Corn and soybean products could bolster rail freight volume for the 2009/2010 crop year, according to a report by Morgan Stanley Research analysts William Greene and Adam Longson. “While total production/export volumes were flat, corn and soybean forecasts implied volume improvement (exports up 9% and 2% and production flat and up 2%, respectively), whereas wheat forecasts predict sharply down volumes (exports down 11% and production down 19%)," the report said. "That said, the USDA forecast for falling wheat stocks could stimulate near-term volumes if higher prices encourage destocking."
Green and Longson believe farmers “have built significant grain inventories in response to weak prices. In this context, we view flat grain production as a positive for two reasons: (1) were volumes to track production rates, flat volumes in 4Q09/2010 would represent a significant second derivative improvement from recent, sharp [year-to-year] declines, and (2) tempered grain production has the potential to stimulate favorable prices - which would likely lead to de-stocking, thus stimulate volumes.”
The Morgan Stanley duo believe Canadian National and UnionPacific will reap the biggest benefits among the Class I railroads. “[W]e view the forecast as a modest positive for rails with heavy U.S. grain exposure (Canadian and Western rails). However, poor wheat exports are an incremental, offsetting negative for [BNSF], as export wheat volumes are some of the highest margin moves on the railroad.”
The Surface Transportation Board (STB) has approved a request from Wilmington, Del.-based chemical shipper E.I. du Pont de Nemours & Co. (DuPont) to withdraw its November 2008 rate case complaint against CSX Transportation. Specifics of a settlement, however, have not been made public.
STB Acting Chairman Francis P. Mulvey did say in a statement that this is the first large rate case mediated to settlement under STB’s oversight. "This mediation demonstrates that active Board staff involvement at the early stages of the case process can help narrow or, as here, completely resolve, disputed issues," said Mulvey. "I commend DuPont and CSXT, and the Board's staff mediators for their efforts. The agency will continue to promote mediation as an alternative to formal and more expensive dispute resolution processes."
DuPont’s complaint, filed last November, said CSX rates for the movement of 38 commodities between 99 origin and destination pairs "possesses market dominance over the traffic and requested that the maximum reasonable rates be prescribed along with other relief pursuant to the Board's Stand-Alone Cost [SAC] test." The SAC test is used in the most complex rate cases that involve large sums of money.
STB’s announcement is available on its website, www.stb.dot.gov, under "E-LIBRARY," then under "Decisions & Notices," beneath the date "05/11/09."
Add Rochester, Minn., officials to the list of those seeking federal stimulus funding to advance high speed rail plans and, in the process, possibly reroute freight rail traffic. The plan is supported by a powerful local political force, the famed Mayo Clinic.
Plans for a $325 million, 48-mile “Southern Rail Corridor” would increase passenger trains speeds and frequency between the state’s Twin Cities and Chicago. The reroute would run south of Rochester west across Dodge County in southeastern Minnesota.
The Mayo Clinic wants a passenger rail link to assure ease of access for patients, but has feuded for years with operators of the Dakota, Minnesota & Eastern Railway Co., now a subsidiary of Class I Canadian Pacific, seeking to reroute freight activity away from its location. Tracks currently pass within 100 feet of the clinic.
But the proposed bypass route has generated opposition of its own. One critic says the Rochester proposal is inferior to Amtrak’s existing service route, which roughly parallels the Mississippi River and is almost 50 miles shorter.
Amtrak’s long-distance Empire Builder is the sole passenger rail link at present between Minneapolis/St. Paul and Chicago; Amtrak’s Hiawatha Service offers more frequent trains between Chicago and Milwaukee.
Now almost six months behind its original opening debut in December, and two months after a revised launch in late March, Austin, Tex.’s 32-mile diesel multiple-unit (DMU) system still is struggling to commence operations, according to Fred Gilliam, chief executive of Capital Metropolitan Transportation Authority.
"Capital Metro is committed to opening the MetroRail line when it is ready,” Gilliam said. “Rather than picking a new date now, we will assess progress during the final comprehensive operational testing phase and begin service when all remaining steps are complete. Capital Metro will report back to the community by mid-June. We are as eager to get MetroRail started as you are."
Gilliam stressed that some progress has been made. "Last week we completed the grinding of the entire rail line. This work was performed to remove rust and other buildup on the rail which sometimes prevents proper shunting, the process where the train wheel completes a circuit when it makes contact with the track.” And, he said, as of May 9, “the Centralized Traffic Control (CTC) system which monitors a train's real-time location on the line and helps control all signals and switches has been validated and is now operational. This was a major milestone because it allows our trains to operate at their planned speeds."
Operations testing is also under way, he said. “In this phase, testing of the vehicles and training of the operators are conducted at full speeds. Up to this point, all testing has been conducted at lower speeds. Trains are now traveling at speeds up to 60 mph in some areas."
A year ago, Capital Metro and the Federal Railroad Administration were at odds over engineer certification and emergency preparedness, issues which lingered into this year. FRA also classified Cap Metro’s fleet of six Stadler-Bussnag diesel units as “commuter rail,” rejecting a request to classify the system as a diesel light-rail transit (DLRT) system comparable to San Diego County, Calif.’s SPRINTER service or New Jersey Transit’s RiverLINE operation.
New Jersey Tuesday announced plans to restore passenger rail service along an existing rail right-of-way traversing Gloucester County, southeast of Philadelphia. The announcement was made in Woodbury, N.J., the county seat, which would be served by the route choice “NJ-3,” one of three routes that were evaluated by the Delaware River Port Authority and its rail transit subsidiary, PATCO.
Two other routes, each along a major state highway, were evaluated but turned aside, in part due to concerns about congestion and sprawl, and in part due to the higher ridership numbers projected for NJ-3. Behind the scenes, Rowan University, located in Glassboro, N.J., lobbied strenuously for the route choice selected.
Still unclear is the choice of rail mode to be used. Many Gloucester County officials and citizens seek a “one-seat ride” to Center City Philadelphia, advocated dual-power modified PATCO equipment that can operate over existing PATCO tracks, powered by third rail. Others have suggested extending New Jersey Transit’ existing RiverLINE service, a diesel light rail transit (DLRT) operation, south to Woodbury and Glassboro, with a transfer to and from Philadelphia via PATCO in Camden.
A similar dispute in the mid-1990s divided rail advocates and local officials, causing an earlier effort to falter.
General Electric Co. Tuesday said it will open a new, state-of-the-art battery manufacturing plant in New York State’s Capital Region to serve as the main manufacturing facility for GE’s newly formed battery business. The company plans to invest $100 million, and expects the effort to generate 350 manufacturing jobs.
Moreover, the company says its development of a high energy density, sodium-based chemistry battery providing energy storage will be applied first to GE’s hybrid locomotive, scheduled to debut in 2010. Company subsidiary GE Transportation will oversee the effort.
GE this week made its submission for federal stimulus funds from the Department of Energy to assist the effort. The company says it has invested $150 million of its own money to develop advanced battery technologies.
Jeff Immelt, GE president and CEO, said GE chose New York for the plant site due to strong efforts by Gov. David Paterson and by Dennis Mullen, president of the Upstate Empire State Development Corp., supporting the GE project.
"This type of public-private partnership is essential to rebuild America’s manufacturing base, create new jobs, and to accelerate the pace at which new technology comes to market,” Immelt said in a statement. "We believe the advanced battery business could be a $1 billion business over the next decade.”
GE said the new factory’s exact location, still to be determined, will be in close proximity to GE Global Research in Niskayuna, N.Y., east of Schenectady, which also advances battery chemistry development. GE long has maintained a presence in New York’s Capital Region, though that presence has waned in recent times.