April 2016 Railway Age by Railway Age

RailwayAge

April 2016 | www.railwayage.com

Serving the railway industry since 1856

VIAâ&#x20AC;&#x2122;s Grand Vision President and CEO Yves Desjardins-Siciliano

ENGINES OF CHANGE THE RAIL/TIE INTERFACE

Another covered hopper car from FreightCar America!

Here is the industry’s newest 5,200 cubic foot capacity covered hopper car, adding to FreightCar America’s expanding product portfolio. It is an ideal addition to North America's grain car fleet. This new car features FreightCar America’s patented high strength cold-rolled steel center sill that, along with other engineering design features, yields reduced tare weight and enhanced payload capability. If you’re looking for a durable, highly productive, and reliable covered hopper car for efficient grain transportation, we’ve got you covered! FreightCar America has been building high quality freight cars since 1901. This grain covered hopper car is just our latest innovation in a diverse and growing line of railcar designs. For more information concerning railcar purchase or lease options, give us a call at 800-458-2235 or email us at sales@freightcar.net.

RailwayAge

april 2016

visit us at www.railwayage.com Features VIA Rail’s grand vision

Engines of change

M/W Focus: Fasteners

Machine vision

News/Columns From the Editor

Update

Watching Washington

Short Line/ Regional Perspective

Financial Edge

Departments Industry Indicators

Industry Outlook

Market

People

100 Years Ago

Meetings

Products

Advertising Index

Classified

27 On the Cover VIA Rail’s President and CEO Yves Desjardins-Siciliano.

Photo: Stephen C. Host Railway Age, USPS 449-130, is published monthly by the Simmons-Boardman Publishing Corporation, 55 Broad St., 26th Fl., New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 217, No. 4. Subscriptions: Railway Age is sent without obligation to professionals working in the railroad industry in the United States, Canada, and Mexico. However, the publisher reserves the right to limit the number copies. Subscriptions should be requested on company letterhead. Subscription pricing to others for Print and/or Digital versions: $100.00 per year/$151.00 for two years in the U.S., Canada, and Mexico; $139.00 per year/$197.00 for two years, foreign. Single Copies: $36.00 per copy in the U.S., Canada, and Mexico/$128.00 foreign All subscriptions payable in advance. COPYRIGHT© 2016 Simmons-Boardman Publishing Corporation. All rights reserved. Contents may not be reproduced without permission. For reprint information contact PARS International Corp., 102 W. 38th Street, 6th floor, New York, N.Y. 10018, Tel.: 212-221-9595; Fax: 212-221-9195. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Cust.#7204564; Agreement #41094515. Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2. Address all subscriptions, change of address forms and correspondence concerning subscriptions to Subscription Dept., Railway Age, P.O. Box 1172, Skokie, IL 60076-8172, Or call toll free (800) 895-4389, or (402) 346-4740. Printed at Cummings Printing, Hooksett, N.H. ISSN 0033-8826 (print); 2161-511X (digital). April 2016 Railway Age 1

From the Editor William C. Vantuono

Editorial and Executive Offices Simmons-Boardman Publishing Corp. 55 Broad Street, 26th Fl. New York, NY 10004 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com

Rail’s triple bottom line

ontrary to what you might be thinking, a triple bottom line does not mean “profits, profits, profits.” That’s the old-school way of measuring success, corporate or otherwise. Frankly, it’s becoming less relevant. In simple terms, the triple bottom line (TBL, or 3BL) incorporates three critically intertwined elements: people, planet and profit. These can also be expressed as social, environmental and financial. One should not exist without the others. Companies that haven’t at least started embracing TBL run the risk of becoming dinosaurs. You know what happened to them. TBL was coined in 1994 by John Elkington, founder of British consultancy SustainAbility, and used in his book “Cannibals With Forks: The Triple Bottom Line Of 21st Century Business.” TBL measures a company’s economic value, its “people account”—its level of social responsibility, and its “planet account”— its environmental responsibility. Elkington argued that companies should prepare a TBL, instead of focusing solely on finances, thereby giving consideration to its social, economic and environmental impact. TBL can be expressed in one word: sustainability, a now-commonplace word that is often over-used. Too often, it’s applied only to the environmental leg of the threelegged TBL stool. How does this relate to railroading? As transportation providers, North American freight railroads are without a doubt the most sustainable. TBL in railroading terms translates to a safety culture and highly competitive wages and benefits (people); fuel efficiency and far less pollution compared to other modes (planet); and shareholder value (profit). Naysayers and NIMBYs can complain that railroads haul a wide array of unsustainable commodities—coal, crude oil, hazardous chemicals, garbage—which of course is true. Railroads can counter that, as transportation companies with legal common-carrier

Railway Age

April 2016

R ailwayA ge

obligations, they typically have no choice, which is also true. But that sounds too much like an excuse, even though it really isn’t. A better response would be, “If (fill in the blank) has to be moved, the most sustainable way is by rail.” Passenger rail? For moving people, no transportation mode is more sustainable. You might argue that passenger railroads cannot fully embrace TBL because they typically are not profitable. From my perspective, profitability is irrelevant. Passenger rail is a vital service that facilitates profitability in the communities it serves. For example, people who take the train to work in congested cities are likely more productive than those who sit stewing in bumper-to-bumper traffic. Luther S. Miller, Nov. 30, 1926 – March 8, 2016: My long-time co-worker and mentor, Luther Sigsbee Miller, died March 8 in Florida. He was 89. Regarded as “the dean of American transportation journalists,” Luther came to Simmons-Boardman Publishing Corp. and Railway Age in February 1958 from The Institute for Railway Progress in Washington, D.C. He was named chief editor of Railway Age in 1966 and worked in that capacity until 2000, when he became Senior Consulting Editor. Among his many accomplishments, Luther co-founded, with the late Robert G. Lewis, International Railway Journal in 1960. He retired, at the age of 88, in May 2015. Luther was the last of his generation of editors at Simmons-Boardman. He leaves behind a legacy of journalistic excellence. For nearly 60 years, his words, as well as those of his numerous colleagues, served to chronicle as well as influence an industry that today is flourishing. Farewell and Godspeed, my dear friend. You will not be forgotten.

ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher jchalon@sbpub.com WILLIAM C. VANTUONO, Editor-in-Chief wvantuono@sbpub.com CAROLINA WORRELL, Managing Editor cworrell@sbpub.com Contributing Editors: Roy H. Blanchard, Alfred E. Fazio, Lawrence H Kaufman, Bruce E. Kelly, Ron Lindsey, Ryan McWilliams, David Nahass, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Creative Director: Wendy Williams Art Director: Sarah Vogwill Associate Graphic Designer: Nicole Cassano Corporate Production Director: Mary Conyers Production Manager: Lily Man Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney Western Offices 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman mischa@sbpub.com Assistant Editor: Jennifer Nunez jnunez@sbpub.com International Offices 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors: David Briginshaw, db@railjournal.com Keith Barrow, kb@railjournal.com Kevin Smith, ks@railjournal.com Customer Service: 800-895-4389 Reprints: PARS International Corp. 253 West 35th Street 7th Floor New York, NY 10001 212-221-9595; fax 212-221-9195 curt.ciesinski@parsintl.com Railway Age, descended from the American Rail-Road Journal (1832) and the Western Railroad Gazette (1856) and published under its present name since 1876, is indexed by the Business Periodicals Index and the Engineering Index Service. Name registered in U.S. Patent Office and Trade Mark Office in Canada. Now indexed in ABI/Inform. Change of address should reach us six weeks in advance of next issue date. Send both old and new addresses with address label to Subscription Department, Railway Age,PO Box 1172, Skokie, IL 60076-8172, or call toll free 1-800-895-4389. Post Office will not forward copies unless you provide extra postage. Photocopy rights: Where necessary, permission is granted by the copyright owner for the libraries and others registered with the Copyright Clearance Center (CCC) to photocopy articles herein for the flat fee of $2.00 per copy of each article. Payment should be sent directly to CCC. Copying for other than personal or internal reference use without the express permission of SimmonsBoardman Publishing Corp. is prohibited. Address requests for permission on bulk orders to the Circulation Director. Railway Age welcomes the submission of unsolicited manuscripts and photographs. However, the publishers will not be responsible for safekeeping or return of such material. Member of:

SBP

SIMMONS-BOARDMAN PUBLISHING CORPORATION

Industry Indicators TRAFFIC ORIGINATED CARLOADS

SHORT LINE AND REGIONAL TRAFFIC INDEX FOUR WEEKS ENDING FEB. 27, 2016

MAJOR U.S. RAILROADS by Commodity Grain Farm Products ex. Grain Grain Mill Products Food products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber and Wood Products Pulp and Paper Products Metallic Ores Coke Primary Metal Products Iron and Steel Scrap Motor Vehicles and Parts Crushed Stone, Sand, and Gravel Nonmetallic Minerals Stone, Clay & Glass Products Waste & Nonferrous Scrap All Other Carloads Total U.S. CarLoadS

FEB. ’16 153,925 3,164 37,113 25,078 125,217 44,713 299,670 5,642 13,472 22,954 14,629 16,294 34,586 14,064 77,339 77,116 15,298 28,114 13,211 22,798 979,042

FEB. ’15 156,139 3,767 39,076 25,337 123,444 56,433 412,290 5,843 14,633 23,869 19,573 14,552 37,073 13,116 64,766 76,085 16,000 26,475 11,430 17,453 1,089,174

% CHANGE -1.4% -16.0% -5.0% -1.0% 1.4% -20.8% -27.3% -3.4% -7.9% -3.8% -25.3% 12.0% -6.7% 7.2% 19.4% 1.4% -4.4% 6.2% 15.6% 30.6% -10.1%

280,610

299,383

-6.3%

1,259,652

1,388,557

-9.3%

CARLOADS

Chemicals Coal Crushed Stone / Sand / Gravel Food & Kindred Products Grain Grain Mill Products Lumber & Wood Products Metallic Ores Metals & Products Motor Vehicles & Equipment Nonmetallic Minerals Petroleum Products Pulp, Paper & Allied Products Stone, Clay & Glass Products Trailers / Containers Waste & Nonferrous Scrap All Other Carloads

COMBINED U.S./CANADA RR INTERMODAL

FOUR WEEKS ENDING FEB. 27, 2016

MAJOR U.S. RAILROADS by Commodity TRAILERS CONTAINERS TOTAL UNITS

Railroad employment, Class I linehaul carriers, february 2016 (% change from february 2015)

FEB. ’16 94,527 954,599 1,049,126

FEB. ’15 116,965 812,383 929,348

% CHANGE -19.2% 17.5% 12.9%

3,609 237,392 241,001

5,679 217,736 223,415

-36.5% 9.0% 7.9%

Transportation (train and engine) 58,889 (-19.36%)

98,136 1,191,991 1,290,127

122,644 1,030,119 1,152,763

-20.0% 15.7% 11.9%

Total employees: 154,212 % change from FEB. 2015: (-10.44%)

COMBINED U.S./CANADA RR TRAILERS CONTAINERS TOTAL COMBINED UNITS

Source: Monthly Railroad Traffic, Association of American Railroads

average weekly U.S. Rail Carloads: all commodities (not seasonally adjusted)

% CHANGE 20.2% 0.0% -3.0% 11.5% 6.7% 37.3% 6.2% 182.5% 7.4% 29.6% -40.9% 13.0% 7.4% 10.5% 46.1% 11.6% 3.4%

FEB. 2016 - 331,709

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

ORIGINATED FEB. ’15 39,502 18,105 21,158 9,934 22,420 4,885 8,510 3,380 15,440 7,000 2,031 1,798 16,327 9,731 30,556 7,523 72,663

TOTAL CARLOADS, FEBRUARY 2016 vs. 2015

CANADIAN RAILROADS ALL Commodities

ORIGINATED FEB. ’16 47,466 18,109 20,513 11,072 23,929 6,705 9,034 9,548 16,579 9,070 1,201 2,032 17,532 10,748 44,639 8,394 75,138

BY Commodity

Executives, Officials, and Staff Assistants 9,480 (-5.07%)

Transportation (other than train & engine) 6,335 (-4.12%)

Maintenance of Equipment and Stores 29,660 (-4.66%)

Professional and Administrative 14,023 (-1.88%)

Maintenanceof-Way and Structures 35,825 (-3.62%)

Source: Surface Transportation Board

All class I employment categories take a hit Figures released by the STB show Class I total railroad employment dropped 10.44% in February 2016, measured against February 2015. All six categories took a hit with Transportation (train and engine) dropping the most at 19.36% followed by Executives, Officials, and Staff Assistants, which dropped 5.07%; Maintenance of Equipment and Stores, which dropped 4.66%; and Transportation (other than train and engine), which dropped 4.12%, compared to 2015. 4

Railway Age

April 2016

Industry Outlook RBN Energy: The decline and fall of East Coast CBR Bakken equivalent light sweet crude priced close to international benchmark Brent for an average $34/bbl, saving a minimum of $6.25/bbl.”

