The Surface Transportation Board Friday noted Florida’s Department of Transportation has filed a “verified notice of exception” to acquire 61.5 miles of rail right-of-way owned by CSX Transportation located in five central Florida counties. FDOT seeks to acquire the route to establish "SunRail" regional rail service on the line centered in Orlando; CSX would remain active as a freight operator on the route.
The filing comes even as Florida legislators continue to debate the merits of FDOT’s intent, with many expressing concerns over liability issues and some still convinced central Florida does not require regional or commuter rail service. A key state legislative committee hearing was delayed until this weekend, one industry source tells Railway Age; rail proponents fear the delay threaten legislative approval.
Despite such uncertainty, FDOT’s submission asserts, “The transaction is scheduled to take place on June 30, 2009 (after the May 3, 2009 effective date of the exemption).”
Besides FDOT and CSX, Amtrak and a short line, Florida Central Railroad Co., operate over portions of the route to be purchased; FDOT’s submission to STB affirms that those tenants will continue to operate on the route.
The Good Friday holiday, added to ongoing bad weather in the Midwest and a struggling economy, pushed rail freight traffic numbers down for the week ended April 11, compared to the comparable week in 2008, the Association of American Railroads said.
U.S. freight carload traffic fell 24.5% from the comparable week last year, with loadings down 22.5% in the West and 27.3%. Intermodal volume fell 21.6% from last year. Volume of an estimated 26.4 billion ton-miles was off 23.7% from the 2008 level.
Canadian freight carload traffic fell 28.3% for the week compared with the year-ago period, while intermodal declined 24.6%. Mexico’s two major railroads reported freight railcar volume down 29.6%, while intermodal plunged 39.3%.
Combined North American rail volume for the first 14 weeks of 2009 on 14 reporting U.S., Canadian, and Mexican railroads was down 17.7% from last year’s first 14 weeks; combined intermodal was down 15.6%.
Short line Indiana Rail Road has been granted approval by the Surface Transportation Board to begin construction on a five-mail rail extension to serve Bear Run coal mine, located in Indiana’s Sullivan County. STB ruled that the proposed extension is a spur, exempting Indiana Rail Road from a more lengthy review process.
"The issue presented here is whether INRD's proposed track construction involves the construction of a 'spur' or, alternatively, a 'line of railroad,'” STB said. "The board does not exercise licensing authority 'over construction, acquisition, operation, abandonment, or discontinuance of spur tracks.' The determination of whether a particular track segment is a 'railroad line' requiring board authorization or an exempt spur turns on the intended use of the track segment. Exempt spurs are 'commonly constructed either to improve the facilities required by shippers already served by the carrier or to supply the facilities to others, who, being within the same territory and similarly situated, are entitled to like service from the carrier,'" the board quoted from federal statute.
"The intent of the proposed track is to improve the facilities required by Peabody, an existing shipper whose Farmersburg mine is already being served by INRD," STB continued. "The track will not invade the territory of another railroad because the closest track already in service is a CSXT main line 6.2 miles west of Bear Run pit. Furthermore, INRD has historically served the area that the proposed track will occupy, and the track will serve only Peabody."
Peabody last month that it had lined up long-term supply contracts for 90 million tons of coal from Bear Run. Peabody said that it will begin production in the second half of 2009 and increase production thereafter.
Indiana Rail Road will invest $17 million initially to construct the line, with an additional $5 million to be invested during the next two years.
Last month, Indiana Rail Road President and CEO Thomas G. Hoback stated, “Peabody’s investment is one of the most significant industrial developments in Indiana in this decade, and it is the largest single new business opportunity ever awarded to the Indiana Rail Road Company. We project that it will increase our current coal transportation volumes by more than 30%. We value the confidence shown by Peabody, a global leader, in our ability to provide world-class service.”
The regional railroad, based in Indianapolis, operates a 500-mile route system based primarily in Indiana and Illinois, with terminals in Chicago, Indianapolis, Terre Haute, Ind., and Louisville, Ky.
A federal judge in Washington has upheld efforts by the ports of Los Angeles and Long Beach, the nation’s two largest ports, to pursue its clean-truck program designed to reduce emissions in the Los Angeles basin.
U.S. District Judge Richard Leon denied a preliminary injunction sought by the Federal Maritime Commission, saying regulators held "weak" arguments that the program threatens to cause irreparable harm or to unreasonablyincrease shipping costs. FMC filed suit last fall, alleging that small trucking firms and independent drivers will be driven out of the market by the new rules.
Last month, key provisions of the clean-trucks program were declared unconstitutional by the U.S. 9th Circuit Court of Appeals in San Francisco, backing contentions of unfairness submitted by the American Trucking Associations. A ruling is expected April 27 in that case.
"This is a clear victory for our clean-truck program and the idea that you can both green and grow the Port of Los Angeles at the same time," Mayor Antonio Villaraigosa said, referring to Judge Leon’s ruling.
