Freight carload traffic on U.S. railroads was at a nine-week high in the week ended June 6, showing "slight signs of a slowly improving economy," the Association of American Railroads announced Thursday.
U.S. carriers originated 260,282 freight carloads during the latest week, down 19.8 % from the same week in 2008. Intermodal volume of 188,801 trailers or containers was off 20.1% from last year.
Eighteen of 19 carload commodity groups were down from last year; declines ranged from 6.7% for grain mill products to 68.2%% for metallic ores. The only group showing an increase was that labeled “all other carloads,” which was up 24.4%.
Canadian railroads reported volume of 55,914 cars for the week, down 27.9% from last year, and 39,357 trailers or containers, down 19.7%.
Mexican railroads reported originated volume of 11,791 cars,down 19.9% from last year, and 4,634 trailers or containers, down 21.9%.
Combined North-American rail volume for the first 22 weeks of 2009 on 14 reporting U.S., Canadian, and Mexican railroads totaled 7,346,180 carloads, down 20.2% from last year, and 5,074,383 trailers and containers, down 16.7%.
The Surface Transportation board issued a decision Thursday intent on "clarifying" that Union Pacific has a common carrier obligation to quote rates for the movement of chlorine to three disputed destinations.
The case has been closely watched at a time of rising concerns that moving potentially lethal materials through certain areas poses a threat to national security.
STB made these findings:
"In January 2009, US Magnesium LLC (USM) requested that UP establish common carrier rates for the transportation of chlorine from Rowley, UT, to 35 different destinations. UP established rates for most of the traffic, but replied that it would not publish rates from Rowley to four destinations in or near Houston and Dallas, TX, and Allemania and Plaquemine, LA because: (1) although UP previously published rates for these destinations, USM never shipped to them; and (2) it was not a reasonable request to expect UP to transport chlorine over 1,000 miles through multiple High Threat Urban Areas (HTUAs), as defined by the Transportation SecurityAdministration (TSA) ... when there is an abundant supply of chlorine located closer to the denied destinations....
"Many shippers and receivers filed comments in opposition to UP’s petition, and railroads and associations of railroads filed comments in support, while other interested parties filed comments noting their various concerns. ... USM, North America’s sole producer of magnesium, explains that chlorine is a co-product of its magnesium production process. The volume of chlorine produced by USM in a given year varies directly with the demand for magnesium. USM asserts that increased demand for magnesium led USM to ship chlorine via UP to Allemania in 2007 and to Houston in 2008. USM points out that, if it is unable to reach a market for its chlorine, then it must release it into the air, which is not cost-effective and may cause it to decide to stop producing magnesium in the U.S. Several shippers also dispute UP’s claims and assert that the supply of chlorine in the Gulf Coast region is inadequate, requiring customers in the region to have chlorine delivered from over 800 miles away, including from Canadian sources.
"[W]e find that UP has an obligation to establish rates and service terms in response to USM’s request, and subsequently to provide service under the rates offered.
"UP alleges safety concerns in arguing that USM’s requests are unreasonable, but it fails to establish that the transportation at issue is unsafe. Indeed, the record shows that UP has moved chlorine for USM to two of the denied destinations in the last 2 years."
Asserting that China is "at the epicenter of revolutionizing rail infrastructure and operations for the 21st Century," IBM has announced the opening of a Global Rail Innovation Center in Beijing.
The center will bring together of the world's foremost industry leaders, researchers, and universities" in a country the is introducing "new high speed trains and a hugely expanded rail network at an unprecedented pace," said IBM in an announcement released Thursday in Beijing and at IBM headquarters in Armonk, N.Y.
Members of the center's advisory board include: Judge Quentin L.Kopp, chairman of he California High Speed Rail Authority; Professor Joseph Sussman of the Massachusetts Institute of Technology; Tsinghua University; Michigan Technological University; Motorola; Railinc; Sabre; and RMI.
Karl Dierkx, director of the new center, said that "by bringing together leading industry experts and advanced technologies, we can help rail provides increase rail capacity, efficiency, safety, and customer service, resulting in networks of smarter rail systems around the world."
