April 2017 Railway Age by Railway Age

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April 2017 | www.railwayage.com

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CONRAIL

SMALL RAILROAD, HUGE TASK

SHORT LINE OF THE YEAR: NORTH SHORE RAILROAD TRANSIT FOCUS: DENVER M/W: BIG DATA YIELDS BIG RESULTS

From the Editor William C. Vantuono

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Deeply connected to the world

y now it should be obvious to many in this industry that the Trump Administration’s extremely nationalistic ideology, specifically as it applies to international trade, will critically injure our railroads and the railroad supply industry if any of it morphs into law. If anyone doubts this, I strongly suggest you listen to what the Association of American Railroads has to say. The AAR last month released an assessment, based upon cold, hard numbers, of international trade’s impact on the freight railroad industry. This report publicly proclaims what many of us have known for years: A significant amount of railroad traffic and revenue is directly attributable to international trade. As the AAR puts it, railroads and international trade “are deeply connected.” Just how deep? The AAR has determined that “at least 42% of rail carloads and intermodal units, and more than 35% of annual rail revenue, are directly associated with international trade.” Furthermore, “Approximately 50,000 domestic rail jobs, accounting for more than $5.5 billion in annual wages and benefits, depend directly upon international trade. If rail traffic indirectly associated with trade was included, the figures would be notably higher.” “These numbers validate our view that U.S. policymakers should proceed with caution in their quest to reverse some impacts of globalization,” says AAR President and CEO Ed Hamberger. “Efforts that curtail overall trade would threaten thousands of U.S. freight rail jobs that depend on it, and limit essential railroad revenues used to modernize railroad infrastructure throughout North America. “For a highly capital-intensive industry that has spent $26 billion annually in recent years, private investment is the lifeblood of a freight rail sector that must devote massive sums to safely, efficiently and affordably deliver goods across the economy. Upending the ability of railroads to do so by undermining free trade agreements that have done

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far more good than harm would have farreaching effects.” Amen, brother. Ed Hamberger is, as he must be, a master of diplomacy, something President Trump has a lot to learn about. I probably would say something like, “Dismantle NAFTA? Are you people out of your minds? That’s nuts!” The AAR backs up its assessment with solid data. The numbers don’t lie: “The report looked at a host of rail movements, analyzing data from the 2014 STB Waybill Sample—the most recent data available at the time of the analysis—other government data, information from U.S. ports and Google Earth, among others. The Waybill Sample contains data from a stratified sample of waybills submitted each year by freight railroads to the STB. Each waybill contains, among other things, information on the origin and destination of the shipment and the volume and type of product moved. The scope of operations and reach into the U.S. economy discovered through the analysis was stark. In 2014, there were 329 million tons of exports handled, nearly double the still-sizeable 171 million tons of imports moved by rail. “With ample discussions in Washington policy circles today on the role of trade, imports vs. exports and manufacturing, the data provide a reminder that today’s global economy is firmly established and cannot be easily undone with rushed policy modifications. Doing so could have damaging and counterproductive effects on American workers and various industries—including a freight rail network that serves nearly every industrial, wholesale, retail and resource based sector of the economy.” This is nothing new. Railroads have been handling trade-related business since long before Railway Age first appeared in print. That was 1856. I hope we don’t go back to living in the Dark Ages.

ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher jchalon@sbpub.com WILLIAM C. VANTUONO, Editor-in-Chief wvantuono@sbpub.com STUART CHIRLS, Senior Editor schirls@sbpub.com Contributing Editors: Roy H. Blanchard, Jim Blaze, Alfred E. Fazio, 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: Nicole Cassano Graphic Designer: Aleza Leinwand Corporate Production Director: Mary Conyers Digital Ad Operations Associate: Kevin Fuhrmann 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: Maggie Lancaster mlancaster@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.uk Keith Barrow, kb@railjournal.com.uk Kevin Smith, ks@railjournal.com.uk Dan Templeton, dt@railjournal.com.uk 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 3135, Northbrook, IL 60062-2620, or call toll free (800) 895-4389, or (402) 346-4740. 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:

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April 2017 Railway Age 1

RailwayAge

April 2017

visit us at www.railwayage.com Features Short Line of the Year Regional of the Year Transit Focus: Denver LRT Expedited Service zMax® Micro-Lube Trial Railinc Freight Car Report Track Geometry

21 27 35 38 41 44 50

Technology: Decisive RR’ing 53

Columns From the Editor Watching Washington Financial Edge ASLRRA Perspective

2 16 17 60

News/Departments Industry Indicators Industry Outlook Market Update People 100 Years Ago Meetings Products Advertising Index Professional Directory

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Classified

On the Cover Former Conrail President and Chief Operating Officer Ron Batory Photo: Conrail Railway Age Magazine (Print ISSN 0033-8826; Digital ISSN 2161-511X), (USPS 449-130), (Canada Post Cust. #7204564; Agreement #40612608; IMEX PO Box 25542, London, ON N6C 6B2, Canada) is published monthly by Simmons-Boardman Publishing Corp., 55 Broad St., 26th Floor, New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 218, No. 4. Printed in the U.S.A. Periodicals postage-paid at New York, NY and additional mailing offices. SUBSCRIPTIONS: Qualified individuals in the railroad industry may request a free subscription. Pricing for non-qualified subscriptions, printed and/or digital version: $100.00 per year/$151.00 for two years in the U.S./Canada/Mexico; $139.00 per year/$197.00 for two years, foreign. Single copies are $36.00 each. Subscriptions must be paid for in U.S. funds only. COPYRIGHT © Simmons-Boardman Publishing Corporation 2017. All rights reserved. Contents may not be reproduced without permission. For reprint information, contact PARS International Corp., 102 W 38th St., 6th Floor, New York, NY 10018. Phone (212) 221-9595. Fax (212) 221-9195. For subscriptions and address changes, please call (800) 895-4389 or (402) 346-4740; Fax (402) 346-3670; e-mail railwayage@omeda.com; or write to: Railway Age Magazine, SimmonsBoardman Publishing Corp., PO Box 3135, Northbrook, IL 60062-3135. POSTMASTER: Send address changes to Railway Age Magazine, PO Box 3135, Northbrook, IL 60062-3135. April 2017 Railway Age 3

Industry Indicators TRAFFIC ORIGINATED CARLOADS

SHORT LINE AND REGIONAL TRAFFIC INDEX FOUR WEEKS ENDING FEB. 25, 2017

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. ’17 90,336 3,640 37,585 24,968 126,915 39,167 357,289 4,865 13,028 22,250 81,252 17,126 36,955 15,342 73,583 87,204 16,432 28,054 15,092 22,380 1,044,040

FEB. ’16 153,791 3,163 37,113 25,075 125,209 44,710 299,700 5,644 13,471 22,955 79,563 16,280 34,958 14,063 77,329 77,113 15,298 28,110 13,211 22,795 978,899

% CHANGE 1.8% -15.1% 1.3% -0.4% 1.4% -12.4% 19.2% -13.8% -3.3% -3.1% 2.1% 5.2% 6.8% 9.1% -4.8% 13.1% 7.4% -0.2% 14.2% -1.8% 6.7%

314,529

280,968

11.9%

1,358,569

1,259,867

7.8%

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. 25, 2017

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

FEB. ’17 93,678 974,761 1,068,439

FEB. ’16 93,977 955,112 1,049,089

% CHANGE -0.3% 2.1% 1.8%

4,257 249,870 254,127

3,608 237,156 240,764

18.0% 5.4% 5.6%

97,935 1,224,631 1,322,566

97,585 1,192,268 1,289,853

0.4% 2.7% 2.5%

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 -9.8% 25.5% 4.5% -6.6% 3.7% -14.6% -7.2% -68.6% -7.0% -10.1% 54.8% 7.1% -12.4% 9.6% 14.7% 17.6% 1.7%

Railroad employment, Class I linehaul carriers, february 2017 (% change from february 2016)

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

ORIGINATED FEB. ’16 45,075 18,201 20,309 10,883 23,880 6,643 8,920 9,556 16,474 9,036 1,205 1,952 17,242 10,386 44,678 8,302 74,011

TOTAL CARLOADS, FEBRUARY 2017 vs. 2016

CANADIAN RAILROADS ALL Commodities

ORIGINATED FEB. ’17 40,662 22,839 21,229 10,169 24,761 5,671 8,274 2,996 15,326 8,125 1,865 2,090 15,111 11,380 51,229 9,767 75,276

BY Commodity

Transportation (train and engine) 58,650 (-0.41%)

Executives, Officials, and Staff Assistants 9,098 (-4.03%)

Professional and Administrative 13,200 (-5.87%)

Total employees: 148,843 % change from FEB. 2016: (-3.48%) Transportation (other than train & engine) 5,887 (-7.07%)

Maintenance of Equipment and Stores 27,941 (-5.80%)

Maintenanceof-Way and Structures 34,067 (-4.91%)

Source: Surface Transportation Board

class I employment WEAKER BUT some areas improve Figures released by the Surface Transportation Board show Class I total railroad employment dropped 3.48% in February 2017, measured against February 2016. While there was an overall decline across all categories, most areas turned in an improved showing from a year ago, led by Transportation (train and engine). Areas that showed significantly lower numbers included Maintenance of Way and Structures and Transportation (other than train and engine). 4

Railway Age

April 2017

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Industry Outlook 2016 safest year on record: AAR

Seattle: Trump budget a “body blow” The Trump Administration’s proposed budget for Fiscal Year 2018, which would eliminate the FTA New Starts grant program, “would cause farreaching impacts on the construction of voter-approved projects in the Puget Sound region,” Sound Transit says. The most immediate impact would be elimination of $1.17 billion in New Starts funding for the Lynnwood Link light rail extension. It would also block a $500 million request for extending LRT to Federal Way. According to Sound Transit, “In coming years, elimination of the New Starts program would impact Puget Sound commuters and taxpayers by blocking efforts to secure more than $5 billion in federal contributions toward voter-approved projects. The funding is assumed in the agency’s financial plans

based on past federal funding levels.” “The move to zero-out federal funding for regional infrastructure projects is a body blow,” said Sound Transit Chief Executive Officer Peter Rogoff. “Shortly after joining Sound Transit, I reduced the agency’s federal grant assumptions to levels that seemed more reasonable to sustain over the long term. We did not anticipate a scenario in which the federal government would completely walk away from the table after decades of partnership with cities across America.” Sound Transit officials warned that iif funding is not restored, the agency’s Board of Directors “would need to exercise options for closing the gap from losing federal funding. Options include adjusting project timelines and scopes and assuming more debt at a greater cost to taxpayers.”

Passenger lagging freight in PTC: FRA The FRA’s quarterly status update on progress implementing PTC shows freight railroads continuing to make “consistent progress” while passenger rail progress “only slightly increased.” The data, current as of Dec. 31, 2016, confirms freight railroads now have PTC active on 16% of tracks required to be equipped—up from 12% last quarter. Passenger railroads made less progress—with a slight increase to 24% from 23%. FRA says that due in part to Amtrak’s “significant progress,” 41% of passenger locomotives are now fully equipped with PTC, compared to 6

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April 2017

29% the previous quarter. The freight railroad percentage of PTC-equipped locomotives rose to 42% from 38%. Union Pacific’s quarterly progress report noted that 26% of track segments are PTC-ready. UP also pointed out that there are nuances to the FRA data. For example, while FRA notes that 2% of UP locomotives are PTC-equipped, the railroad says 64% are fully PTC equipped with the exception of a single component, the PTC-compatible, crash-hardened “black box”. Installation has been held up by a supplier-related issue.

U.S. railroads had the lowest train accident rate on record in 2016, according to Federal Railroad Administration (FRA) data. Derailment rates, which declined 10% in 2016 from 2015, as well as track-caused accident rates, are also both all-time lows. “The 2016 rail safety statistics continue a string of record-setting years, showing this period has been the safest ever for the rail sector,” AAR said. Notable statistics, calculated per million train-miles using March 2017 FRA data, and compared to 2000: • Train accident rate is down 44%. • Equipment-caused accident fell 34%. • Track-caused accident rate fell 53%. • Derailment rate fell 44% since 2000. “Safety is a never-ending, constant pursuit for the freight rail industry,” said AAR President and CEO Edward R. Hamberger. “Our goal remains zero incidents and zero injuries, but it is still noteworthy that railroads today are the safest they have ever been. We see clear benefits of our investments, made possible through an economic regulatory framework that allows railroads to earn the revenues needed to invest $635 billion since partial deregulation [in 1980 under the Staggers Rail Act], and believe strongly in the application of new and transformative technologies.” AAR noted that recent years have also been the safest in terms of employee on-duty injury rates. In 2016, the employee on-duty injury rate dropped by 1.8% relative to 2015. However, incidents at grade crossings rose by almost 5%, “an unfortunate circumstance tied partly to increased highway transportation and highway accidents nationwide,” AAR said. “Nonetheless, the freight rail industry believes that safety improvements support its goal to streamline government processes, incentivizing the FRA and other government entities to focus less on prescriptive steps and more on desired outcomes. In conclusion, “[O]perating a safe railroad is ultimately good business,” Hamberger said.