The twin ports, which handle roughly two out of every five international containers moving to and from the U.S., have on-dock ship-to-rail capabilities, but considerable “near-dock” traffic remains, with trucks shuttling containers or trailers between ships and rail facilities.
The clean-truck program charges a $35-per-container fee to generate funds for dealing with environmental and health impacts attributed to truck diesel emissions, offering a sliding scale of reductions and exemptions for trucks that meet clean-air standards.
President Obama on Thursday, April 16, released an unprecedented long-term strategic plan to advance U.S. high speed rail development, beginning with the $8 billion “down payment” provided through the Administration’s recent American Recovery and Reinvestment Act, augmented by $1 billion per year for five years in budget appropriations.
"Make no little plans," the President said at a nationally televised news conference as he presented a plan—centered on rail—for the future of U.S. transportation. It would begin with upgrading existing rail lines—a foundation, so to speak—and then progress to building dedicated high speed corridors, as has been done elsewhere in the world. In great detail and with an almost startling breadth of knowledge about the high speed industry, he talked about the many benefits of high speed rail, among them the convenience of center city to center city travel and relief from highway and air travel congestion.
“If we want to move from recovery to prosperity, then we have to do alittle bit more,” Obama said. “We have to build a new foundation for our future growth.” Citing congested highways and air routes, as well as being “at the mercy of fluctuating gas prices,” he noted that high speed rail wasn’t “some fanciful pie-in-the-sky vision of the future; it is now. It is happening right now; it’s been happening for decades. The problem is, it’s been happening elsewhere, not here.”
Joined by Vice President Joe Biden (who would not have been able to conceal his enthusiasm, even if he tried) and Secretary of Transportation Ray LaHood, the President pointed to the 10 rail routes identified for high speed rail development, defined (in U.S. terms) as capable of 110 mph speeds (see map, below). The 10 include:
1. California Corridor (Bay Area, Sacramento, Los Angeles, San Diego)
2. Pacific Northwest Corridor (Eugene, Portland, Tacoma, Seattle, Vancouver BC)
3. South Central Corridor (Tulsa, Oklahoma City, Dallas/Fort Worth, Austin, San Antonio, Little Rock)
4. Gulf Coast Corridor (Houston, New Orleans, Mobile, Birmingham, Atlanta)
5. Chicago Hub Network (Chicago, Milwaukee, Twin Cities, St. Louis, Kansas City, Detroit, Toledo, Cleveland, Columbus, Cincinnati, Indianapolis, Louisville)
6. Florida Corridor (Orlando, Tampa, Miami)
7. Southeast Corridor (Washington, Richmond, Raleigh, Charlotte, Atlanta, Macon, Columbia, Savannah, Jacksonville)
8. Keystone Corridor (Philadelphia, Harrisburg, Pittsburgh)
9. Empire Corridor (New York City, Albany, Buffalo)
10. Northern New England Corridor (Boston, Montreal, Portland, Springfield, New Haven, Albany).
Amtrak’s Northeast Corridor, which operates at top speeds of 150 mph, isn’t identified as one of the 10, but the Department of Transportation did note “opportunities for the Northeast Corridor from Washington to Boston to compete for funds to improve the nation’s only existing high speed rail service.”
Administration officials said they will take a collaborative approach to formulate HSR programs, including working with stakeholders to gather feedback to advance given routes.
The program divides projects eligible for funding into “first round” candidates “that can be completed quickly and yield measurable, near-term job creation and other public benefits, and “next round” items “to include proposals for comprehensive high speed programs covering entire corridors or sections of corridors.”
Within the latter group, California’s proposed $44 billion, 700-mile HSR system is deemed likely to receive significant federal support, since the Golden State has committed almost $10 billion of its own funds to advance the project.
Observers pointed out that Obama’s support for U.S. passenger rail development has exceeded that of any other U.S. president in recent times. Some had expected the President to allow Vice President Biden, a frequent Amtrak traveler and longtime passenger rail supporter, to handle any such program by himself, but Obama has continued to give direct input into U.S. HSR efforts.
The freight railroad response to the President's announcement was positive but cautious. "The high speed rail plan . . . iswelcome news for all Americans," AAR said in a statement. "We applaud the President's leadershipin recognizing the importance of rail to the future of our nation'stransportation network. As members of the OneRail Coalition, we support expanded use of bothfreight and passenger rail in this country. Luckily, those goals arenot mutually exclusive as many of the tracks over which our passengertrains operate are owned by the freight railroads. However, it isessential that improvements aimed at developing high speed passengerroutes do not ignore freight rail’s need to move our nation’s goods. . . . America has the best freight railroad system inthe world; there is no reason why we can't have the best passenger railsystem as well. We look forward to working with the Administration,Congress, and the states to see that the promise of expanded freight andhigh speed passenger rail is realized."
Testifying before the House Appropriations Subcommittee on Transportation on April 2, BNSF chief executive Matt Rose (lower right), a supporter of the OneRail Coaltion, said that, with significant upgrades, "it is possible toincrease speeds from 79 mph to 90 mph on tracks that both freight andpassenger trains use. At sustained speeds in excess of 90mph, passenger train operations will need to be segregated from freightoperations on a separate track."