As RBN Energy LLC analyst Sandy Fielden describes in Slow Train Coming: The Decline and Fall of East Coast Crude by Rail, the economics of shipping crude oil out of North Dakota’s Bakken region, compared to importing equivalent crude, are having a detrimental impact on crude-by-rail (CBR) shipments to the East Coast. “If East Coast refiners bought their crude at the wellhead in North Dakota during February 2016, they would have

paid average prices of about $4.90/ bbl below U.S. Benchmark West Texas Intermediate (WTI) at Cushing, Okla., which works out to about $26.25/bbl. (price estimates from Genscape),” says Fielden. “If they shipped that crude by rail to refineries in Philadelphia on the East Coast, they would have paid about $14/bbl rail freight, meaning the delivered cost of crude would be $26.25 + $14 or $40.25/bbl. Alternatively, they could have simply imported

A few key takeaways: • “Overall U.S. CBR volumes declined 30% in 2015 in response to narrower crude spreads and the buildout of pipeline networks that provided cheaper alternative routes to market. At the same time, the proportion of all U.S. CBR movements being shipped to the East Coast has been increasing, largely because shipments to the Gulf Coast have declined with the buildout of pipelines. • “Actual CBR shipment volumes to the East Coast peaked in November and December of 2014 at 488 Mb/d (million barrels per day) and have been declining ever since, reports the U.S. Energy Information Administration— down 33% from December 2015. • “Over time, we expect that if price differentials continue to favor crude, then CBR shipments to the East Coast will continue to decline as rail terminal commitments either expire or are deemed sunk costs that have to be paid anyway.”

STB revises SAC case procedural schedule Railroad rate complaints that come before the Surface Transportation Board for handling under SAC (Stand-Alone Cost) case handling will be subject to “expeditious handling”—a decision rendered in no more than 485 days—according to new final rules. The STB’s final rules revise the procedural schedule for certain large-railroad rate cases. “Specifically, the Board’s action will harmonize its regulations to conform with Section 11 of the Surface Transportation Board Reauthorization Act of 2015, P.L. 114-110 (2015), by revising regulations that set the procedural schedule for SAC case handling,” STB said. “Section 11 requires the Board to maintain procedures for the expeditious handling of rate cases 6

Railway Age

April 2016

before the agency. Accordingly, timelines in SAC rate case proceedings found at 49 C.F.R. § 1111.8 have been significantly shortened, including limits on the time allowed for discovery and the time allowed for development of the evidentiary record.” The procedural schedule prescribed by Congress is reflected in the final rule, and includes the following timeline: • Day 0: Complaint filed, discovery period begins. • Day 7 or before: Conference of the parties convened pursuant to § 1111.10(b). • Day 20: Defendant’s answer to complaint due. • Day 150: Discovery completed. • Day 210: Complainant files opening

evidence on absence of intermodal and intramodal competition, variable cost, and SAC issues. • Day 270: Defendant files reply evidence to complainant’s opening evidence. • Day 305: Complainant files rebuttal evidence to defendant’s reply evidence. • Day 335: Complainant and defendant file final briefs. • Day 485 or before: The STB issues its decision. The revised rules are not applicable to SAC cases filed before the Reauthorization Act’s effective date of Dec. 18, 2015. To address implementation of other parts of Section 11 of the Reauthorization Act, the STB will hold a series of meetings.

CMY

INSULATED RAIL JOINTS FRICTION MANAGEMENT TRACKWORK NEW RAIL CONTINUOUS WELDED RAIL FASTENING SYSTEMS TRACK TURNOUTS CAR REPAIR EQUIPMENT FRICTION MODIFIERS CONCRETE TIES TRACK MONITORING TRACK ACCESSORIES

YOUR TOTAL TRACK MANAGEMENT COMPANY ™ For more than a century L.B. Foster has provided the materials necessary to build and maintain the world’s rail infrastructure. Today, we continue as a leading innovator of products and services that improve rail safety and advance operating efficiencies. L.B. Foster sales and product professionals are available worldwide.

lbfoster.com NA: 1.866.523.7245 Intl: +44(0)1142562225

Market

CSR Sifang lands second major U.S. transit car contract In the largest single purchase of rapid transit cars in Chicago history, the CTA (Chicago Transit Authority) has awarded a $1.31 billion contract to China-based CSR Sifang America Joint Venture for 846 7000 Series cars. CTA will initially purchase a base $632 million order of 400 cars, with options to purchase the remainder in coming years. This is CSR Sifang’s second U.S. contract for transit cars. In 2015, the company won an order for 284 railcars from Boston’s MBTA.

North America Bay Area Rapid Transit (BART): Received the inaugural car of its Fleet of the Future, which itook a crosscountry journey from Bombardier’s, Plattsburgh, N.Y. plant to a BART testing facility in Hayward, Calif. This prototype car will be followed by nine others throughout the year to complete BART’s first new 10-car test train. Kinkisharyo International: Had its new P3010 light rail vehicles (LRVs) roll into their first revenue service on March 5, 2016 as the Los Angeles County Metropolitan Transportation Authority (LACMTA) opened its $1 billion Gold Line Extension now serving Arcadia, Monrovia, Duarte/City of Hope, Irwindale, Azusa and APU/Citrus College. Maryland Department of Transportation (MDOT) and Maryland Transit Administration (MTA): Selected Purple 8

Railway Age

April 2016

Line Transit Partners, a consortium of Fluor Enterprises Inc., Meridiam Infrastructure Purple Line, LLC, and Star America Purple Line, LLC, as the preferred proponent to design, build, finance, operate and maintain the Purple Line project. Metrolinx: Selected CH2M for its Next Wave Rapid Transit Projects – Consultant Services for Program Management Services contract. These include the Hurontario LRT, Hamilton LRT, and other rapid transit projects to be determined. Washington State Department of Transportation (WSDOT): Moved one step closer to obtaining its new Siemens Charger locomotives with the installation of the first engine. Siemens USA is building new diesel-electric locomotives for six states, including Washington. The new locomotives will power the Amtrak Cascades service.

Worldwide: Busan Transportation Corp. (South Korea): Has awarded Hyundai Rotem a Won 52.8 trillion ($US 442.1 million) contract to supply 40 new metro trains for use on Metro Line 1. Mass Rapid Transit Corporation (Malaysia): Has awarded Turner & Townsend a contract to provide quantitative risk assessment during the construction of MRT Line 2 in Kuala Lumpur, on which work is due to start soon. Metropolitan EAD: Awarded Siemens and Newag, Poland, a €140 million contract to supply trains and signaling for the first phase of the new Line 3, which is due to open in 2019. Seibu Railway (Japan): Awarded Hitachi a contract to supply seven eight-car EMUs for limited express services on its 1067-mm-gauge network.

Update Supply Briefs OmniTRAX Logistics expects 2016 growth OmniTRAX Logistics Services, LLC (OLS), the transloading, terminal and logistics affiliate of OmniTRAX, Inc., is rapidly expanding its service territory throughout the U.S. in 2016. OmniTRAX, Inc., an affiliate of The Broe Group, is promoting the unit’s growth with the launch of a new website at www. myshippingmadeeasy.com. OLS built the website to accentuate the company’s “We Make Shipping Easy” slogan. Key features of the OLS website include an overview of the company, a listing of locations, detailed information of each service offering and a comprehensive catalog of the products handled, which include dry and liquid bulk, metal products, consumer products, building products and project cargo.

TCRH acquires Transco’s Ohio railcar repair facility RR Mergers & Acquisitions, specialists in the sale of rail service and supplier companies, announced the sale of Transco Railway Products Inc.’s Bucyrus, Ohio railcar repair facility to Bucyrus Railcar Repair, LLC, a wholly owned subsidiary of T&C Rail Holdings, Inc. (TCRH). For more than 30 years, Transco Railway Products (TRPI) has provided railcar repair to the rail industry at its Bucyrus, Ohio facility. Located on the Norfolk Southern main line with switching from the Chicago, Ft. Wayne & Eastern Railroad, the facility spans 33 acres with 165,000 square feet under roof, 28 repair spots and blast/paint capabilities. TCRH is a rail-focused holding company. The Bucyrus facility is TCRH’s first railcar repair acquisition in North America. 10

Railway Age

April 2016

Transport Canada scrutinized for prior safety snafus

Former Canadian Transport Minister Lisa Raitt has been criticized for Transport Canada’s handling of the Lac-Mégantic disaster under her watch.

he reputation of Canada’s much-criticized rail regulator is being further pummeled, both by its elected master and by the union representing lineside safety inspectors. The Canadian government revealed March 9, 2016 that it has placed Transport Canada under special oversight by the Treasury Board, the country’s guardian of public finances. The apparent cause was a hiring binge of rail safety inspectors without budgetary authorization. Then, a day later, the leader of the union representing those same rail inspectors called for a criminal investigation into Transport Canada’s top rail regulators with respect to the special treatment they accorded the railway involved in the July 2013 oil-train runaway that caused the deaths of 47 people at Lac-Mégantic, Quebec. In a revelation to Railway Age last month, Christine Collins, national president of the Union of Canadian Transport Employees, said that Transport Canada inspectors had strongly recommended, in writing, that the now-defunct Montreal, Maine & Atlantic not be allowed to operate dangerous goods trains with just one crewman. The inspectors were overruled by at least one senior

Transport Canada executive, said Collins. The executive left Transport Canada shortly after Lac-Mégantic. “Our members told us they expressed their concern about the safety practices of the railway, but that their recommendations were disregarded by senior management,” said Collins. Whoever overruled the inspectors by giving the MM&A such special dispensation from normal operating rules “should be charged under the health and safety provisions of the Canada Labour Code,” said Collins. No employee of Transport Canada has been publicly held to account for what proved to be a disastrous derogation from normal safety policy. Why MM&A was given special treatment has never been explained. Only the engineer and five other MM&A employees have been criminally charged under the Railway Safety Act and the Fisheries Act for negligence related to Lac-Mégantic. Their trials are pending. Until now, it was widely believed that the MM&A train had slipped its automatic brakes. In fact, only the locomotive’s independent air brake was set to back up what tragically turned out to be an insufficient number of handbrakes set by the engineer before leaving the train unattended.

AAR to FRA: No basis for two-person crews Citing the Federal

Railroad Administration’s (FRA) acknowledgement of “little evidence or safety data” in its attempt to mandate two-person train crews, a proposed rule first announced by the FRA in April 2015, Association of American Railroads (AAR) President and CEO Edward R. Hamberger said, “Safety is this industry’s number one concern, but there is simply no safety case to be made for a regulation that requires two-person crews, especially where Positive Train Control is fully operational.” The rule was published in the Federal Register on March 15, 2016, and public comments are due on May 16. “Worldwide, trains safely operate with one person in the cab, including here in the United States with passenger and commuter trains and some short line freight railroads. Major European railway systems running many

mixed freight and passenger trains per day have safely implemented singleperson train crews,” Hamberger added. “Coming from an administration that champions smart, data-driven regulations, it is inexplicable how this proposal was approved by the President’s Office of Management and Budget,” Hamberger said. “Even the FRA concedes they have no ‘reliable or conclusive statistical data’ to suggest that two-person crews are safer. I encourage the FRA to reexamine the facts and exercise sound regulatory judgment before finalizing a rule that lacks empirical support.” Hamberger pointed out that Class I freight railroads remain committed to two people in the cab for trains operating on main line track that is not equipped with Positive Train Control. PTC, which is “designed to provide continuous monitoring of train

AAR President and CEO Ed Hamberger

operations to protect against human error in controlling speeds and movements” will be in operation for 60,000 out of the nation’s 140,000mile freight rail system. “The freight rail industry is spending billions to automate operations inside freight locomotives. Instead of piling on additional, duplicative regulatory costs that offer no incremental safety benefit, the government should focus on creating an environment that fuels innovation and technological advancement in furtherance of safety,” concluded Hamberger.

Keeping Technology in Motion

April 2016 Railway Age 11

Update RBN Energy: Putting the brakes on Bakken crude

Increased pressure on North Dakota crude oil producers is “finally” putting the brakes on Bakken crude production, writes RBN Energy LLC analyst Sandy Fielden in Is It All Over Now? Producers Lose Their Appetite For Bakken Crude Output. “For the past year, many shale oil producers have defied the expectations of many and kept output at or near to record levels in the face of falling oil prices and much tougher economics,” writes Fielden. “Improvements in productivity, cost cutting and a

concentration on ‘sweet spot’ wells that generate high initial production (IP) rates have all helped cash strapped producers survive. But with oil prices so far in 2016 stuck in the $35/Bbl and lower range and with the worldwide crude storage glut still weighing on the market, producers are finally pulling back.” A number of signs point to the decline in production continuing during the rest of 2016 unless there is an extended oil price recovery. For a start, the number of new permits to drill wells in North Dakota is at a seven-year low, indicating a low appetite for drilling. Second, there were 1,183 inactive wells in the state in December, about 30% above normal for this time of year. The operators have essentially abandoned these inactive wells, usually because they are losing money. Many of these inactive wells are older and had very low

The "GREEN TAG" Injector

production rates, less than 35 b/d. A third indicator of declining producer interest in the Bakken is the large number of producing wells in North Dakota currently being transferred (sold) by one operator to another— 697 wells as of Feb. 17, 2016. The strongest indicators of a slowdown in Bakken production come in the reduction in drilling rigs operating in North Dakota and a parallel decline in the number of well completions. All expectations are that U.S. shale production will tumble this year (despite the suggestion in the title it is not quite “all over” yet). The situation on the ground in North Dakota indicates that the slowdown is gaining momentum. The extent of any decline in production is still hard to forecast accurately, clouded as it is by the unknown impact of an increase in DUC (drilled but uncompleted) wells.

Patented ECOTIP® SUPERSTACK injector reduces smoke while saving fuel. Reduce fuel consumption by as much as 3%, while lowering emissions.

Your Pollution SOLUTION › FUEL SAVINGS › REDUCE SMOKE › LOWER PARTICULATES

www.interstate-mcbee.com 12

Railway Age

April 2016

31460 INM_Green EcoTip Superstack_halfpg_RailwayAge.indd 1

› LOWER TOTAL COSTS

For more information on ECOTIP Injectors, call Interstate Diesel today at 216-881-0015 or toll free at 800-321-4234.

