Latest News Continued

Kansas City Southern looks to its new international intermodal corridor for sustained growth.

An elder statesman among the growing crowd of U.S. transit properties, Massachusetts Bay Transportation Authority—the “T”—holds to its vision: expand its service area and service options.

PTC’s cost, technical challenges, and tight time frame are giving the railroads headaches. Suppliers are working feverishly to provide relief.

Track time is a precious commodity. Suppliers of high-productivity m/w machines enable railroads to make the most of it.

The Surface Transportation Board announced Friday that is has scheduled a meeting of the National Grain Car Council for Sept. 16 to discuss the readiness of U. S. railroads to move export grain to ports in quantities far higher than earlier expected.

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The agenda includes “a report by railcar manufacturers and lessors on current and future availability of various grain-car types; presentation and discussion of developments regarding Positive Train Control; discussion of export grain in intermodal containers; and an open forum on BMNSF Certificates of Transportation for Processors; weather's effect on supply/demand of equipment; and export market impact on U.S. grain car supply.”

While Friday's STB announcement did not allude to it, expectations for a significant increase in world demand for U.S. wheat were examined in the latest monthly Wheat Outlook, released Aug. 16, by the U.S. Department of Agriculture’s Economic Research Service. 

“This month's changes,” said the report, “feature a dramatic 13.5 million-ton reduction in wheat production forecast collectively for Ukraine, Russia, and Kazakhstan, three companies that together produce more than 85% of ESU-12 wheat. Wheat production for EU-27 for 2010-11 is projected down 4.3 million to 13.5 million.”

What this means to U.S. wheat exports and the need forgrain-carrying railroad cars or containers is this, says the USDA report: “U.S. exports are expected to reach 33.0 million tons for July-June marketing year 2010/2011, up 6.0 million from last month’s projection. This forecast is 8.8 million tons, or 36.5%, more than U.S. exports in the 2009/10 year. The main U.S. competitors in the lower protein wheat market are the EU-27 and the three countries of the FSU 12 ... With all of these main competitors’ wheat projections down this month, and with the announcement of the Russian export wheat ban, U.S. export prospects soar.”

--> The Surface Transportation Board announced Friday that is has scheduled a meeting of the National Grain Car Council for Sept. 16 to discuss the readiness of U. S. railroads to move export grain to ports in quantities far higher than earlier expected. ...

Britain’s Nomad Digital Ltd. said Friday it was chosen to support Alstom’s contract with rail operator Southeastern, in conjunction with London-based Nexala, to supply a remote condition based monitoring system, on Southeastern’s Networkers.

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The contract has been awarded for the design, supply, and installation of the system for the Alstom Class 465/2, 465/9, and Class 466 fleets, totaling 93 units.

Alstom will be deploying its new data acquisition units (DAU) to monitor various train systems, Nomad will provide communications and data management services, with Nexala providing the data analysis. Specifically, Nomad’s R3200 router will be used to transfer the data acquired by the DAU’s from the train to shore using 3G technology.  Nomad will be responsible for the collation and management of the train data on the shore priority to its analysis by Nexala’s Spectrum application. Nomad will also provide remote monitoring and helpdesk support.

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The first three trains will be equipped for trial operation by November 2010, with fleet installation starting in January 2011.

In a statement, Nigel Wallbridge, Nomad Digital’s chairman, said, “It’s clear that Condition Based Monitoring is going to be a significant factor in improving maintenance and increasing train availability. This is intended to make trains more reliable, cost-effective, and secure for the benefit of passengers. We are delighted to be working with Alstom on this project.”

--> Britain’s Nomad Digital Ltd. said Friday it was chosen to support Alstom’s contract with rail operator Southeastern, in conjunction with London-based Nexala, to supply a remote condition based monitoring system, on Southeastern’s Networkers. ...

Bombardier Transportation Saturday will join Sweden’s Botniabanan AB to inaugurate the nation’s Botnia high speed rail line, the first rail line in the Nordic countries to operate with ERTMS/ETCS Level 2 capability. Bombardier says its INTERFLO 450 rail control system will oversee operations on the nroute, running northeast along the coast of Sweden between Nyland and Gimonäs.

The 190-kilometer (118-mile) line will handle trains running at speeds up to 250 kh/h (155 mph), making the Botnia route the fastest within Sweden, a nation that’s no stranger to HSR development.

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Bombardier says its scope for the Botnia line project comprised the trackside products required for 22 stations on the line, along with 143 bridges and 25 kilometers (15.5 miles) of tunnels, including wayside and onboard automatic train protection.

Said Bombardier Transportation Head of Rail Control Solutions Nordic Region Peter Cerdevall,  “In light of our unique relationship with the Swedish market, we are particularly proud to have delivered our technology for this landmark line. This milestone for our technology attests to our strong reputation in Sweden and continuing leadership in ERTMS.”

