Norfolk Southern shares were up 3.52% to $53.79 in late afternoon trading Friday following an upgrade from “neutral” to “overweight” by J. P. Morgan analyst Thomas Wadewitz. At the same time, Wadewitz downgraded Canadian National from “overweight” to “neutral.” CN shares were up 0 27%. By comparison, the Dow Jones Industrial Average was up 0.45%.
The prospect of an upturn coal traffic was a main factor in the NS upgrade. The J. P. Morgan analyst pointed out that NS gets 28% of its business from coal.
Noting that NSX shares have lagged those of some other railroads this year, Wadewitz said in a research note, “Our sense is that there is room for Norfolk Southern to do better than the rail group over the next 12 months.” He is holding to his yearend 2010 price target of $68 a share for NS.
The number of fatalities on U.S. railroads reached 217 in the first four months of this year, up 10.2% over the same period in 2009, according to preliminary statistics for January-April posted on the website of the Federal Railroad Administration’s Office of Safety Analysis.
Primarily responsible for the increase was a 26.1% jump in grade crossing fatalities, from 69 in the 2009 period to 87 this year. Trespasser fatalities added up to 112 this year, the same as in the corresponding 2009 period. Employee fatalities also remained at he same level as last ear—seven.
A total of 728 railroads reported 3,486 accidents/incidents in this year’s first four months, down 3.8% from last year.
Train accidents declined 7% to 596 in the 2010 period, with collisions down 20.8% to 38 and derailments down 3.6% to 429.
Track causes were blamed for 198 train accidents, down 4.3% from last year; human factors for 190, down 6.9%; equipment causes for 106, down 20.8%; signal cases for 17, down 10.5%; and miscellaneous causes for 107, down 1.9%.
The number of yard accidents declined 1.8% to 319 in the 2010 period.
Kansas City Southern said Thursday that a week after Hurricane Alex made landfall in Mexico, it was still “too early in the recovery process to estimate the financial impact of the repairs and business interruption which KCS and KCS de Mexico currently expect will be reflected primarily in their third-quarter financial results.”
The company said the storm caused “significant track damage around the Monterrey and Saltillo areas as well as on the lines to Laredo and Matamoros,” and “there have also been multiple track related incidents due to the hurricane.”
KCSM has issued freight embargos at the U.S.-Mexico border and into Monterrey while the damage is repaired. It could take up to two weeks to clear congestion and move trains currently parked as a result of the service disruption.
KCS as been sending equipment, track materials, and workers into Mexico from the U.S. as KCSM worked with connecting carriers on movement and staging of trains so that when lines reopen service it can return to normal as quickly as possible.
The company said it maintains insurance to cover such events with self-insured retention amounts ranging from $5 million to $10 million.
Germany’s Deutsche Bahn said Thursday it has dismissed several midlevel executives for paying bribes in Greece and at least two African nations, Algeria and Rwanda.
Allegations of the bribes were first reported several months ago to authorities, but DB has not moved on the matter until now. DB said the activity took place through DB International, its actively growing international business that provides expertise to nations that are building or upgrading their passenger rail and rail transit services.
DB itself was first to make the scandal public, but it declined tosay how many employees were involved. It did note it was ending contracts with several consultants also suspected of illegal activity. German federal authorities said at least 10 individuals were involved.
The bribes allegedly involved passed back to purchasing managers and public officials in the customer country, often designated as consultant’s fees.
U.S. freight carload traffic for the week ending July 3 scored another advance over traffic from the comparable week one year ago—up 18.8%--but also edged up 0.4% from the comparable week in 2008, the Association of American Railroads reported Thursday. One caveat: Comparison weeks in both 2009 and 2008 included the July 4th holiday, AAR said.
Still, the gains for the 26th week were significant, as 18 of the 19 carload commodity groups increased from the comparable week in 2009. They included metallic ores, up 205.5%; motor vehicles and equipment, up 122%; metals and metal products, up 80.3%; and crushed stone, sand, and gravel, up 50.6%. Seven of the commodity groups also posted gains over 2008 levels.
U.S. intermodal traffic rose 36.6% from the comparable 2009 week and was up 19.1% over 2008 levels, in fact reaching its highest level since week 42 of 2008.
