In its latest quarterly report on the freight car market, Economic Planning Associates said railcar builders will continue to face “strong headwinds” this year, but anticipated gains in both commodity and intermodal traffic could stimulate new equipment demand later this year and lead to a pick-up in orders in 2011.
The year 2009 was unremittingly dismal for builders, said EPA: “Even the relatively low level of 21,682 assemblies last year far outpaced he level of only 8,336 cars that were ordered.”
This year, said EPA, “We expect assemblies of 16,000 units [and] in 2011 we look for deliveries of only 21,000 cars. . . . We look for new railcar deliveries to advance moderately to 34,800 cars in 2012 and then expand annually to the level of almost 60,000 units in 2015.”
It all depends on traffic, and prospects are brightening, said EPA: “Agricultural exports are slated to rise, the housing markets are improving, light-vehicle sales are expanding, manufacturing activities have revived, and a stronger economy will stimulate greater production of electricity. These activities will prompt the haulings of grain, lumber, motor vehicles and parts, chemicals, plastics, and coal.”
Transportation Secretary Ray LaHood Tuesday said President Obama's $79 billion budget includes an additional $1 billion for higher speed passenger rail (HrSR) corridors as well as $4 billion for a National Infrastructure Innovation and Finance Fund to issue grants and loans for projects, including freight rail, that provide "a significant economic benefit to the nation or a region."
These programs augment the customary multibillions budgeted for intercity, commuter/regional, metro, and light rail passenger systems and certain freight rail improvements.
“President Obama’s budget builds on an historic first year for this Department of Transportation,” said Secretary LaHood (pictured at left). “In addition to making critical investments in our nation’s infrastructure, we jump-started high speed rail across America, launched a campaign against distracted driving and proposed landmark transit safety legislation. This budget reflects our priorities and values by continuing to invest in safety, livable communities, and an improved national transportation system.”
Secretary LaHood said the budget promotes safety in a number of areas, including $14 million for the FAA to hire 82 new safety and certification inspectors and safety technical specialists and $30 millionto add 260 positions to support the Obama Administration’s Public Transportation Safety Program Act of 2009, "which the administration proposed to Congress last year to ensure a high and standard level of safety across all transit systems."
The additional $1 billion for passenger rail follows President Obama and Vice President Biden’s Jan, 28 announcement of $8 billion in Recovery Act funds for states across the country to develop America’sfirst nationwide program of higher speed intercity passenger rail service.
Secretary LaHood said the budget highlights "the importance of livable communities, and providing greater choices for transportation users through the integration of transportation, housing and commercial development decisions. This budget provides $527 million for livable communities by establishing an Office of Livable Communities, creating a program to improve local and state project planning and development capabilities, and funding programs that expand transit access for low-income persons.
A budget summary document is available at www.dot.gov.
In the first 11 months of 2009, rail crossing fatalities declined 17.8% to 222 compared with the same period to 2008, and trespasser fatalities were down 7.2% to 399, according to a preliminary report released Jan. 30 by the Federal Railroad Administration's Office of Safety Analysis.
These accounted for 621 of the total of 649 U.S. rail fatalities reported in the period. There were 15 employee fatalities, down 34.8% from the 23 reported in the same period in 2008.
The accident/incident numbers were down across the board in the 2009 period: train accidents, down 27.6% to 1,644; collisions, down 2 9.5% to 124; derailments, down 28.8% to 1,166; and yard accidents, down 29.1% to 888.
A podcast of the interview with Railway Age’s 2010 Railroader of the Year, BNSF Chairman, President, and CEO Matt Rose, is accessible on Railway Age's website by clicking www.railwayage.com, then clicking “Video: BNSF's Matt Rose interview” in the upper right corner of the web page.
Conducted by Railway Age Editor William C. Vantuono, the interview with Rose covers a range of subjects facing the U.S. freight rail industry—including the freight industry’s role in U.S. passenger rail fortunes of the future—as BNSF prepares to be acquired by Berkshire Hathaway, Inc. later this month.