European Rail Traffic Management System (ERTMS) technology, a supplier-independent rail signalling standard, allows trains to cross international borders in Europe safely without having to change personnel or equipment. At the core of ERTMS is the European Train Control System (ETCS). 

 

--> Bombardier Transportation Saturday will join Sweden’s Botniabanan AB to inaugurate the nation’s Botnia high speed rail line, the first rail line in the Nordic countries to operate with ERTMS/ETCS Level 2 capability. Bombardier says its INTERFLO ...

Norfolk Southern Friday began running test trains on its upgraded Heartland Corridor between Chicago and Norfolk, Va. NS says the upgraded route has been reduced 250 miles, while improvements such as clearances for doublestack intermodal traffic will contribute to reduced fuel costs and travel times as well.

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“Our goal strategically is to provide as many opportunities for steamship partners,” said Jeff Heller, NS group vice president, International, in an interview. Heller said NS has no intention of dictating how its shipping clients should access the Norfolk Southern rail network (via either West Coast or East Coast ports of call), but that providing another point of access to the network would be well received by many shippers, especially as the Panama Canal expansion begins allowing the new generation of monster freighters through its locks.

The Heartland Corridor upgrade cost an estimated $261 million, with NS supplying  $141million in the public/private partnership effort. Federal funds supplied a large portion of the public contribution, with individual states contributing the remainder.

According to Heller, NS will continue testing on the route in preparation for the first double-stack train scheduled to traverse the corridor on September 9.

 

--> Norfolk Southern Friday began running test trains on its upgraded Heartland Corridor between Chicago and Norfolk, Va. NS says the upgraded route has been reduced 250 miles, while improvements such as clearances for doublestack intermodal traffic will contribu ...

The Association of American Railroads said Thursday U.S. rail intermodal volume for the week ending Aug. 21, 2010 set a new 2010 record for the second consecutive week, up 22.4% from the same week in 2009, and up 2.6% compared with 2008.

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AAR also noted weekly container volume, a subset of intermodal, was the highest on record, also for the second consecutive week, up 24.2% compared with the same week in 2009, and up 11.5% with the same week in 2008. Trailer volume, the other intermodal subset, rose 12.4% compared with the same week in 2009, but was down 30.5% from the comparable 2008 period. 

U.S. freight carload traffic “continued moderate weekly gains,” AAR said, up 6.2% from the year-ago period but down 11% from the comparable week in 2008. Fourteen of the 19 carload commodity groups increased from the comparable week in 2009. All 19 carload commodity groups trailed comparable 2008 levels of traffic.
 
Canadian freight carload traffic rose 10.5% for the week compared with 2009, while intermodal advanced 21.7%. Mexican freight carload traffic advanced 19.5% from a year ago, while intermodal rose 12.6%.

Combined North American rail volume for the first 33 weeks of 2010 on 13 reporting U.S., Canadian, and Mexican railroads was up 10% from last year, with intermodal up 14.8% from last year.

--> The Association of American Railroads said Thursday U.S. rail intermodal volume for the week ending Aug. 21, 2010 set a new 2010 record for the second consecutive week, up 22.4% from the same week in 2009, and up 2.6% compared with 2008. ...

Recovering from the worst business downturn in nearly 80 years, U.S. Class I railroads earned an average rate of return on net investment of 9.60% in the 12 months ended June 30, 2010, compared with a year-ago ROI of 9.47%.

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The nation's two largest railroads had returns in the low double-digits. BNSF Railway earned 10.25% vs.10.20% a year ago, closely followed by Union Pacific, with a return of 10.02% compared with 9.15% in the prior 12-month period.

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Soo Line, smallest of the Class I railroads, was statistically the best performer in the 12 months ended with this year’s second quarter. Soo Line ROI was 16.30%, up from 11.06% a year ago.

Norfolk Southern earned an ROI of 9.44% in the latest 12-month period vs. 10.89% a year ago; CSX earned 8.54% vs. 8.59%; Kansas City Southern earned 8.43% vs. 6.79%; and Grand Trunk Western, 7.84% vs. 7.39%.

Whether any of these ROIs meet the Surface Transportation Board’s revenue adequacy standard is not now clear. In the view of the STB, which uses the information in rate cases and other proceedings, a railroad is revenue adequate if it earns the current cost of capital.

The latest cost of capital determination by the STB was 11.5% for the year ended Dec. 31.

--> Recovering from the worst business downturn in nearly 80 years, U.S. Class I railroads earned an average rate of return on net investment of 9.60% in the 12 months ended June 30, 2010, compared with a year-ago ROI of 9.47%. ...
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