With Railway Age since 1992, Bill Vantuono has broadened and deepened the magazine's coverage of the technological revolution that is so swiftly changing the industry. He has also strengthened Railway Age's leadership position in industry affairs with the conferences he conducts on operating passenger trains on freight railroads and communications-based train control.
U.S. prosecutors Thursday charged 11 people, including former Long Island Rail Road employees, with an alleged $1 billion fraud involving hundreds of railroad workers filing false disability claims. The fraud reportedly also involved doctors, who assisted LIRR employees filing disability claims shortly before they retired. The move allowed those filing to claim disability pay on top of their retirement pension, prosecutors said. In filing the claims, the railway workers allegedly paid up to $1,200 to hire one of several disability doctors.The U.S. attorney's office in Manhattan said the scheme cost the RailroadRetirement Board more than $1 billion. The investigation developed after aseries of reports by The New York Times starting in 2008. The Times said that almost every longtime LIRR employee was receiving disability payments, resulting in a disability rate sharply higher than other regional passenger railroads, including sister railroad Metro-North.
Between 2004 and 2008, 61% of the 1,423 LIRR workers who retired and began receiving some form of Railroad Retirement Board benefits were between 50 and 55 years old, prosecutors said. By comparison, only 7% of 61 people who retired from the MTA-controlled Metro-North commuter railroad and started receiving benefits were between 50 and 55 years old during that period, prosecutors said.
A Halloween feel was in place early Monday morning at New Jersey Transit’s Hoboken Terminal, with the venerable terminal’s concourse eerily deserted on a weekday due to service disruptions on much of NJT’s Hoboken Division following the weekend snowstorm. Service on NJT’s Morris/Essex Line, Gladstone Branch, and Montclair/Boonton Line was expected to resume Tuesday, as NJ Transit crews continued work to remove downed trees obstructing right-of-way, and also to restring overhead wire on NJT’s electrified territory. Heavy, wet snow, alternating with rain, affected New York City suburbs most heavily due in large measure to accumulation on trees that had not yet shed their leaves this autumn. Both official and anecdotal reports cited the resultant damage as more severe, at times, than similar damage caused by Hurricane Irene late last August.
Pershing Square Capital Management, an activist hedge fund, reportedly has compiled a stake in Canadian Pacific Railway exceeding 12%. In a regulatory filing, New York-based Pershing Square said CP Rail shares are undervalued and an attractive investment, and that it expected “to engage in discussions” with the company about a wide swath of its business.Shares of CP rose 6.8% Friday after the filing was disclosed, and were up an additional 2.3% early Monday morning in trading on the New York Stock Exchange. The move appears superficially similar to an effort during 2007 and 2008 by London-based The Children’s Investment Fund to acquire a significant portion of stock in CSX Corp., resulting in the placement of Fund representatives on the CSX Board of Directors.
CP had no official comment, though it did issue this response to questions from its employees: “While we have an active dialogue with many of our investors, our practice is not to comment on those discussions. As you may be aware, in a regulatory filing Friday with the U.S. Securities and Exchange Commission, Pershing Square Capital Management advised it had acquired 20.6 million shares of Canadian Pacific. As with others, CP is open to the views of its shareholders. We will speak with Pershing Square to hear their input into our plan, already targeted at realizing greater efficiency and improved service reliability. As we've been discussing for the past few quarters, especially heading into winter, it is important that each of you to continue focusing on strong performance on the Integrated Operating Plan, meeting our customer needs, and ensuring the safe operation of the railway.”
One rail industry observer offered this observation: “I saw the new movie ‘Margin Call’ over the weekend -- it's a superb film and I recommend it highly. One of the points made by Jeremy Irons, who plays the head of the failing firm, is that they just buy and sell numbers on Wall Street and there is no emotion in it. Following yesterday morning's collapse of (former U.S. Senator, New Jersey Goverrnor, and Goldman Sachs executive) John Corzine's MF Global, I am reminded that these guys frequently don't even know nor care what business the companies they buy are in. Pershing Square head William Ackman (pictured) has been known to start these things and then bail as soon as the stock price gives him close to the profit he sought. He'll never be caught trying to run CP; to him it's just paper and a line on a map.”
PATH officials Monday hosted a ceremonial ride employing the final seven PA-5 rapid transit cars of a 340-car delivered by Kawasaki Rail Car Corp. to the bistate agency. The cars replace earlier equipment in service since the 1980s, with some gear dating back to the 1960s, officials said. After traveling from Journal Square Station in Jersey City to Hoboken, N.J., a brief press conference took place. Bill Baroni, deputy executive director of PATH’s parent, the Port Authority of New York & New Jersey, reaffirmed PATH as “a vital and critical link for transportation and economic development in New York and New Jersey,” which now carries 267,000 riders per weekday, or about 74 million riders per year. Baroni praised PATH General Manager Mike DePallo for overseeing the $499 million car order and the overall modernization of PATH infrastructure, which includes $400 million in signaling upgrades. DePallo told Railway Age implementation of Communications-Based Train Control (CBTC) indeed was next on PATH’s priority list.