2/23/16 4:20 PM

STB sets timeline for CP+NS replies On March 16, 2016, the Surface Transportation Board issued a decision, Docket No. FD 36004, “Canadian Pacific Railway Limited—Petition for Expedited Declaratory Order,” responding to CP’s March 2 petition, and setting a timeline for replies and CP’s rebuttal. “On March 2, 2016, Canadian Pacific Railway Limited (CPRL) filed a petition requesting that the Board issue a declaratory order on two issues pertaining to CPRL’s pursuit of a possible merger with Norfolk Southern Railway Company (NSR) whether: (1) ‘a structure in which CPRL holds its current rail carrier subsidiaries in an independent, irrevocable voting trust while it acquires control of [NSR] and seeks STB merger authority potentially could be used to avoid the exercise of unlawful premature common control’; and (2) ‘It would be potentially permissible for the chief executive officer of [CPRC] to terminate his position at [CPRC] entities in trust and then to take the comparable position at [NSR] pending merger approval,” STB said (Pet. 2.) “CPRL has requested that the Board issue an expedited declaratory order by May 6, 2016. “On March 7, 2016, the Transportation Communications Union/IAM (TCU/IAM) requested that the Board provide interested parties 45 days to reply to the March 2 petition. Also on March 7, 2016, CSX Corporation requested that the Board deny the March 2 petition, or, should the Board proceed, issue a procedural schedule that would allow parties 30 days from publication to submit comments and 15 days for the simultaneous submission of reply comments,” STB noted. STB ordered that: • Substantive replies to CPRL’s petition were due by April 8, 2016. • CPRL’s rebuttal was due by April 13, 2016. • Notice of this action will be published in the Federal Register. • This decision is effective on its service date.

RAIL MAINTENANCE MADE EASY.

Brandt delivers comprehensive maintenance of way services, and it’s all one call away. Regardless of the task, we’ll mobilize our team of trained experts quickly, work to a highstandard, and we’ll do it all safely and efficiently. We take pride in a job well done, and customer satisfaction is always key. Contact us today to discuss your maintenance challenges. We’ll make it easy! That’s Powerful Value. Delivered.

brandt.ca 1-306-791-7533 Email us at roadrail@brandt.ca

April 2016 Railway Age 13

Rail Systems & Vehicle Engineering

SOLUTIONS

Vehicle Engineering Systems Engineering Fare Payment and Revenue Systems Operaaons Planning, Simulaaon and Analysis

www.ltk.com

Railway Age April 2016

Update BNSF to develop new customer sites BNSF last month announced a new Site Certification Program aimed at identifying optimal rail-served sites for customer development along its network. To launch the new program, BNSF developed a list of candidates and conducted in-depth reviews of 10 economic development criteria to determine if the industrial sites meet BNSF’s stringent readiness standards, which are intended to minimize development risks customers may face. As part of the program launch, BNSF announced that Shafter, Calif., Newton, Kans., Shelby, Mont., and Temple, Tex., “achieved the distinction of demonstrating advanced readiness for industrial growth for commercial development projects. The BNSF program allows the certified sites to use the new ‘BNSF Certified Site’ distinction in marketing materials to attract new businesses. BNSF is actively marketing the sites on bnsf.com and will promote the sites to the economic development industry across the country.” A customer who builds a new railserved facility on a BNSF Certified Site is expected to save between six to nine months of construction time as a result of the site’s advanced level of preparedness for development. To be considered as a certified site, industrial sites agree to submit documentation that allows BNSF to look at tangible evidence of a commitment by the owner and the community to develop a high-quality industrial park or site that is strongly supported by a public-private collaboration and existing investments. BNSF’s certification is expected to generate economic development for the industrial sites and their communities. Factors known to be critical for a commercial development project include a true picture of property size and boundaries; the confirmed availability of utilities, public services, and highway access; proper zoning for industrial usage; and transparency of current land ownership. To be considered, visit www.bnsf.com/ed.

Watching Washington Frank n. wilner

Makeover crucial for dereg defense

or those sheltering railroads against assaults on regulatory freedoms, the 1980 Staggers Rail Act (Staggers) is considered sacrosanct. Shippers lacking effective transportation alternatives say conditions have changed profoundly since 1980, with railroads now financially sound and capable of meeting current and future service needs without captive shippers paying, in perpetuity, higher rates than customers with truck and barge options. Notably embracing this position is Ph.D. economist Harvey A. Levine, with a 360-degree perspective on rail regulation. Over four decades, he has studied the issues as an academic, a statistician at Surface Transportation Board (STB) predecessor Interstate Commerce Commission (ICC), as chief economist for the Association of American Railroads (AAR), and now a shipper consultant. Levine says regulatory fine-tuning will not upset the railroad renaissance, constructed solidly through progressive legislation; regulatory enlightenment; financial aid; and a rejuvenated management that embraced mergers, streamlined networks, adopted innovative technology and tailored service to shipper wishes: • Creation of Amtrak saved railroads billions of dollars. • Federal assistance restructured failed Northeast and Midwest railroads. • The 1976 Railroad Revitalization and Regulatory Reform (4-R) Act exempted competitive traffic from regulation; eased the path for mergers and network rationalization; established an unregulated zone of rate-making flexibility; ordered regulators to develop revenue adequacy standards; and outlawed discriminatory state and local taxes. • Tax law changes allowing accelerated depreciation dispensed a $2.5 billion cash windfall.

• Mergers, track abandonments and line sales delivered productivity improvements through economies of scale and density. Some 40% of Class I track was jettisoned while revenue ton-miles increased 85%. • Labor agreements eliminated the caboose, reduced crew size from five to two and allowed remote-control yard switching. • Doublestack operations extended market reach and slashed costs.

Railroads must inspire a new generation of opinion leaders and decision-makers. • Railroads shifted 70% of rolling stock ownership costs and risks to shippers and private investors, while improved locomotive design boosted fuel efficiency and pulling capability. Staggers strengthened the 4-R Act. It restricted maximum rate regulation to shipments where railroads have market dominance and rates exceed a minimum threshold; permitted confidential rate contracts; shifted to shippers the burden of proof; and permitted uncontested recovery of increased fuel, labor and materials costs. Levine says that with two-thirds of rail traffic now free of regulatory oversight, and railroads experiencing no difficulty attracting record levels of private-sector investment for maintenance, renewal and expansion—the essence of revenue adequacy—regulatory fine-tuning is justified. He

advocates harmonizing STB revenue adequacy standards with those used by Wall Street, and placing greater restraints on the rate-making freedoms of revenue-adequate railroads. As additional evidence regulatory fine-tuning will not threaten the rail renaissance, Levine cites industry acceptance of the 2015 STB Reauthorization Act, which simplifies, speeds and strengthens regulatory oversight of shipper rate complaints; and Canadian Pacific’s (CP) volunteering sole-served shippers access to a second railroad in exchange for authority to merge with Norfolk Southern. CP offers to open gateways to competitive pricing and allow reciprocal switching for captive shippers in terminal areas. What was so four decades ago, no longer is so today. Service quality improved; most rates, adjusted for inflation, declined; and inflationadjusted rail costs tumbled even more. If Levine is mistaken that new caps on captive shipper freight rates will not upset the rail renaissance, then railroads and the nation will pay a steep price. What to do? To counteract populist appeals to evenhandedness, railroads must inspire a new generation of opinion leaders and decision-makers devoid of references to the decades’ old 4-R or Staggers acts, but having an understanding of free markets. Required is stronger intellectual reasoning, not intrepidly pointing to laws familiar only to the millennials’ grandfathers as a mutually agreed-to bulwark not to be breached. Otherwise, railroads are defending a modernday Maginot Line. Baseball legend Satchel Paige warned, “Don’t look back. Something might be gaining on you.” It’s the millennials, and effective messages must be crafted for their 21st century intellectual appetites. April 2016 Railway Age 15

to the 30th Annual Tie Grading Seminar Register now for the 30th Annual Tie Grading Seminar August 2-4 at the Stella-Jones plant in Bangor, Wis.

Hotel: Best Western Riverfront Hotel, La Crosse, Wis. Make tracks to the most intensive crosstie information event of the year. Enjoy three full days of important education PLUS video interactive sessions: • See at a glance ties that will last and those that won’t • Gain insights from professors, railroaders, foresters, wood preservers and sawmillers • Tour a tie-producing plant • Join lectures and discussions, including our popular Species Identification and Crosstie Grading Derby • Bonus session: Railroading Engineering Principles Used to Develop Tie Specs • Learn species ID, defect inspections, specs and grades storage, seasoning and handling

T H E H O T E L R O O M B L O C K W I L L B E H E L D U N T I L J U LY 1 4

Perspective: Short Line & Regional Linda Darr

45G permanance: The right thing to do

ach year, Railroad Day provides an excellent opportunity for our industry to come together to discuss our concerns with members of Congress. This year was no different, as more than 440 colleagues manned a record 355 meetings on March 3, 2016. One of the messages that we carried to the Hill was the need for permanence for the 45G Tax Credit. The tax credit provides short line and regional railroads a 50-cent tax credit for each dollar the railroad spends on track rehabilitation and maintenance up to $3,500 per mile of track owned or leased by the railroad. The tax credit has proven to be one of the most important safety related initiatives in the past ten years for our small railroads, the health of the national rail network and our customers. Safe track makes for safe operations. ASLRRA cheered the Building Rail Access for Customers and the Economy (BRACE) Act introduction on February 25, 2016, which will make the short line railroad track maintenance tax credit (45G) permanent. The BRACE Act was introduced in the Senate (S. 2595) by Mike Crapo (R-Idaho) and Senate Finance Committee Ranking Member Ron Wyden (D-Ore.). It was concurrently introduced in the House of Representatives (H.R. 4626) by Lynn Jenkins (R-Kans.) and Earl Blumenauer (D-Ore.). The BRACE Act is also supported by customers in the wide variety of industries that rail serves. “A permanent short line tax credit would give my serving short lines a much better ability to plan long-term to support our future growth and development,” said Simon Smith, Senior Manager, Supply Chain, Columbian Chemicals Company, Marietta, Ga. There are many good-for-business, good-for-customers, and good-for-

safety stories that have come because of 45G tax credit benefits. For example, Kansas & Oklahoma Railroad in Wichita, Kans., completed a 43mile track upgrade on its Hutchison Subdivision with an investment of $8.68 million. This upgrade included replacing aging 90-pound jointed rail with 115-pound continuous welded rail (CWR) and rebuilding the roadbed under the rails. There were 20,000 ties installed. Completing this project has allowed the K&O to reduce operating costs and transit times to move traffic

The tax credit has more than paid for itself by helping short lines and their customers grow and prosper. from western Kansas to Wichita and has eliminated the safety issues caused by aging rail and roadbed. Florida Central Railroad (FCEN) in Plymouth, Fla., invested $10 million to replace 16 miles of rail, including 16,000 new ties, 30 new switches and 40 crossings. The railroad was able to hire 40 contractors from Florida plus others from around the country that welded the rail and assembled the switch packages. 6,400 tons of ballast was produced locally by recycling broken concrete. The FCEN has 25 customers that depend on its safe and reliable service. The improvement also laid the groundwork for a possible Central Florida Commuter Rail expansion onto the short line as a feeder line to the core system on CSX in Orlando.

The Dakota & Iowa Railroad of Sioux Falls, S.Dak., installed 22.5 miles of CWR and rehabilitated a bridge at a cost of $7.6 million. The D&I utilized the short line tax credit and received a loan from the State of South Dakota to replace century-old rail with new 115-pound CWR. The D&I’s improved infrastructure is now more capable of handling the larger, heavier cars that are a standard of today’s railroads. As a large hauler of ethanol, which is classified as a hazardous material, the D&I is now better equipped to safely transport these types of commodities. Because of the tax credit, infrastructure investment by short lines has increased by 128% from its inception in 2004 through 2013, the final year prior to the 2015 extension. Railroading is a capital-intensive industry, and 45G has been instrumental in allowing short lines to invest a large percentage of their earnings in track and bridge rehabilitation. Over the life of the credit, short line capital investment has ranged between 24% to 31% of annual revenues, significantly higher than most other industries in the country. And the tax credit has more than paid for itself by helping short lines and their customers grow and prosper. In turn, the short line industry’s overall annual federal tax liability has increased by 64% since 2013, the year prior to the credit being enacted. The BRACE Act is built on an effective, proven and very popular public policy. It will directly support low-cost, environmentally sound transportation to thousands of railroad customers across virtually every sector of the economy and all regions of the nation. As of March 30, 11 members of the Senate and 19 members of the House had signed on to support the bill, most of them within a span of just a few weeks. April 2016 Railway Age 17

LIGHT RAIL 2016 PRESENTED BY RAILWAY AGE AND RT&S

PLANNING, ENGINEERING AND OPERATIONS APRIL 27 & 28

Downtown Marriott, Philadelphia

Platinum Sponsor

Gold Sponsor

Supporting Organizations

Sponsorships & Exhibits Available Contact Jon Chalon at jchalon@sbpub.com / 212-620-7224 18 RAILWAY AGE January 2016

KEYNOTE ADDRESS Jeffrey D. Knueppel, P.E. General Manager SEPTA

CONFERENCE TOPICS • • • •

Express Operations on Hudson-Bergen Light Rail Scheduling Zone Expresses on SEPTA’s Norristown High Speed Line Ontario’s Kitchener-Waterloo ION LRT Alternative Vehicle Technology for FRA-Regulated Operations

•

NJ Transit River LINE/Conrail Extended Temporal Separation

•

Signalization and its Impact on Operations

PDHS FOR PROFESSIONAL ENGINEERS

www.railwayage.com/lightrail

PLUS: SEPTA and NJ LIGHT RAIL Transit Tours January 2016 RAILWAY AGE 19

National Dream redux

rom the era of fur-trading voyageurs, the St. Lawrence River Valley between the Great Lakes and Montreal has been Canada’s economic aorta. Solitary canoes gave way to steamships, railways, airplanes and freeways, and the vital artery is now clogged within a smear of yellow smog, often thick enough to taste. Most of the congestion and much of the pollution is due to reliance on individual passenger vehicles for travel between the country’s two largest cities, Montreal and Toronto. In Europe or on the eastern seaboard of the U.S., such a 600-km (372-mile) separation would be deemed an optimum distance for intercity passenger trains. Problem is, the busy main lines of CN (Canadian National) can accommodate just

20 Railway Age April 2016

six daily passenger departures each way, slotted between intermodal hotshots and slow-ordered oil trains. Now, all indications are that Canada will have a fast, frequent and fully electrified, intercity passenger railway by 2020—more than a century after what is still the country’s only electrified passenger line opened in 1918. Since its creation in 1977 by Prime Minister Pierre Trudeau from a cast-off collection of tired, first-generation diesels and 1950s coaches (but no tracks of its own on which to run them), VIA Rail Canada (commonly referred to as VIA or VIA Rail) has struggled to maintain a credible timetable. At the operational mercy of freight-only carriers that didn’t give an air horn’s hoot about passenger schedules, successive

Photos: Stephen C. Host

VIA’s Toronto-Ottawa-Montreal high-frequency passenger rail corridor project meets Canada’s aggressive economic and sustainability goals.