Greenwich, Conn.-based Genesee & Wyoming Inc. Thursday said it foresaw its second quarter profitability falling between 35 and 37 cents a share, down at least 18% from its earlier projection of 45 cents a share, due to a continuing decline in freight traffic on its 63 short line and regional railroad properties.
Analysts, on average, expected 44 cents, which has moved down 3 cents during the past two months.
Genesee & Wyoming also lowered its revenue guidance to $130 million, compared with an earlier expectation of $140 million to $145 million. G&W expects its operating ratio to be between 81% and 83% during the quarter; it had expected a ratio of 79% to 80%.
G&Ws overall traffic for the first two months of the second quarter fell 5.5% from the comparable period a year ago. On a same-railroad basis, measured against properties under the G&W banner one year ago and excluding recent acquisitions, traffic dipped 21.4%.
The company said it so far has furloughed 234 employees since the beginning of the year, including 70 in the current quarter. In addition, 64 of the company’s locomotives, roughly 12%, are in storage,including 17 units placed in storage since the end of the first quarter.
Florida legislators May 1 rejected a proposed $1.2 billion regional rail system, "SunRail," centered in Orlando and envisioned to serve five nearby counties, but Florida’s Department of Transportation still must honor $44 million in costs owed numerous suppliers.
The costs include $462,000 owed to CSX Transportation, for rail safety inspection, flagging, and signal maintenance. CSX had planned to sell right-of-way to the state as part of the proposal.
State Sen. Paula Dockery, who helped defeat the proposed rail plan, said the cost was "an outrage," saying FDOT and other SunRail supporters spent "a quarter of a million taxpayer dollars to lead rallies and bus businesspeople upto Tallahassee to lobby this flawed CSX commuter-rail deal." SunRail backers said the costs were necessary to prepare for the proposed service. Moreover, "We don't see this as a waste of money," said Christine Kefauver, representing Orlando Mayor Buddy Dyer, who supported SunRail. "A lot of environmental work has been done that has a shelf life."
FDOT records show that the largest sum, $10.1 million, is owed to EarthTech, the project’s primary consultant. Other contractors reimbursed, or to be paid, include: Lochrane Engineering, $3.4 milllion: WRS Environmental Services, $2.6 million; URS Corp., $1.9 million; and Shutts and Bowen, real estate attorneys, $1.7 million.
Unless other means are found to fund SunRail, the deal struck by CSX and FDOT expires June 30.
New Jersey Transit's need to provide enough power to haul 10-car bilevel trains spurred the corporation Wednesday to approve a $72 million contract with Bombardier Transportation for nine ALP-46A electric engines. The order supplements NJT’s current fleet of 27 ALP-46 units, and will help replace 32 older ALP-44 engines ordered as early as 1990.
“It’s more cost-effective than rehabilitating the old ALP-44s and the first ALP-46A will be delivered by next year and the order filled by 2011,” said NJT Executive Director Richard Sarles.
NJT’s increasing use of Bombardier multilevel equipment on its three primary electric lines—the Northeast Corridor, North Jersey Coast Line and Morris & Essex Lines—has increased passenger capacity, but at times prompted the need for the company to use two electric engines to ensure prompt performance of 10-car trains.
The ALP-46A units are each rated to sufficiently power a 10-car consist; in addition, the ALP-46A units are expected to provide more rapid acceleration, reducing potential dwell time issues, particularly on the Northeast Corridor.
Lake Oswego, Ore.-based railcar supplier Greenbrier Cos. will receive a $75 million term loan from New York investment firm WL Ross & Co. LLC, allowing the company to pay down debt and prepare for future industry growth. The two parties continue to discuss a possible increase in the loan’s size, to $150 million.
In return, Greenbrier has issued warrants to WL Ross to purchase 3.4 million shares, amounting to a company stake of 17% stake, with a $6 “strike price,” or roughly a 25% discount to the stock’s closing price Wednesday. WL Ross will also buy at least $1.5 million in stock.
The squeeze on railway suppliers already has forced Greenbrier Cos. to slash its dividend and implement cost-cutting measures. Greenbrier Cos.also has diversified by pursuing other related businesses, including refurbishment and parts, leasing and services, and marine manufacturing. More than half of the company's revenue in its latest fiscal year came from outside railcar production.
Shortly before noon Thursday, shares of Greenbrier Cos. traded at $8.33, up 4.52%.