Hoboken Mayor Dawn Zimmer called PATH “a lifeline to our community,” noting that 56% of city residents used public transit, with most of those including PATH as part of their travel.
PATH still awaits fulfillment of an add-on order of 10 PA-5 cars from Kawasaki, made by the PA in late 2010.
Based on current backlogs and anticipated further gains in demand for a variety of railcars, EPA is projecting assemblies of 40,400 cars this year, followed by an increase to 51,300 units next year. Longer term, EPA is projecting an acceleration in railcar demand that will take deliveries from 54,300 units in 2013 to 63,500 units in 2016.
“A closer inspection of the third-quarter orders indicates that railcar demand was broad based, with significant strength in tank cars and small cube covered hoppers,” EPA said. “Mid-sized covered hoppers, coal cars, and intermodal platforms also recorded good levels of orders. Mill gons are beginning to respond to growth in industrial production and steel mill shipments. Third-quarter orders for 460 mill gons brought end-of-September backlogs to 2,050 cars.
“And, we believe that orders during the next year or so will continue to advance, albeit at a more moderate pace. Replacement pressures have intensified among a number of car types such as boxcars and various covered hoppers. At the same time, the shift to aluminum bodied coal cars will stimulate demand while strict regulation of hazardous materials being transported on tank cars will boost demand for newer pressurized tank cars. The generous depreciation provisions of the tax code in place this year will also facilitate the decision to purchase new equipment. In addition, the railroads will also provide support to new equipment demand during the foreseeable future.
“In spite of a weakening economy which has softened both commodity and intermodal haulings in the third quarter, railroads continued to score impressive financial gains. The roads are attributing record quarterly levels of revenues and profits based on some modest volume growth, increased revenue per unit, and operating efficiencies. UP reported that third quarter operating revenues climbed 1.6% to an all-time quarterly record $5.1 billion and operating income rose 13% to a record $1.6 billion. Each of UP’s six business groups registered freight revenue growth and four of them posted volume gains. Likewise, CSX saw operating income rise 6% to an all-time high $878 million while net earnings rose 12% to a record $464 million. Due to price increases, KCS also reported strong third quarter financial results.
“In spite of the slowing in traffic, the roads continue to invest in locomotives, facilities, and rolling stock. In recent months, ambitious efforts are underway to expand and improve intermodal services.
“The domestic coal situation has not changed much since our last report. At mid-year, electricity generation was running only 0.3% above the 2010 pace. And, with the Federal government continuing to increase regulations concerning the mining and burning of coal, consumption through June of this year was 4.8% below the comparable period of last year.
“At the same time, utilities continue to draw down their coal inventories. As of June, inventories amounted to 166.0 million tons, far below the 181.1 million tons on hand in June 2010. While the draw down could be justified by lower burn rates, any rebound in electricity generation and coal consumption would boost inventories in the future. Exports continue to expand at a strong pace. In addition to Asia, exports to Europe are advancing at a healthy clip. And, a senior Chinese official with the China Coal Industry Association stated on September 15 that China may soon lower value added tax and port charges to encourage coal imports which are sorely needed for China’s expanding economy. The official went on to say that China will import some 150 million metric tons this year, followed by annual increases in both 2012 and 2013.
“Longer term, foreign demand for our coal will intensify as steel producers in Asia and South American continue to drive demand for metallurgical coal while Japanese and European countries look to move away from nuclear to coal fired facilities for power generation.
“Longer term, we remain constructive on the outlook for coal demand and rail movements, especially as the Administration and the Department of Energy recognize the need to ease the onerous burden of EPA regulations. We expect further major investments by the western roads as coal traffic expands not only for domestic consumption by electric utilities but also for the export markets. With the continued revival in coal exports straining capacity in the east, we also expect investments in eastern facilities and equipment.
“The housing and construction markets should stabilize as we proceed through the year while a modest annual advance in light vehicles demand and production will induce growth in movements of motor vehicles and parts, manufacturing activities will continue expanding, albeit, at a more moderate pace, leading to greater movements of metals, ores, fabricated products, and a variety of chemical and petroleum products. Export markets for corn and wheat are at high levels while domestic use of corn (including ethanol production) is expanding.
“The covered hopper market remains vibrant. Stronger production of ethanol from corn as well as a rebound in chemicals and plastics activities is stimulating demand for hi-cube equipment while increased export volumes and greater domestic grain consumption bolster demand for midsized cars. Sharply higher energy prices are stimulating oil and gas exploratory activities and a large number of the small cube cars are destined to oil and gas field service companies as well as other sectors of construction. Light vehicle sales and production activities are improving and we should eventually see a rebound in demand for auto parts box cars and autorack cars.
“At the same time, interest in mill gons and steel coil cars rebounded in the second quarter. During the first eight months of this year domestic steel shipments were running 8.0% above the comparable period of last year while steel mill product imports through August were 20.8% ahead of last year’s first half.