Rose (pictured at left) holds two distinct advantages to help shape that future, Vantuono says. “First, he joined our industry at a critical point in its history, around the time the Staggers Rail Act was passed. He had a chance early on to work under the experience guidance of several highly regarded veterans, and learn from them. Second, he's young enough to have many years to go—and a chance to help determine our industry's direction, to nurture its growth, to provide guidance, to influence public opinion.”
The video link is co-sponsored by Plasser American and Western-Cullen-Hayes.
Cyclonaire Corp. says it has launched a new website at www.cyclonaire.com., “designed to educate the user on the products and capabilities of Cyclonaire. The site features a quick and easy path to obtain information on pneumatic conveying as well as offering a full range of conveying components, parts, and accessories on-line.”
The York, Neb.-based company says users also will find resource materials to help in selecting the proper system to handle specific needs.
Union Pacific’s response to STB said the railroad “is disappointed by [the] decision invalidating certain chlorinerates covering a few dozen shipments per year. Under STB rules, its task was tochoose between two groups of shipments to determine which group is most like UPchlorine shipments involved in the case. The Board concluded that a group ofshipments consisting entirely of chlorine shipments was less comparable to thechlorine shipments in the case than a group consisting almost entirely of othercommodities that are less hazardous to the public and priced under differentmarket conditions than chlorine.
“Furthermore, the Board chose US Magnesium’s group of mostly non-chlorine shipments on the basis of astatistical analysis that the Board candidly admitted might not bestatistically valid and that resulted in a virtual dead heat between thecompeting groups. This statistical analysis was never discussed by anyone inthe record of the case, had never been proposed by the Board in any othercontext, and does not appear in the Board’s rules. UP believes that astatistically insignificant exercise that produces a toss-up, has no precedentin case law or rules, and contradicts the Board’s own findings that chlorinecarries greater risks and moves in markets distinct from ammonia and otherhazardous products, constitutes the essence of arbitrary and capriciousdecision-making. Accordingly, we plan to appeal.
“The Board sharply criticized UP forusing so-called ‘re-billed movements,’ which are shipments that move over two or more railroads. We respectfully disagree. This is like saying that if you are comparing airline rates from Kansas City to Los Angeles, you would exclude rates to L.A. for passengers who will catch another airline from L.A. to Hawaii—and instead you would select rates for a bus from Kansas City to Phoenix for a ‘comparison.’
"Union Pacific’s top priority is providing safe transport of all goods to the benefit of the communities weserve. Union Pacific is obligated by federal law to carry Toxic InhalationHazard (TIH) materials, which require significantly enhanced and costly safetyand security measures. We believe that the rates we charge to chlorine andother TIH shippers, such as US Magnesium, should reflect the costs and risksassociated with transporting their products.”
Christensen Associates Inc., an independent consulting team studying rail competitiveness for the Surface Transportation Board, has issued a new report finding that "rate increases since 2004 were driven by fluctuating fuel prices and other costs and did not appear to reflect a greater exercise of railroad market power over captive shippers."
The updated report re-emphasized the key finding of an earlier report: "Providing significant rate relief to some shippers will likely result in rate increases for other shippers or threaten railroad financial stability."
The STB said in its summary: "Overall, the updated study painted a portrait of a healthy rail industry that, since 2006, has remained largely revenue sufficient, meaning railroads are able to over their operating costs and earn a rate of return that enables them to attract investment vital to pay for more locomotives, railcars, and make other improvements. The study also found hat the large productivity gains in the 1980s and 1990s--when the railroad shed excess lines, reduced crew sizes, and streamlined operations--are no longer strong enough to offset rising operating costs."
Christensen also noted that since late 2008, railroad traffic has dropped nearly 20% from the levels of 2006 and 2007, and preliminary data show rates fell last year.