Canadian carload volume was up 21.3% over the comparable 2009 period, while intermodal traffic rose 22.2%. Mexico’s two major railroads reported carload volume was up 21.9%, while intermodal gained 21.3%.
Combined North American rail volume for the first 26 weeks of 2010 on 13 reporting U.S., Canadian, and Mexican railroads was up 10.8% from last year, while intermodal advanced 13.6%.
Transportation Secretary Ray LaHood Thursday announced $293 million in federal funds to “coordinate transportation, housing, and commercial development investments” in numerous U.S. cities.
The funds will flow through two grant programs, the Bus and Bus Livability Grant Program and the Urban Circulator Grant Program. LaHood, along with Federal Transit Administrator Peter Rogoff, announced the winners of the two competitive grant programs during a press conference call in Washington.
Five new streetcar projects and one Bus Rapid Transit project will be funded with $130 million from the FTA’s Urban Circulator Program. The five rail projects, awarded roughly $105 million, or 36% of the funds, are: the St. Louis Loop Trolley Project ($25 million); the Charlotte (N.C.) Streetcar Starter Project ($25 million); the Cincinnati Streetcar Project ($25 million); the Fort Worth (Tex.) Streetcar Loop ($25 million); and Dallas’ Olive/St.Paul Street Loop ($4.9 million), extending the current McKinney Trolley to connect with DART light rail at St. Paul Station.
An additional 47 projects aimed at upgrading bus services and facilities will receive more than $163 million from the FTA's Bus and Bus Livability Program.
“Streetcars are making a comeback because cities across America are recognizing that they can restore economic development downtown—giving citizens the choice to move between home, shopping, and entertainment without ever looking for a parking space,” said Rogoff. “These streetcar and bus livability projects will not only create construction jobs now, they will aid our recovery by creating communities with the potential to be more prosperous and less congested.”
DOT said 65 applications totaling more than $1 billion were submitted to the Urban Ciruclator Program, while 281 applications totaling more than $2 billion were submitted for the Bus and Bus Livability Grant Program. Projects were eligible to receive up to 80% in federal funding, although a maximum of $25 million was placed on Urban Circulator projects.
A detailed list of the projects can be found here.
Officials from Cleveland’s Regional Transportation Authority (RTA) in recent years have urged passenger rail advocates to consider the virtues of Bus Rapid Transit (BRT), in the process chiding those who questioned the tag line of “just like light rail, but cheaper.”
(Railway Age has been included in that scolding, following its April 2009 article evaluating BRT and LRT, entitled "Option or oxymoron?"; we received our redress in June 2009 during the American Public Transportation Association Rail Conference in Chicago.)
But one media report now notes RTA’s $200 million HealthLine, which traverses Euclid Avenue, “is moving at about the same slow pace as the bus it replaced.”
Cleveland is adjusting traffic signals along the route to bolster BRT’s speed, which during one monitored run covered the 7.1-mile route in 44 minutes—three minutes faster than the predecessor No. 6 bus, but falling short of the projected trip time of 33 minutes. A monitored trip in the opposite direction was completed in 36 minutes.
“I am very disappointed with the performance of the Euclid Corridor,” said Brad Chase, chairman of RTA's Citizens AdvisoryBoard, which pressured RTA to release the run times. “It is much nicer and ridership is up, but timing-wise it has never really made it.”
Chase, who said he rides both bus and rail routes, is hopeful speeds can improve. “I know that [the train] is not going to stop at traffic lights,” he said. “This [the HealthLine] is supposed to operate like a train but on wheels and it is just not there. It can be. We have the equipment but need to program it properly.”
Michael Schipper, RTA’s deputy general manager who was in charge of the Euclid Corridor project, said the agency understands the city is trying to coordinate the lights, but the priority bus function should be working, as should another function of the traffic signals called a Q-jump, which would give the bus lane a green light for five seconds in the middle ofthe light phases for the side streets so the bus could go through.
Leveraging $23 million in federal stimulus funds obtained last February, the city of Dallas, aided by the North Central Texas Council of Governments, expects to move forward on a 1.5-mile streetcar route linking Dallas Union Station with Methodist Dallas Medical Center in the Oak Cliff neighborhood, southwest of downtown Dallas.