To see the President's televised press conference, CLICK HERE. Vice President Biden, a long-time staunch passenger rail supporter and daily rider on Amtrak's Northeast Corridor during his entire Senate career, provided opening remarks. To see Biden's remarks, CLICK HERE.
—Douglas John Bowen, Managing Editor, with William C. Vantuono, Editor
Seeking to capture a significant portion of the $8 billion in federal stimulus money targeted for high speed rail, eight governors from Midwest states have written Transportation Secretary Ray LaHood for $3.5 billion to be applied to regional rail upgrades.
The state leaders envision establishing a regional network, with Chicago as the hub, operating trains at relatively modest “high” speeds up to 110 mph serving three routes terminating at Detroit, St. Louis, and Madison, Wis. (mostly likely via Milwaukee). Future extensions would include links to Indianapolis, Cleveland, and Minneapolis.
Amtrak at present serves each city (except Madison), with multiple frequencies linking Chicago with St. Louis, Detroit, and Milwaukee. Train speeds often are limited to 79 mph, though one short stretch on the Chicago-Detroit route has been upgraded to 110 mph standards.
Governors from Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio, and Wisconsin co-signed the letter to LaHood.
Union Pacific and Progress Rail Services are preparing to test a low-emission intermediate-haul locomotive at the Southwest Research Institute in San Antonio, Tex. Testing, which the companies claim is a first for intermediate-haul locomotives, is scheduled to begin later this month.
A Union Pacific SD40-2 locomotive, originally built in the 1970s, has been repowered with a 3,005-hp Caterpillar low-emission, clean-diesel engine, model 3516C-HD, designed to surpass EPA Tier 2 locomotive emissions requirements. The engine incorporates advanced emission control technologies that have been tested successfully in a laboratory setting and will be tested for service on intermediate-haul routes.
UP and Progress Rail Services say the engine initially will be field-tested in a controlled local application to closely monitor its performance and durability over the testing period.
CSX Corp. led off first-quarter earnings reports for the Class I railroads Tuesday, April 14, and as expected reported a profit decline, down 30% from the first quarter of 2008. Revenue fell 17% to $2.25 billion. But CSX still beat Wall Street consensus estimates, logging earnings of $246 million, or 62 cents per share, for the quarter; analysts anticipated 51 cents per share on revenue of $2.26 billion.
CSX acknowledged that volume was down across all segments, as construction and consumer-related markets remained weak; auto and auto parts shipments were particularly hard hit, down 53% from the year-ago quarter.
The company said it cut its operating expenses by 17%, and also noted fuel costs fell by $250 million due to both lower fuel prices and shrinking volume.
“Freight revenues at the rail division (CSXT ) were down 16% to just under $2 billion as a 2.5% improvement in average revenue per carload was no match for 19% decline in volumes,” said Jason Seidl, director at Dahlman Rose & Co. (and a Railway Age contributing editor). “Operating profits fell just 12% as CSXT was able to improve its operating ratio by 130 basis points.” By contrast, CSX Intermodal suffered a 22% revenue decline for the first quarter. “This suggests to us that CSXI has had to resort to cutting rates in an attempt to remain competitive with the very aggressive trucking market,” Seidl said.
“With the rail industry trying to cope with the most drastic volume declines in recent history, we believe management will focus on how they are attempting to cut costs in its attempt to right-size the rail network,” Seidl said.
CSX Chairman, President, and CEO Michael Ward, in a statement, said, "In this economic downturn, CSX is focusing sharply on the things that are more within our control—safety, customer service and productivity.” He added, “We are taking tough actions to right-size our operations in this challenging environment."
In Wednesday morning trading, CSX shares rose 10%, to $31.23.
Hatch Mott MacDonald (HMM) said Tuesday it has signed a contract with the Tri-County Metropolitan Transportation District of Oregon(TriMet) to provide preliminary engineering services for the Portland-Milwaukie Light Rail Project--East Segment, extending Portland’s ever-growing LRT from SE 8th Avenue in Portland to the suburb of Milwaukie, in neighboring Clackamas County. A notice to proceed is expected this week.
As prime consultant, Hatch Mott MacDonald will lead a project team of 16 subconsultants to deliver preliminary engineering, civil engineering, light rail trackway design, traffic engineering, structural engineering, geotechnical engineering, architectural/urban design, public utility relocation design, environmental, and permit coordination services for the 7.3-mile extension. Constructionon the new MAX line could begin in 2011 and be completed by 2015.
Paul Heydenrych, P.E, HMM’s area manager for Oregon and Southwest Washington, will serve as project manager. Heydenrych has more than 30 years experience managing large transportation design and construction programs. His work experience in the Portland area includes providing project controls and construction management support services for the Westside MAX light rail extension as part of the consultant team hired by TriMet.
"We are delighted to be selected for this important expansion of Portland's light rail system,” said John Townsend, executive vice president and head of operations in the western U.S. for Hatch Mott MacDonald.