The original report was issued in November 2008. The STB ordered it to be updated to reflect shippers' concerns that "the report's study period ended in 2006 and did not include subsequent years of rapidly escalating costs."
U. S. rail
freight traffic is showing "slight improvement" over 2009 but remains
"sharply down" when compared with pre-recession 2008, the
Association for American Railroads
For the week
ending Jan. 23, 2010, U.S. railroads originated 277,420 carloads, up 3.9% from the same week in 2009 and down
11.1%"from the same week in 2008. Intermodal traffic totaled 200,807
trailers and containers, up 2.9 % from a year ago and off 4.4% from 2008.
The AAR said
that 13 of the 19 carload to commodity groups were up from last year, with 10 of them posting double-digit
increases. ranging from 5.5% for
grain to 103.8% for nonmetallic minerals. Declines ranged from 25.7% for the catch-all category "all other
carloads" to 3.1% for coal.
Total volume on
U.S. railroads for the week ending Jan. 23, 2009 was estimated at 30.2 billion
ton-miles, up 4.9 percent from
last year and down 7.9 %to from 2007.
railroads reported 73,354 carloads
for the week, up 13.5% from last year, and 44,295 trailers or containers, up
railroads reported originated volume of 14,867 cars, up 29.8% from the same
week last year, and 6,960 trailers or containers, up 41.6%.
American rail volume for the first 3 weeks of 2010 on 13 reporting U.S.,
Canadian and Mexican railroads totaled 1,032,527 carloads, up 1.7 % from last
year, and 750,539 trailers and containers, up 2.3 %.
L.B. Foster Co.
today reported net income of $3.9 million or $0.38 per share in the fourth
quarter of 2009, compared to net income of $5.7 million or $0.55 per share in
the fourth quarter of 2008.
2009 sales declined 31.8% to $98.0
million compared to the same quarter last ear. Selling and administrative
expenses were down $2.8 million or 23.9%.
our segments posted significant declines in net sales for the fourth quarter;
however, cost controls and pay for performance incentive plans mitigated the
negative impact to income. While we have won several large orders this quarter,
business activity continues to be inconsistent in our Rail and Construction
businesses and very weak in our Tubular divisions," said Stan Hasselbusch,
President and CEO.
for the quarter were $114.7 million compared to $99.5 million last year, a
15.3% increase while year-to-date bookings were down 15.9%," said
Hasselbusch. "Backlog was $172.7 million, an increase of 30.2% over the
prior year; however, the gross margins associated with that backlog are lower
than the prior year due to decreased pricing and an increased competitive
environment across all product lines."
also commented:: "We won several attractive awards in 2009 that were
related to the federal stimulus legislation, primarily in our transit and
precast concrete building businesses. While we expect a significant portion of
those 2009 awards to be reflected as sales in 2010, we also anticipate that the
volume of new stimulus-related opportunities will slow in 2010."
For the 12
months ended December 31, 2009, L.B. Foster reported net income of $15.7
million or $1.53 per d share compared to net income of $27.7 million or $2.57
per share in 2008.
business expected to be "flat or
slightly up," Wabtec Corp. today
issued 2010 earnings per share
guidance of $2.35-$2.50. The company had not previously issued 2010
updated its 2009 guidance to $2.37-$2.41 per share on revenues of about $1.4
billion. This guidance, which is
in line with the company's previous guidance, now includes a fourth-quarter charge of $3.9 million,
or six cents per diluted share, for an arbitration ruling.
Wabtec plans to
report 2009 results on Feb. 23.
of very challenging economic conditions, Wabtec's 2009 performance demonstrated
the strength of our diverse business model and strategic planning process, the
leadership of our management team and the hard work of our employees throughout
the company," said Albert J. Neupaver, Wabtec's president and chief
executive officer. "In 2010, market conditions will continue to be
challenging, but we expect that benefits from our restructuring actions in 2009
and other growth initiatives will offset the decline in U.S. locomotive and
freight car production, and the completion of a major transit contract."