Market

First locomotive rebuild for Motive Power Resources Motive Power Resources last month completed its first locomotive overhaul at its new heavy overhaul and repair facility in Minooka, Ill. The rebuilt EMD SD38, upgraded with a ZTR Nexus system, rebuilt mechanicals and other upgrades, was shipped to customer Ardent Mills in Easton, Pa. The rebuilder’s overhaul center comprises 30,000 square feet of heavy locomotive overhaul and repair space; 5,000 square feet of remodeled office and administrative space, all-new track construction, and a new 12,000-square-foot warehouse for parts and components. “With our new facility, we are fully able to accommodate complete locomotive rebuild projects, wreck repairs and specialty locomotive projects to customer specifications,” said Steve Bomba, President of MPR. “We feel this is a natural extension of our growing list of product offerings.”

North America The Connecticut Department of Transportation awarded NRE a five-year contract to overhaul six EMD GP40-2H locomotives that are part of the state’s fleet and operated on the Shore Line East service. The locomotives, which were originally built in the 1970s, will be rebuilt by NRE for another life cycle of passenger service. SEPTA is buying 45 bi-level coaches from China Railway Rolling Stock Corp. (CRRC) valued at $137.5 million.The bid by CRRC was $34 million less than Bombardier, and $47 million under the bid of Hyundai Rotem. CRRC has contracted with the Los Angeles County Metropolitan Transportation Authority to build 64 new subway cars for the Metro Red and Purple Lines. Metro, in a Notice To Proceed, said the HR4000 vehicles will replace older equipment on routes between downtown Los Angeles, the Mid-Wilshire District and North Hollywood. The first pilot vehicle is slated for delivery in the spring of 2020, with the 8

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April 2017

base order of 64 cars due in September 2021. The deal includes five options by Metro to purchase an additional 218 cars. The total contract is valued at as much as $647 million. Massachusetts Gov. Charlie Baker and MassDOT Secretary Stephanie Pollack visited the Massachusetts Bay Transportation Authority (MBTA) depot at Wellington on March 21 to view a mock-up of the CRRC metro car for Boston’s Orange Line. In October 2014, MassDOT awarded CNR Changchun Railway Vehicles (now part of CRRC Corp.) a $566.6 million contract to supply 152 vehicles to replace the PA3 cars built by Hawker Siddeley Canada between 1979 and 1981. MBTA also ordered 132 vehicles for the Red Line, an order that was subsequently increased to 252 cars. The trains will be equipped with LED lighting, air-conditioning, and advanced passenger information systems. Assembly will be carried out by CRRC MA Corp. at its new 150,000-squarefoot plant in Springfield, Mass., where manufacturing is due to begin in April

2018. The Orange Line cars are scheduled to enter service between 2019 and 2023. Wabtec Corp. has acquired Aero Transportation Products (ATP), a manufacturer of engineered freight car components with annual sales of about $40 million. ATP manufactures hatch covers and outlet gates for freight cars.

Worldwide: DB Cargo and GE Transportation have signed an agreement to digitize 250 locomotives across Germany, the U.K., France and Poland over the next five years. The deal is GE’s first European digital contract. The partnership marks the first time non-GE locomotives have been equipped with GE digital solutions. It follows a threemonth pilot of GE Transportation’s RailConnect 360 Asset Performance Management Solution, which provided locomotive performance status updates that increased efficiency and delivered a 25% reduction in service failures.

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Update Trump budget trounces transportation

Eliminating Amtrak’s long-distance trains, curtailing the FTA’s New-Starts program and eliminating the TIGER (Transportation Investment Generating Economic Recovery) discretionary grant program are among the elements of President Donald J. Trump’s Fiscal Year 2018 Budget Request to Congress, “America First, A Blueprint For Making America Great Again.” “These cuts are sensible and rational,” Trump says in the “Message to Congress” portion of the budget request. “Every agency and department will be driven to achieve greater efficiency and to eliminate wasteful spending in carrying out their honorable service to the American people.” “The Department of Transportation (DOT) is responsible for ensuring a fast, safe, efficient, accessible, and convenient transportation system that meets our vital national interests and enhances the quality of life of the American people today, and into the future,” Trump said. “[The Budget request] reflects a streamlined DOT focused on performing vital federal safety oversight functions and investing in nationally and regionally significant transportation infrastructure projects. It reduces or eliminates programs that 10

Railway Age

April 2017

are either inefficient, duplicative of other federal efforts, or that involve activities that are better delivered by states, localities, or the private sector.” Trump’s 2018 Budget requests $16.2 billion for DOT’s discretionary budget, a $2.4 billion or 13% decrease from the 2017 annualized CR level. It: • Restructures and reduces federal subsidies to Amtrak “to focus resources on the parts of the passenger rail system that provide meaningful transportation options within regions. The Budget terminates federal support for Amtrak’s long distance train services, which have long been inefficient and incur the vast majority of Amtrak’s operating losses. This would allow Amtrak to focus on better managing its State-supported and Northeast Corridor train services.” • Limits funding for the Federal Transit Administration’s Capital Investment Program (New Starts) to projects with existing full funding grant agreements only. “Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.” • Eliminates funding for the “unauthorized” TIGER discretionary grant program, which awards grants

to projects “that are generally eligible for funding under existing surface transportation formula programs, saving $499 million from the 2017 annualized CR level.” Further, DOT’s Nationally Significant Freight and Highway Projects grant program, authorized by the FAST Act of 2015, “supports larger highway and multimodal freight projects with demonstrable national or regional benefits.” This grant program is authorized at an annual average of $900 million through 2020. It is important to understand that the Surface Transportation Board was separated from the DOT for administrative matters by the 2015 STB Reauthorization Act. The STB, as well as the National Mediation Board (NMB), would not be affected by Trump’s DOT budget reduction, and are not mentioned in the budget request. STB and NMB budget recommendations are not clear at this point. A March 13 Presidential Executive Order, “A Comprehensive Plan for Reorganizing the Executive Branch,” applies only to Executive Branch agencies such as DOT, FRA and PHMSA (Pipeline and Hazardous Materials Safety Administration), since STB and NMB are independent of the Executive Branch. It is at the determination of those agency’s heads whether to comply. “The devil will remain in the details for the time being,” according to one observer. And, as the Washington Post points out, “Discretionary spending limits, addressed by this proposal, are set by congressional budget resolutions. Congress typically makes changes to the President’s proposal. Last year, lawmakers disregarded Obama’s budget altogether. Mandatory spending, by contrast, is set by other laws and is often determined by the size of the benefit and the eligible population.” As such, the budget request is largely symbolic, “so the sky is not actually falling,” notes the observer.

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Update Prendergast honored as Railroader of the Year Former New York MTA Chairman and CEO Tom Prendergast was honored as Railway Age’s 54th Railroader of the Year at a dinner of the Western Railway Club on March 14 at the historic Union League Club, Chicago. Prendergast recently retired from the MTA after a career spanning a quarter-century, where he also served as President of New York City Transit and the Long Island Rail Road. He has since joined STV Inc. as Executive Vice President and Chief Strategic Officer. While acknowledging that other cities have as large a fleet of subway cars, Prendergast noted that none could match New York’s network of 473 stations, which serves some six million passengers every day. Prendergast led the agency through its worst operating crisis during Superstorm Sandy, while also securing the largest capital program, $29.5

Railway Age

April 2017

billion, in its history. He also presided over the opening of the Second Avenue Subway extension, a project 88 years in the making. Also honored at the dinner were

Railway Age’s Fast Trackers, 10 rising stars under the age of 40 who have made an impact in their respective fields or within their company (RA, February, p. 22).

Railway Age Publisher Jonathan Chalon, left, and Editor-in-Chief William Vantuono congratulate Railroader of the Year Tom Prendergast at the Western Railway Club dinner March 14 in Chicago.

CTC allocates $60 million to California rail projects The California Transportation Commission (CTC) has allocated more than $217 million to 72 projects in the state, including more than $60 million for rail projects. The bulk of the rail focused allocations, $49.99 million, was to the San Diego Association of Governments for improvements along the Los AngelesSan Diego-San Luis Obispo corridor. The work includes the conversion of single-track to double-track rail, bridge replacements and signal improvements. The San Bernardino Associated Governments received a total of $9.71 million for two grade separation projects; the first in the city of Colton and the second in the city of Yuma. The North County Transit District received $1 million to replace a turnout that is near the end of its useful life and will allow for increased track speed. The Capitol Corridor Joint Powers

Authority received $200,000 to install two wayside power cabinets at the Oakland Maintenance Facility. “Caltrans is working to ensure every dollar counts when it comes to

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California’s transportation infrastructure,” said Caltrans Director Malcolm Dougherty. “These investments will benefit Californians by improving the economy and the environment.”

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Update American railroads earned a relatively good grade of B for infrastructure while the rest of the U.S. sectors got a barely passing D+ in the latest report card from the American Society of Civil Engineers (ASCE). The quadrennial report depicts the condition and performance of American infrastructure across 16 sectors, assigning letter grades based on the physical condition and the investments that will be needed for improvement. A grade of B indicates infrastructure is “good, adequate for now,” while the D is “poor, at risk,” as ASCE described its grading process. The ASCE report divides the U.S. railroad network’s 140,000 miles of track and more than 100,000 bridges into two categories” • Private freight railroads.

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• Iintercity passenger rail, operated almost exclusively by Amtrak. While capacity across the Class I network is “generally sufficient to meet current needs,” demand is expected to grow “amid road congestion and as demand for goods increases,” ASCE noted. While observing that capacity has been increased via double-stack trains and heavier carloads—and that Class I’s own their own infrastructure—the report praised freight railroads for maintaining the condition of the majority of the nation’s track, bridges and connections at ports and intermodal facilities. “[The railroads] … proactively maintain, replace, and upgrade systems though maintenance and capital programs,” ASCE reported. “Changes in freight cargo trends in recent years have necessitated changes in the network. Coal, the most commonly transported bulk product

by rail, has experienced a decline, while intermodal traffic has experienced substantial growth, requiring investment in connections to ports and truck transfer facilities.” “Freight railroads continue to upgrade their networks to support additional demand with greater capacity, added efficiency, and improved safety. This has required the rebuilding of bridges, tunnels, track, and signal systems,” the ASCE report stated. The ASCE report recognized that much of Amtrak’s national passenger rail network outside the Northeast Corridor is owned and maintained by freight railroads, and that the carrier relies on them for maintenance and support. The Northeast Corridor, mostly owned and operated by Amtrak (though commuter trains run by state transportation agencies such as New Jersey Transit, SEPTA, MBTA,

MARC, New York MTA and ConnDOT comprise the bulk of traffic) is a different story. “While safe to operate, much of the NEC’s infrastructure is beyond its useful life, increasing maintenance costs and reducing system reliability,” ASCE said, adding that “the average age of major NEC backlogged projects is 111 years, including 10 moveable bridges, three sets of tunnels, and one viaduct.” “Upgrades and repairs to basic infrastructure items like signals, power systems, and tracks, as well as service improvement projects to add capacity, are needed to meet growth in the northeastern economy and related travel demand,” the ASCE report noted. “The condition of the NEC continues to deteriorate while projects are on hold pending funding. Amtrak has been left with little choice but to be reactive to maintenance issues due to inadequate funding.”