“The fact that the major roads continue to report strong revenue and profit performances in spite of sluggish traffic growth also will benefit the rail car industry. We expect the roads to continue to invest in order to accommodate anticipated commodity haulings growth. This will involve expenditures for facilities, power, and rolling stock.
“Longer term, far stronger economic activities will provide support for certain rail car assemblies while an improvement in the financial environment, high gasoline prices, and strong government backing stimulate greater demand for ethanol and DDG cars. Replacement pressures and technological advances as well as legislative measures will also play a role in promoting the demand for a variety of railcars.
“Construction activities are expected to return to higher levels, which should support movements of aggregates and structural steel products. Continued expansion in demand for petroleum products, chemicals, and food and beverages will prop up the haulings of a variety of liquid products and the demand for tank cars.
“Stricter air emission standards will promote the use of lower sulphur western coal, which is also lower BTU value coal, leading to greater volumes of coal traveling longer distances. This in turn, will lead to replacements of older, smaller, steel bodied coal cars with the larger volume aluminum gondolas and hoppers of today and tomorrow. At the same time, eastern coal fleet requirements could stimulate some demand for technologically advanced steel and hybrid coal cars.
“Growing worldwide nutritional needs and expanding exports will pressure the current grain service cars as we proceed through the longer term while long neglected segments such as equipment to haul waste, aggregates, and limestone show signs of revival and should add to the railcar delivery mix in the years to come.
The California High-Speed Rail Authority Tuesday released a new business plan that it says lays the foundation for an economically viable high speed rail system that will create 100,000 jobs in the next five years, and is expected to generate another 1 million jobs moving forward.
But the business plan for California's HSR system now is estimated to cost $98.5 billion tolink the Bay Area and Anaheim, adjusted for future inflation anticipated during the next 20 years.
That’s more than the original $44 billion price. The plan, however, also states the system would be profitable even at the lowest ridership estimates and wouldn't require public operating assistance. <br><br>
In a research paper presented last week at a railroad environmental conference at the University of Illinois at Urbana-Champaign, Amtrak reported that the use of B20 biodiesel (a blend of 20% pure biofuel and 80% diesel oil) also operated below the U.S. Environmental Protection Agency (EPA) limits for the General Electric P32-8 locomotive used in the test. The locomotive carried an Amtrak decal indicating the use of B20 fuel and other special markings to make certain that only biodiesel fuel was used in the 3,200-hp, 12-cylinder engine built in 1991 and compliant with EPA’s Tier 0 standard.
“The trial design included one year of testing, evaluating the engine and gasket wear, determining the quality of air emissions, and regularly monitoring the quality of the biodiesel fuel,” said Roy Deitchman, Amtrak Vice President, Environmental, Health and Safety. “The results of the trial indicate the in-service locomotive was very reliable with the B20 blend, engine wear was limited, air emissions were below EPA limits for this generation of passenger locomotive, and the biofuel supply met industry standards.”
Amtrak received a $274,000 grant from the Federal Railroad Administration to carry out the research project in partnership with the Oklahoma Department of Transportation (Okla. DOT) on the Heartland Flyer, a daily train operated by Amtrak with state support from Oklahoma and Texas.
A Texas-based vendor supplied the biodiesel blend, and the trial received support on fuel and engine component evaluation from Chevron Oronite. The engine manufacturer provided input on warranty matters and some of the testing was carried out at the General Electric facility in Erie, Pa.
The trial was included in TIME magazine’s list of “The 50 Best Inventions of 2010” with a cartoon pointing out that the biodiesel blend included beef byproduct. Operating daily between Oklahoma City and Fort Worth, the Heartland Flyer was the first on the list of transportation inventions and only one of TIME's transportation innovations to be publically available.
“Routine use of biodiesel fuel at Amtrak is contingent on many factors, including cost vs. traditional ultra-low sulfur diesel fuel and availability,” Deitchman said. “But we found no significant engine performance issues during the trial and we were able to replace nearly 35,000 gallons of diesel with a renewable fuel that was locally produced.”
Jack L. Hadley, at one time the owner of the Kiamichi Railroad Co. operating in Oklahoma and Texas, died Oct. 30 at his home in Latrobe, Pa. He was 85. Hadley was an executive for the railroads of Jones & Laughlin Steel and later LTV Steel before becoming a short line owner in 1987. Within one year, Hadley tripled the number of employees at Hugo, Okla.-based Kiamichi Railroad and was serving 100 businesses along the line, stretching from Medill, Okla., to Paris, Tex. Hadley then acquired the adjoining Chaparral Railroad Co., and also began operating the South Orient Railroad in Texas.
Hadley sold the properties in 1995; the Kiamichi Railroad, which also extends into Arkansas, currently is owned by Jacksonville, Fla.-based RailAmerica. Hadley started his career in labor relations before moving to Jones & Laughlin, where he focused on the company’s rail operations, including the Monongahela Connecting Railroad in Pittsburgh, the Aliquippa and Southern Railroad in Aliquippa, Pa., and the Cuyahoga Valley Railroad in Cleveland.