Timed to coincide with the opening of a hearing Wednesday afternoon on federal railroad policy, Sen. Jay Rockefeller (D-W. Va., top), chairman of the Senate Committee on Commerce, Science, and Transportation, released a committee staff report charging that the 30-year-old Staggers Rail Act “gives railroads the authority to charge many U.S. businesses extraordinarily high shipping rates [and] needs to be reformed.”
The report—Current Financial State of the Class I Freight Rail Industry—found that the “largest American freight railroadcompanies have been earning record profit margins at the expense of their shipper customers.”
“If you listen to what the railroads tell their regulators in Washington, they are barely keeping the lights on,” said Rockefeller (pictured at left). “But the reality is that Class I railroads have become some of the most profitable companies in the United States. They enjoy substantial market power yet the current railroad regulatory system regards them as incapable of both making needed capital investments and remaining healthy. It’s past time to update our rail policies to change a system that allows railroads to grossly overcharge captive shippers and to better meet our nation’s future transportation needs.”
He said that “using the companies’ Securities and Exchange Commission (SEC) filings, quarterly investment calls, industry analyst reports, and other sources, the committee staff report concludes that the freight rail industry has more than achieved the Staggers Rail Act’s policy goal of restoring the financial stability of the U.S. rail system.
The report found that:
“In the same year (2008) that the rail industry told the Surface Transportation Board that its profitability was lagging behind other sectors of the economy, Fortune magazine rated railroads as one of the top five most profitable industries in the U.S. economy.
“While the railroads tell their regulators they are not making high enough profits to cover all of their long-term capital investment needs, the Class I railroads are using billions of dollars of their profits to buy back stocks and boost the short-term values of their stocks for their shareholders.
“Although the railroad industry claims that it still has difficulty attracting sufficient amounts of investment dollars, Warren Buffett and other investors have been pouring billions of investment dollars into the companies.”
The Association of American Railroads issued a strongly worded statement from President and CEO Ed Hamberger (bottom) in response to Rockefeller’s attack:
“We vehemently disagree that there is a need to roll back the successes achieved since the 1980 Staggers Act. The vision held by
Congressional Democrats and President Carter 30 years ago—allowing
railroads to succeed or fail in the marketplace—has resulted in
railroads becoming a true American success story. Imposing new Washington regulations
will undermine railroads’ ability to sustain the private investments in
the nation’s rail network that provides hundreds of thousands of American
jobs, and the foundation for both freight and passenger rail.
“The report makes profits and corporate efficiency sound like dirty words. The reality is the railroad industry’s return to financial health has resulted in private capital—not taxpayer dollars—getting turned back into building and maintaining the nation’s rail network. Even during the worst recession in 80 years, America’s freight railroads have kept investing, spending $21.8 billion of their own private capital in 2008 and $20.2 billion in 2009 to build, maintain and modernize the nation’s 140,000-mile rail network that serves both passengers and freight.
“This report is aimed not at leveling the playing field, but at justifying attempts to regulate lower rates for some large shippers, like chemical companies, agribusiness, and electric utilities. And as the Surface Transportation Board’s own report found, lowering rates for some shippers through re-regulation would result in increased rates for other shippers, or decreased investments in the rail network.
“There’s nothing wrong with success. We’ve run smart, successful businesses, improving efficiency and service for our customers, while keeping prices below what they were 30 years ago. Now is not the time to inject greater regulatory involvement from Washington, but instead to keep letting the
current balanced system work.”
CSX Transportation Inc. announced that it had settled a two-year-old rate dispute with Seminole Electric Cooperative Inc. It did not divulge the terms of the settlement.
In a case brought against the railroad at the Surface Transportation Board in September 2008, Seminole challenged the reasonableness of CSXT rates for moving coal to the Seminole Generating Station near Palatka, Fla.
Seminole’s 2008 complaint specified that that CSXT served mine origins and origin groups in Kentucky, Illinois, Indiana, West Virginia, and Pennsylvania, plus coal transfer terminal facilities at Charleston, S.C. Claiming that CSXT had market dominance over this traffic, SCI asked that the STB prescribe “reasonable rates” pursuant to the board's standalone cost test.
