Among all railroad employees, the crews that operate trains have taken the hardest hit since traffic began to plummet. Statistics released Wednesday by the Surface Transportation Board showed a 12.01% decline in transportation (train and engine) employment in March, to 59,901, compared with March 2008. Total employment was down 5.18% to 154,960 in March 2009.
Maintenance of way and structures employment rose 0.35% in March to 34,675. Transportation (other than train and engine) was up 7.07% to 7,106. All other categories declined: executives, officials, and staff assistants, 10,013, down 0.81%; professional and administrative, 13,520, down 1.32%; and maintenance of equipment and stores, 29,745, down 1.95%.
One of America's great commuter rail success stories is starting to look more like a cautionary tale. South Florida's Tri-Rail system, which increased its ridership 22.9% last year to 4,303,509, is preparing to eliminate 20 of its 50 weekday trains that operate between Miami and West Palm Beach, plus all of its weekend and holiday trains.
Nothing short of a miracle that no one expects can forestall this worst-case scenario, and Tri-Rail is slimming down, hoping to get by for the next 18 months on a vastly reduced operating budget until the national economy--and the tax money that supports Tri-Rail--get back to normal. The trains come off starting Oct. 5.
When and if the trains come back, riders who have been enticed to give up their auto commutes will have to be wooed back. In addition to the cuts in service, a fare increase that goes into effect next month is expected to reduce ridership by 6%.
Tri-Rail's last hope for operating dollars to replace funds lost to the recession ended when a proposed $2-a-day rental car tax died in the legislature, which adjourned Tuesday after approving a $65 billion state budget that included nothing for Tri-Rail. (The legislature also turned down efforts to advance SunRail passenger service in central Florida.)
Serving southern Florida for the last 20 years, Tri-Rail started up as temporary commuter service to relieve highway congestion while an Interstate highway was being rebuilt. It was so successful that it stayed, and grew to the point where South Florida Regional Transportation Authority Executive Director Joe Giuletti was able to say just a few months ago: "People in South Florida, like record numbers across the country, have come to realize that using public transportation isn't just about saving money on gasoline; it's also about mobility, sustainability, and taking responsibility for the environment."
Unfortunately, some people in Florida and across the country still have to learn that commuter rail service isn't just about moving the masses--it's also about dedicated funding. That's an item Florida lawmakers refused to find for Tri-Rail.
FreightCar America Inc. Tuesday reported a first-quarter profit of $2.6 million, or 22 cents a share, compared with a loss of $10.2 million, or 87 cents a share, in the first quarter of 2008. Beyond the obvious turnaround, the company’s profit also beat Wall Street consensus estimates of 13 cents per share.
That didn’t stop Wall Street from punishing shares of the company Tuesday and early Wednesday. Analysts cited as reasons revenue falling short of expectations, and declines in new orders, deliveries, and backlog. First-quarter revenue of $39.6 million fell far short of analyst expectations of $109.9 million; the amount also was down from $95.1 million in the first quarter of 2008.
FreightCar America shares continued to fall Wednesday morning, and were down 72 cents or nearly 4% to $17.32 Wednesday afternoon, after retreating more than 10% on Tuesday.
Company Chief Executive Chris Ragot said the company remains in a cost-cutting mode, with first-quarter selling, general, and administrative expenses 15% below the comparable 2008 quarter. "We will continue to assess market conditions and are prepared to make further reductions as necessary," he said.
Ragot also said, “Despite the challenging market conditions, we are pleased with our financial results for the first quarter.” He added, “The preservation of our strong balance sheet is critically important and our highest priority. Our cash position and liquidity remain strong, with cash on hand of approximately $130 million at the end of April. We maintain two credit facilities totaling $110 million, both of which are undrawn.”
Net orders for new railcars totaled 339 units in the first quarter of 2009, which represents a decrease of 1,367 units or 80% from 1,706 units ordered in the fourth quarter 2008. Railcar deliveries totaled 974 units in the quarter, including deliveries of 374 cars sold and 600 cars leased. This compares to 1,287 total units delivered in the first quarter of 2008. Total backlog of unfilled orders was 1,985 units at the end of the quarter, compared with 2,620 units at the end of the fourth quarter of 2008.
High speed train building is booming in France, where the government regards it as a recession buster, and the earnings of TGV builder Alstom reflect it. Alstom announced Monday that it earned a net profit of 1.1 billion euros ($1.48 billion) in the year ended March 31. That was up from 852 million euros in the prior year. Alstom notched full-year sales of 18.75 billion euros ($25 billion) that were 11% higher than 2008 sales levels, and close to the analyst forecast of 18.99 billion euros.
At a news conference in Paris Tuesday, company CEO Patrik Kron acknowledged that Alstom could be adversely affected by global economic crisis this year, noting, “The brutal downturn in the world’s economy has created uncertainties in our markets.”
But Kron also noted that government stimulus plans in the United States and China contain "a rail infrastructure element.” What this will mean for Alstom depends on "the timescale and nature of the projects," he added. By contrast, demand for new electricity generation equipment, another key business sector for the company, was seen to be declining as some future projects face postponement.
