. Global Rail Consortium is the only other project bidder. (FHSRA rejected proposals from et3.com and Georgia Monorail Consortium.)
With public hearings planned for Oct. 7, 8, and 9, FHSRA will select the final bidder and identify the Orlando route at its Oct. 27 Board meeting. A contract is scheduled to be signed by Nov. 1.
Political opposition to the high speed line--whose pricetag could exceed $3 billion--is mounting, however. Florida Gov. Jeb Bush has asked voters to repeal the constitutional amendment passed in 2000 that requires the state to build the system, due to its high cost. In June, he vetoed legislators' allocation of $7.2 million for FHSRA in the 2004 state budget. The Authority has continued operating using federal funds received last year.
JetTrain kicked off its Florida tour at Miami International Airport's Tri-Rail Station. Bombardier's Stewart and Champ Car's PK Racing team driver Mika Salo "christened" the locomotive with champagne. The turbine-electric locomotive, sponsored by the FRA through the Next Generation High Speed Rail Program, is based on the power car for Amtrak's Acela Express electric high speed trainset. Powered by a 5,000-hp Pratt & Whitney PW150A engine, the four-axle JetTrain is equipped with IGBT-controlled a.c. traction motors, blended dynamic/friction (cheek disc plus tread) brakes, 500kW HEP, and CEM (crash-energy management). It is capable of sustained operation at 150 mph and provides 50,000 foot-pounds of tractive effort.
The locomotive will be available for viewing in Orlando on Oct. 11.
JetTrain was first introduced to the industry in October 2002 at Washington D.C.'s Union Station.
APTA presents 21st annual awardsThe American Public Transportation Association presented 15 individual and transportation system awards during its annual meeting in Salt Lake City, Utah, last month.
Lawrence D. Dahms and Alan F. Kiepper were inducted into the asociation's Hall of Fame for their "extraordinary contributions to public transportation on a sustained basis." Dahms left the helm of the Metropolitan Transportation Commission in Oakland, Calif., in December 2000, after serving for 23 years as executive director. He worked with APTA and other industry organizations to design the Intermodal Surface Transportation Efficiency Act of 1991, and helped guide the $1.5 billion Bay Area Rapid Transit extension to San Francisco International Airport. Dahns steered MTC's growth into a prominent regional body in charge of directing more than $1 billion in local, regional, state, and federal transportation funds.
Kiepper's decades-long career in public transit included work as general manager of the Metropolitan Atlanta Rapid Transit Authority, where he led the first three phases of construction and operation of the rail system. He also served as general manager and CEO of the Metropolitan Transit Authority of Harris County, Tex., and president of MTA New York City Transit. At NYCT, he introduced a customer service orientation program and lowered subway crime by more than 50%. In 1996, he joined Parsons Brinckerhoff as senior vice president and has continued to consult on transit projects worldwide.
The Outstanding Public Transportation System Manager Award went to Sandy Draggoo, executive director of Capital Area Transportation Authority (Lansing, Michigan). The Outstanding Public Transportation Business Member Awards were presented to Gary E. Griggs, president of Parsons Brinckerhoff Quade & Douglas, Inc., and W. H. (Bill) McCloud, senior vice president and chief operating officer of transportation management firm ATC.
This year's winner of the Outstanding Transit Board Member Award was James S. Barbour of the San Joaquin Regional Transit District in Stockton, Calif.
Three individuals received Distinguished Service Awards. Robert J. Grow, co-founder of Envision Utah, a alliance of Utah's business, labor, political, and religious leaders that studies community growth strategies, received the Local Distinguished Service Award for "significant contributions at the local level to public transportation through policy, legislative initiative, and leadership." U.S. Representative Don Young of Alaska and U.S. Senator Richard C. Shelby of Alabama received National Distinguished Service Awards.
APTA also presented five organization awards. The Metropolitan Transportation Commission (Oakland, Calif.) won the Innovation Award for the launch of a 511 travel information service in the Bay Area. Four public transportation systems received an award in one of four categories for "efficiency and effectiveness, including achievements in safety, operations, customer service, financial management, minority and women advancement, policy and administration, and community relations and advancement of industry initiatives."