Under an increasingly popular procedural option, the board and the disputants finally agreed that the latter should try to reach a settlement on their own.
Russian Railways said Wednesday it will begin once-a-week train service between Moscow and Nice, France, beginning Thursday.
In Moscow, the train will depart from the Belolrussky station each Thursday at 4:17 p.m. local time, arriving in Nice each Saturday at 7:12 p.m. (local time). From Nice the train will depart on Sundays at 7:22 p.m.and arrive in Moscow on Tuesdays at 11:17 p.m.
The train will pass through Russia, Belarus, Poland, the Czech Republic, Austria, Italy, and France.
Cities to be served by the service include: Moscow, Vyazma,Smolensk, Orsha, Minsk, Brest, Terespol, Warsaw , Katowice, Zebrzydowice, Bohumin, Břeclav, Vienna, Linz, Innsbruck, Bolzano, Verona, Milan, Genoa, San Remo, Bordighera, Ventimiglia, Menton, and Nice.
Russian Railways said the travel time eastbound from Moscow to Nice will be 52 hours 55 minutes; westbound from Nice to Moscow is scheduled for 49 hours 55 minutes. The train will have deluxe, first, and second class carriages.
RailAmerica, Inc. said Wednesday that it expects carload traffic on its 40 railroads to grow approximately 5% in the third quarter of 2010 compared to the third quarter of 2009. RailAmerica lines operate approximately 7,400 miles of track in 27 U.S. states and three Canadian provinces.
The company reported that its August carload totaled 72,221, up 3.6% from 69,702 in August 2009. These results exclude the discontinued Ottawa Valley Railway.
August shipments were up in six of 12 commodity groups compared to August 2009. Leading the increases were metallic ores and metals, chemicals, and non-metallic minerals and products. The largest declines were in coal, waste and scrap materials, and motor vehicles.
Axion International announced Wednesday that “one of the largest railroads in North America has placed the first purchase order, under a letter of intent for the ongoing purchase of Recycled Structural Composite (RSC) railroad ties.”
“We’re thrilled to receive this initial order from such a respected customer,” said Jim Kerstein, Axion CEO. “Without question this is further validation that the Class I railroad market is looking for longer-lasting, more long-term economical alternatives to wood and concrete.
Per the Association of American Railroads “the U.S. rail industry spent $7.7 billion dollars on maintaining roadway and structures in 2008,” said Kerstein. “That number is increasing annually and we believe suppliers, like Axion, who deliver more durable, environmentally friendly products with a lower cost of lifetime ownership will increase their share of that pie.”
Axion said its RSC, developed in conjunction with Rutgers University’s Materials Sciences and Engineering Department, “is inert and contains no toxic materials. It will never leach, warp, and is impervious to insect infestation. Because it is lighter than traditional materials, transporting RSC is less expensive and reduces energy costs. In addition, RSC is completely recyclable at the end of its functional life.”
Namibia says it plans to sign an agreement on theconstruction of a rail link to transport coal from landlocked neighbor Botswana west through Namibia before the end of October.
The memorandum of understanding will also cover the construction of a coal export terminal on Namibia’s Atlantic coast, the country’s Ministry of Information and Communication Technology said in an emailed statement.
Botswana reportedly has about 200 billion metric tons of coal reserves, according to its Ministry of Minerals, Energy and Water Resources. The World Bank has funded a feasibility study into the rail link.
Regional and short line operator Genesee & Wyoming Inc. (GWI) on Tuesday reported August traffic volume totaling 73,711 carloads, an increase of 11.6% compared with August 2009. GWI’s traffic in the third quarter of 2010 through August was 145,269 carloads, up 9.5%, compared with the third quarter of 2010 through August.
The traffic increase in the third quarter of 2010 through August was principally due to increases of 6,651 carloads of farm and food products traffic, 2,045 carloads of other traffic, and 1,893 carloads of chemicals & plastics traffic. All other traffic increased by a net 2,024 carloads.