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April 2017 Railway Age 15

Watching Washington Frank n. wilner

FRA’s new chief: Check ego at the door

h, to be a public servant fulfilling the boast of Caesar Augustus: “I found Rome a city of bricks and left it a city of marble.” For the incoming Federal Railroad Administrator, it is best to check ego at the door and accept the pithy guidance of Charles Dickens: Oh let us love our occupations Bless the squire and [her] relations Live upon our daily rations And always know our proper stations

Consider the “squire” as Transportation Secretary Elaine Chao, and “her relations” as Deputy Secretary Jeff Rosen and other DOT senior staff who edit the Administrator’s speeches and congressional testimony. “Daily rations” are what remain after the politically more favored Federal Aviation Administration, Federal Highway Administration and Federal Transit Administration harvest their share of the federal largesse. It is airport and highway congestion, and commuter trains running late, or not at all—preventing voters from going to work or returning home—that command media attention and set DOT priorities. As for “proper stations,” it’s learning to live as the second banana in the federal hierarchy, which can be emotionally traumatic for one long removed from the lower ranks. Indeed, wrongly dare to carry into office a personal agenda and you’ll soon hear the Washington version of Gabriel’s horn, conspicuously announcing your unceremonious departure. The Administrator’s function is to read, mark, inwardly digest and propagate President Trump’s agenda as understood by the Transportation Secretary. What Allan Rutter, who served as 16

Railway Age

April 2017

President George W. Bush’s FRA Administrator, labels a valuable asset is “professional bureaucrat training,” acquired, he said, from the Lyndon B. Johnson School of Public Affairs at the University of Texas, and as Texas Transportation Director under Gov. Bush. “Figuring out how to get [proposed policies and programs, and new safety rules] through the Washington process” is a challenge quite alien to those who spent a career in the private sector, says Joseph Boardman, Administrator also under George W. Bush, and previ-

A deputy steeped in the ways of Washington’s bureaucracy is the Excalibur of office. ously New York State’s longest serving Transportation Commissioner. For a new Administrator, a deputy steeped in the ways of Washington’s inscrutable bureaucracy is the Excalibur of office, to be selected astutely and trusted unreservedly. “If you don’t, you will waste too much time getting anything done,” Boardman says. As author Lewis Carroll warned of avoiding the Jabberwock, Jubjub bird and Bandersnatch, the Administrator should beware of the lobbyist. Acting Administrator Betty Monro found herself on the pages of The New York Times and into retirement in 2004 after allegations of excessive chumminess. Administrator Joe Szabo resigned in 2015 amidst allegations of pushing a union agenda to require

minimum train-crew size absent evidence of safety benefits. Confidence in, and respect for, career staff and their institutional knowledge is essential. Former FRA Administrators say “always expect” a major rail accident—and prepare by rehearsing what will be said and done in collaboration with career staff. Staff expertise also is essential in separating engineering science from politics in managing the timetable for installation of Positive Train Control and assessing the benefits of electronically controlled pneumatic (ECP) brakes, and in refereeing the debate over the effectiveness of fines vs. non-punitive alternatives in assuring a world-class safety culture. As for Amtrak, while the FRA Administrator manages the annual appropriation and Amtrak compliance with other congressional directives, the Transportation Secretary is, by law, an Amtrak board member. While Administrators typically are assigned that role, Rosen exercised it while DOT General Counsel—and may do so again as Chao’s deputy. “The FRA Administrator should be the representative,” says Boardman, who also was Amtrak’s President, because the agency’s career staff understands Amtrak, high-speed rail, state partnerships and the problems associated with passenger trains on freight railroad tracks “better than anyone else.” Among those who held the post previously, there is agreement that a new Administrator enter office with “reasonable” expectations of what can be accomplished in the time there, and seek out predecessors for guidance. Above all, be perpetually in alignment with the Transportation Secretary. In the Trump Administration, that means boning up on benefit/cost ratios and public-private partnerships.

Financial edge DAVID NAHASS

Rail Equipment Finance 2017 wrap-up

ollowing in the spirit of its predecessors, the 31st annual Rail Equipment Finance conference was a huge success and an incredible opportunity to get a complete understanding of today’s rail equipment market and where it may be headed into 2017. Here is an edited summary of what happened at REF (full version on the Railway Age website, in the Finance/ Leasing channel) and what the experts had to say about equipment and the U.S. and global rail economy. Philip Baggaley from Standard and Poor’s discussed the economy and the potential headwinds for growth, such as rising interest rates and an unstable manufacturing environment. He also touched on the potential fiscal changes in the economy as a result of the new Administration, including changes in the corporate tax rate and the potential for trade related issues and their potential impact on the economy. Chad Soares from PriceWaterhouse Coopers discussed changes in lease accounting headed to firms in the U.S. These changes will eliminate accounting rules around operating leases that have been in place for decades. Dave Murawski from Union Tank Car discussed the dropoff in new tank car orders and production as well as in the commodities served by those types of cars. UTLX also sees a change in the natural gas transportation market and an increase in exports. Rod Case from Oliver Wyman sees a future for 18-wheel long-haul autonomous trucks. He set forth the idea that the driverless-truck future is now and that the rail industry must adapt to a changing environment or risk getting left behind. What’s on the immediate horizon? Driver platooning of multiple trucks, to be followed by driverless line-haul in the near future. Ron Sucik of RSE Consulting

discussed the need for the railroads to more aggressively pursue the share of the intermodal business they do not currently have. He believes that the Class I’s should move to attract six million additional loads away from over-the-road service. In Railcar Valuation, Leasing and Lease Rates, Edward Biggs, Robert Blankemeyer, Chuck Brown, Pat Mazzanti and Dave Murawski gave us their points of view on the used equipment market. One high-level takeway is the divergent values between cars that are off-lease

There is no more formidable a lineup of rail finance experts assembled in the industry. and cars that are on-lease. No surprise, but in the current weak market, the difference is quite significant. Having come up though the ranks at Union Tank Car, Executive Vice President Ken Fischl was in a unique position to discuss the rail and industrial economies. Key takeaways were about the aging U.S. workforce and its impact on the perceived need for a manufacturing economy and the challenges that might pose. Fischl also noted that the current recovery, driven primarily by personal spending, needs more manufacturing investment. Michael Weiss of Greenbriar Equity Group discussed new rail safety trends coming out of Europe from Frauscher Tracking Systems. Using fiber-optic technology, the Frauscher system

performs and centralizes many rail safety tasks and equipment health systems in use today. Weiss also discussed the state of the M&A market, with a focus on rail. He noted that purchase price multiples today for M&A deals are as high as they have ever been, while M&A volumes are at high annualized levels (but off a 2015 peak). Graham Brisben of PLG Consulting discussed Downstream Impacts of the U.S. Energy Revolution. Brisben sees shale gas opportunities as a partial replacement for the loss of loads of crude by rail (and coal) and feels that these loads are sustainable, long-term. He sees sand levels stable and increasing as sand volumes in frac wells continue to increase. He also sees increasing plastics production as low feedstock costs encourage growth; and he predicts an increase in NGL production in east coast shale drilling, as well as an increase in the fertilizer business, with domestic fertilizer production to grow steadily over the next few years. Jason Kuehn of Oliver Wyman took on the topic of why has the rail industry not made more aggressive efforts to embrace alternative-fuel locomotives. Citing competitiveness, cost effectiveness and efficiency, Kuehn noted that, in his opinion, failure to more progressively forward on this issue holds back rail’s ability to be competitive with trucks and the inevitable incorporation of autonomous trucking. Kuehn also advocated a stronger platform for the railroads to push for autonomous trains, while admitting that government regulation continues to oppose these initiatives. From Kuehn’s perspective, all parts of the railroad transportation supply chain (railroads, government, suppliers, testing agencies) must work together to bring these ideas forward to insure implementation. April 2017 Railway Age 17

Railway age confeRence & expo

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exploRe the challenges, issUes, and tRends affecting the noRth ameRican Rail maRket

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oPENING SESSIoN: THE cLASS I LANDScAPE, Now AND IN THE FuTuRE

REGIoNAL AND SHoRT LINE ISSuES

keith creel

Pete claussen

THE REGuLAToRy AND LEGISLATIvE ENvIRoNmENT— RAILRoAD PERSPEcTIvE

REGIoNAL AND SHoRT LINE ISSuES

Ed Hamberger

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THE REGuLAToRy ENvIRoNmENT— RAILwAy SuPPLIER PERSPEcTIvE

REGIoNAL AND SHoRT LINE ISSuES

Founder & Chairman Gulf & Ohio Railways / Knoxville Locomotive Works

President & CEO Canadian Pacific

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Tom Simpson

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President Railway Supply Institute

AmTRAk: wHAT’S NExT?

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Short Line of the Year North Shore Railroad

All photos: North Shore Railroad

By WILLIAM C. VANTUONO, Editor-in-Chief

t is rather unusual for a Class III railroad to handle dimensional (high/wide) loads. The North Shore Railroad (NSHR), Railway Age’s 2017 Short Line of the Year, has the distinction of handling such traffic in volume, moving a variety of specialized, dimensional shipments over a short period of time. NSHR operates a remnant of the ex-Delaware, Lackwanna & Western Bloom Branch in Pennsylvania (Heritage: DL&W, Erie-Lackawanna, Conrail), along the north branch of the Susquehanna River. Conrail had intended to abandon the remaining Berwick-Northumberland stretch of this line in 1983. By 1984, shippers and other interested parties had

formed the SEDA-COG (Council of Governments) Joint Rail Authority to purchase and save the line. After competitive bidding, NSHR was selected as operator. “All of the companies that saved this line are now gone,” notes NSHR Chief Marketing Officer Todd Hunter. “But since that time, NSHR has grown local rail business and added new industries. Today, NSHR regularly serves a dozen customers and handles around 2,000 annual carloads.” Pennsylvania has an abundance of natural gas, which, naturally, supports construction and operation of natural gas-fired electric power generation plants. Says Hunter, “In 2016, our region saw the establishment of April 2017 Railway Age 21

short line of the year

Heat recovery steam generator.

Very tight building clearances!

three baseload natural gas power plants. With multiple railroads in close proximity, we had to work diligently to secure the work of handling construction materials for all three.” One of these power plants, the Moxie Energy, LLC., Caithness Freedom Generation Plant, received its dimensional components exclusively on NSHR. “The economic and environmental impact of this power plant is significant to our region and beyond,” says Hunter. “It is an integral supplier of power to the PJM (Pennsylvania-Jersey-Maryland) Grid, which provides power to more than 61 million people in 14 different states. Moxie Energy needed to import various dimensional components for its build: transformers, steam drums, stators, generators, heat recovery steam generators, turbines and boilers.” “Big loads call for giant logistics,” notes Hunter. For each load, NSHR asked “three basic questions: Can it be done. How close can we get the load to its final destination? What is the best possible site can we can unload from? Consideration for an offloading site involved an assessment of accessibility for required, specialized equipment.” NSHR took into account other important items involving the community in the powerplant’s vicinity: “Would utilization of certain locations be affected by and/or interrupt 22

Railway Age

April 2017

Very tight bridge clearances!

