Railroad stocks handily outperformed the Dow Jones Industrial average in a Wall Street rally that followed the release of unexpectedly strong economic indicators. Reuters said the new data "bolstered optimism that the worst of the global recession was past."
In early afternoon trading, the Dow was up 2.55%, with railroads showing the following gains: CSX, 7.02%; Union Pacific, 6.60%. Norfolk Southern, 6.53%; Burlington Northern Santa Fe, 5.95%; Canadian Pacific, 4.23%; Kansas City Southern, 3.2%; and Canadian National, 2.72%.
One welcome sign was the Commerce Department's report on Monday that U.S. construction posed an unexpected 0.9% gain in Ariel--the second month in a row that builders around the country increased spending. Economists had expected a 1.2% drop in April.
More good news came from the Institute for Supply Management, which said its May index of manufacturing was 42.8, its highest level since last September. Thomson Reuters analysts had anticipated a May index of 42.
Meanwhile, railroad traffic, while still registering double-digit losses, appears to have slowed its rate of decrease. U.S. carload traffic for the week ended May 23 was 21.5% below the corresponding week in 2008, but 4.9% ahead of the previous week.
OMERS Private Equity of Toronto, Ontario, has acquired Nordco, Inc. from The Riverside Co, Nordo announced Monday. Terms and amount of the sale were not disclosed, though a Riverside Co. spokesman allowed that the deal was “extraordinary,” and “a wonderful return for our investors.”
Oak Creek, Wis.-based Nordco Inc. has about 330 employees in several subsidiaries, including: Dapco Industries , Ridgefield, Conn.; Nordco Rail Services of Lee’s Summit, Mo.; Shuttlewagon of Grandview, Mo., and J.E.R. Overhaul of Arcola, Ill. Nordco manufacturing facilities are located in Oak Creek and in Oshawa, Ontario.
The Riverside Co. purchased Nordco as part of a management-backed buyout in 2003. The firm moved Nordco into a larger facility, launched a rebuild and repair division, and added the other companies during its parental tenure.
With 693 large and small U. S. railroads reporting, the first quarter of 2009 saw double- and triple-digit improvements in safety, according to statistics posted on the Federal Railroad Administration's website May 29.
Train accidents were down 30.6% to 450 from the 648 reported in the January-March period last year. Collisions declined 2% to 39, and derailments were off 32.5% to 318.
Track causes were cited in 137 train accidents, down 38% from last year; human factors for 149, a decline of 33.2%; and signal causes for 13, down 7.1%. Miscellaneous causes were blamed for 74 accidents, down 28.2%.
Total fatalities, mostly caused by grade crossing accidents and trespassing, declined 1.3% to 350. Crossing fatalities were down 2% to 49, and trespassing deaths were up 3.3% to 94. There were seven employee fatalities compared with six last year.
Accidents rates, which take into consideration the exposure factor (total traffic), were also down in significant categories: The train accident rate declined 19.9%; the yard accident rate dropped 20.5%; and the total accident/incident rate was down 9.98%.
Beginning today, the Downtown Seattle Transit Tunnel will operate later in the day, open until 1:00 a.m. instead of closing at 7:00 p.m. on weekdays and Saturday, and until midnight on Sundays. The tunnel will maintain its current opening hour of 5:00 a.m.
The extended hours immediately will allow 18 King County (Wash.) Metro and Sound Transit bus routes to operate later each day. The move also presages the addition of Sound Transit light rail transit services, which will share the tunnel with current bus services beginning July 18.
Russia announced Friday that it plans up to 54 Bombardier high speed trains valued at up to $770 million so part of its preparations for the 2014 Winter Olympics to be based in Kochi, on the Black Sea.
First Vice President Fyodor Andreyev told a news conference that the trains should be delivered by 2013. Reuters suggested that purchase of a fleet of modem trains from a foreign supplier would underline Russia's desire to host "a showcase international event."
Russian Railways said the cost of the trains world not come from the $12 billion Russia has set aside for the Olympics event, suggesting that financing might come instead from a syndicate of lenders.
Russia has already placed orders for eight Siemens (Germany) high speed trains costing $400 million, and eight Alstom (France) trains valued at $180 million.
One of the world's most ambitious railway expansion projects, a $4.5 billion line linking regions crossed by Russia's Siberian Railroad, took a step forward Thursday with the announcement that the four participating countries would form a joint venture company to continue preliminary studies initiated last year.
The agreement to form a joint venture was reached at a meeting of high-ranking Austrian, Russian, Ukrainian, and Slovakian railway officials in the Russian Black Sea resort city of Kochi.
Russia's broad-gauge will be used in the expansion from Konice in Slovakia to the Austrian capital, Vienna. Current technology enables a smooth gauge change.
Plans for the line were unveiled in April 2008 when the railways signed a protocol to initiate pre-project studies.
The goal is to make the rail systems more competitive against sea and road transport.