By David Thomas, Canadian Contributing Editor

VIA Rail CEOs have lamented the difficulty of running trains without a railway. The past decade was particularly painful. Freight trains outgrew the length of passing sidings, forcing VIA Rail’s shorter passenger trains to cede the main track at every meet. A succession of federal governments, in a parsimonious quest for balanced budgets, kept VIA running, but with little hope for growth. Then, two years ago, in the twilight of its 10-year rule, the Conservative government made what seemed like a routine elevation of VIA Rail’s general counsel to the presidency: Yves Desjardins-Siciliano, a Montreal-born lawyer and dutiful bureaucrat.

Wrong. After a few months on the job, Desjardins-Siciliano sloughed off his sheepskin disguise and began to howl against the tyranny of freight train dispatchers and austerity’s starvation diet. The new CEO hit the luncheon circuit to promote the notion of a dedicated passenger railway—starting with Montreal, Ottawa and Toronto—that would be funded through public-private partnerships or what he prefers to call “publicpublic partnerships,” referring to Canadian public sector pension funds that invest the world over in passenger railways. Desjardins-Siciliano sketched the outline of a dedicated right-of-way that would be cobbled together by some future, more sympathetic national government—with trackage and trainsets financed by investors seeking a safe haven in a country whose foundational motto is “Peace, order and good government.” Boring, perhaps, but “nice boring,” if you are a global investor looking for a safe haven. The government responded with resounding silence. Desjardins-Siciliano’s after-lunch speech tasted like pie-in-the-sky. Then, in October 2015, came the Trudeau Restoration. Justin, son and heir to VIA Rail’s creator Pierre, was elected by voters to the country’s Prime Ministership—a job that, relatively speaking, is considerably more powerful than the presidency of the United States. With a parliamentary majority and strict voting discipline, the Prime Minister controls the legislative majority as well as the executive branch. Gridlock, in Canada, is confined to the highway between Montreal and Toronto. Trudeau II offered up his own Christmas pie in the form of the ritualistic but authoritative “Speech from the Throne,” setting out the new Prime Minister’s legislative program. The juicy plum Justin pulled out by his thumb was a promise to invest heavily and immediately in public works and transformational projects, notably passenger transit and climatefriendly infrastructure: “Recognizing that public investment is needed to create and support economic growth, job creation and economic prosperity, the Government will make significant new investments in public transit, green infrastructure and social infrastructure.” So, suddenly, Desjardins-Siciliano was staring out from the abyss, waving his transformative plan that would stimulate the economy and go a very long way towards meeting Trudeau’s commitment to reduce greenhouse gases. The opportunity did call for a few tweaks to the original plan. With a government committed to immediate, direct investment of taxpayer dollars, Desjardins-Siciliano realized that his scheme of public-public partnerships would be faster to negotiate than the typical P3 arrangement. In effect, he turned to a much simpler equity model that would leverage the government spending, by attracting direct investments from Canada’s huge public pension funds. And then, he topped his reformulated confection with the irresistible cherry of end-to-end electrification. Running trains on clean, self-sustaining power, drawn from Quebec’s subarctic rivers, would deliver more than economic stimulus; it would simultaneously satisfy Trudeau’s climate promises, cheaply and quickly. Though at the time of his recent interview with Railway Age the government had yet to announce the specifics of April 2016 Railway Age 21

VIA RAIL

GE P42s are the newest motive power in the VIA Rail fleet.

its green transportation investments, Desjardins-Siciliano was confident enough in his new railway project to call it a “poster child” for national economic and climate policy. The VIA CEO laid out the project’s economic, social and political rationale, as well as key technology parameters that will find expression in eventual invitations to bidders. “We believe this is to be a transformational project that will change the way Canadians move within the densely populated economic corridor between Quebec City and Windsor, Ont.,” Desjardins-Siciliano said. “The first phase would start with, at a minimum, Montreal, Ottawa and Toronto, although extensions to Quebec City and Windsor can be included initially or soon thereafter. Because it is such a transformational project, we believe it will be looked upon favorably by our new shareholder.” VIA Rail’s “new shareholder,” of course, is Trudeau’s Liberal Party government. The railway, like Amtrak in the U.S., is owned entirely by taxpayers, though that burden could be shared with direct investments by the pension funds, which would share both the risks and the returns on their investments. “This project aligns perfectly with the government’s environmental, social and economic agendas,” said DesjardinsSiciliano. “It is a low-cost project; it aims at accessibility and affordability for Canada’s middle class; it creates a knowledge corridor for the more than 500,000 post-secondary students 22 Railway Age April 2016

who live within it; it will reduce car congestion on the highways by the equivalent of 5 million car trips per year. That, in carbon production, is like taking 2.4 million cars permanently out of the car pool.” Low-cost? Yes indeed, to those who correctly consider C$4 billion to be a bargain for a 600-km railway, with 18 daily departures each way. The financial magic in VIA’s Corridor plan is that there is no technological mystery to it: It eschews the cost and environmental disruption of high-speed rail in the Japanese, Chinese and European fashion. Instead, it relies on out-of-the-catalog technologies to provide “fast and frequent” service that will easily outrun private passenger cars, but not pointlessly compete with airplanes. Assembling the right-of-way and building roadbed, trackage and signaling will cost C$2 billion. VIA already owns more than 200 km (125 miles) of the route, having previously acquired CN’s and Canadian Pacific’s Coteau, Quebec to Brockville, Ontario main lines via Ottawa. As recently as the end of 2015, VIA purchased the Smiths Falls to Brockville portion of the line from CP, after investing some C$20 million in tenant improvements over the years, including new passing tracks, curve realignments and centralized traffic control. CP retains its Smiths Falls freight yard and running rights to connect with its Montreal-Toronto main line. That, perhaps, is a model for additional purchases of underutilized freight tracks between Montreal, Ottawa and Toronto. VIA anticipates acquiring a mixture of lowtraffic freight lines and abandoned rights-of-way. The shopping list for locomotives and passenger cars adds up to another C$1 billion. After courageous experiments with untested technologies including whining, aircraftengined Turbo Trains and finicky LRCs, VIA will opt for tried and true trainsets that will cruise at 180 kph (110 mph). The final billion-dollar tranche actually makes the project a more irresistible deal for a government determined to meet its international commitment to cut greenhouse gases. The Corridor will be, by far, the longest electrified railway in Canada—drawing clean, green power from existing hydroelectric facilities in Quebec’s far north. While electrification was a nice option in the 1.0 version of Desjardins-Siciliano’s vision, it became a must-have upgrade in light of Trudeau’s ambitious commitments at the December climate change conference in Paris. “Whether to electrify is less an operating issue than a broader national policy choice,” said Desjardins-Siciliano. “The operational advantages of electrification are not really material in terms of time savings or energy costs. But I think we will all agree that it is the right thing to do. If our shareholder is keen on reducing Canada’s carbon footprint, then electrification is a natural.” Electrification certainly makes sense in Canada, but why not, while we are at it, opt for “true” high-speed rail (300320 kph) instead of higher-speed (180-220 kph) service operating on a more “conventional” right-of-way? “The potential for a good return on investment is

VIA RAIL

determined by the cost at entry, not the price at exit,” said Desjardins-Siciliano. “The price of entry here is much lower than that for a high-speed project. Therefore, your potential for a better return is greatly enhanced. The C$4 billion price tag drives 7 million passengers a year—up from 2 million, now. That compares to a C$10-$12 billion investment in high-speed that would only drive 10 million passengers.”

“The potential for a good return on investment is determined by the cost at entry, not the price at exit.” “High-frequency trains at top speeds of 180 kph mph can be done quickly and cheaply, vs. a high-speed project, which would cost more, take more time to build, and which would ultimately have a consumer price tag that excludes the middle class,” he said. “As we see in Europe, the ticket price for a high-speed train would be equal to or greater than airfare [between the same points]. Therefore, it would only serve those who can afford it, and it would only tie together major urban centers, not cities in between. Our project delivers trip times for Montreal-Toronto of 3.5 hours,

Ottawa-Toronto in 2:45, and Montreal-Ottawa in 1:20. The last high-speed train study put Montreal-Toronto at just under 3 hours, Ottawa-Toronto at 2.5 hours and MontrealOttawa at about 1 hour. “We don’t believe high-speed is worth it: Better times would still be made by planes at no financial advantage to the consumer, and without being disruptive to the economic mix and redundancy required from a national transportation system. We are convinced that the greatest contribution we can make is taking those 5 million car trips a year off the highways, making Canadians more productive by not wasting time in highway bottlenecks and enhancing their safety, and making an economic contribution to Canada by allowing freight and passenger trains to run independently and efficiently.” The key success factors are frequency and reliability, believes the VIA CEO. Of the 18 or more departures daily each way, some would be Montreal-Toronto expresses, others stopping only at Ottawa, and most including service to smaller local communities along the way. “The key reason this project can be done so quickly is that it is based on abandoned or little-used rights-of-way,” he said. “We save ourselves environmental studies and a lot of time building crossings and the rest of it. What we have to do is upgrade the track for greater speeds and introduce better signaling.

April 2016 Railway Age 23

VIA RAIL How to fund it

The Corridor project is also moneyready, believes Desjardins-Siciliano, who has, over past months, pitched the project to Canada’s big public pension funds, which look for safe, long-term returns. Most are already experienced investors in passenger rail. Ontario’s teachers and municipal workers pension funds jointly own the United Kingdom’s HS1 high-speed railway connecting London’s St. Pancras Station to the Channel Tunnel. PSP Investments owns a substantial share of CN on behalf of present and future retirees of the Royal Canadian Mounted Police, the Canadian military and the federal public service. Perhaps most pertinent to VIA’s Corridor project is the recent invest“We believe this is a transformational project that will change how Canadians move.” ment of US$1.5 billion for 30% of Some of those are dark territories or have signals too far Bombardier’s worldwide railway business by Quebec’s Caisse apart for passenger speeds. We will add double-track where de dépot, which manages the province’s universal pension necessary, and long passing tracks where that makes more fund. An additional side bet on VIA’s Corridor railway could sense. The other beauty for the government is that this is a enhance the Caisse’s Bombardier investment, should the shovel-ready, quick-deployment project.” Quebec-based company secure some of the action.

sit idle without idling

By equipping a locomotive with a HOTSTART block heater, the prime mover can be shut down and easily restarted, even after days sitting in freezing weather. This eliminates the problems with idling including wasted fuel and oil, wet-stacking, emissions, noise and engine wear.

