Recovering from the worst business downturn in nearly 80 years, U.S. Class I railroads earned an average rate of return on net investment of 9.60% in the 12 months ended June 30, 2010, compared with a year-ago ROI of 9.47%.
The nation's two largest railroads had returns in the low double-digits. BNSF Railway earned 10.25% vs.10.20% a year ago, closely followed by Union Pacific, with a return of 10.02% compared with 9.15% in the prior 12-month period.
Soo Line, smallest of the Class I railroads, was statistically the best performer in the 12 months ended with this year’s second quarter. Soo Line ROI was 16.30%, up from 11.06% a year ago.
Norfolk Southern earned an ROI of 9.44% in the latest 12-month period vs. 10.89% a year ago; CSX earned 8.54% vs. 8.59%; Kansas City Southern earned 8.43% vs. 6.79%; and Grand Trunk Western, 7.84% vs. 7.39%.
Whether any of these ROIs meet the Surface Transportation Board’s revenue adequacy standard is not now clear. In the view of the STB, which uses the information in rate cases and other proceedings, a railroad is revenue adequate if it earns the current cost of capital.
The latest cost of capital determination by the STB was 11.5% for the year ended Dec. 31.
The Tank Car Specialist course, an emergency response training and exercise regimen provided by the Security and Emergency Response Training Center (SERTC), is the first to be certified by the Department of Homeland Security/Federal Emergency Management Agency.
“With the ongoing potential of HazMat incidents, this long-awaited milestone for SERTC will assist in making response training more readily available to the emergency response community,” said Mike Cook, general manager of SERTC, in a statement.
The Tank Car Specialist course develops the specific fundamentals and skills associated with emergency response to railroad tank car incidents involving hazardous materials (HazMat) and/or weapons of mass destruction (WMD). The training provides detailed technical information combined with extensive hands-on practice of the actions and appropriate responses with simulated large-scale HazMat/WMD incidents. This specialist level course covers the highly technical skills and knowledge necessary for responding to hazardous materials in a rail transportation environment. The skills required at this level are significantly beyond those of a hazardous material technician, SERTC says.
Pueblo, Colo.-based SERTC is now enrolling emergency responders for hazardous material training through a federally funded program that provides broad access to intensive training at its training facility located at the Transportation Technology Center in Pueblo. Registration for training is available online at www.sertc.org.
Stewart Southern Railway, Saskatchewan’s 11th operational short line railway, is scheduled to mark an official grand opening Friday in Fillmore, Saskatchewan, roughly 65 miles southeast of Regina, the provincial capital.
The event in Fillmore will take place at Fill-More Seeds Inc. , and will include speeches from various dignitaries, and also offer a chance to review the railroad’s equipment and facilities, according to Gail Anderson, administrative coordinator for both Fill-More Seeds Inc. and Stewart Southern Railway Inc.
Fairport, N.Y.-based RailComm says it has been selected to provide the GCOR dispatch system for Genesee and Wyoming’s 16 Southern Region railroads.
RailComm’s state-of-the-art Domain Operations Controller (DOC®) train control system will be accessed through a web-enabled Software-as-a-Service (SaaS) delivery model. RailComm says its SaaS offering provides a “pay-as-you-go” model, thus eliminating capital equipment procurement constraints.
Through SaaS, the railroads can be remotely dispatched by G&W anywhere an internet connection is available. That allows relocation of dispatchers to alternative locations as required. Additionally, railroad management can log in from an office, home, or even from a hotel and directly view dispatching activity and management reports.
Since the DOC® control application resides on servers within RailComm’s managed data center in Rochester, N.Y., the requirement for local IT support at each railroad is greatly reduced, the company says.
A partial list of properties within G&W’s Southern Region includes: the Bay Line Railroad, Chattahoochee Industrial Railroad, Kentucky West Tennessee Railway, Meridian & Bigbee Railroad, and Valdosta Railway.
Union Pacific has unveiled its new AutoFlex™ convertible multi-level car for transporting vehicles. UP said it holds 15 patents related to the design and process in developing the car, designed by UP’s engineering group and built by UP forces at the railroad’s DeSoto, Mo., car shop.
UP said the 90-foot-long car can be adjusted to bi-level or tri-level vehicle transport while using the same rack structure.
