Affordable coal-based electricity has helped ensure America’s position as a global economic superpower, and freight railroads are a big reason for that, Association of American Railroads (AAR) President and CEO Edward R. Hamberger said Tuesday, addressing the Congressional Coal Caucus.
Railroads deliver 70% of all coal shipments to their final destinations, and the cost-effectiveness of freight rail has made it themode of choice for moving coal, Hamberger noted, adding that today twice as much coal can be shipped for roughly what it cost 30 years ago. “Policy makers should take steps to ensure the continued use of our nation’saffordable domestic coal resources,” said Hamberger (pictured at left), adding support for development of carbon-capture-storage (CCS) technologies and aligning carbon reduction timetables with its commercial availability. “Investing in CCS will ensure America can produce affordable electricity from coal, promote energy independence, and protect our environment.” Coal is the single largest customer segment for railroads, representing roughly 25% of total revenue for the nation’s major Class I railroads. One in every five railroad jobs is related to the movement of coal. “Without coal, the U.S. rail network would face a need for vast restructuringwith greatly reduced capacity to invest in the nation’s rail networkinfrastructure,” Hamberger said.
With various climate change proposals before Congress threatening to curb coal consumption, railroads are urging lawmakers to consider enacting contingent allowances in legislation. Specifically, contingent allowances would be made available to railroads that see a decrease in coal revenue as a direct resultof federal climate change law. If coal markets go unaffected, the contingent allowances would not take effect. However if coal use falls, contingent allowances would help railroad businesses cope with the loss of billions of dollars in unique coal-related assets and revenues decimated from the change in law. “The loss of these coal-related assets and revenue would significantly impede railroads’ ability to meet the transportation needs of businesses all across the country that rely on rail to get to the global marketplace,” Hamberger said. “If railroads cannot afford to renew and expand their capacity, more rail passengers and freight will move by less efficient, less environmentally sound ways across overcrowded highways.”
The Washington Metropolitan Area Transit Authority has selected Cubic Transportation Systems to manage and operate WMATA’s SmarTrip®Regional Customer Service Center (RCSC), a smart card-based fare collection system, designed and integrated by Cubic more than 10 years ago.
Valued at $10 million, the three-year contract goes into effect in July, and includes operation of the patron call center where cardholders can call or email to register their smart card, receive account information, and retrieve lost passwords for online ordering, among other services. Cubic also will deliver and operate a smart card fulfillment center for SmarTrip card orders, and will deliver and support a merchant retail network where customers can buy and reload value on their smart cards.
The patron call center will be co-located in Cubic's customer service center in Concord, Calif., and smartcard orders and merchant retail support will be managed locally from Cubic's Washington, D.C. office.
The SmarTrip system includes WMATA rail services and also nine regional bus operators in Virginia, Maryland, and Washington, D.C. Cubic's services are expected to expand to include the CharmCard system operated by the Maryland Transit Administration, also designed and delivered by Cubic.
The Rusk County (Tex.) Rural Rail District has acquired the Henderson-Overton rail spur from Union Pacific, and expects to begin work to reactivate the route. The district expects to designate Sulphur Springs, Tex.-based Blacklands Railroad as the short line operator.
“We own a railroad,” said Henderson Economic Development Corp. General Manager Sue Henderson. “Rusk County owns a railroad.”
The value of the rail spur was appraised at $4.2 million, but the District's cost was $1.026 million.
The District plans to celebrate the acquisition in mid June,with a locomotive coming down the spur and parking at the historic Henderson depot. “We want it to be a celebration,” said Henderson. “This is a big deal for all of Rusk County.”
Roughly 15.7 miles in length, the Henderson-Overton spur intersects with UP at Overton, Tex. UP ceased operating over the spur last August after the Surface Transportation Board ruled the company could do so.
Calling it “a terrific accomplishment,” CSX Transportation said Tuesday that its maintenance and repair teams worked ahead of schedule to reopen the railroad's 200-mile Memphis-Nashville line in Tennessee, which was heavily damaged by severe flooding earlier this month.
“Despite the fact that many of our employees were directly affected by this tragic flooding, they brought an extraordinary focus to re-opening the line and resuming service to our customers and the communities in that stricken area,” said David Brown, executive vice president and chief operating officer.
Operations were scheduled to resume at 6 p.m. EDT over the entire length of the line in western Tennessee, including two bridges spanning the Harpeth River that were heavily damaged. Additional work is planned each day from 7 a.m. to 5 p.m. EDT. Trains will operate over the line from 5 p.m. to 7 a.m.
Some train re-routes over other rail carriers will continue for several days until all work is complete.
CSX also announced that it intends to pre-pay property taxes for tax year 2010 due in early 2011 to affected Tennessee counties to assist recovery efforts. Almost $2.7 million will be paid early to 23 counties, including $1 million to Davidson County in which the City of Nashville lies.
Meeting the federal government's mandate for installing positive train control by the end of 2015 requires spending that goes far beyond implementation of the technology itself.
In a form 10K filed with the Securities and Exchange Commission, Norfolk Southern identifies PTC and related costs and puts them into the context of total capital spending requirements.