The just-published May issue of Simmons-Boardman's overseas publication, International Railway Journal, spotlights the high speed scene in a cover story, "France invests its way out of the recession." IRJ reports that French National Railways (SNCF) will increase its total planned investment by 42% this year to 2.27 billion euros as part of the government's economic revival plan. This means, among other things, that expansion of the TGV fleet is being accelerated, and Alstom should benefit.
This year SNCF will receive 15 TGV Duplex high speed trains, one more than previously planned, at a cost of 100 million euros; an additional 100 million euros is being made available to increase another Duplex order from 13 trains to 17; and 165 million euros is allocated for rehabilitation of older trains.
Amtrak has made its recommendation for optimal restoration of passenger rail service linking Cleveland, Columbus, and Cincinnati, including a preferred route for such “3C” service—something the Buckeye State has considered, and spurned, for at least 20 years.
Amtrak says its best potential route between Cleveland and Columbus, the state capital, would use existing CSX right-of-way. An alternate route linking Akron with the two cities would add an hour of travel time to the overall trip, Amtrak said. The choice, however, is up to Ohio, an Amtrak spokesman stressed.
Southwest of Columbus, the route to Cincinnati would include Dayton, while the Cincinnati terminus likely would not be the city’s historic Union Terminal; Amtrak cites the high cost of capital improvement and existing freight rail traffic interference as obstacles to the reuse of the station.
Last March Gov. Ted Strickland said the state could restore passenger rail service on the 3C route using $250 million in federal stimulus money, with the long-term goal of making the route a high speed corridor. Strickland requested Amtrak to evaluate the route’s potential in March 2008.
Corridor endpoints Cleveland and Cincinnati currently are served by Amtrak long-distance trains, with Cincinnati served only three times a week in each direction. Dayton and Columbus lost Amtrak service in 1979.
Rep. Peter DeFazio (D-Ore.), chairman of the House Transportation & Infrastructure Committee's Subcommittee on Highways and Transit, will be the featured luncheon speaker Thursday, May 7, during the one day symposium entitled Selling to America’s Railroads: Freight, Intercity and High Speed Rail Development–How Stimulus Funds Will Be Spent on Rail.
The symposium, sponsored by the Railway Supply Institute, the OneRail Coalition, and Women in Government Relations, will run from 8:00 a.m. to 3:00 p.m. at the Phoenix Park Hotel Ballroom, 520 North Capitol Street, NW, Washington, DC 20001.
DeFazio will address the symposium armed with recent experience. Joined by fellow Oregon Rep. Earl Blumenauer (D), DeFazio last week celebrated Transportation Secretary Ray LaHood's awarding $75 million in federal funds for Portland, Ore.'s streetcar system, which includes funds to purchase six streetcars from domestic manufacturer United Streetcar LLC, recently established by Clackamas, Ore.-based Oregon Iron Works.
Besides DeFazio, other government and industry authorities will analyze the availability of stimulus money for rail, including: Karen Rae, deputy administrator, Federal Railroad Administration; Stephen Flippin, director of Federal Affairs, CSX Corp.; Mike Rock, vice president of External Relations, Union Pacific; Darrell Wilson, Norfolk Southern assistant vice president, Government Relations; Frank Busalacchi, secretary of transportation for the state of Wisconsin’s Department of Transportation and also chair, States For Passenger Rail; and Donald Itzkoff, partner, Nossaman LLP, and also former FRA deputy administrator.
Along with flexible spending money available for freight trail projects, some $9.3 billion has been committed toward intercity and high-speed passenger rail development. The U.S. Department of Transportation has issued a strategic plan on how to use those funds to improve/deploy high speed rail, outlined by President Obama April 16. Discussion will focus on what this means for rail and rail suppliers.
The cost to RSI and WGR members is $150 per person and includes breakfast and lunch ($200 for non-members).
Contact RSI’s Nicole Brewin at (202) 347-4664, or email her at firstname.lastname@example.org. Agenda information and registration forms are available at www.railwaysupply.org/convention/Selling2009.aspx.
The Salem County Short Line railroad, located in New Jersey’s southwestern quadrant south of Philadelphia, will get $950,000 in federal funding to bolster freight rail traffic in the region and, possibly, improve ship-to-rail intermodal movements.
New Jersey’s two U.S. senators, Frank R. Lautenberg and Robert Menendez (both Democrats), and Republican Rep. Frank LoBiondo are credited with securing the funding for the 18-mile short line, which runs from Swedesboro to the port of Salem on the Delaware River.
"Our rail line is a crucial element to Salem County'seconomy and a critical factor in the continued economic development," said county Freeholder Deputy Director Beth Timberman. "Investment in our rail line is truly economic stimulus."
Current customers on the short line include floor covering manufacturer Mannington Mills, the South Jersey Farmers Exchange, and Anchor Glass Container Corp.
"It's crucial that we invest in the type of projectsthat will create jobs and keep the economic engine of Salem County running," Menendez said. "The rail line supports our vital manufacturing and agricultural centers and it helps create employment."
One local rail industry observer tells Railway Age that the upgrade in Salem County may aid efforts in neighboring Gloucester County, north of Salem, to restore passenger rail service there. Existing freight rail service provided by Conrail Shared Assets almost certainly would increase along with any increased traffic traversing the Salem County Short Line, necessitating track upgrades and, possibly, more track capacity to handle both freight and passenger traffic expected.