Dimensional loads call for “giant logistics” that address equipment, offloading and clearance issues. school buses and schedules? Would utilization of certain locations interrupt traffic for local businesses?” Highway access was another issue. PennDOT (Pennsylvania Department of Transportation) discourages movement of what it calls “super loads” over large, public bridge structures. “To accommodate PennDOT, we had to give much consideration to offload locations and related road and bridge access,” explains Hunter. Potentially more problematic than PennDOT stipulations are the railroad’s own physical characteristics—clearances, and track and bridge strength. NSHR “carefully measured and scrutinized” its right-of-way. An outside professional engineer also reviewed bridges and track clearances before the railroad gave approvals for movement. At several highway/rail grade crossings, automatic warning equipment had to be temporarily removed to allow loads to pass by,

short line of the year

Moving a dimensional (high and wide) load requires constant supervision.

with NSHR personnel providing flagging protection. NSHR also considered how moving dimensional loads would impact its normal operations and regular customers. “Much strategic planning was done in order not to disrupt regular train service,” Hunter says. “We had to be innovative in operations, while maintaining consistent excellence in customer service. Almost all of these shipments required special train service outside of our normal freight operations. This placed additional demands on our Operations Department for locomotive usage and train crew staffing. As an added level of service and safety, a supervisor accompanied all these movements.” “In order to overcome these obstacles, we had to have ingenuity and the ability to prepare to deal with the unexpected,” says Hunter. “In a proactive manner, we planned for multiple possible unloading sites. The site of first choice on NSHR had potential negative impact on local merchants, schools, and automobile traffic, so we quickly and flawlessly implemented a contingency plan. Also, with these non-typical operations requiring special provisions and equipment, we worked with shippers and logistics providers, railroads, customers, rigging companies, adjoining land owners, and county and local government Preparations for handling dimensional shipments began in 2014. “There was never any guarantee we would handle

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Railway Age

April 2017

short line of the year

these shipments, as there are other railroads in our region,” says Hunter. But the due diligence paid off. In 2016, with more than 40 specially assigned train crews, NSHR handled a whopping 47 dimensional shipments totaling close to 15 million pounds (not including the extra weight of the specialized railcars). That’s more than 7,000 tons that did not travel on Pennsylvania roads. “Our company knows each necessary step to successfully handle high and wide shipments, preparing us for future opportunities,” says Todd Hunter. “We continue to deliver such shipments in 2017. “ Customer appreciation for a job well done comes from Richard Maloyed, Regional Sales Manager at Edwards Moving & Rigging. “Edwards has had the opportunity of working with the North Shore Railroad and affiliates for several projects in 2016,” he says. “The components have ranged from heights of 17 feet, widths of 12 feet, and weights of 268,800 to 610,000 pounds. We have found NSHR to be a first-class railroad and the ultimate professionals, in every sense of the word. The staff has been a breath of fresh air to work with in every facet of the planning and execution stages of each project. Edwards Moving & Rigging looks forward to partnering with the North Shore Railroad on many more project opportunities in the years to come.” RA

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REGIONAL of the year

CONRAIL Chris Spiewak

By ROY H. BLANCHARD, Contributing Editor

onrail (known officially as Conrail Shared Assets Operations or CSAO) is a switching and terminal railroad serving the Detroit, North Jersey and South Jersey/Philadelphia freight markets. CSAO began life on June 1, 1999 with the NS/CSX split of “Big” Conrail. It is the eighth-largest railroad in the U.S., measured in hours worked. Unlike classic, point-to-point regionals such as the Central Maine & Quebec (2016 winner) or the Red River Valley & Western (2005 winner), CSAO is more like the Indiana Harbor Belt (2003 winner), owned by and operated for its owners—in the case of CSAO, Norfolk Southern and CSX.

However, like the CM&Q and RRV&W, Conrail is every inch a regional railroad—three times over. Whereas the IHB or the Belt Railway Co. of Chicago or the Port Terminal Railway Association in Houston each serves and operates in one major market, Conrail operates in and serves three: Detroit, Northern New Jersey, and the Southern New Jersey/Philadelphia area on both sides of the Delaware River. The reason is quite simple. In 1999, when Norfolk Southern and CSX bought the original 1976 Conrail, it was one thing to split the property along historic lines—former PRR, NKP, Wabash lines to NS; former NYC, RDG, and CNJ lines April 2017 Railway Age 27

REGIONAL RAILROAD OF THE YEAR

A Lifelong Passion for Railroading When career railroader Ronald L. Batory retired from Conrail April 1, he left the shared-assets operation insisted upon by the STB at the time of “Big Conrail’s” carve-up between Norfolk Southern and CSX in superb shape. The neutral-switching carrier business model that Batory nurtured over a nearly 20-year span hums along, servicing its two Class I masters while switching roughly one million cars annually for about 1,000 customers in the North Jersey, South Jersey/Philadelphia and Detroit Shared Assets Areas. Said Railway Age Contributing Editor Frank N. Wilner in 2005, “The call went forth for a tested operating expert with Churchill-like statesman qualities” when NS and CSX set up the “new” Conrail in 1999. Batory, who marks 46 years in the industry, is also known for his accessible approach to management. “Successful managers include employees as partners and listen to them closely,” he said. “Employee opinions and expertise matter; the boss doesn’t always know best.” It is this approach that Batory could bring to troubled Washington D.C. and the DOT as Federal Railroad Administrator. He is one of four candidates for the post, and key people in the railway industry have supported his nomination. If selected, he will be the first FRA Administrator with actual railroad management experience. In an environment where political connections and the favors attached to them usually trump real qualifications and experience, Batory’s appointment would be unusual. His track record speaks for itself. Batory started his railroad career in 1971 with Detroit, Toledo & Ironton. At DT&I and successor Grand Trunk Western, serving in various field and staff capacities. Batory departed GTW in 1987 to take on Chapter 11 reorganization of the Chicago, Missouri & Western. As Vice President and General Manager, he assisted the court-appointed Trustee in establishing lines of credit and grants with the State of Illinois, while assisting the Trustee in disposing of the railway’s assets into responsible hands. This evolved into the Southern Pacific acquiring the Chicago-St. Louis corridor and creation of Class II Gateway Western, and a haulage agreement with the Santa Fe between Kansas City and East St. Louis, Ill. Batory then joined SP, where he advanced to General Manager-Midwest Region. As Assistant General Manager, he implemented the operating plan for the Chicago-St. Louis corridor, and was among the planners and executors in orchestrating SP’s access to Chicago

Railway Age April 2017

from Kansas City via trackage rights arrangements with Burlington Northern and Norfolk Southern. In 1994, Batory was appointed President of The Belt Railway of Chicago. He instituted policies and practices that facilitated safety, service and financial performance achievements, while undertaking an infrastructure improvement plan. In 1998, Batory joined Conrail, serving as Vice President Operations and Senior VP Operations for the Shared Assets Areas. He took on planning and execution of cost-effective operations and maintenance that would ultimately sustain a “plane of equality for competition” in areas of New Jersey, New York, Pennsylvania and Michigan. This accomplishment led to his appointment as Conrail President and Chief Operating Officer in 2004. “I’ve always had a passion to work on a railroad,” Batory says. “I was attracted to its massive presence and operating mystique. When opportunity finally lent itself in 1971 amidst many railroad bankruptcies, it was not an unusual desire, but a natural instinct to hire with a railroad. I was fueled with endless curiosity to learn something new every day about my lifelong passion. Entering the business was the beginning of a personal dream. Each experience was an opportunity, delivered by dedicated railroaders with unabridged knowledge. It was the foundation for questioning the need for change, while giving respect to both past and current practices.” As to Conrail’s future, “While institutional knowledge has been leaving, it has been replaced with smart, energetic people hungry for the future,” Batory says. “They represent a greenhouse of talent for the industry, should any seek to pursue outside opportunities.” —William C. Vantuono

REGIONAL RAILROAD OF THE YEAR

to CSX. Reassembling the pre-Conrail lines in these three major markets was well-nigh impossible because of the many line rationalizations, combinations, and re-routes Big Conrail had undertaken to get its own house in order. And so it was that CSX and NS agreed to create “shared asset areas” where ownership and operating expenses would be “shared” between the owners. Freight moving to or from these markets is waybilled to either CSX or NS, thus assuring all customers equal access to two Class I’s, something they never had under Big Conrail. That’s the good news, for customers, at least. The bad news was that unscrambling the Big Conrail egg was fraught with too many duplicate facilities, locomotives and people. It was mainly a single-car railroad, handling some 500,000 revenue units a year. Automotive out of Detroit was big; intermodal was relatively small. It took nearly 1,800 employees (3.8 million work-hours) and 150 locomotive units to manage and operate fewer than 600 route-miles of track while working 27 serving yards. On top

of all this, Conrail dispatched more than 60 passenger trains a day over its own rails as well as 100 combined CSX and NS road trains every day. By 2016, revenue units had almost doubled on the same track footprint, thanks mainly to intermodal traffic growth,

April 2017 Railway Age 29

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REGIONAL RAILROAD OF THE YEAR

and represented more than $1 billion in revenue to CSXT and NS. Conrail now hosts more than 75 commuter and Amtrak trains every day (with no freight curfews), while still achieving 98% on-time passenger train performance. At the same time, the transportation workforce has come down a third—all through attrition (there was just one furlough in 20 years, and all who could return did).

Conrail’s unique two-owner culture delivers a service that originates, terminates, classifies and dispatches more than 100 daily trains. Workforce evolution is critical to the CSAO story. In 1999, the typical Conrail employee was 49 years old with 24 years of railroad experience. By 2015, employees averaged 41 years old with 12 years of railroad experience. Conrail thus encountered a significant “experience cliff ” as more than 48,000 work-years of experience retired. Yet, the railroad is running better than ever. Technical innovation has created a tool kit that didn’t exist

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20 years ago. Asset performance monitoring via GPS (helping reduce the active loco fleet 50%), remote-control locomotives and PTC on the passenger routes, combined with a strict technology-based safety focus and employee cross-training, are hallmarks of Conrail’s operation today. The payoff: running a 150-year old business with 21st century tech skills and up-to-date educational levels, contributing to significant productivity gains through several severe economic downturns. Conrail’s unique two-owner culture delivers a robust service product: The operation makes up, originates, terminates, classifies and dispatches more than 100 trains a day for its owners off a network of 22 serving yards and some 140 daily crew-starts (average crew-size 1.8 persons with zero utility positions). On-time freight departures now run 98%, nearly double the 2000 number; yard dwell is under 19 hours from 30, and car-cycle time from receipt to dispatch is now 6.5 days vs. 9 days 12 years ago. Customer switching plan compliance runs 96%. Change and growth come at a large capital cost. PublicPrivate Partnerships and grants since 1999 represent nearly a third of total Conrail capex, evidencing strong federal, state and local government support. In less than 20 years, CSAO has reinvented itself, becoming a high-performance, servicedriven joint facility for CSX and NS. RA

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Denver: Eagle P3 creates a new transit model

By Stuart Chirls, Senior Editor

hen land speculators established Denver in 1858 as a frontier town amid the booming mining trade stretching from Colorado to California, they banked on the location as a primary overland stagecoach stop to bring in new settlers, supplies and, just as important, gold to finance the rapid expansion of the West. Fast-forward nearly 160 years, and Denver is still the gateway to the Rockies. But its founders could have scarcely imagined that once the railroads replaced the stagecoach as the primary mode of transportation, how golden fortunes would flow in on steel rails and help to make the Mile High City the capitol of what eventually became Colorado. And, as the old adage goes, the more things change, the more they stay the same. Today, Denver is once again the epicenter of a new rail-powered gold rush in the form of an innovative partnership building passenger rail and transit projects on an impressive scale. As part of that, the Eagle P3 FasTracks public-private partnership brought together a multinational cooperative of managers, operators, designers, constructors and suppliers who are now in the midst of expansion of Denverâ&#x20AC;&#x2122;s light and regional/commuter rail network. Administered by the Regional Transportation District (RTD), the voter-approved FasTracks transit expansion will add 122 miles of new commuter rail and LRT; 18 miles of Bus Rapid Transit, and thousands of new parking spaces at rail and bus stations.