Traveling to Baltimore on business, or to see the Birds play at Oriole Park at Camden Yards? Bethesda, Md.-based developer Hospitality Partners has signed a contract with Amtrak to construct and manage a hotel on the upper three levels at the city’s Pennsylvania Station, located on Amtrak’s Northeast Corridor.
The 77-room, $9 million hotel, to be called The Inn at Penn Station, reportedly would be the first such hotel at a rail station in the Northeast that also continues to serve rail passengers. Hotel rooms will line the station's perimeter and will be reached from corridors overlooking the main concourse below. Construction is expected to begin this year and be completed by late 2010.
Amtrak currently commands roughly 61% of the combinedair/rail travel market between New York and Washington, making the hotel’s location potentially lucrative for the national rail passenger carrier. Amtrak spokesman Cliff Black says that, in addition, the city is pinning much of its redevelopment efforts for the neighborhood, dubbed the Charles North renewal area, using Penn Station as a central focus.
The station is also served by Baltimore’s light rail system, operated by the Maryland Transit Administration, bolstering intracity access.
Erie, Pa.-based GE Transportation Friday said it had signed “two landmark agreements” with partners in Kazakhstan. The first, a 15-year customized service agreement (CSA) with Kazakhstan Temir Zholy (KTZ) valued at nearly $500 million, is the largest service agreement outside North America in GE Transportation’s history. Asecond agreement, outlined in a Memorandum of Understanding signed by bothparties, will involve GE Transportation and KTZ investing jointly in a GE Evolution® Series locomotive assembly plant in Astana, Kazakhstan.
In the first agreement, GE will provide maintenance and overhauls for Joint Stock Company (JSC) Lokomotiv’s fleet of 404 GE-modernized locomotives. JSC Lokomotiv, a subsidiary of KTZ, the nation’s state-owned railway, manages KTZ’s locomotive fleet. The 15-year contract is GE Transportation’s largest for locomotive maintenance outside North America and its first in Kazakhstan.
GE has teamed up with Kamkor Repair Corp. (Kamkor) to further improve performance of KTZ’s fleet of “2TE10” locomotives by providing guaranteed locomotive availability and reliability; supply of all material and componentsto safeguard JSC Lokomotiv’s fleet investment; manage locomotive component inventory and material logistics; and share training to ensure long-term maintenance capabilities from local personnel. Kamkor will provide the facilities, labor, and the remaining legacy equipment for the 404 “2TE10” locomotives.
"The ongoing cooperation between GE and the Republic of Kazakhstan is proof that a strategic partnership can help fuel long-term economic growth,” said Jeff Immelt, chairman and CEO of Fairfield, Conn.-based parent General Electric Co., at an official signing ceremony in Astana (photo at left). “Today’s announcements ensure that Kazakhstan’s critical rail infrastructure remains modern and efficient in the future while expanding GE’s global service base. GE not only continues to supply industry-leading products and services, but also helps Kazakhstan create sustainable growth through manufacturing capacity and a world class rail system.”
In the second agreement, GE Transportation will be an investment partner in the 54,000 square meter Astana Assembly Plant, expected to begin production of GE’s Evolution Series locomotives by the end of the year. The facility would be capable of assembling approximately 100 locomotives per year while employing more than 600 people. KTZ in 2006 ordered 310 GE Evolution Series locomotives and the first 10 units are already in operation in Kazakhstan. The 300 other locomotives will be assembled in the Astana plant from components and kits manufactured in Grove City and Erie, Pa.
“GE and the Republic of Kazakhstan have a long and fruitful history of working together,” said Lorenzo Simonelli, president and CEO of GE Transportation. “Since 1995, GEand KTZ have collaborated to drive Kazakhstan’s economic development. These agreements are a natural extension of our existing strategic partnership with KTZ and mark an important milestone in Kazakhstan. Both the locomotive assembly plant and service capabilities we provide will allow the customer to maintain its assets for years to come. We look forward to building upon our productive relationships in Kazakhstan to continue to serve the country’s infrastructure needs.”
The Association of American Railroads is urging concerned industry participants to contact their U .S. Senators quickly to voice concern over the proposed rail antitrust bill, S. 146, now scheduled to hit the Senate floor June 2. A link at AAR’s website, http://www.bipac.net/alert.asp?g=aar, offers one way to create and customize a letter for delivery; AAR is offering to forward any letter to the appropriate Senate representative.
S. 146, sponsoredby Sen. Herb Kohl (D-Wis.), who sits on the Judiciary Committee, would repeal railroad antitrustexemptions and remove the Surface Transportation Board’s exclusive jurisdiction over the industry. The June 2 vote will be to invoke cloture, or shut off debate, on the bill. AAR urges those contacting their representative to urge a vote against cloture, so that the bill will not go to the Senate floor for a vote.
AAR maintains that S. 146, if enacted, would impose new and conflicting regulations, subjecting railroads to oversight by not only STB but the Department of Justice as well. Also, the bill could subject railroads to a duplicative and unnecessary dual regulatory scheme, allowing use of the court system for regulatory purposes.