GWI owns and operates 62 short line and regional freight railroads in the United States, Canada, Australia, and the Netherlands.
Plano, Tex.-based Dell Services said Tuesday it has signed a contract with BNSF to provide end-user computing support, fully-integrated service desk support, field services, and managed print services throughout the organization. The amount of the contract was not disclosed.
Dell said that, under the contract, Dell Services “will offer highly automated processes and tools to support end-user devices and develop customized process flows for the end-user computing environment. Dell Services’ automated service management solutions will help BNSF maximize efficiencies and facilitate significant improvements on software and hardware inventories. “
Through its services desk offerings, Dell Services will provide a single point of contact for resolving technical issues. To ensure service quality, Dell Services will provide around the clock service desk support, utilizing disciplined workflows, automated process tools, and industry best practices to increase efficiencies and control costs.“As we embark on a new relationship with BNSF, we are proud to support the company with tools that create inventory efficiencies, optimize print resources, and enable around-the-clock technical support to help BNSF succeed,” said Dell Services President Peter Altabef.
Siemens announced Monday that it is bringing a full-sized mockup of the Siemens Velaro high speed trainet to Florida to show Americans what the future may hold for them. After its Oct. 8 debut in Tampa, th eSiemens "Future of Florida High-Speed Rail Tour" will continue to Orlando, Miami, Tallahassee, and other cities.
“Visitors to the exhibit in each city will not only hav ethe chance to see the Velaro, the fastest passenger train in the world, but also the opportunity to have their questions answered by high-speed rail experts,” Siemens claimed.
“We'd like to congratulate Florida on leading the charge for high speed rail in America,” said Eric Spiegel, president and CEO of Siemens Corp. “Not since the early days of the space program has there been such potential for growth as there is in Florida right now.”
“We want to give Floridians a taste of what a true high speed rail trainset looks and feels like,” added Oliver Hauck, president o fSiemens Mobility in the U.S. “Siemens Velaro trainsets are successfully running on some of the fastest and most important routes in the world today.”
The Velaro tour recalls an earlier, more-ambitious HSR demonstration program: Seventeen years ago, when Amtrak was evaluating high speed trainset technology for the Northeast Corridor, Siemens and Deutsche Bahn (German Rail), in cooperation with Amtrak, brought a specially modified, fully operational ICE (Intercity Express) trainset to the U.S. It operated on the NEC in revenue service for several months and also toured the country. The ICE demonstration followed a similar program with an X2000 trainset involving Amtrak, ABB Traction, and Swedish State Railways. Amtrak eventually awarded the NEC high speed trainset contract to a Bombardier/Alstom consortium; the Acela Express equipment entered revenue service on the NEC in 2000.
Norfolk Southern Train 236, one of the first double-stackedtrains to transit the railroad's new Heartland Corridor, rolledthrough Prichard, W. Va. at 11 a.m. Monday, pulling containers on their way fromChicago to Norfolk, Va.
It was greeted at Prichard, the site of a planned intermodalterminal, by NS CEO Wick Moorman along with corridor partners, designers,builders, and other NS officers and employees.
“For morethan one hundred years, we’ve been your partner in moving America’s most plentiful and dependable energy source fromthe Pocahontas coal fields. Now, working together, we have improved ourcorridor through West Virginia so that it has more capacity, speed, andreliability not just for coal trains but for the container trains that carry theproducts required for international commerce and consumerdemand,” said Moorman (pictured at left).
Also on hand was U.S. Rep. Nick Rahall of West Virginia,vice chairman of the House Transportation and Infrastructure Committee and akey supporter of the Heartland Corridor project, who said: “Now this isthe engine to pull jobs America’s way. Our economic strength, and WestVirginia’s future, depend on the vitality of a national transportation system. Railis an increasingly critical cornerstone of commerce for thiscountry. Government must invest and partner where it makes sense with privateindustry, so we can compete globally. At the same time, by strengthening ourtransportation network, we anchor our national security.”