With a service area of 2,337 square miles and a population of 2.87 million, RTD employs more than 2,700, transporting better than 103 million passengers annually, on an annual operating budget approaching $500 million. Brand names in the rail passenger business are present: Siemens provides 172 SD-100 and SD-160 LRVs serving 46 stations on 48 miles of track. The new electrified commuter rail rosters HyundaiRotem Silverliner V electric multiple-unit cars. FasTracks consists of six new rapid transit corridors and three extensions to expand and enhance service for bus/rail connections across the eight-county district. There is an aspect of Eagle P3 that sets it apart from other P3s. Eagle is being delivered and operated under a 34-year agreement that RTD has entered into with Denver Transit Partners (DTP), a special-purpose company owned by Fluor Enterprises, the international engineering and construction firm; Uberior Investments, a subsidiary of the Bank of Scotland, and John Laing Investments, a British developer, owner and operator of housing, property and infrastructure. The other participating companies are a whoâ&#x20AC;&#x2122;s who of transportation contracting and consulting: Balfour Beatty Rail, WSP/ Parsons Brinckerhoff, STV and Wabtec, among others. The details of the Eagle project are impressive: Construction of the East Rail Line from downtown to Denver International Airport; the Gold (G) Line to the western suburbs; a Commuter Rail Maintenance Facility north of city center, April 2017 Railway Age 35

transit focus: denver RTD

Siemens provides 172 SD-100 and SD-160 LRVs serving 46 stations.

and the first segment of the Northwest Rail to Broomfield and surrounding towns. Project funding totals $2.2 billion, broken down to $1.03 billion in federal money; $280 million from a Transportation Infrastructure Finance Innovation Act (TIFIA) loan; $450 million in private equity, and the balance from locally-sourced funds. “This project would not have been possible without this P3 model,” says John Thompson, Executive Project Director and CEO of Denver Transit Partners. “The unique aspect is that we have made a long-term commitment—34 years—and we are just seven years into that. We look at it as a good reference project, not just a finance venture.” Timing, as usual, was everything. While the Eagle P3 signed its concession in 2010, the effects of the Great Recession cost the District an estimated $1 billion in lost revenue, according to Dave Genova, RTD General Manager and CEO. “The P3 allowed RTD to advance FasTracks much further than we could have without engaging a P3,” he said when commenting on the agency’s quarterly report in October. While the structure of the partnership is unique, so are the terms of the deal. DTP doesn’t get paid for tickets sold but rather, for meeting on-time performance benchmarks. That’s become an increasingly steep learning curve, Thompson admits, pointing to the complicated nature of a private entity managing a public transit project. Since it opened in April 2016, the project’s University of Colorado A Line has been dealing with unexpected technology-related delays that have slowed on-time performance. Since the Eagle contract is performance-based, there are deductions permitted for failure to meet benchmarks. These are currently totaling $250,000 per month for the A Line, and $100,000 a month for the B Line. “Since the opening, daily average on-time performance is 87.3%,” says Genova. “Now, that is not good enough; we want to be a minimum of 90% or better.” The line experienced a one-time power outage and a too-long and since-shortened phase break accounting for some service exceptions. But a thorny issue that remains is the grade crossing protection technology. 36

Railway Age

April 2017

The 12 grade crossings between downtown and the airport utilize a wireless communication system to predict the arrival of a train and activate flashing lights, warning bells, and quad gates. Due to station dwell time, train operation and other variables, a timing gap has developed between the time a crossing is protected and when a train actually arrives, leading to concerns about adequate protection for waiting non-motorist cyclists and pedestrians. While RTD deploys flaggers and tests software revisions to work out the issue, the Federal Railroad Administration and Colorado Public Utilities Commission have granted an extended waiver for operation of the line pending formal certification. At the same time, the system is required by federal law to implement Positive Train Control, and getting the two systems to work together presents another challenge. But, the issue is farther reaching. While a fall 2016 target for opening the G Line came and went, RTD will wait on testing and operations until the grade crossing issues on the A Line are resolved. With that lesson learned, “There’s no timeframe for opening the G Line,” says Thompson. “We’ve seen some performance consistency over the past few weeks [through March], and we’re in a much better place. G Line construction is complete from stations and track to signals. The time to opening isn’t being measured in weeks, but we are making progress.” Meanwhile, the project is starting to stimulate development, both residential and commercial, along the line to the airport. “It’s going to transform Denver,” Thompson says. “We’re seeing signs of new investment.” He reports that the airport line recorded 40,000 boardings in 2016. Transit agency representatives from other cities, including Toronto’s Metrolinx, have visited to get an up-close look at what many think is the future of rail transit development. “I don’t think you can just drop this project into another situation, but the fact that people see it as a model at a high level is commendable,” Thompson says. “The risk is held in check when it’s best managed by both the private and public entities in a partnership.” RA

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Non-stopped LRT

multitude of modern light rail systems have grown well beyond the initial starter routes to become regional in nature. Examples include Denver, as well as Dallas, Sacramento, San Diego and Portland. As trips grow in length, it become advisable to look for means at increasing schedule (i.e. commercial) speed to mitigate the growth in trip duration. Thankfully, the onceprevalent and traditional maximum speed for LRT of 50 to 55 mph is history, with a number of LRT systems now operating in the 60 to 65 mph range. Unfortunately raising maximum authorized speed (MAS) by itself does not generally achieve a sufficient reduction in 38 Railway Age April 2017

trip time, since LRT station spacing is often very close. The offering of some form of “expedited” service where certain stations are “non-stopped” can, along with a higher MAS on exclusive or semi-exclusive portions of LRT right-of-way, achieve significant trip time reductions. Expedited service refers to any type of express operation on a route that is not equipped with a dedicated express track over the length of the express zone (for example, a fulllength third track allowing overtakes of locals). A wide variety of expedited services are possible, including: • Demand-Only Stopping. This is the simplest form of expedited service. Trains stop only upon request, from passengers

William C. Vantuono

Various methods of expedited service can achieve significant trip-time reductions. By ALFRED E. FAZIO, P.E., Contributing Editor

NJ Transit’s Trenton-Camden RiverLINE diesel LRT offers Limited-Stop Express service.

either on board or in a station. Unfortunately, this type service is not effective on busy lines, as stop requests may be frequently placed by a single passenger. • Skip-Stop. This type of operation involves assigning stations as “A” or “B” stops, or “All Stop.” The Chicago Transit Authority (CTA) benchmarked for this service type. This operation is useful in maintaining fluidity on congested lines, particularly during peak hours. • Zone Express. A zone comprises a series of successive stations, and trains stop only in designated zones. This form of operation is common in commuter rail but was once utilized on the New York City Transit Canarsie “L” Line. Zone Express offers high schedule speeds but may reduce total line capacity. • Skip-Zone. In this Zone Express variation, trains operate in platoons, stopping at alternating groups of stations. Inner zone trains may short-turn, thereby economizing on crews and equipment. In planning expedited service, it is important to consider that the operation becomes somewhat more complex with

respect to train management (dispatching), train identification and station signage. Likewise, critical engineering systems require consideration. For example, a zone operation is based upon overtaking “ghost” slots. Therefore, the scheduled service should be less than the practical capacity offered by the signal system. Location of pocket tracks and interlocking location and configuration are often critical. Finally, system safety requires consideration, for example, in the case of station bypasses, and particularly when operating across pedestrian walkways. A sampling of expedited services is shown on selected systems. Regional rapid transit and regional rail are included as general information. Variations on the service types also exist. For example, NJ Transit’s Hudson-Bergen Light Rail (HBLR) uses a modified zone for its highly successful Bayonne Flyer express operation. HBLR General Manager Phil Maccioli notes that the Bayonne Flyer is an extra service superimposed on the peakhour Southern District services of average headway of 10 minutes on both the West Side and Bayonne lines. Thus local stations do not see a lower train frequency as a result of the express. Also noteworthy is that morning Flyers do not stop at the Southern District’s busiest station, Liberty State Park. This is to maintain fluidity of the densely utilized junction just south of the station. Despite this apparent paradox, the station receives five-minute service during morning peak hours. Following are several examples of expedited service: • HBLR Bayonne Flyer: This is a “Modified Zone,” where the Flyer bypasses the busiest station to improve the line’s fluidity. • MTA New York City Transit Jamaica Line “J”and “Z” SkipStop rapid transit service. Both the J and Z operate express over a triple-tracked inner zone. • PATCO rapid transit Zone Express. • NJ Transit RiverLINE Limited-Stop Express, which is more accurately described as an Interurban LRT. • SEPTA Norristown High Speed Line. This “light rapid transit” line offers Zone Express service. There are three such zones on the 14-mile-long line. Express trains achieve 70 mph. • SEPTA Media-Sharon Hill light rail line, which provides Zone Express service.R RA E xpedited Services EXPEDITED SERVICES Demand Stop Skip Stop Zone Express • Skip Zone Express Train “A” Stop

Trains “A” and “B” Stop

Train “B” Stop

Demand Stop

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• “A” Terminates •“B” Terminates

April 2017 Railway Age 39

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Micro-lubricant with mojo

By WILLIAM C. VANTUONO, Editor-in-Chief

zMax®, used in racecar and aircraft engines since 1946, is beginning to penetrate the railroad locomotive market—literally.

OmniTRAX

eople familiar with motorsports history will recognize names like Mauri Rose, Dyno Don Nicholson, Arnie Beswick and George DeLorean (brother of John Z., whose real claim to fame was the 1964 Pontiac GTO, not the ill-fated DeLorean DMC-12). They may not be familiar with Joe Lencki, who in the years leading up to World War II was a prominent racecar mechanic, lubrication scientist and engine designer competing at Indianapolis Motor Speedway. Lencki’s engines were among the most successful of their day. During the war, tasked with improving the range and reliability of military aircraft engines, Lencki supervised engine construction for the Wright Cyclone R3350 B29 engines. He returned to racing in 1946, picking up where he had left off in a search for a lubricant that could mitigate cold-start engine damage. Lencki soon developed a specially reformed “pure lubricant”

he named “Speedway Cocktail.” This product, which offered “metal soaking” properties developed with the assistance of Nobel Prize-winning physicist Enrico Fermi, gained quick acceptance in the motorsports community. It was sold for professional use only. In the 1950s, Lencki renamed his product Lenckite. In the early 1960s, he connected with former U.S. Air Force mechanic Ed Rachanski Sr., a full-time aircraft engine builder and part-time drag racer for LincolnMercury. In 1980, largely through Rachanski Sr.’s persistence, Lenckite received FAA Approval for use in all aircraft piston engines. More than 70 years after its acceptance in the motorsports community and 37 years after receiving FAA Approval, Lencki’s product is beginning to work its way into the railroad industry. zMAX®, as it’s named today, is produced by Bedford Park, Ill.-based Oil-Chem Research Corp., which

in 1996 was purchased by Bruton Smith’s Speedway Motorsports, Inc. Speedway Motorsports has broadened zMax’s consumer marketplace, which includes auto parts and big-box stores like Walmart. Ed Rachanski Sr. serves as Chief Technical Officer. His son, Ed Rachanski Jr., is the company’s Technical and Manufacturing Director. Short line conglomerate OmniTRAX this year became the first railroad company to adopt zMAX as part of its regular locomotive maintenance program, after a successful trial run. “As most everyone knows, using an oil or fuel additive in the rail industry is hard to do, whether it’s because of the different variables that come into play that make it difficult to track the benefits, or just the stigma of ‘snake oils,’” says Director of Mechanical-North Justin Moon. “So when Ed Rachanski Jr. approached me about a test program, I was skeptical on what we were going to see. Because it’s a micro-lubricant April 2017 Railway Age 41

zmax: from racecars to aircraft to locomotives

and my knowledge of what it has done in the automotive field, I was willing to give it a try.” OmniTRAX tested zMax in two EMD GP38-2s equipped with 16-645E3B engines and one EMD SD50 equipped with a 16-645F3B for one year in the Illinois area. The engines were approximately three-quarters into their normal expected lifecycle. “After the first six months, I was sold on getting zMAX into the rest of our fleet, simply because of how it cut down the amount of oil the engine was pushing out the stack during the winter months while idling,” Moon says. “During annual inspections on these locomotives, we noticed how the air boxes were cleaner than normal, with fewer ash deposits. There was less carbon buildup in the stacks, and no excessive wear on any internal engine parts. “With these types of results in addition to what I will call the ‘soft’ benefits—no more dry starts due to better

lubricated-metal and bearing surfaces, and labor savings by not having to wash the locomotives as often—I made the decision that zMAX was going to be part of our normal maintenance practices. We recently rolled out a new mechanical instruction to all OmniTRAX properties. Orders have been placed, and soon we will have 100 locomotives across the U.S. and Canada using zMAX.” “We don’t have a full overhaul program,” says Moon. “We do standard periodic 92-day, 184-day, and 365-day inspections. We rarely bring new units into the fleet.” The typical lube oil capacity of a 645 engine is 260 gallons; 13 gallons of zMAX are added every 92 days. In the fuel system, 15 gallons are added every 184 days; the product is introduced into the fuel system through the fuel pump, near the fuel injector rails. As described by Rachanski Jr., zMAX is produced with a proprietary

reformation formula. “We start with highly refined petroleum oil whose molecular structure is further refined to create a Micro-lubricant™,” he says. “zMAX uses the engine’s lube oil as a carrying agent to reach the metal. Based on Auger Electron Spectroscopy, it penetrates into metal 82 times deeper than other lubricants. It keeps metal surfaces cooler and better lubricated to help fuels and oils do the job they were designed for. It cleans, lubricates and protects metal from the inside out, and disperses varnish, carbon and other harmful performancerobbing deposits.” “zMax is not an oil additive or chemical,” Rachanski stresses. “It’s a pure petroleum product compatible with all motor oils, conventional and synthetic. Its molecules have been reformulated smaller than regular engine oil molecules. This allows its unique ‘micromolecules’ to soak into the metal.” “Ordinary engine oil additives use