HOTSTART.com

24 Railway Age April 2016

VIA RAIL

Desjardins-Siciliano calculates that as little as one-quarter of the total cost would come from the government’s infrastructure budget, with the balance from the pension funds. And since, in any event, the government would have to spend C$1 billion on rolling stock, just to keep its current service running, “we believe that the inevitable and unavoidable C$1 billion investment in new rolling stock can be leveraged by generating C$3 billion of non-government funding to create an altogether much better public service,” he said. “We believe the optimum structure is one in which the construction risk, the operating risk and the revenue risk are shared between the government, through VIA Rail, and financial partners. That is the one we would favor. But we are agnostic on the financial structure: What we want to see is a dedicated corridor to serve more people more frequently, to reduce the burden of VIA on the Canadian taxpayer, and to enhance the relevancy of VIA’s service to more Canadians. The government will decide how best to address this opportunity.” Desjardins-Siciliano believes VIA’s Corridor would actually reduce the government’s annual subsidy: “The Corridor would become self-sufficient, so that the subsidy, which is tagged today at more than C$300 million, would come down to about C$110-$120 million, to subsidize the long-haul services and the remote services. Over time, the contribution of the Corridor would be sufficient to absorb a large

part of the other VIA services.” For a government needing to rapidly stimulate an economy that became financially and psychologically over-dependent on high oil prices, time is of the essence. The full railway could be built in just three construction seasons, said Desjardins-Siciliano: “The start date depends on which financing model you choose. If it’s a P3, it’s going to take 12-18 months to select partners and negotiate. If it’s a conventional equity model, in which public pension funds come in as minority players, you can have your shovel in the ground within six months.” The pension funds are poised to jump in, he said: “We have secured their interest in participating, should the government go forward.” So are rolling stock manufacturers and infrastructure contractors. Projects of such scale attract international bidders with wide scopes of competencies, so that VIA passengers should expect to be riding a cosmopolitan blend of technologies and engineering. Train manufacturers likely to bid, alone or in combinations, include Bombardier (Canada), Siemens (Germany), Alstom (France), Hyundai Rotem (South Korea), Talgo (Spain) and CAF (Spain). Montreal’s newest rubber-tire Métro cars, for example, consist of Bombardier carbodies riding on Alstom bogies. As for roadbed, trackage, signaling and electrification, a

April 2016 Railway Age 25

VIA RAIL

number of global engineering firms can be expected to bid, including AECOM (U.S.) RailWorks (U.S., with its Canadian subsidiary PNR RailWorks), Parsons (U.S., with its Canadian subsidiary Delcan) and WSP | Parsons Brinckerhoff (Canada), as well as Bombardier, Siemens and Alstom, which have engineering subsidiaries of their own. “Canadians are reaping tremendous benefits because of the significant investment in mass transit over the past 50 years and in the past decade, in particular,” said Mark Patterson, president of RailWorks passenger rail subsidiary L.K. Comstock National Transit. “The proposed railway represents an exciting opportunity for Canada to make another forward-looking investment in public transportation.” There is only one substantial electrified passenger line in North America: Amtrak’s Boston to Washington Northeast Corridor and its Keystone Corridor extension connecting Philadelphia and Harrisburg, which, on some sections, operates at VIA’s anticipated 180 kph top speed. In California, Caltrain is electrifying and purchasing new trainsets for its San Francisco-San Jose corridor. “Commuter rail is already enjoying a huge renaissance in Canada, so intercity rail is coming back in a big way,” said Paul Nimigon, WSP | Parsons Brinckerhoff, Vice President for Rail Projects. WSP is Canada’s biggest homegrown railway design and engineering firm, and is heavily engaged

26 Railway Age April 2016

in Metrolinx’s ambition to electrify the web of commuter lines centered on Toronto’s lavishly revitalized Union Station—a 1927 beaux-arts beauty. Union Station electrification is clearly key to VIA’s project. Montreal’s underground Central Station is already equipped to serve Canada’s only existing electrified railway, AMT’s 1918-built Deux Montagnes line, which bores 5 km (3 miles) through Mount Royal. “The biggest obstacle to VIA’s Corridor project is a negative public and political perception of Euro-style, high-speed rail,” said Desjardins-Siciliano. “We have convinced ourselves, throughout 30 years of looking at high-speed projects, that they would be extremely expensive to build and would serve only the terminal cities, and at the expense of airlines. So, to all of a sudden come up with the notion that we can build in four years for C$4 billion what we always thought would take 10-12 years and C$10-$20 billion is an intellectual challenge.” VIA seems to have convinced at least one high-level thinker. NASA Space Shuttle astronaut Marc Garneau, now Canada’s Minister of Transport, uses VIA’s existing service to commute weekly between his home in Montreal and the national capital. Perhaps he secretly sympathizes with a predecessor (Trudeau père’s transport minister, Jean Marchand) who infamously said, “The best thing about Ottawa is the train to Montreal.” RA

Norfolk Southern developed the GP33ECO yard switcher at its Juniata Locomotive Shops using EMD components, among them an EPA Tier 3-certified 12-cylinder 710 diesel engine.

Engines of change State-of-the-art locomotives stand ready to make their mark on what is ideally a power-hungry industry. Problem is, with traffic down, the railroads aren’t so hungry for new power.

ier 4 locomotives are a little bit like DOT-117 hazmat tank cars. The industry has invested valuable resources and time attempting to attain a lofty and largely unfunded regulatory goal (in this case, the EPA’s). But now that the regs are in place, the size of the existing fleet is too big for the number of train starts, so a lot of this state-of-the-art equipment will have to wait before the market demands that new power be pressed into service. Many locomotives are now stored serviceable, a term that equipment lessors and OEMs would rather not hear.

By WILLIAM C. VANTUONO, Editor-in-Chief

“Two years ago, every serviceable locomotive was reactivated,” noted Oliver Wyman’s Jason Kuehn at Rail Equipment Finance 2016. “Now, 15% or more of the road locomotive fleet is in storage. The price spread between natural gas and diesel has choked off interest in LNG and CNG-fueled locomotives. And Tier 4 emissions levels are so strict that they’ve halted the virtuous cycle supporting locomotive replacement. We’ve gone from the perfect storm to a dead calm in two short years.” So what’s a locomotive builder to do, besides try to adapt to market

conditions that seem to happen faster than the time it takes to rebuild a prime-mover? If your’re an OEM and/or rebuilder, large or not-so-large—Progress Rail/ EMD, GE Transportation, National Railway Equipment, MotivePower, Railserve, RJ Corman, Brookville Equipment, Knoxville Locomotive Works, Republic Locomotive, etc.— you press ahead with R&D, look for new markets (China, India, Russia, South Africa), attempt to fill a niche market, or maybe even test the passenger locomotive market. At least that segment seems to be growing. April 2016 Railway Age 27

LOCOMOTIVES Engines of Change

There isn’t a locomotive builder that isn’t offering something new and/or innovative in 2016. Following is a partial rundown. • EMD’s Tier 4 freight locomotive, the SD70ACe-T4, is powered by an all-new, 4,400-traction-hp, 12-cylinder, four-stroke EMD-developed 1010 diesel engine. EMD attained Tier 4 without the use of urea as an aftertreatment. The 1010 is a radical departure from EMD’s traditional two-stroke engine. It is not based on a Caterpillar engine, though, according to Progress Rail President and CEO Billy Ainsworth, it “combines the engineering expertise of Progress Rail, ElectroMotive and Caterpillar.” EMD’s other Tier 4 offering, the F125 Spirit highspeed passenger locomotive, utilizes a 4,700-hp Caterpillar C175-20 engine. The SD70ACe-T4 includes a high performance AC traction system, isolated powertrain, radial bogies,

individual axle control, advanced electronics and an enlarged cab designed for crew ergonomics and safety. EMD plans to have these locomotives available in the second half of 2016. • MotivePower’s MP54AC for GO Transit is the first regional/commuter locomotive in North America certified to meet Tier 4 emissions standards. The MP54AC is a repower of existing GO Transit MP40PH-3C locomotives utilizing twin Tier 4 Locomotivecertified Cummins QSK60 engines that produce up to 5,400 hp for traction power and HEP (head end power). The QSK60 meets Tier 4 using integrated SCR (Selective Catalytic Reduction) exhaust after-treatment technology, which removes NOx from the exhaust stream, enabling reduced emissions and improved fuel efficiency. The technology reduces diesel particulate emissions by about 85% and NOx (nitrous oxide) emissions by about 75%, compared to the locomotive’s original Tier 2

NatureBlend is the next generation of environmentally friendly SolidStick wheel flange lubricants used by railroads throughout North America. MPL’s innovative new extreme pressure formulation is comprised of 100% renewable and biodegradable polymers and oils to provide superior wheel flange lubrication.

configuration. The twin-engine setup provides for redundancy of major systems and flexibility of operation during off-peak periods, where running just one of the engines can provide significant fuel savings on shorter trains. • GE’s Evolution Series Tier 4 locomotive is powered by GE’s 12-cylinder EVO engine and requires no aftertreatment system. Requiring ultralow-sulfur ASTMD975 Diesel #2 fuel, its advanced air-to-air cooling system “enhances performance and lowers emissions.” It’s equipped with a VSPD control system that does not require an auxiliary alternator. • NRE’s NREX 2015 Genset last year became the first locomotive to be verified by the California Environmental Protection Agency as achieving Tier 4 emission standards. CARB (California Air Resources Board) verified the locomotive at NOx and PM (particulate matter) emission levels at or below

Patent Pending

www.mplinnovations.com

425-398-1310 28

Railway Age

April 2016

SD70ACe-T4

160038

Rhymes with “See More”

When you have the momentum of a few thousand tons behind you, it’s good to be able to see what’s in front of you. With safety at the forefront, the SD70ACe-T4 was designed with a windshield that provides additional lines of sight and reduces glare from nighttime lights.

Enjoy the view.

progressrail.com •

@Progress_Rail

Electro-Motive Diesel is owned by Progress Rail Services, A Caterpillar Company

LOCOMOTIVES

of 1.0 and 0.01 g/bhp-hr (grams per brake horsepower-hour), respectively, qualifying NRE locomotives for the Carl Moyer Emissions Grant Program, which provides locomotive-funding grants of up to 85% of the total locomotive cost, as a trade-in transaction. The California-based program requires that the locomotive manufacturer hold

a Tier 4 CARB Verified Certificate. Independent axle control (IAC) is a distinguishing feature of NRE’s NR33CDE-IAC road switcher, more commonly referred to as an SD40-IAC or an SD40-4. It’s built on an SD40-2 platform equipped with an EMD 645E3B prime-mover. When employed in hump yard service, the DC-traction

THEThe RX500 INDUSTRIAL LOCOMOTIVE

RX500

is 100% new, built to modern standards, with nothing rebuilt.

• The first major redesign of the industrial locomotive since diesel replaced steam • The RX500 outpulls the SW1200 while using only 1/3 the fuel • Saves 1,000,000 gallons of fuel over the life of the locomotive

• The RX500 pays for itself in fuel and maintenance savings • AC Traction for maximum adhesion and wheelslip control • Dynamic braking, cushioned couplers, remote diagnostics, and event recorder • The Ultimate Green Machine

P.O. Box 1236, Greenville, SC 29602 1-888-LOCOMOTIVE • 864-271-4000 www.republiclocomotive.com • info@republiclocomotive.com

Railway Age

April 2016

NR33CDE-IAC offers a unit reduction of one locomotive over a three-unit consist of SD40-2s. This is mostly attributable to a 50% adhesion factor increase over an SD40-2, achieved with NRE’s DC chopper module and N-Force microprocessor control system. Performance, says NRE, “is equivalent to that of an AC-traction locomotive.” This locomotive can also be employed in line-haul service. • The first Railserve DUAL LEAF® Gen-Set locomotive to meet Tier 4 environmental regulations will hit the rails early this summer, and Railserve expects to launch regular production almost immediately after. The DUAL LEAF was developed specifically for shippers, industrial railroads, and short lines that operate where there is a need for high tractive effort at speeds up to 30 mph. “The units are cost-effective at highutilization rates, and the Cummins QSX15 has been a reliable and proven engine for our LEAF locomotives,” says T.J. Mahoney, LEAF Program Manager. “Now that the unit is available as a Tier 4-compliant model, we can equip the DUAL LEAF with this power source.” The DUAL LEAF is being manufactured at the Railserve facility in Longview, Tex. The Tier 4 QSX15 engine has a footprint identical to the previous model, meaning there is no need for redesign or significant changes in the layout of the DUAL LEAF, which incorporates two of the Cummins engines. Mahoney says the Tier 4 DUAL LEAF will have improved operating performance and reduced environmental impact. As compared with conventional units, it will cut particulate emissions by 99% and NOx emissions by 92%. Fuel consumption is expected to drop even further because the Tier 4 units operate at lower RPMs in low-notch and idle phases, typical settings for most switching operations. The original single-engine Railserve LEAF locomotive complies with regulations through 2017, “but if customers need them sooner, we are ready to produce Tier 4 single-engine systems,” says Mahoney. RA

CMY

A Locomotive Solutions Partnership Unlike Any Other Holland applies its real-world expertise and pioneering innovations to provide high-valued solutions to the railroad industry. By partnering with our customers, we solve real-world issues surrounding the servicing of locomotives. Our mobile service allows locomotives to stay on the mainline reducing downtime and providing a signiﬁcant cost savings. Holland technicians provide a variety of servicing activities including: • AC and DC wheel truing • Maintaining critical fluids & traction sand • Waste removal • Cab cleaning • Brake shoe servicing • Toilet servicing • Removal of graffiti, oil residue and debris AAR M-1003 Certified / ISO 9001:2008 Registered

Discover the power of a true partnership.

Visit hollandco.com

Call 708-672-2300

We Thrive on Rail Fastening Challenges.

The track fastening challenges faced by railroads around the world differ. Pandrol rail fastenings are meeting those challenges on more than 400 railroads in over 100 countries. For 75 years Pandrol has developed innovative rail fastenings in response to our customer’s ever changing needs. Our Research and Development group continually works to improve existing products while developing new concepts to address future demands. Our technical experts and field engineers are working daily with customers to solve today’s needs while anticipating tomorrow’s challenges.

Put Pandrol’s local and global knowledge to work for you.

N O R T H

A M E R I C A

Pandrol USA, LP 501 Sharptown Road P.O. Box 367 Bridgeport, NJ 08014 (856) 467-3227 (800) 221-CLIP www.pandrolusa.com

We welcome the challenge.

Learn more>

Fastening system solutions

Progress Rail’s ME63 “skl” style fastening system uses the inherent structural strength of concrete ties to achieve gauge restraint.