The Regional Transportation District (Denver, Colo.) won in the category of providing more than 30 million passenger trips annually. In the last three years, RTD built two light rail lines on time and within budget, and purchased 18 LRVs and 757 buses for its 1,400-vehicle system. Its Southwest Light Rail Line opened in July 2000, and within a year, ridership soared to 105% of projections. A 1.8-mile extension to downtown Denver--funded through a public/private partnership with sports teams and other entertainment venues--opened in April 2002. Daily ridership on the line exceeded projections by 61% in nine months. In 2002, RTD introduced an aggressive accident prevention program that resulted in a 54% reduction in accidents in one year, and partnered with state and local entities to purchase historic Union Station and turn it into an intermodal facility.
Delaware Transit Corp.--DART First State (Dover, Del.) won in the category of providing more than 4 million passenger trips and fewer than 30 million trips annually; Space Coast Area Transit (Cocoa, Fla.), providing more than 1 million passenger trips and fewer than 4 million trips annually; and Arlington Transit (Arlington, Va.), providing fewer than 1 million passenger trips annually.
NYCT awards $100 million communications contract MTA New York City Transit has selected the consortium of Siemens Transit Technologies to design, supply, and install a public address/customer information screens system (PA/CIS) at 156 subway stations. The three-year, $100 million contract also covers installation of a closed circuit TV surveillance system with customer help point intercoms at 10 stations. The PA/CIS system will interface directly with NYCT’s Rail Control Center for Automatic Train Supervision, supplied by Siemens. All of this means that "riders will be able to view real-time information regarding train location and station arrival on 1,000 new customer information screens and hear announcements on new public address loudspeakers," said Siemens.
Siemens Transit Technologies is a consortium of Siemens Transportation Systems, Inc., one of Munich-based Siemens AG’s operating companies in the U.S.; and Transit Technologies, LLC, with headquarters in Hauppauge, N.Y. Transit Technologies is now engaged in $300 million in computer- and communications-based projects for the New York City subway system.
Alcatel wins $500 million London CBTC contractTube Lines has awarded a contract worth more than $500 million to Alcatel to re-signal London’s Jubilee and Northern lines with SelTrac®, a communications-based train control (CBTC) technology which Alcatel says has been chosen by more than 20 metro systems worldwide. The contract with Tube Lines, a company responsible for upgrading and maintaining portions of the London Underground, will take seven and one-half years to complete. It covers a total of 60 miles and 50 stations used by 900,000 riders daily. The contract carries an option for re-signaling the Piccadilly Line, with design work starting in 2005.
Green Kid heads for test at Chevron refineryThe Green Kid hybrid switching locomotive (1,000-hp equivalent) will be tested later this year at the Chevron Products El Segundo refinery in California. Railserve Inc., which provides switching at the refinery, plans to buy a Green Kid unit "upon successful completion of the test and with grant funding under the South Coast Air Quality Management District Carl Moyer incentive program," said RailPower Technologies. RailPower developed the Green Kid and the bigger (2,000-hp equivalent) Green Goat. Railserve, a Marmon Group subsidiary, provides switching, track maintenance, and other rail services, and operates a fleet of 127 locomotives.
Harsco and Jacobs win U.K. contractsTwo U.S. companies--Pittsburgh-based Harsco Corp. and Jacobs Engineering Group of Pasadena, Calif.--have won separate contracts involving the U.K.’s Network Rail system.
Harsco Track Technologies will supply two new track construction trains to Balfour Beatty for that company’s upcoming track maintenance responsibilities on sections of Network Rail in Scotland and England. Along with options for related equipment and services, the contract could be worth $5 million.
For an undisclosed sum, a Jacobs subsidiary will provide "significant" multi-functional design consulting services for Sections 1 and 5 of a modernization project to permit Network Rail’s West Coast Main Line to accommodate 125-mph trains.