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zmax: from racecars to aircraft to locomotives

materials like Teflon®, PTFE, zinc phosphates, Graphite and MoS2 in an effort to increase protection and lubricity,” Rachanski says. “Based on SAE J357, a lubricant additive agent is ‘a material designed to enhance the performance properties of the base stock or to improve the base stock properties that do not naturally exist.’ zMAX does neither, as it is not designed to improve or enhance any qualities of the engine oil. Introducing zMAX into the engine oil is the means to transport it directly to the engine’s metallurgy.” zMAX “maintains the critical oil film seal between the pistons, rings and cylinder walls, resulting in proper combustion sealing and reduced blowby,” says Rachanski. “Proper combustion sealing increases horsepower. It reduces and stabilizes fuel and oil consumption. It reduces oil particulate emissions, black smoke (partially burned fuel) from the exhaust stack and oil puddles from the crankcase breather hose. In older engines, even those with silver bearings, it improves lubricity and reduces wear, dissolving and dispersing harmful deposits, helping to improve and maintain performance.” In new or remanufactured engines, if used during assembly or at initial start-up, zMAX “will maintain baseline performance throughout the life of the engine,” Rachanski adds. In turbocharged applications, it “increases cooling, reduces deposits, provides better heat dissipation at shutdown and helps improve turbo response.” During short- or long-term storage, a zMAX-treated oil film “stays on the metal, continuously protecting against rust and corrosion. Its instant oil film at startup protects surfaces until full lubrication reaches components. The improved heat transfer from micro-lubrication results in cooler surfaces and less thermal distortion.” Internal engine deposits reduce oil flow and the oil’s ability to transfer heat. zMAX-treated surfaces “stay lubricated, so it’s difficult for deposits to form on them,” Rachanski notes. “It continuously ‘weeps’ out of the metal’s pores and stays on the metal. Better compression results in more-efficient combustion,

improving fuel economy, increasing horsepower and lowering emissions.” In another trial with a western short line test locomotive, overall fuel consumption dropped 15% and oil consumption fell 83%. Crankcase pressure vacuum increased 47%. Fuel injector failures were eliminated and fuel dilution was reduced. Valve lash

adjustors were cleaner. No cylinder liner replacements have been needed on the treated units since application. In one instance, zMAX freed a stuck turbocharger sprag clutch gear, saving the railroad $23,000 because a replacement unit wasn’t needed. Lejak & Associates, Inc., is the exclusive distributor of zMAX. RA

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Six Years of growth Railinc’s 2017 North American Freight Railcar Review shows covered hoppers and tank cars driving a fleet-size increase. By DAVID HUMPHREY, PH.D., Senior Analyst, Railinc Corp., for Railway Age

he revenue-earning fleet is a subset of the North American rail fleet largely composed of freight cars that can be used in interchange service and against which an interline waybill can be placed. It is made up of six subfleets: hoppers; covered hoppers; gondolas; flat cars; tank cars; and boxcars. It excludes locomotives, intermodal trailers and containers, maintenance-of-way equipment and end-of-train devices. Railinc’s annual analysis of the North American revenue-earning fleet reveals that the total fleet increased in 2016 for the sixth consecutive year and that two key car types—covered hoppers and tank cars—drove that growth. Hoppers, one of the smaller subfleets, continued to decline in 2016. Boxcars, the smallest subfleet, halted what had been a long decline. The average age of cars declined for the fifth consecutive year, and new cars again trended large, with the majority having gross rail loads (GRLs) of 44 Railway Age April 2017

286,000 pounds. Moving along into 2017, detailed analysis reveals the following trends: • Total fleet size was up 1.4% from year-end 2015 to year-end 2016, compared with a 3.3% increase the previous year. • Increases in covered hopper and tank car populations drove growth. The number of covered hoppers grew the most, followed by tank cars. The hopper subfleet declined for the seventh consecutive year, and the gondola population decreased for the fourth consecutive year. For the first time in years, the number of boxcars held steady from the previous year. On a percentage basis, gondolas declined the most of any type. • The average age of the fleet decreased in 2016 for the fifth consecutive year. It fell from 19.6 years to 19.5 years. The decrease suggests more new cars are joining the fleet as older cars exit it.

• The trend of GRL 286 cars predominating among additions to the fleet continued in 2016. In the past six years, GRL 286 cars have accounted for 83% of new additions to the fleet. Larger cars enable operational efficiencies that reduce costs and ease logistics challenges. However, the number of GRL 286

Large covered hoppers used to haul grain and fertilizer added more than 20,000 new cars in the past two years, and make up about 17% of the revenue-earning fleet.

cars added to the fleet was down by about 30% from 2015.

Sean Kelly

Fleet Size Increases Again

The revenue-earning fleet realized a net increase of 23,000 cars in 2016 but grew at a lower rate than the previous year. At the end of 2016, there were 1.628 million units, up 1.4% from

the previous year (Figure 1). Covered hoppers drove the growth, increasing by 3.9% over 2015. Tank cars were up 2.5%, and flat cars increased 1.0%. Boxcars (including refrigerated cars) held steady after years of decline. In contrast, gondolas were down 2.7%, and hoppers decreased by 2.1%.

The average age of railcars in the revenue-earning fleet continues to decrease. In 2016, it was down 0.1 years, to 19.5 years, the lowest since before Railinc implemented the new Umler system in 2009 (Figure 2). This suggests the economy continues to head in a positive direction as historical data show that fewer new railcars join the April 2017 Railway Age 45

RAILINC NORTH AMERICAN FREIGHT CAR FLEET STATISTICS

fleet during and immediately following economic dips. More than 129,000 new cars joined the revenue-earning fleet in the past two years. The number of new cars added in each of the past five years has exceeded 50,000. Historically, the average age of the fleet and the number of cars added to the fleet mirror the economic environment (Figure 3). When the economy is strong, as in the mid-1990s and mid2000s, the fleet tends to be refurbished with the addition of new equipment. During periods of recession, such as around 1991, 2002 and 2009, the amount of new equipment added to the fleet decreases significantly. Over the past 20 years, the vast majority of new railcars have been GRL 286. In the past six years, they have accounted for 83% of new additions to the revenue-earning fleet. This trend continued in 2016 (Figure 4). However, the number of GRL 286 cars added in 2016 decreased by about 18,500 from 2015.

Figure 1

Figure 2

Subfleet Trends

There are more than 700 equipment types in the Umler Component Registry. Of those, 10 types accounted for 52% of the revenue-earning fleet in 2016. For the second consecutive year, nine of the top 10 car types are either tank cars or covered hoppersâ&#x20AC;&#x201D; the two largest subfleets in the revenue-earning fleet. As the demographics of the subfleets change, so do average car size and total combined capacity of all units in a car type. For example, with the growth in the tank car population, the total subfleet capacity has increased by 45.2% since 2009. Most new tanks are large, which has also pushed up the average car size in recent years. The total subfleet capacity for covered hoppers has increased since 2009. The average covered hopper car size increased last year, reversing a multiyear trend. Over the past several years, the 46 Railway Age April 2017

boxcar population decrease drove down the total boxcar subfleet capacity. Large boxcars were added in 2016, which led to an increase in average car size, but not at a fast enough rate to offset the population loss. In previous years, this report has presented data on individual car types grouped by their GRL capacity. This year, the report presents select car types by the kinds of commodities they commonly carry, which provides a more nuanced view of these car types. For example, while covered hoppers carry grain, sand, plastic pellets, and other commodities, the types of covered hoppers that transport each commodity are

different in their characteristics. Plastics: Covered hoppers are commonly used to ship plastic pellets. This commodity subfleet grew by about 11,500 cars in the past two years, more than in the previous 12 years combined. Cars with equipment type code C214 comprise nearly the entire commodity subfleet as defined here. They made up 7% of the revenue-earning fleet and are the third-largest equipment type. New additions to the fleet have trended large. Of the cars added to the plastics subfleet in the past 20 years, 85% have had a capacity of 6,000 cubic feet or more. Grain and fertilizer: Large

RAILINC NORTH AMERICAN FREIGHT CAR FLEET STATISTICS

Figure 3

More than 129,000 new cars joined the revenue-earning fleet in the past two years.

covered hoppers used to haul grain and fertilizer added more than 20,000 new cars in the past two years, and make up about 17% of the revenueearning fleet. Two types of covered hoppers—C114 and C113—account for 95% of the commodity subfleet and are the two most populous equipment types in the revenue-earning fleet. Larger covered hoppers with capacities of at least 5,000 cubic feet have made up the majority of additions to this commodity subfleet in the past 35 years. Sand and cement: Small-cube covered hoppers are used to ship sand and cement, and four types—C111, C112, C311 and C312—have added almost 63,000 cars during the past six years. They now account for more than half of the sand and cement subfleet population. About 95% of the subfleet consists of covered hoppers with equipment code C112, which was the fourth-largest type in 2016 and is now larger than the fleet of J311 coal gondolas. Due to the weight of sand and cement, the cars that carry these commodities tend to be smaller. Almost all have a capacity of just over 3,000 cubic feet. Coal: Gondolas and open hoppers are used to ship coal. These cars still made up a significant portion of the revenue-earning fleet—14%, or 223,000 railcars—in 2016. However,

more than a quarter of those cars were added between 2005 and 2008. Since then, about 18,000 cars joined the fleet, including less than 700 total in 2015 and 2016. Aggregates: Aggregates, such

as limestone and crushed stone, are shipped in gondolas and open hoppers. The number of these car types added to the revenue-earning fleet in 2015 and 2016 was up 22% over the previous two-year period.

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RAILINC NORTH AMERICAN FREIGHT CAR FLEET STATISTICS

Boxcars: The smallest subfleet, boxcars are used to ship a wide variety of products, from consumer goods to automotive parts. The boxcar fleet is older than other car types. For the first time in a decade, the number of boxcars retired from the fleet in the past two years was approximately equal to the number of new boxcars added. Boxcars make up 7% of the revenue-earning fleet.

Figure 4

Conclusion

The total size of the revenue-earning freight car fleet increased for the sixth consecutive year in 2016, up 1.4% from year-end 2015. The fleet added cars in the tank car, covered hopper, and flats subfleets. Decreases were seen in the gondola and hopper subfleets. Boxcars, the smallest subfleet, held steady in 2016, halting a six-year decline. For the first time in a decade, a significant number of new boxcars were added to the fleet.

48 Railway Age April 2017

The average age of cars in the revenue-earning fleet declined for the fifth year in a row, suggesting more new cars are joining the fleet as older cars exit. GRL 286 cars continue to predominate among new additions to the revenue-earning fleet. Larger cars enable

operational efficiencies that reduce costs and ease logistic challenges. Railinc is a wholly owned subsidiary of the Association of American Railroads. For more information or to download this report, visit www.railinc.com. RA

Big data yields

big results

Railroads are moving toward predictive maintenance with stateof-the-art track geometry technology. By STUART CHIRLS, Senior Editor

RailWorks

hat would the future of track geometry look like if a railroad could spot broken rail, a worn frog or compromised roadbed before it disrupted traffic? Well, the future is here, as algorithmic technology and the magic of big data begin to transform maintenance-of-way inspection. Using data to predict track maintenance issues is rapidly becoming a central function of testing, since it’s generally less expensive to fix a small issue before it becomes a big problem that delays or shuts down service. Ensco, based in Falls Church, Va., offers an autonomous track geometry “smart” system that can be installed on a railroad revenue vehicle, such as locomotive, boxcar or passenger coach. “It’s less expensive for the railroad, as a revenue vehicle is already paid for,” says Matthew Dick, Deputy Division Manager,  Product Business Operations for Ensco. “This makes maintenance straightforward process and, unlike a unique vehicle, labor, staff and travel expenses are less. The railroad can inspect more often at lower cost”—as much as

one-eighth to one-tenth the cost of conventional inspection. “Railroads continue to operate manned test vehicles but add autonomous track geometry to do more things,” Dick says, adding that while the autonomous system replaces humans with algorithms, Federal Railroad Administration regulations require all data to be manually reviewed. Ensco’s Vehicle/Track Interaction (V/TI) monitor is mounted in a rail vehicle to assess the condition of the track based on the reactions of that vehicle, for a realistic picture of track conditions. The company’s available Track Data Management Suite organizes the track geometry data and puts it to use. Ensco also offers the Automated Maintenance Advisor, which trends deteriorating conditions and recommends maintenance tasks. “The railroads want to be efficient and do more with less,” says Dick. “They want a system that helps them figure out what to do.” Other suppliers agree. “Track geometry parameters alone are not enough to understand the condition of the rail,” says Luca Ebreo, April 2017 Railway Age 49

TRACK GEOMETRY

President of Mermec Inc., the North American division of Italy’s Mermec SpA based in West Columbia, S.C. “That information must be combined with onboard analysis systems to better understand rolling stock dynamics on the track.” More railroads, Ebreo says, from Class I’s to Amtrak to transit operators, are purchasing track geometry services than the system itself. “Why? First, the aging of people with deep knowledge of track geometry leaving the railroads. Second, investments by railroads are mainly to save money on operations. But in this case, as far as predictive assessment and maintenance is concerned, an ounce of prevention is worth a pound of cure.” Mermec, which operates two hi-rail test vehicles and one R&D vehicle in North America, offers its Ramsys autonomous asset management tool as a standalone product or add-on as part of the client railroad’s enterprise resource planning (ERP) platform. Ramsys databases for track structure, measurement data and inspections and maintenance practices include a tool that provides different scenarios to weight the economy of maintenance. It can be installed in any railcar, and runs automatically in the train consist. Data is automatically evaluated and sent to the operator. Ebreo said Ramsys is now used autonomously in Canada by CN. However, the railroad provides onboard technicians.