No matter the environment, fastening systems need to be resilient, easy to install and customizable to a variety of specifications.

well-designed fastening system not only preserves proper track geometry, but will also help to extend the life of other components. Suppliers of these systems are focused on improving the resiliency of fasteners used in freight operations, while fastening systems for passenger operations have been incorporating advanced materials to make the components lighter in weight and easier to transport. Transit solutions

L.B. Foster Company says it utilizes its technical and product development expertise to introduce customized product solutions to meet specific customer needs. According to Jason Bowlin, General Manager, L.B. Foster Transit Products, “35 different fastening designs have been developed to meet the unique requirements of transit agencies across North America. We closely collaborate with engineering design firms and transit authorities to address critical requirements such as stiffness, adjustability, rail seat width and alternative clip designs.” As examples: “Our design of a resilient tie system, incorporating a concrete tie/boot, elastomeric pad, insulator and clips, has recently been introduced into a West Coast transit system. To grow our position across North America,

By Mischa Wanek-Libman, Engineering Editor

we continue to focus on evolving customer needs. And to enhance the performance of components in severe environmental conditions such as tunnels, through the novel use of coatings, solutions involving application to specific elements of the fastener are expected to dramatically reduce corrosion from stray currents and significantly extend the fastener life.” More than nuts and bolts

Lewis Bolt & Nut Company introduced its patent pending Quick-Set® Hook Bolt System following successful testing at TTCI. The company says the new system is designed to be installed from the surface of a bridge deck and does not require holes to be drilled through the bridge ties. The single Quick-Set bolt can be installed in under five minutes by sliding the hook bolt through the associated bracket, attaching the hex nut and engaging the flange. Installing highstrength lag screws through the bracket and into the ties, and adding a second (lock) nut, completes installation. The Quick-Set system offers an option to include a built-in continuous guard rail along with a new bracket the company says offers a wider surface area that allows lags to be installed closer to the center of the bridge ties. Lewis Bolt together with Nylok® Corp. recently developed the new Everlok™ Nut, which incorporates a patented, April 2016 Railway Age 33

M/W Focus - Fasteners

proprietary patch applied by Nylok. Once installed to recommended torque values, the nut remains tight. If desired, it can be removed and re-installed without damage to threads as is common on metal-to-metal lock nuts. Improved product life

Pandrol North America uses a three-dimensional printer that allows the company to design, evaluate and review concepts with customers before a final design is produced. “This, along with having a small production line dedicated to R&D prototyping, reduces the lead time of turning an idea into a real product. However, we do understand a product is not complete until it passes the true test of performing in daily service under real operating conditions,” said Allen Goff, Vice President Sales and Marketing. The FE1505 rail fastening assembly is an example of this. It was created in response to customer requests for a fastening assembly to last the life of rail in heavy-haul applications. The FE1505 is equipped with a recessed rail seat utilizing a FASTCLIP fastener and two-piece integral pad. It has been installed in a heavy-haul environment for more than two years and “continues to perform very well,” said Goff. Pandrol has also implemented a second production line to meet the growing demand for its customizable Victor tie plates, which utilize standard AREMA rolled steel tie plates

in customer-requested sizes equipped with the customer’s choice of resilient fastener. The Victor product line includes a “Rollblock” version that provides a solid flat bottom, eliminating the protrusion created by a bolt head. Pandrol has also taken its well-known ‘e’-clip design to another level. “The new ‘e’-clip RE offers all the familiar advantages of the original design but with fewer components that provides faster installation and improved product life,” said Goff. Maintaining gauge

Progress Rail Services has integrated its latest acquisition under its Fastener Solutions Division, Rail Product Solutions (RPS), a provider of fastening systems freight and transit. The latest product offering is GageLok® screws. The selfdrilling GageLok secures rails and tie plates to traditional, wood ties, and can be used to replace traditional cut track spikes and screw spikes to prolong tie life and minimize tie splitting during insertion. According to Progress Rail Director of Fastening Engineering Jose Mediavilla, “The unique manufacturing technology allows GageLok screws to be formed cold. That results in a tougher, more shear resistant product that can stand up to the rigors of curved track in heavy-haul environments. The added shear strength and thread grip of our GageLok screws allow them to be used against the rail or

RAIL SOLUTIONS REDEFINED At Progress Rail Services, we have expanded our offerings with the acquisition of Rail Product Solutions. Now, in addition to new and used trackwork, rail and OTM products, rail welding and rail take up products and services, we offer 160039

the industry’s most complete line of innovative, cost-effective freight and transit rail fasteners. Which one is yours?

Get fastener solutions you can rely on from Progress Rail.

BONDED DF FASTENERS EMBEDDED BLOCK SYSTEMS EMBEDDED RAIL SYSTEMS UNDER TIE PADS TRACK MATS

RAIL ANCHORS E-CLIP SERIES SL SERIES ME SERIES

QUALITY. RELIABILITY. INNOVATION. Progress moves you forward.

Railway Age

April 2016

M/W Focus - Fasteners

as plate-holding screws to prevent gauge widening. Laboratory and field tests on Class I railroads have proven that our GageLok screws can hold track gauge up to three times longer than traditional methods.” For concrete ties, gauge restraint is achieved with the ME63 “skl” style fastening system, which uses the inherent structural strength of concrete coupled with the advanced design and manufacturing process of the fastening components. Optimized functionality

Vossloh Fastening Systems introduced a fastener for high speed and conventional slab track applications: System 300 NG (New Generation), described as “the evolutionary next step of our System 300, with design updates that optimize surface geometries and increase material efficiency, thereby reducing the overall volume of material needed to achieve the same performance and safety standards as System 300.” “This improved usage not only saves the environment, but also reduces logistics costs. These new components are adapted to the already approved Vossloh Skl 15 tension clamp to ensure the established characteristics of System 300, e.g. high fatigue strength and high toe load. The highly elastic cellentic intermediate plate optimizes load distribution,” said Vossloh. “Many of our systems utilize composite plastics components that are resistant to corrosion and abrasion, while

also providing electrical insulation. Compared to steel, these lightweight materials also provide the added benefit of reduced logistics costs, as these lighter weight materials are much less expensive to transport to the job site. Examples include Vossloh fastening systems DFF 21 and DFF 300 UTS for urban transport. Both feature a durable nylon baseplate. Many of our systems include our patented cellentic rail pad, an elastomer made of EPDM that serves to increase stability, as well as reduce noise and vibration. Our W40 systems for heavy-haul utilize another type of innovative rail pad geometry that reduces rail tilting and deflection, increasing the life of the components,” said Vossloh. High strength fastening systems

Alcoa Fastening Systems & Rings manufactures the Huck 360®, a locking fastener that the company says improves on the traditional HuckBolt® system by providing dependable clamping strength and reliability that HuckBolt® fasteners are known for, but with the added benefit of offering quick installation and removal with conventional tools. The Huck 360 eliminates the ‘gap’ around the crest of the bolt when tightened to a specific clamp force, preventing transverse vibration by locking the thread flanks in place. With conventional nut-and-bolt systems, clamp load quickly decays under vibration. RA

OUR MAJOR PRODUCT RANGE Quality engineered, state-of-the-art equipment:

Mobile and stationary car hoist system.

Transfer tables.

Body hoists and stands.

Truck assembly and test stands.

Spinning posts.

Mobile / stationary waste removal systems.

Truck hoists.

Portable hydraulic rerailing equipment.

Turntables.

Plastic cable channels.

Drop tables.

Portable car movers.

Railway Age

April 2016

Toll Free: (800) 325-0296 Fax: (770) 458-5365 e-mail: sales@railquip.com www.Railquip.com 3731 Northcrest Road Suite 6 Atlanta, GA 30340

Picture this!

How machine vision is revolutionizing automated vehicle health monitoring. By Dr. Matthew Witte, Scientist, Transportation Technology Center, Inc.

ailways are increasingly moving toward automated detector systems to supplement manual rolling stock inspection. Machine vision systems that inspect components on a moving train can improve safety and efficiency by reducing maintenance and inspection costs. These systems offer distinct advantages over manual inspection. Unlike their human counterparts, machine vision systems can inspect continually without tiring or becoming distracted, and they can monitor railcar parts that are not easily seen by an inspector on the ground, such as undercarriage areas. Significantly, planned maintenance and defect monitoring become possible with automated inspection because the results of every inspection are recorded. To realize the benefits of machine vision, the railroads need reliable, fully automated component inspection systems. TTCI is evaluating a number of systems at the Facility for Accelerated Service Testing (FAST) while working with suppliers to reduce the development cycle time. Systems under test at FAST include truck component inspection systems from KLD Labs, Inc., Hauppauge, N.Y., and New Vision Science and Technology Co., Ltd., Beijing, China, and one undercarriage inspection system developed by Duos Technologies, Inc., Jacksonville, Fla. System capabilities vary. The KLD Labs system has demonstrated the ability to diagnose missing end cap bolts, broken/ missing springs (outside only) and perform spring compression and axle spacing measurements. This system will begin revenue service testing in 2016. The New Vision system has been in use in China for several years, but is new to North America. The Duos undercarriage inspection system

performs inspections on the body structures, including center sills and draft components. These systems are evolving as the vendors gradually add more capabilities. Recently, New Vision installed its TFDS (Trouble Found on moving train Detection System) at FAST. This technology creates 3D images by combining images from a standard 2D camera with 1D (purely distance) data from a laser range finder. When the data are combined, the result is a true-depth image containing 3D information. This 3D model is then compared to a standard model of the components. The illustration is an example of a FAST train railcar 3D truck image. The TFDS system images components with cameras in three zones: on both sides at axle level, and between the rails looking up at the truck underside. The images are of each side of the truck and of the brake beams, bolster, cross braces, and draft components, including the couplers from the underside. Diagnosis of components with the New Vision TFDS will be based on comparison to a configuration model. New Vision is currently working on the standard model. TTCI is also investigating thermal imaging for monitoring locomotive condition. KLD Labs and Duos are designing inspection systems that use thermal imaging to sense the temperature of components on the underside of the locomotive while it is in motion, such as motor suspension bearings, gearbox condition and motor supply cable temperature. The expectation is that these systems will monitor locomotives while under way and identify any components ranging beyond normal limits. Feasibility studies were completed in late 2015, and first-phase prototypes are expected to begin Story continues on page 40 testing at FAST in 2016. RA April 2016 Railway Age 37

RAILWAY AGE CONFERENCE & EXPO

JUNE 7-8, 2016 Hotel Allegro Chicago

EXPLORE THE CHALLENGES, ISSUES, AND TRENDS AFFECTING THE NORTH AMERICAN RAIL MARKET

Platinum Sponsor: Gold Sponsor:

AGENDA HIGHLIGHTS:

An interactive dialogue among top-level executives, Railway Age’s experienced editors, and attendees

OPENING SESSION: CURRENT CHALLENGES & OPPORTUNITIES

REGIONAL AND SHORT LINE ISSUES

Rob Knight

James R. Hertwig

CFO, Union Pacific with Railway Age Editor-in-Chief William C. Vantuono

REGIONAL AND SHORT LINE ISSUES Rick Webb

CEO, Watco Companies, LLC

President & CEO, Florida East Coast

MAINTAINING A STATE OF GOOD REPAIR ON A MULTI-BILLIONDOLLAR ASSET Thomas F. Prendergast

Chairman, New York Metropolitan Transportation Authority

THE REGULATORY ENVIRONMENT— RAILROAD PERSPECTIVE

THE VIEW FROM WALL STREET

Ed Hamberger

Managing Dir., Cowen & Co.; Contributing Editor, Railway Age

President & CEO, Association of American Railroads

Jason Seidl

HOTEL BLOCK: Hotel Allegro Chicago group rate of $299/night ends May 2nd. Call 1-800-KIMPTON and mention Railway Age Rail Insights to make your reservations.

SPONSORSHIPS & EXHIBITS: Contact Jon Chalon at jchalon@sbpub.com, 212.620.7224.

machine vision

Pinpointing potential problems and Quickly Addressing Them “Progress is about harnessing technology that promotes safety, efficiency and better customer service,” according to CSX. “Machine vision gives us new vantages of passing cars, from top-of-car views to undercarriage shots. And all these images are taken as the train passes at track speed. Machine vision allows us to pinpoint potential problems and quickly address them before they grow into larger issues that can cause service delays.” CSX, BNSF and other railroads have turned to companies like Beena Vision Systems Inc. as they deploy this relatively new tool. Beena Vision was founded in 2003 by Kambiz Nayebi, who during an earlier academic career “realized that there were a number of commercial applications for machine vision.” “During discussions with my peers, we felt the largest technology gap was in the rail industry,” says Nayebi. “In those days it was an industry looking to improve efficiency. I commenced on the preliminary design work for what is now our core product, WheelView. Following a number of design iterations, discussions with potential users and hard testing at TTCI, we had a product ready for commercialization in 2003. WheelView proved that technology theory can be applied into rigorous and difficult applications in the railway industry. “TTCI provided world-class railway resources and a skilled and informative technical staff. We worked closely with them as they are the industry-recognized ‘systems prover.’ The FAST facility provided the opportunity to test for repeatability of wayside system

Railway Age

April 2016

By WILLIAM C. VANTUONO

Beena Vision machine vision array as deployed on BNSF.

data. It was invaluable to have the association with TTCI. We still have a very respectful cooperation with TTCI, but as Beena Vision became more global we had to become more independent. “Our product range has increased to more than 15 systems with a market presence on five continents. We manufacture high-quality hardware with complementary software applications that provides meaningful information by converting inspection data into actionable information, and we support our equipment in the field. “Our new TreadView system provides comprehensive wheel condition monitoring, detecting a variety of wheel surface defect such as shelling, spalling, broken wheel sections, and flat-spot depth and size. Recently, some customers identified a need to look at coupler securement integrity. We have taken this on with our CouplerView Cross-Key and CouplerView-Pin products, which have saved significant outage and remediation costs for users. “Machine vison has to be

supported by intuitive software that connects data to multiple levels of information and gives customers access. The challenge is combining passive images with dynamic measurements. The future is having fewer capital-intensive systems that won’t require large Internet capacity, and maybe a level of portability. People talk about onboard systems as the future. Perhaps, but not in the foreseeable future. We’re integrating machine vision into all levels of maintenance, including pre- and post-repair shop inspections, creating a much safer environment for shop and field technicians.” Among the numerous innovations that Beena Vision customers experience are: breaking trains apart and shopping rolling stock as an exception; maintenance based on condition rather than schedule; running components to full service life; applying labor to repair, not inspect; reducing reliance on heavy workshops; eliminating unscheduled maintenance through continuous monitoring; and driving planning and the supply chain through condition assessment.