“NS expects total capital expenditures for 2010 to be approximately $1.44 billion,” the filing said. “Furthermore, the railroad expects the implementation of positive train control to result in additional capital expenditures of $700 million in the years 2011 through 2015. In addition, $400 million of upgrades to systems and track structure, required for the implementation of PTC, will be accelerated from future years’ spending.”
Earlier this year NS CEO Wick Moorman said that while PTC is a “great technology,” the unfunded federal mandate “could ultimately mean that we will not be able to invest in other areas, some of which conceivably have as much or more of an impact on safety operations as PTC.”
Railroads also warn that without help on PTC, they may have to divert money from vital capacity projects. NS updated two of these in its 10K report.
One is the federally backed CREATE initiative to ease congestion and add rail capacity in metropolitan Chicago, now in is early stages. A total of $321 million in federal finding and $100 million from the railroads has been pledged; much more is needed.
The other is the NS’s Crescent Corridor Project to create a truck-competitive, high-capacity rail intermodal corridor along Interstate highways in 11 states. NS is working through a series of public-private partnerships. State and federal commitments already total $150 million, with NS currently funding up to $133 million, including $42 million in this year’s capital budget.
Transportation Certification Services recently completed training Cargill employees at Cargill’s Channelview, Tex., facility. TCS trained employees in basic rail safety and operations to safely and expeditiously handle grain trains delivered to the facility by the Port Terminal Railroad Association. The facility holds up to 300 cars, necessitatinga coordinated, safe operation.
Overland Park, Kan.-based TCS and its affiliate, Rail Temps Inc., have been addressing training and staffing needs for North American railroads and rail-related industries since 1991. Cargill is a privately held, international producer and marketer of food, agricultural, financial, and industrial products and services.
The Florida Coalition for Safe Highways asked Gov. Charlie Crist Monday to veto a bill that it said would make highways less safe as well as “subsidize the trucking industry and require local and state governments to spend approximately $150.7 million annually to compensate the infrastructure damage that would result from heavier trucks.”
Passed in the final hours of the 2010 legislative session, House Bill 1271 went to the governor’s desk late on Friday. The coalition said “lobbyists for powerful trucking companies” inserted language increasing the legal load from 80,000 to 88,000 pounds.
The coalition said that based on a 2000 U.S. Department of Transportation Comprehensive Truck Size and Weight Study, the additional 8,000 pounds world make trucks "more difficult to control and more likely to be involved in a serious accident."
Veto of the bill was also urged by Steve Casey, executive director at the Florida Sheriffs Association; Fraser Howe, PE, chairman of the American Society of Civil Engineers (ASCE) committee, which published a 2008 Report Card on Florida's Infrastructure; and Tom Guilmet, the executive director of the Florida Safety Council.
Amtrak said Thursday that officials from Virginia Railway Express have asked it to continue operating VRE trains beyond June 28, when Amtrak’s contract was to expire. VRE acknowledged the request, while also alluding that Amtrak was obstructing the transition of operations.
Amtrak President and CEO Joseph Boardman said Amtrak wants to help VRE and ensure VRE passengers are not negatively impacted by the “inability” of contractor Keolis Rail Services America to start operations. However, he said, if Keolis is unable to meet its contractual obligations, then VRE should re-bid the contract.
Keolis Rail Services America last October was chosen to VRE to assume operations. But VRE Chairman Paul Milde reportedly said VRE has asked Amtrak for breathing room because Amtrak is interfering with the transition. He also said VRE has asked members of Congress to intervene in the matter, claiming Amtrak was hindering the transition process.
For its part, “We are prepared to take over service on the 28th,” said Gregg Baxter, Keolis Rail Services America general manager.
Keolis Rail Services America is part of the Keolis Group, based in Paris.
CSX Corp. on Thursday announced the appointment of William Clement to succeed Jim Hertwig as president of CSX Intermodal when Hertwig retires at the end of June.
CSX said that Clement, currently assistant vice president ofsales and marketing for CSX Intermodal, “has made significant contributions in a wide variety of operational, analytical, and commercial roles within the intermodal business over the past 20 years.”
“Bill Clement brings the right combination of experience, customer relationships, and strong leadership abilities to this job,” said Clarence Gooden, CSX executive vice president of sales and marketing and chief commercial officer. “Our intermodal service offering is ideally positioned to meet our customers’ evolving supply chain requirements while addressing the environmental concerns of our customers and nation.”
The board of directors of Canadian Pacific Railway on Thursday approved a C$70 million (US$66 million) increase in capital spending in 2010. CP now plans to invest between C$750 million and C$800 million (US$710 million and US$757 million) on capital improvement programs this year.
The board also declared an increase in CP’s next quarterly dividend to C$0.27 per share from C$0.2475 per share, payable on July 26, 2010, to holders of record at the close of business on June 25, 2010.
“The improving economy, our strong balance sheet and solid earnings and free cash flows have enabled us to expand our capital programs totake advantage of growth and productivity opportunities,” said Executive Vice President and Chief Financial Officer Kathryn McQuade. “CP’s strong franchise showed resilience through the recession and this dividend increase continues our trend of dividend growth aligned with earnings growth.”