The project, estimated to cost $35 million, would also be funded from regional toll road revenue. The project is separate from the Olive/St. Paul Street Loop, a Dallas streetcar project awarded $5 million Thursday by DOT and the Federal Transit Administration.
The city of Dallas would own the line, while Dallas Area Rapid Transit (DART) would operate it through an agreement with the city. Streetcar fares and revenues from parking, tax-increment financing, and public improvement districts would cover annual operating and maintenance costs, estimated at $1.5 million.
Groundbreaking is targeted for July 2013, with revenue operation beginning in October 2015. But “there are a lot of caveats and unknowns,” said Tom Shelton, a senior transportation project manager for the North Cenral Texas Council of Governments. Among the unknown factors: the load capability of the Houston Street Bridge, on which a structural analysis will be made this summer.
The Greenbrier Cos. Thursday reported net earnings for the third quarter of $4.6 million, or 23 cents per diluted share, a welcome contrast to the comparable quarter a year ago when the company logged a net loss of $51.1 million, or $3.04 per diluted share.
Revenue for the third quarter of $211.5 million was down from $244.4 million one yea ago. Earnings before interest, taxes, debt, and amortization (EBITDA) for the quarter was $25.9 million, or 12.2% of revenue, compared to $20.3 million, or 8.3% of revenue, in the third quarter of 2009.
The company noted it had reduced its net debt by almost $75 million, and ended the quarter with $117 million in cash and $106 million of committed additional borrowing capacity.
New railcar deliveries in the third quarter of 2010 were 700 units, compared with 800 units in the third quarter of 2009. Greenbrier's new railcar manufacturing backlog as of May 31, 2010 was 4,400 units with an estimated value of $370 million. Greenbrier commenced management of a lease fleet of nearly 4,000railcars valued at approximately $230 million, acquired by the newly formed WLRoss-Greenbrier Rail Holdings I LLC.
Said President and CEO William A. Furman in a statement, “Each of our business segments realized improved performance, leading us to a return to profitability and our highest pre-tax earnings since the fourth quarter of 2008. Both revenue and margin grew in the third quarter compared to the first two quarters of 2010. We are currently seeing some improvement in end-market demand for our rail products and services.
“Our third-quarter results place us on solid footing to finish our fiscal year with positive momentum, and we continue to believe that the second half of 2010 will be stronger than the first half,” Furman said.
He added, “Leveraging our strategic relationship with WL Ross, WLR-GBX, owned by affiliates of WL Ross & Co., was formed in April 2010 and purchased a used lease fleet of 4,000 railcars, which are managed by Greenbrier. The acquisition of this portfolio allows us to further scale our fleet management operations, a core competency of Greenbrier, and to participate in the economic performance and upside of this portfolio.”
In an analyst’s note Thursday, Steve Barger, director, Industrial Manufacturers, for KeyBanc Capital Markets, Inc., said that Greenbrier Cos. “reported a strong $0.23, vs. our estimate of $0.03 and consensus of a loss of $0.02. Even though revenue was down 13% year-over-year (and up 6% sequentially), GBX posted strong year-over-year and sequential increases in gross and operating margin. Railcar book/bill in the quarter was 1.0x, the best figure since 1Q08 when the Company booked the massive General Electric order.
“Overall, this was an encouraging quarter, although we think the consolidated margin is probably higher than we should expect on a run rate due to mix in Manufacturing and car sales in Leasing & Services. Regardless, we believe this supports our positive view on the name and we expect the stock (and the group) will react favorably to this news,” Barger said.
Manitoba’s capital city appears ready to commit to lightrail transit, after the Winnipeg Executive Policy Committee Wednesday recommended the mode to the City Council as part of a long-term plan. LRT is strongly supported by Winnipeg Mayor Sam Katz.
The City Council is expected to vote on the recommendation soon, but the issue is controversial; some council members want funds to continue being targeted at a Bus Rapid Transit route now under construction. Committing to light rail would likely divert some of the funds now envisioned for BRT extensions.
Any LRT system in Winnipeg would be the first within Manitoba. Neighboring Alberta has two cities, Edmonton and Calgary, which committed to modern LRT in the 1978 and 1981, respectively—the first two North American cities to do so.