People

Meetings

High profile Kansas City Southern (KCS) has promoted Jeffrey M. Songer from Senior Vice President Engineering and Chief Transportation Officer to Executive Vice President and Chief Operating Officer. In addition to his responsibilities for transportation and engineering, he is now also responsible for the mechanical function. Songer reports to KCS President Patrick J. Ottensmeyer. Songer joined the company in 2005 and was promoted to Vice President and Chief Engineer in 2012 and to Senior Vice President Engineering and Chief Songer Transportation Officer in 2014. Prior to joining the company, KCS he spent 12 years in the construction and finance industries. Songer holds a master’s degree in business administration and a bachelor’s degree in engineering from the University of Kansas.

May 9, 2016 Chicago Rail Mechanical Association, First Union Rail Odyssey Golf Course and Banquets, Tinley Park, Ill. Contact : Ken Derby, thecrma1988@gmail.com Website: www.thecrma.org

May 10, 2016 Western Railway Club Dinner Union League Club of Chicago Contact: wrclub13@comcast.com

June 3, 2016 CSX—Ricky Johnson named Vice President-Engineering, reporting to Cindy Sanborn, Executive Vice President and Chief Operating Officer. Additionally, the railroad named Greg Mellish Chief Engineer Maintenanceof-Way North; Lee Moss Chief Engineer Maintenance-of-Way South; and Eric Pachman Assistant Chief Engineer. Herzog Services, Inc.—Carlo Patrick joined the company as Vice President, effective March 21, 2016. HNTB Corporation—Jeff Konrad, PE, promoted to Vice President of Rail in the Pennsylvania District. The firm also hired Christopher Harding as a professional land surveyor; Paul Adams, PE, as Project Director in HNTB’s rail transit practice, located in Newark, N.J. Dean Kimball, AIA, LEED AP, hired to serve as Architecture Department Manager and Associate Vice President, based in the HNTB’s Manhattan, New York City, office. Los Angeles County Metropolitan Transportation Authority (LACMTA)— Current Federal Transit Administration Acting Administrator Therese McMillan named LACMTA’s new Chief Planning Officer. New York City Transit—Senior Vice President, Department of Subways Wynton Habersham appointed to the position permanently, marking the first time an African-American has been named to lead the division. He is

responsible for planning, directing and controlling the subway and its safe operation. Reading & Northern—Rian J. Nemeroff, CTL, appointed Vice President–Forest Products. He will be responsible for managing the forest products business, a market segment that comprises more than one-third of the railroad’s business. STV—Eric Root, P.E., promoted to Vice President, where he will be responsible for managing the rail systems design component for the firm’s various design-build contracts across the U.S. and Canada.

100 YEARS AGO in

April 1916 Penalties to be imposed for violation of car service rules The Commission on Car Service of the American Railway Association, of which Fairfax Harrison, president of the Southern Railway, is chairman, recently submitted a report to the executive committee of the association, giving notice that effective on June 1, 1916, it will impose penalties, as authorized, for violation of the car service rules, which provide for the return of foreign cars to the owning roads.

Chicago Railroad Mechanical Association, Golf Outing at Cog Hill Country Club Odyssey Golf Course and Banquets, Tinley Park, Ill. Contact: Ken Derby, thecrma1988@gmail.com Website: www.thecrma.org

June 7, 2016 Rail Insights Hotel Allegro, Chicago, Ill. Website: railwayage.com/ railinsights

June 14-16, 2016 International Crosstie & Fastening System Symposium Newmark Civil Engineering Lab, Urbana, Ill. Contact : crosstie-conf@illinois.edu Website: http://railtec.illinois.edu/ Crosstie/2016/crossties.php

June 19-22, 2016 2016 APTA Rail Conference Sheraton Grand Phoenix, Phoenix, Ariz. Contact: kspence@apta.com Website: apta.com

August 8-12, 2016 Railway Engineering Short Course Newmark Civil Engineering Lab, Urbana, Ill. Contact: railtec-shortcourse@ mx.uillinois.edu Website: http://railtec.illinois.edu/ short-course/overview.php April 2016 Railway Age 41

ENERGY

BY RAILâ&#x20AC;&#x2DC;16 R A I LWAY A G E | O C T O B E R 2 7 - 2 8 P R E S E N T E D BY R A I LWAY A G E

OCTOBER

27-28 AGENDA HIGHLIGHTS

ARLINGTON, VA KE Y BRIDGE MARRIOT T

Traffic trends: compressed natural gas, crude by rail, ethanol Can liquefied natural gas move without an FRA waiver? Is crude oil volatility being addressed? Climate change, energy independence and the railroads The carbuilding market: hazmat tank cars and covered hoppers Politics, a Presidential election and regulation: Changes or status quo?

The U.S. and Canada: Harmony or disparity? SPONSORSHIPS & EXHIBITS Contact Jon Chalon at jchalon@sbpub.com, 212.620.7224

WWW.RAILWAYAGE.COM/ENERGY 212.620.7205

CONFERENCES@SBPUB.COM

RAWrkSiteTrn1_2pg2014AllClass_Layout 1 1/22/14 2:53 PM Page 1

Products Integrated camera and sensor systems

My Employees don’t have time for training.

Flexible Scheduling. Anytime. Anywhere. Duos Technologies Inc. creates networked intelligence solutions to streamline workflow and improve processes, and uses technology to disentangle hard-to-solve quandaries. Its advanced solutions provide real-time views of railcars, monitor trains to detect illegal riders, identify missing hatches and open boxcar doors or detect unwanted intrusions on platforms, tracks and within rail yards. Its video-camera-powered imaging systems stitch together HD images to enable foreign object detection. One of its systems operates at speeds of up to 15 mph, which requires the trains to slow down as they pass through an inspection portal. For many applications, this was enough, but Duos knew that by increasing the performance of its imaging system, it could offer its customers an even greater return on their investment. A high resolution, high-speed intelligent machine vision system would allow its inspection portal to span across security, safety, mechanical and operational imperatives. Named xtd Extreme True Definition Technology, this system uses 2K line scan cameras that generate 224 megapixel images per railcar. The use of a line scan camera (vs. an area camera) provides an additional level of adaptability. For this integration, Duos developed a high-precision speed system allowing for synchronized image capture at speeds of up to 70 mph. For a Texas border crossing, Duos designed a leadingedge portal to provide the U.S. Customs and Border Protection (CBP) agency with a tool to aid customs officers in the inspection of inbound rail cars. The rip™ system uses multiple technologies to remotely scan railcars passing through the inspection portal, and then displays stitched 360degree views of the entire rail consist. The system features an automated Foreign Object Detection (FOD) algorithm that compares undercarriage images to reference images taken from the same car. The images are “matched up” for comparison by using the unique car identification code provided by the AEI tag system. Adapted area cameras were selected for looking up from under the train, which required developers to build new systems based on machine vision systems to provide security for multiple border crossings.

Work Site Training Courses: Locomotive: • GE 7FDL Diesel Engine Maintenance • Testing and Troubleshooting 26-Type Locomotive Air Brake Systems • Locomotive Periodic Inspection and FRA Rules Compliance • Locomotive Electrical Maintenance and Troubleshooting • Locomotive Air Brake Maintenance and Troubleshooting • Distributed Power Maintenance and Troubleshooting • Distributed Power Operations, Training, and Operating Rules

Freight Car: • Freight Car Inspection and Repair • Single Car Air Brake Test • FRA Part 232 Brake System Safety Standards for freight and other non-passenger trains • Train Yard Safety

Track: • Track Safety Standards

CORRESPONDENCE TRAINING • WORK SITE TRAINING • CONSULTING

The Railway Educational Bureau 1809 Capitol Ave., Omaha NE, 68102 Toll Free (800) 228-9670 • (402) 346-4300 www.RailwayEducationalBureau.com

April 2016 Railway Age 43

The Railway Educational Bureau Books

FRA Regulations

ZTR launches new locomotive battery assist

Mechanical Department Regulations Code of Federal Regulations Title 49 Parts 210, 215, 216, 217, 218, 221, 223, 225, 229, 231, 232. Contains eleven of the FRA regulations commonly used by Mechanical Department Personnel. Spiral bound, softcover.

Mech Dept. Regs.

BKMFR

Order 25 or more and pay only $26.00 each

$28.95

Part 240–Qualification and Certification of Locomotive Engineers This book affects locomotive engineers, trainers and supervisors. This final rule will clarify the decertification process; clarify when certified locomotive engineers are required to operate service vehicles; and address the concern that some designated supervisors of locomotive engineers are insufficiently qualified to properly supervise, train, or test locomotive engineers. 162 pages. Spiral bound.

Qual. and Certif. of Loco. Engineers

BKLER

Order 50 or more and pay only $11.90 each

$13.25

Part 213: Track Safety Standards, Subparts A-F 49 Part 213, Subparts A-F. Classes of Track 1 through 5: Applies to track required to support passenger and freight equipment at lower speed ranges. Includes Defect Codes and Appendices A, B, and C to Part 213. Softcover. Spiral bound. 120 pages. BKTSSAF Track Safety Standards, Subparts A-F $10.50 Order 50 or more and pay only $9.45 each

Part 213: Track Safety Standards, Subpart G 49 Part 213, Subparts G. Classes of Track 6 and higher. Softcover. Spiral bound. 88 pages. BKTSSG Track Safety Standards, Subpart G $9.50 Order 50 or more and pay only $8.55 each

Part 214: Railroad Workplace Safety The FRA's Railroad Workplace Safety standards address roadway workers and their work environments. Subparts A-General, B-Bridge Worker Safety Standards, C-Roadway Worker Protection, D-On-Track Roadway Maintenance, and Defect Codes for Part 214. Spiral bound. 74 pages. .

BKWRK

Railroad Workplace Safety Order 50 or more and pay only $8.95 each

$9.95

The Railway Educational Bureau 1809 Capitol Ave., Omaha NE, 68102 www.RailwayEducationalBureau.com

800-228-9670

www.transalert.com Add Shipping & Handling if your merchandise subtotal is: U.S.A. CAN U.S.A. CAN 25.01 - 50.00 10.78 16.80 100.01 - 150.00 16.28 36.60 50.01 - 75.00 11.99 21.20 150.01 - 200.00 19.03 49.15 75.01 - 100.00 14.30 27.95 200.01 - 300.00 23.10 61.20

* No bookseller discounts available.

Railway Age

April 2016

Products

Orders over $300, call for shipping

The newest version of the ZTR Control Systems KickStart locomotive battery assist uses supercapacitor technology to augment the power required to start the locomotive engine, minimizing the drop in battery voltage during start. It has been redesigned with functional improvements that reduce this drop even more, so that electronics stay on and the strain on the batteries is diminished. The new hardware design is lighter, weighing only 45 pounds, and more compact for easier installation and requires no regular maintenance after installation. Other benefits include reliable cold weather performance, and intuitive diagnostics. “We work with railroads every day and are aware of the challenges they face, specifically with respect to starting issues,” says Amarjit Soora, Manager of Engineering, Railway Business Unit at ZTR Control Systems. “We’re proud of this new design.” For more information, visit www.ztr.com.

Rail Car Caddy makes moving railcars simple, efficient Making it safer and easier to move railcars, DJ Products has released its Rail Car Caddy, a battery powered, compact mover that makes moving railcars weighing up to 100,000 pounds virtually effortless. When new rules were set by the U.S. Department of Transportation that required tank cars to be retrofitted with new safety equipment, DJ Products sought to help make the process easier. The Rail Car Caddy transports individual cars through the yard and warehouse in a simple and efficient way. The Rail Car Caddy is fitted with a railcar coupler that swiftly attaches to a car. With a turn of the Rail Car Caddy’s variable-speed twist grip handle, workers are able to safely and effortlessly guide cars to their desired locations. The lowspeed, high-torque design of the Rail Car Caddy, with adjustable acceleration and braking, allows workers to move railcars safely and precisely. The Rail Car Caddy fits between the tracks and has the torque needed to move heavy railcars. At the same time, it’s able to get the operator right next to the car to make small, precise movements. Many rail companies are also finding that the Rail Car Caddy is ideal for indoor use because it has no emissions. For more information, visit www.djproducts.com.

Ad Index Company

Phone #

Fax

URL/Email address

Page #

Beena Vision Systems, Inc.

678-597-3156

678-597-0156

info@beenavision.com

Brandt Road Rail Corporation

306-791-3287

306-525-1077

sgettis@brandt.ca

Danella Rental Systems, Inc.