Among other features of Mermec’s testing technology: A two-beam system with optical technology that can measure track data at zero mph, good for stop-and-start transit operations. At the same time, Mermec is delivering a system to Japan for high-speed rail that can measure at up to 300 mph. At Atlanta-based Balfour Beatty, the TrueTrak system combines hardware and software in a single track geometry package. Developed in the United Kingdom, the company is looking to bring it into the U.S. in 2017. Balfour Beatty acquired Omnicom, an inspection and surveying specialist, in September 2016, and married the latter’s optical products with its track geometry technology. “TrueTrak combines track geometry with line-scan camera vision technology,” says Steve Atherton, Manager of the Track Solutions Division for Balfour Beatty Infrastructure Inc. (BBIIUS). “It is autonomous, can be mounted in a railcar, revenue car or hi-rail vehicle,” including one provided by BBIIUS. The company is finalizing details on a pilot program with a U.S. Class I, Atherton says. The U.K.’s Network Rail has already adopted TrueTrak, which he claims led it to reduce track inspection staff by double-digits. As for big data, Atherton says, “We have the capacity to do predictive analysis. But right now, none of the railroads are predictive; they are all reactive to different degrees. I don’t

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TRACK GEOMETRY

think predictive analysis is fully understood yet. It’s historical. They say, ‘This is how we do it.’ [Maintenance] is moneydriven. There are rules and regulations. There are also union issues. It’s a mixed bag out there among the railroads. No one has defined the complete value of big data for the railroads. It’s going to take some years to get there.” By combining technology into a single platform, BBIIUS hopes to make it more useful and affordable, a cost-effective solution. “The railroads are looking to sweat their assets a bit more after investment and the traffic downturn of the past few years,” notes Atherton. “There are different ways to skin the cat when budgets are tight.” RailWorks aims to grow its track geometry business by expanding beyond main line mileage. “Track geometry describes a very large spectrum,” says R.T. Swindall, Vice President of RailWorks Maintenance of Way, Jacksonville, Fla. “For instance, BNSF (RailWorks’ largest railroad customer) uses its own track geometry car. But we are seeing outsourcing of some testing. We see clients testing main line tracks themselves, but outsourcing for testing of non-main line tracks” such as secondary and lessused branches and yards. “BNSF has us running testing in [several] of its yards; we have a half-dozen trucks busy with that work,” Swindall says. In testing, RailWorks has offered vertical loading up to

60,000 pounds. That differentiates it from other providers, which employ lateral testing forces—a no-no for short lines and other carriers with lightweight rail. RailWorks measures 40 geometry data points including gauge cross-levels, warps, twist and surface alignments, says Mark Sanders, Maintenance of Way Manager of Technical Services. The FRA prescribes requirements for track geometry, he observes, but adds that RailWorks will “customize our services to what the customer is looking for.” Testing can be conducted with the vehicle moving forward or backward, with loadings for standard or “heavy” (nonloaded) track geometry. The company also plans to add a Ride Quality Index for testing of transit lines in 2017. RailWorks currently deploys six trucks and is looking to add four more in 2017. “Our units are simpler, much less complicated than some of the ‘space shuttles’ out there, and are staffed by one person,” Swindall says. The trucks are based at Jacksonville and do not need to return to base to be recalibrated between assignments. Swindall expects RailWorks’ inspection business to increase by double-digits compared to 2016, based on exposure to additional markets such as transit, and on feeding data surveys into other areas such as track construction and maintenance. “That gives the customer more planning tools for predictive maintenance,” he notes. RA

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enscorail.com +1 703.321.4515 | rail@ensco.com ENSCO Rail is a wholly owned subsidiary of ENSCO, Inc. April 2017 Railway Age 51

Weâ&#x20AC;&#x2122;re current, are you? FRA Regulations FRA News:

Mechanical Department Regulations A combined reprint of the Federal Regulations that apply specifically to the Mechanical Department. Spiral bound. Part Title 210 Railroad Noise Emission Compliance Regulations 215 Freight Car Safety Standards 216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment 217 Railroad Operating Rules 218 Railroad Operating Practices - Blue Flag Rule 221 Rear End Marking Device-passenger, commuter/freight trains 223 Safety Glazing Standards 225 Railroad Accidents/Incidents Updated 1-1-17. 229 Locomotive Safety Standards 231 Safety Appliance Standards 232 Brake System Safety Standards

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enterprise perspective

By RON LINDSEY, Contributing Editor

Decisive Railroading has the potential to reduce the maintenance and capital investment required by traditional traffic control.

ailroads, as an industry, are 50% Centralized Traffic Control (CTC), 50% Dark Territory, albeit one-third of the latter is Absolute Block Signaling (ABS), a nested level of vitality. Now, there is a form of Next-Generation Train Control (NGTC)—Virtual CTC (VCTC)—that can offer tremendous benefits. VCTC, however, requires suppliers and railroads willing to consider paradigm shifts in all four Core Technologies. These are Communications, Mobile IT Platforms, Positioning, and IT Architecture All provide the opportunity to implement “Decisive Railroading,” an advanced level of railroading that can greatly reduce the capital investment and ongoing maintenance expenditures of conventional CTC operations and IT architectures, while improving the efficiency and safety of freight and passenger railroads alike. Safety and efficiency over the past decade have benefitted from three paradigm shifts: wireless voice to wireless data communications, mobile (on-board) IT processing, and use of virtual positioning for non-vital systems that do not generate movement authorities. Combinations of these three paradigm shifts have provided the means to deploy non-vital Positive Train Control (PTC) in the U.S. and the vital European Train Control System (ETCS) on that continent. Paradigm shifts in virtual positioning for vital systems and IT Architecture have yet to be considered by most railroads across

the globe, and yet those shifts can have an unprecedented positive effect on capital investment and ongoing maintenance expenditures. The major challenge for each of these technologies is rejecting the sunk-cost argument of continuing with CTC and conventional IT architectures, and then making the investment in advanced technologies based upon business cases that focus on increasing safety and efficiency, while reducing ongoing maintenance costs of physical positioning. This requires a major shift in the perspectives of traditional railroad operations, and establishment of an enterprise perspective of the effectiveness of a railroad’s major departments. Vital Positioning

The physical positioning of CTC vitality (i.e., track circuits and control points) is well established for railroads. And yet, virtual positioning (e.g., GPS) is entrenched in what we do as individuals. Why not use virtual positioning traffic control system vitality (i.e., determining block occupancy) and eliminate the intensive capital investment and ongoing maintenance costs of physical positioning? Availability of extremely accurate virtual positioning (e.g., augmented GPS) for a train’s head end in sync with end-oftrain positioning is available now for at least the main lines, if not interlockings, that can meet the accuracy requirement of physical positioning. One point that those in denial of virtual April 2017 Railway Age 53

decisive railroading

positioning for vital operations may state is that of the need for broken rail protection. But consider that: 1) 0ne-third of U.S. freight trackage does not have such protection; 2) signaling-grade track circuits are not the only means to provide such protection (e.g., acoustic sensing by wayside fiberoptics), and 3) major European railroads do not require such protection. There are regulatory challenges and business case analyses that need to be addressed for rationally moving forward. For virtual positioning, the next level of NGTC is VCTC, such as my consultancy, Strategic Rail LLC (SR), designed for the railroads of Egypt and Kazakhstan. VCTC provides fixed, flexible and virtual block operations with expanded PTC functionality. A version of VCTC provided by a U.S. supplier is now in revenue service in Mozambique. However, it is unlikely that most European traffic control suppliers will offer VCTC in the near term because it greatly decreases their revenues derived from customers’ capital investment and ongoing maintenance expenditures. As a side point, I wish to note that providing PTC protection in freight yards and passenger terminals (e.g., NJ Transit’s Hoboken Terminal) is a straight-forward, no-cost addition to main line PTC by using geo-fencing. That is, once a train enters a geo-fenced area (e.g., a yard or terminal), and until it departs, an increase in speed beyond a defined limit is immediately enforced without warning to the

engineer. This addition to PTC requires no capital investment or GPS reception within the yard/terminal. IT Architecture

Typically, a railroad’s IT Architecture is developed over time on a department-by-department basis. Hence, the resulting Silo-based IT Architecture (SITA) is likely to result in significant duplication in the generation, processing, storage and distribution of critical data. Such duplication can have a substantial negative effect on the efficiency and safety of a railroad’s operations. Instead, what is required is an Enterprise IT Architecture (EITA), as has been deployed by major passenger airlines, based upon a Single Source of Truth (SSOT) design to address such inefficiencies by eliminating the duplication of SITA data management. SR designed an EITA for Kazakhstan’s railroad, Kazakhstan Temir Zholy (KTZ), that can be applied to those railroads that are willing to make the business case for utilizing it. For example, in KTZ’s situation, more than 1,000 generations/ usages of data flows were identified that could be eliminated with an EITA. Finally, from a U.S. freight rail industry perspective, an Industry IT Architecture (IITA) is an absolute requirement for railroads serious about scheduled operations, either individually or as an industry. RA

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Railway Age

April 2017

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People

Meetings

High profile RailWorks Corp. has appointed John Brohm, a 30-year veteran of the transit and rail supply industry, as Executive Vice president with responsibility for the Ontario operations of PNR RailWorks Inc., its Canadian subsidiary. Brohm, who previously served as President and CEO of Thales Transport & Security, based in Pittsburgh, Pa., and held prior leadership positions with Alcatel Transport Automation (U.S.), Inc., will lead PNR RailWorks’ track, signals and communications and major projects operations throughout Ontario. His Brohm PNR RailWorks appointment comes at a time of record-setting investment in rail transit infrastructure across Ontario. “John is a native of Ontario and is thrilled to working in the area he calls home,” said RailWorks Corp. President and CEO Kevin Riddett. “He has invaluable experience and expertise that directly apply to emerging market opportunities in Ontario.”

April 18-20, 2017 Railway Age/RT&S Light Rail Conference: Planning, Engineering, Operations, followed by Rail Transit Finance. Grand Hyatt Denver, Colorado. Information: http://www.railwayage.com. conferences@sbpub.com. May 23-25, 2017 North American Rail Shippers

Transportation veteran Ralph Ehlers has joined Parsons Corp. as Vice President of Rail and Transit, Canada, based in Markham, Ontario. Ehlers will focus on implementing new lines, expanding existing systems, and providing project management for all elements of mass transit, including main line railways, commuter rail, high-speed rail, bus rapid transit (BRT), and urban transit. The Operation Lifesaver, Inc., (OLI) Board of Directors named Robert C. VanderClute as Chair, following the recent resignation of previous OLI board chair William “Bill” Barringer. VanderClute, President and Chief Operating Officer of the consulting firm FirstRail International, was previously Senior Vice President of Safety and Operations with the Association of American Railroads, and before that served as Vice President for Rail with Parsons Brinckerhoff. A life-long railroader, VanderClute earlier in his career spent 27 years with Amtrak, rising to the position of Vice President Operations and COO. Gannett Fleming Canada ULC is expanding its transportation practice out of its Toronto office with David Bannister, Yousef Kimiagar and Dr. Magdy Samaan. With more than 35 years engineering experience, Bannister joins as Vice President and Director of Facilities and Program Development. Kimiagar joins as a Vice President and Canada Systems Manager with more than 30 years of international engineering and

project management experience. He specializes in integrating complex and advanced technology systems in the rail transit environment. Samaan joins as a Transportation Structures Practice Manager responsible for expanding and growth of the transportation structures business in Ontario and across Canada. Samaan has more than 23 years of experience in the planning, concept development, analysis, design, construction engineering, inspection, strengthening, value engineering and project management of structures.