UP claimed these benefits for AutoFlex™ customers:
* “Easier convertibility and more flexibility resulting from the ability to quickly and efficiently adjust the rail car to transport large or small vehicles.
* “Enhanced loading and unloading safety resulting from convenient access provided by an improved panel end-door structure.
* “Increased service quality thanks to a proven durable door edge system, improved tie-down chock systems, and upgraded in-transit damage protection.
* “Superior security by removing exterior ladder access to the railcar roof and upper decks. The ladder is accessible only when the end doors are open.”
“Improving safety and efficiency create greater value for our customers,” said Julie Krehbiel, Union Pacific vice president and general manager - Automotive. “With the AutoFlex™ convertible multi-level, we can more easily adjust to changes in consumer purchasing trends and keep our customers’ products moving. This is a newly engineered railcar, not a converted bi-level car, and our engineering group did an outstanding job in developing this new railcar.”
“Results of our preliminary tests have been very promising in terms of vibration, stability and overall ride quality,” said Barry Kanuch, Union Pacific chief mechanical officer. “We are excited about the car’s performance so far.”
UP spokesman Tom Lange said current plans call for constructing 100 AutoFlex™ cars per year for the foreseeable future. UP will build the cars itself in DeSoto.
The Greenbrier Companies announced Wednesday that it has received orders totaling is approximately $130 million for new and refurbished railcars.
Included are orders for 1,000 new double-stack intermodal platforms and more than 700 new covered hopper cars. Greenbrier will also re-engineer and modify approximately 1,100 existing double-stack platforms to 53 feet from smaller dimensions.
The new orders and refurbishment work will be carried out at the company’s Gunderson and Greenbrier Rail Services facilities in 2010 and 2011. “The orders are from five separate customers, and are subject to final documentation, but are considered to be firm commitments,” said Greenbrier. “The customers represent major railroad and leasing companies in North America.”
Greenbrier announced that it will increase its workforce by 260 workers at its Gunderson facility in Portland, Ore., bringing total employment to more than 900. These additions will be carried out both by calling back workers furloughed during the industry downturn and by new hires. The company said it will divert approximately 175 workers from its ocean-going marine barge construction at Gunderson to new railcar production as a result of current softness in the marine market.
Greenbrier said the new and refurbished railcars will support a growing need for 53-foot double-stack well capacity in North America, despite a continued surplus of 40-foot and 48-foot equipment. “Double-stack freight cars transport various sizes of containers stacked two high,” noted the builder. “The majority of such railcars are constructed to haul 40-foot international ocean-going containers. The recent strong growth in 53-foot domestic containerization allows railroad shippers to compete effectively with longer and heavier trucks on the nation’s highways. Greenbrier is adjusting its production to fulfill this growing demand.”
Watco Transportation Services Inc. (WTS), the Pittsburg, Kan.-based operator of 22 short lines railroads in the U.S., has joined the Association of American Railroads with a full membership. Watco roads operate more than 3,700 track miles in 18 states. Watco will have access to all association services and will be eligible to serve on AAR committees and the AAR Board.
“The addition of WTS broadens our membership and strengthens our ability to represent our industry effectively before the decision makers that shape policy and law affecting railroads,” said AAR President and CEO Edward R. Hamberger.
The AAR announcement noted that in March 2008 WTS’s South Kansas and Oklahoma Railroad was named the Railway Age Regional Railroad of the Year. Railroads operated by WTS also include the Alabama Southern, Alabama Warrior Railway, Arkansas Southern, Austin Western, Baton Rouge, Boise Valley, Eastern Idaho, Grand Elk, Great Northwest, Kansas & Oklahoma, Kaw River, Louisiana Southern, Mission Mountain, Mississippi Southern, Pacific Sun, Palouse River and Coulee City, Pennsylvania Southwestern, Stillwater Central, Timber Rock, Vicksburg Southern, and Yellowstone Valley Railroads.
WTS is owned by Watco Companies, Inc. (WCI), which also owns Watco Mechanical Services division, operating 14 railcar repair shops, four locomotive shops, and 19 mobile mechanical shops. The Watco Transload and Intermodal Services division manages 12 transload facilities, seven warehouses, and one intermodal location.