610-828-6200

610-828-2260

pbarents@danella.com

FreightCar America

312-928-0850

312-928-0890

tbaun@freightcar.net

Gage Bilt, Inc.

586-226-1500

586-226-1505

solutions@gagebilt.com

GE Transportation

814-875-2099

513-786-2540

chris.banocy@ge.com

Holland Co.

708-367-2987

708-672-0119

ptenhoven@hollandco.com

Hotstart

509-536-8667

509-534-4216 mfloyd@kimhotstart.com

Interstate Diesel Service, Inc.

800-321-4234

216-706-5010

proach@interstate-mcbee.com

L B Foster Company

412-928-3506

412-928-3512

glippard@lbfoster.com

LTK Engineering Services

215-641-8826

215-542-7676

tfurmaniak@ltk.com

MAC Products

973-344-0700

973-344-5891

edward.gollob@macproducts.net

MPL Technology

425-398-1310

425-398-1320

info@mpltechnology.com

NRE

618-241-9270

618-242-8519 sales@nre.com

Pandrol USA, Inc.

1-800-221-CLIP

856-467-2994

Power Drives, Inc.

716-822-3600

716-824-4817

r.panzica@powerdrives.com

Progress Rail Services

256-505-6402

256-505-6051

info@progressrail.com

Progress Rail Services

256-505-6402

256-505-6051

info@progressrail.com

Railquip Inc

770-458-4157

770-458-5365

sales@railquip.com

Railway Educational Bureau, The

402-346-4300

402-346-1783

bbrundige@sb-reb.com

Railway Tie Association

770-460-5553

770-460-5573

ties@rta.org

Republic Locomotive

864-271-4000

864-271-5254

phaden@republiclocomotive.com

Salco Products, Inc.

630-685-4661

630-783-2590

sales@salcoproducts.com

Thinkify, LLC

408-782-7111

408-782-2111

info@thinkifyit.com

Vertex Railcar Corporation

508-556-5500

info@vertexrail.com

Vossloh Group

+00 49 239 252 273

info@vossloh-north-america.com

00 49 239 252 274

43, 44

The Advertisers Index is an editorial feature maintained for the convenience of readers. It is not part of the advertiser contract and Railway Age assumes no responsibility for the correctness.

Advertising Sales MAIN OFFICE Jonathan Chalon, Publisher 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com AL, AR, IN, KY, LA, MI, MS, OH, OK, TN, TX Marc Condon 20 South Clark Street, Suite 1910 Chicago, IL 60603 (312) 683-5021 mcondon@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, PA, RI, SC, VT, VA, WV, Canada – Quebec and East, Ontario Jerome Marullo 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com

AK, AZ, CA, CO, IA, ID, IL, KS, MN, MO, MT, NE, NM, ND, NV, OR, SD, UT, WA, WI, WY, Canada – AB, BC, MB, SK Heather Disabato 20 South Clark Street, Suite 1910 Chicago, IL 60603 (312) 683-5026 Fax: (312) 683-0131 hdisabato@sbpub.com The Netherlands, Britain, France, Belgium, Portugal, Switzerland, North Germany, Middle East, South America, Africa (not South), Far East (Excluding Korea /China/India), All Others, Tenders Louise Cooper International Area Sales Manager The Priory, Syresham Gardens Haywards Heath, RH16 3LB United Kingdom +44-1444-416368 Fax: +44-(0)-1444-458185 lc@railjournal.co.uk

Scandinavia, Spain, Southern Germany, Austria, Korea, China, India, Australia, New Zealand, South Africa, Russia, Eastern Europe Baltic States, Recruitment Advertising Julie Richardson International Area Sales Manager The Priory, Syresham Gardens Haywards Heath, RH16 3LB United Kingdom +44-1444-416368 Fax: +44-(0)-1444-458185 jr@railjournal.co.uk Italy, Italian-speaking Switzerland Dr. Fabio Potesta Media Point & Communications SRL Corte Lambruschini Corso Buenos Aires 8 V Piano, Genoa, Italy 16129 +39-10-570-4948 Fax: +39-10-553-0088 info@mediapointsrl.it

Japan Katsuhiro Ishii Ace Media Service, Inc. 12-6 4-Chome, Nishiiko, Adachi-Ku Tokyo 121-0824 Japan +81-3-5691-3335 Fax: +81-3-5691-3336 amkatsu@dream.com CLASSIFIED, PROFESSIONAL & EMPLOYMENT Jeanine Acquart 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7211 Fax: (212) 633-1325 jacquart@sbpub.com

April 2016 Railway Age 45

equipment Sale/Leasing

Available For Lease ◆ 3,600 cu. ft. Open Top Hoppers. 45 degree slopes for aggregate, coke, coal, etc. ◆ Pressure Differential (PD) Covered Hopper Cars – 3,915 cu. ft. capacity, operate at 14.7 psi. ◆ Flat Bottom Gondolas – 4,000 cu. ft. cars, 263K Gross Rail Load and no interior bracing. ◆ Mill Gondolas – 65’ 6” inside length with 5’ sides and 52’ 6” inside length with 4’ 6” sides. For additional information and pricing, please contact John Goodwin phone (605) 582-8318 e-mail jgoodwin@mwrail.com www.carmathinc.com Available for Lease 4650 cu ft Covered Hopper Cars 3600 cu ft Open Top Hopper Cars 100 ton Automated/Manual Ballast Cars 4480 cu ft Aluminum Rotary Open Top Gons 65 ft, 100-ton log spine cars equipped with six (6) log bunks Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

READING, BLUE MOUNTAIN & NORTHERN RAILROAD The Reading, Blue Mountain & Northern Railroad is looking to purchase used signal items. These items include, but aren’t limited to, cases, bungalows, signal cantilevers, signal ladders and masts, signal heads, Electrokode 4 and 5 electronics, Genrakode and VPI equipment. Also, circuit controllers, electric locks, and motion sensors would all be considered. If any of this used equipment would be for sale, please contact Jonathan Barket at jbarket@readingnorthern.com or 610.562.2100.

products & services

JUMP STARTER 3370RR

Let’s do it again!

Our March birthday bash for delineators was such a success that we’re going to extend it all the way through April!

Purchase 8 Rolls of FRA 224 Reflective Delineators and get 2 free! (20% discount holds in larger quantities)

264 Industrial Park Rd. PO Box 8 St. Clair, PA 17970 Fax 1-888-826-0108 www.reidlerrailgraphics.com Email: csweigert@reidlerdecal.com

Give us a call at

• 72 VOLT MOBILE UNIT • EMERGENCY DISCONNECT • • STARTS ENGINES UP TO 6000 HORSE POWER • • 70 AMP HOUR BATTERY CAPACITY • BUILT-IN CHARGERS • • MAINTENANCE FREE LEAD ACID BATTERIES • • HEAVY DUTY CLAMPS • 25 FT. JUMPER CABLES • • REVERSE POLARITY WARNING LIGHT • • 1500 CCA, 1700 PEAK CURRENT •

www.STARTPAC.com OR TOLL FREE 844.901.9987

1-800-628-7770

Railway Age

April 2016

AGM3370RR (3.4in x 5in).indd 1

18/02/2016 15:46

PROFESSIONAL DIRECTORY

RECRUITMENT

EDNA A. RICE, EXECUTIVE RECRUITER, INC

strAteGic PLANNiNG: • Commuter rail tranSitionS • fra ComplianCe programS • operationS auditing

Kansas City Office (913) 661-2424 oPerAtioNs trAiNiNG & coNsULtiNG: www.tcsrailservices.com • engineer training & CertifiCation other services: • exCellent HiStory witH fra, ntSB • Staffing • interim management • meCHaniCal & part 238(Qmp)

EDNA A. RICE, President

(713) 667-0406 FAX (713) 667-1651 Web address: www.ednarice.com Email: resume@ednarice.com

6750 West Loop South Suite 735 Bellaire, Texas 77401-4111

TRAINING

Part 243 Training & Certification Part 242 Conductor Training Part 240 Engineer Training and re-certification -------------------------------------------------------Modoc Railroad Academy 916-965-5515 info@modocrail.com

RailwayAge.com The News Destination for the Rail Industry

Are you a railroad or supplier searching for job candidates? visit http://bit.ly/railjobs THE RAILWAY AGE JOB BOARD connects candidates and opportunities in the rail industry. To place a job posting, contact: Jeanine Acquart • 212 620-7211 • jacquart@sbpub.com April 2016 Railway Age 47

Financial edge DAVID NAHASS

REF 2016: Secular and cyclical changes

he 30th Rail Equipment Finance Conference is in the books. For three days, more than 400 railroaders, investors, analysts, owners and operators of rail equipment gathered to discuss the market for rail equipment, to look back over the past 12 months and to discuss the future of rail investment. The verdict: Changes are happening in the rail market on a secular and cyclical basis. Five REF takeaways: 1. Fundamental changes in the energy landscape will impact the rail industry for years to come. 2. Significant growth opportunities in rail exist in intermodal and plastics. 3. Strong dollar continues to negatively impact rail’s commodity marketplaces. 4. The U.S. economy continues to show strength, but there are potential concerns on the horizon. 5. Used asset values (excluding sand and crude) continue to show strength. The REF 2016 Program kicked off with Steve Feilmeier, Chief Financial Officer of Koch Industries. He discussed the state of the U.S. economy, our relationship with China, and the fundamental changes in the energy landscape, and raised concerns about economic policy and the sustainability of U.S. economic strength. A few highlights: • North American Fleet Summary, David Humphrey: A growing national fleet shows decreases in total age. A majority of the earning fleet has been moved into a small group of car types some of which are under stress right now. • Manufacturing Review, Robert Pickel: Decreasing backlogs for new cars are further distressed by industry headwinds (increased velocity/decreased loadings). Railcar deliveries declining/ expected to decline 2016-2018. Need optimism? Only 50% of the national fleet is 286,000 pounds gross rail load. • Economic Review, Standard and Poor’s: Strong economy is tempered by worries

Railway Age

April 2016

about China and pressure from low oil prices. Companies in the rail economy remain strong; S&P feels comfortable that asset-backed transactions remain sound in spite of market downturns. • Tank Railcars, David Murawski: The tank railcar marketplace is under stress due to softening demand for cars in energy service and a changing regulatory environment. Challenges going forward are tank railcar recertification, off-lease equipment and the future service of cars that may require modification.

Strength and optimism remain in most markets, and demand for secondary market assets is high. • Boxcars, Glenn Courtwright and Paddy O’Neill: More boxcars are available for service and new boxcars are being built to serve boxcar markets. The national fleet continues to evolve to serve multiple industries. Older assets are being refurbished to stay in service (some as long as 65 years!) • Steel Products, Trey Savage and Brenda Wheeler: Strong economic headwinds (strong dollar/weaker Chinese economy) are stressing pricing for scrap and finished steel. Global demand for scrap steel is low and expected to remain so in the near future. • Energy Market, Nicole Leonard: The oil and sand demand will likely remain weak for all of 2016, but there is a correction/ turnaround expected into 2017. Largescale transportation of crude by rail may never return to 2014 levels, but rail will play an important role in crude and sand,

especially in Canada. • The Service Imperative, Rod Case: As the railroad industry looks for growth avenues, smaller, short haul, service oriented rail business in Europe may offer advice to the U.S. market on where to look for the next growth opportunity. • Coal Cars, Mike McMahon: As coal declines and renewables take a larger role; exports will carry the next wave of coal demand in the U.S. Weak shortterm demand will continue. • Intermodal Environment, Ron Sucik: Domestic intermodal loadings will continue to be strong through 2016. Rail velocity and external issues like the Panama Canal remain loading and equipment demand drivers. • Wall Street Analyst, Anthony Hatch: Railroad investment paying off in improved service. As the rail market adjusts to a weaker coal and evolving energy landscape, look to plastics and intermodal to continue to be the drivers in growth in railroad demand and earnings. • The Private Investor, Michael Weiss: As the rail industry contemplates cyclical and secular changes, M&A multiples and leverage ratios are approaching historic levels. Investors need to be vigilant and rely on their expertise in a shifting landscape. Don’t overreach at high levels. • Railroad Capital Overview, Joe Devoe and Mark Gerlach: The investment environment for financial institutions continues to be pressured by regulation and capital requirements. Rail investing remains highly competitive and is expected to remain so throughout 2016. • Lease Rates and Equipment Values: Negative sentiment is having an impact on values and lease rates, especially in energy. Strength and optimism remain in most markets. Demand for secondary market assets remains high. Watch out for lease rate weakness in 2016. Have questions? Set them free at dnahass@railfin.com.

r ailway age and parSonS preSent

Gen

Train ConTrol

The fuTure of CBTC & PTC for safer, more efficient railways

The international conference on Next-Gen Train Control—now an annual event—will feature comprehensive project updates and in-depth technical sessions presented by leading rail experts from around the world. Entering its third decade, this conference is the rail industry’s single-most important gathering of communications and signaling professionals from around the globe.

September 15 & 16, 2016 Key bridge marriott arlington, Va

Sponsorship & Exhibit Info: Jonathan Chalon at jchalon@sbpub.com, (212) 620-7224

Digital. Industrial. Revolutionary. The GE Evolution Series Tier 4 Locomotive is the industryâ&#x20AC;&#x2122;s first locomotive to meet the U.S. EPA Tier 4 emissions standards. And, with more than 200 sensors onboard, our digital solutions make these the â&#x20AC;&#x153;smartestâ&#x20AC;? locomotives on the market, generating over a billion instructions per second. Imagination at work

getransportation.com