100 YEARS AGO in

Association (NARS) Annual Meeting. Parc 55 Hilton, San Francisco, CA. Information: (331) 643-3369; www. railshippers.com June 7-8, 2017 Railway Age Third Annual Rail Insights Conference Union League Club of Chicago Information: http://www.railwayage.com. conferences@sbpub.com. Sept. 25-27, 2017 Institution of Railway Signal

April 1917 NEW YORK A WAY STATION On April 1 the first regular through passenger train was run from Boston, via the Hell Gate bridge and the Pennsylvania tunnels under the East and North rivers, to Washington. Much has been made in the New York daily papers of the fact that New York is now for the first time in its history a way station between New England and the South. This is a picturesque way of looking at the completion of the $100,000,000 New York Connecting Railroad. [But] the Hell Gate bridge is not a money paying investment. The undertaking is an example of good and useful citizenship on the part of one of the greatest of American railroad corporations.

Engineers (IRSE) 2017 Annual Convention. Dallas, Texas Contact : ray@globalsignals.net http://irsecon17.wixsite. com/dallas. Oct. 19-20, 2017 Railway Age/Parsons International Conference on Next-Generation Train Control Courtyard Philadelphia Downtown Information: http://www.railwayage.com. conferences@sbpub.com.

April 2017 Railway Age 55

Products Heavy-duty loco jump starter

Environmentally friendly open-track spill-containment collector pans The locomotive refueling track in TransNet’s San Ysidro Yard in San Diego, Calif., received an environmentally friendly improvement with the addition of new, custom-designed spill-containment pans from Trans Environmental Systems, Inc. (TESI). These heavy-duty steel track pans were specifically designed for railroad tracks where Pandrol clips are used instead of traditional driven-in railroad spikes. West Coast General Corp. installed them “with minimum effort,” says TESI principal Merrill Bishop.

“These open track collector pans were designed to TESI’s patent-pending design. Heavy-duty drop-in matrixes can be added for tanker trucks and other heavy yard road equipment to use this fueling facility. Calumet-Superior Oil Refinery in Superior, Wisc., has been using this model since 2009. These pans are equipped with NPT drains in the ends of each set and a flat bottom, which allows for easy cleaning. Blown-in debris will not clog a floor drain, like in a typical open track pan.” Information: www.transenvsys.com.

StratoMAX F-Knuckle meets AAR M-216 fatigue life specification

Strato, Inc.’s StratoMAX F51AE F-Style knuckle has passed the Association of American Railroads (AAR) M-216 fatigue life cycle test. This specification requires an average fatigue life of at least 600,000 cycles. “The addition of our M-216 F-knuckle 56

Railway Age

April 2017

to the StratoMAX product line supports our commitment to provide a superior coupler system that today’s longer, faster trains in service need,” says President and CEO Mike Foxx. The StratoMAX product line includes AAR M-216 E-knuckles and M-216 F-knuckles, couplers and coupler components. These products are ready to ship from several strategically placed distribution centers in North America. Strato is a leading rail industry supplier. The company’s products include airbrake hoses and components, freight and passenger car parts, castings and fabrications, custom product design and engineering services. Information: korozco@stratoinc.com

New from Start Pac is a heavy-duty locomotive jump starter designed in response to feedback from the industry that something more robust than existing equipment was needed for repeat starts. The 214RR is able to perform multiple daily or repeated back-to-back locomotive engine starts, making it ideal for maintenance locations. It’s compact and portable, weighing 875 pounds and measuring 30.5 inches long x 24 inches wide x 18 inches high. The largest of Start Pac’s jump-start batteries, it is still easily maneuvered by forklift or can be mounted directly on service trucks. At maintenance locations, reliability and portability are key. The 214RR is a zero-maintenance, sealed lead acid battery with the added benefit of helping to reduce operating costs by improving safety and efficiency in the field. The 214RR consists of a large battery bank for repeated locomotive jump starting and comes with a charger that monitors the battery and maintains 100% charge without overcharging it. Specifications: • 214 amp-hour battery capacity. • 72V battery. • 3,800 amps peak current • 1,600 CCA (cold cranking amps) @ 80 degrees F. • 1,450 CCA degrees F @ 32 degrees F. • 1,300 CCA @ 0 degrees F. • 875 pounds. 30.5 inch L x 24 inch W x 18 inch H. • Separate 20 amp charger included. • Built-in forklift pockets. The 214RR is patent pending. More information is available at http:// startpac.com/products/locomotive/ model-214rr-repeated-jump-starter/.

Ad Index Company

Phone #

Aldon Company Inc

847-623-8800

Fax

URL/Email address

847-623-6139

Page #

e-rail@aldonco.com 13

Ansaldo STS

Danella Rental Systems, Inc.

610-828-6200

610-828-2260

pbarents@danella.com

Dixie Precast

770-944-1930

770-944-9136

fbrown142@aol.com

ENSCO Rail

703-321-4515

dick.matthew@ensco.com

Hotstart

509-462-1972

509-534-4216 lczernik@hotstart.com

Interstate Diesel Services Inc

800-321-4234

216-706-5010

proach@interstate-mcbee.com

Loram Maintenance of Way Inc

763-478-6014

763-478-2221

sales@loram.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

Miller Ingenuity

877-843-0767

NRE

618-241-9270

sales@milleringenuity.com

618-242-8519 sales@nre.com

C4 30-31,Bellyband

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

Railhead Corp

800-235-1782

708-844-5559

jdonnan@railheadcorp.com

Railquip Inc

770-458-4157

770-458-5365

sales@railquip.com

Railway Equipment Co

763-972-2200

763-972-2900

sales@rwy.com

Railway Educational Bureau, The

402-346-4300

402-346-1783

bbrundige@sb-reb.com

20,54

40 34,52

Railworks

866-905-7245

952-469-1926 jrhansen@railworks.com

Republic Locomotive

864-271-4000

864-271-5254

phaden@republiclocomotive.com

859-885-7804

www.rjcorman

24-25 43

RJ Corman Railroad Group

800-611-7245

Siemens

800-SIEMENS

www.usa.siemens.com/transportation 26

Softrail Inc

888-872-4612

sales@signalcc.com

Strato Inc

732-317-5406

korozco@stratoinc.com

Tradepoint Rail

410-409-1301

info@tradepointrail.com

Trans Environmental Systems Inc

800-220-2466

www.transenvsys.com

railaccountservices@wellsfargo.com

732-981-1222

Wells Fargo Wholesale Marketing

844-459-9664

Wi-Tronix

888-948-7664

630-679-9954 cjasmin@wi-tronix.com

zMax Micro -lubricant

704-455-3273

704-454-1377

gelliott@zmax.com

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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, KY, Jon Chalon 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, OH, 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

AR, AK, AZ, CA, CO, IA, ID, IL, In, KS, LA, MI, MN, MO, MS, MT, NE, NM, ND, NV, OK, OR, SD, TN, TX, 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

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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 2017 Railway Age 57

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TuRninG OppORTuniTies inTO new Business 58 Railway Age April 2017

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equipment Sale/Leasing

Available For Lease ◆ Pressure Differential (PD) Covered Hopper Cars – 5,125 & 5,230 cu. ft., 286K GRL, operate at 14.7 psi. ◆ Pressure Differential (PD) Covered Hopper Cars – 3,915 cu. ft. capacity, operate at 14.7 psi.

Available for Lease 3000 cu ft Covered Hopper Cars 4650 cu ft Covered Hopper Cars 3600 cu ft Open Top Hopper Cars 4480 cu ft Aluminum Rotary Open Top Gons 65 ft, 100-ton log spine cars equipped with six (6) log bunks 60 ft, 100 ton Plate F box cars, cushioned underframe and 10 ft plug doors 50 ft, 100 ton Plate C box cars, cushioned underframe and 10 ft plug doors Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

◆ Mill Gondolas – 65’ 6” inside length with 5’ sides and 52’ 6” inside length with 4’ 6” sides. ◆ Open Top Hopper Cars-4,000 cu. ft., three pocket with manual gates and rotary couplers. ◆ Box Cars – 60’ cars equipped with interior load dividers, plug doors & cushioned underframes. ◆ Covered Hopper Cars – 3,250 cu. ft., 286K GRL

For additional information and pricing, please contact John Goodwin phone (605) 582-8318 e-mail jgoodwin@mwrail.com www.carmathinc.com

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April 2017 Railway Age 59

Perspective: Short Line & Regional Linda Darr

The short line tax credit is good policy

sing tax credits to maximize private investment in infrastructure is a prominent theme of the Trump Administration, and the proven success of this rehabilitation tax credit is a poster child for that policy. Yet, for the sixth time in 10 years, the short line industry must make an all-out effort to extend the short line 45G rehabilitation tax credit. With a new Administration and new Congress, and for the benefit of those decision-makers unfamiliar with 45G, here are the top five reasons to embrace this credit. 1. Maximizing Private Infrastructure Investment

The credit requires two dollars of private investment for every one dollar in tax credit. To be clear, the government is not giving us a dollar, but rather is letting private companies invest more of the money they earn in capital improvements. The additional spending power allows short lines to speed up projects that are in the works and take on new projects that were otherwise unaffordable. 2. Creating Jobs

Railroad rehabilitation is a labor-intensive effort. As small businesses, most short lines do not have the necessary in-house labor force or specialized equipment, so they must hire contractors. These are good-paying jobs that can be taken by members of the skilled labor force who were left behind by the general economy in the past decade. 3. Buying American Goods and Services

Railroads are an all-American proposition. They can’t take their operations or their jobs overseas. Moreover, virtually everything they buy to improve their infrastructure—crossties, rail, ballast, locomotives and cars—is made in 60

Railway Age

April 2017

North America. The North American railroad supply industry is the most vibrant in the world, employing tens of thousands of individuals across the U.S., Canada and Mexico, and it is railroad spending that keeps it that way. 4. Connecting Customers to Markets

Railroad customers are the ultimate beneficiaries of the short line tax credit. Short line railroads operate nearly 50,000 miles of track in areas of the country that are no longer served by Class I railroads. Without that service, thousands of ship-

Since 2004, it has demonstrated its effectiveness in maximizing private investment. pers would have no connection to the national railroad system. With that service, these businesses become engines of growth in their local economies. Because most of the track purchased by short lines were the marginal or moneylosing segments of the Class I system, they received little investment prior to their sale. To provide customers with efficient and competitive service, they require significant rehabilitation. The 45G tax credit helps fill that bill. 5. Improving Safety

Every dollar invested in improving railroad track and bridges is an investment in a safer railroad. Train derailments are a leading cause of railroad accidents and employee injury, and better track and stronger bridges are a surefire way to reduce these accidents.

For those Washington decision-makers that are new to this issue, you can take comfort in knowing that these arguments have been convincing for so many that have come before you. Legislation enacting or extending the rehabilitation tax credit has been introduced and passed in Congress six times since 2004. Each time, that legislation was one of the most heavily co-sponsored of the thousands of bills introduced, almost every time by a healthy majority of both House and Senate, and always in a very bipartisan way. This year looks to be no different. In early March, Reps. Jenkins and Blumenauer and Sens. Crapo and Stabenow introduced identical House and Senate bills to make the 45G tax credit permanent (HR 721/S 407). In just one short month, 144 Representatives and 22 Senators have co-sponsored their respective bills. Moreover, Republicans and Democrats have done so in almost equal numbers, the kind of bipartisan agreement not often seen in Washington. The nation’s shippers are also lending their public support to this legislation. Organized under an umbrella called “Saving our Service” (SOS), more than 600 rail shippers and counting have joined together to urge Congress to enact this legislation. These shippers are located across 49 states and are a testament to the importance local rail service holds for their businesses and local economies. The short line rehabilitation tax credit is sound public policy that is good for the economy, good for jobs and good for safety. Since first enacted in 2004, it has demonstrated its effectiveness in maximizing private investment in railroad infrastructure, and has done so in areas of the country most in need of that investment. There is every reason to make it permanent.